Bp Exploration & Oil Co. v. Maintenance Servs., 01-3137.
| Decision Date | 18 December 2002 |
| Docket Number | No. 01-4291.,No. 01-3194.,No. 01-3137.,01-3137.,01-3194.,01-4291. |
| Citation | 313 F.3d 936 |
| Parties | BP EXPLORATION & OIL COMPANY, Plaintiff-Appellee/Cross-Appellant, v. MAINTENANCE SERVICES, INC., Defendant-Appellant/Cross-Appellee, DJA Inspection Services, Inc., Defendant. BP Exploration & Oil Company, Plaintiff-Appellant, v. Maintenance Services, Inc., Defendant-Appellee. |
| Court | U.S. Court of Appeals — Sixth Circuit |
John C. Fickes (briefed), Clair E. Dickinson (briefed), Brouse & McDowell, Akron, OH, Joseph T. Dattilo (argued and briefed), Brouse & McDowell, Cleveland, OH, for Plaintiff-Appellee/Cross-Appellant in 01-3137, 01-3194.
Michael K. Yarbrough (argued and briefed), Scott D. Phillips (briefed), Frost, Brown & Todd, Columbus, OH, Thomas D. Amrine (briefed), Frost, Brown & Todd, Cincinnati, OH, for Defendant-Appellant/Cross-Appellee in 01-3137, 01-3194.
John C. Fickes (briefed), Clair E. Dickinson (briefed), Brouse & McDowell, Akron, OH, Joseph T. Dattilo (argued and briefed), Brouse & McDowell, Cleveland, OH, for Plaintiff-Appellant in 01-4291.
Michael K. Yarbrough (argued and briefed), Scott D. Phillips (briefed), Frost, Brown & Todd, Columbus, OH, Thomas D. Amrine (briefed), Frost, Brown & Todd, Cincinnati, OH, for Defendant-Appellee in 01-4291.
Before: MARTIN, Chief Circuit Judge; RYAN, Circuit Judge; and COHN, District Judge.*
We have combined for decision, in a single opinion, two appeals that come to us from the district court involving the same parties.
In the first appeal, the district court entered judgment for the plaintiff, BP Exploration & Oil Company, in the amount of $603,695.54 on a jury verdict finding the defendant, Maintenance Services, Inc. (MSI), sixty percent liable and the plaintiff forty percent liable for causing a leak in a fuel storage tank owned by BP. MSI appeals from an order denying its motion to reduce BP's damages award by $50,000 that BP received in settling its claims against another defendant, St. Paul Fire and Marine Insurance Company. In its cross-appeal, BP challenges the district court's refusal to grant judgment as a matter of law on the issue of BP's alleged contributory negligence.
In the second appeal, BP appeals the district court's decision regarding the amount of post-judgment interest MSI must pay. For the following reasons, we AFFIRM the district court's judgment in both cases.
In August 1997, BP contracted with MSI for "repairs, upgrades and seal installation" on a fuel storage tank (Tank 20) owned by BP and located in Canton, Ohio. As part of the contract, MSI named BP as an additional insured under MSI's Commercial General Liability Insurance policy with St. Paul Fire and Marine Insurance Company (St. Paul). In September 1997, MSI began the repair work, which consisted of filling holes in the tank's floor, welding patches over corroded areas, and using cutting torches to replace seals in the tank's "floating roof." During these repairs, MSI burned a small hole in the floor of the tank.
Initially, the hole went undetected. MSI completed the repairs, and BP, without testing the newly repaired tank floor for defects, refilled it with fuel. According to its manual, BP could have performed an "8-foot water test," in which water is added to an empty tank in order to discover any leakage. Unfortunately, BP did not test the tank, and in early November 1997, BP began to notice inconsistencies between its fuel receipts and its sales and inventory. Following a heavy December rain, BP personnel found a "stain" on the ground near Tank 20, and after pumping the fuel out of the tank, BP discovered the hole. By this time, approximately 45,000 gallons of fuel had escaped into the soil, necessitating a significant cleanup operation and prompting action by at least one adjoining property owner.
About two years later, BP filed suit in the U.S. District Court for the Northern District of Ohio for damages exceeding $3 million. BP's initial complaint named MSI and St. Paul as defendants, but BP later added two other defendants, DJA Inspection Services, Inc. (DJA), a company that inspected Tank 20 prior to MSI's repairs, and American Safety Risk Retention Group, Inc. (ASRR), DJA's insurer. BP proceeded against these four parties under two alternative theories of liability.
BP's first, ultimately winning theory posited that MSI had burned the hole in Tank 20 while conducting its repairs. On this theory, BP sued MSI for negligence and breach of contract relating to the repair work. BP also sued St. Paul for breaching the insurance contract by failing to defend and indemnify BP in suits arising from MSI's misconduct. BP also sued both MSI and St. Paul on claims relating to the scope of coverage provided by the insurance policy. BP's second, ultimately losing theory was that DJA had failed to discover the hole during the inspection preceding MSI's repairs. Pursuant to this theory, BP sued DJA for negligence and breach of contract relating to the inspection and sued ASRR for breach of the insurance policy covering DJA's work.
Before trial, BP settled its claims against St. Paul. The parties executed a "BuyBack and Release Agreement," in which St. Paul promised to pay BP $50,000 in exchange for BP's promise to release all of its claims against St. Paul. The agreement expressly provided that its terms were not to be construed as an admission of coverage or liability. The money was paid and St. Paul was dismissed from the case. Soon thereafter, BP also dismissed its claims against ASRR, DJA's insurer.
The district court conducted a jury trial on BP's negligence and breach of contract claims against both MSI and DJA. At the close of MSI's case, BP moved for judgment as a matter of law, dismissing MSI's defense that BP was guilty of contributory negligence. The district court denied the motion, and BP now cross-appeals from that decision. At the trial's conclusion, the jury returned a verdict exonerating DJA but finding MSI liable for negligence and breach of contract. The jury awarded BP $935,404 in damages on the negligence claim and $78,000 on the contract claim, but it also found BP liable for contributory negligence. Pursuant to Ohio's comparative negligence statute, the jury allocated sixty percent of the fault to MSI and forty percent to BP. The district court adjusted the damages awards and entered judgment against MSI, accordingly.
MSI then filed a motion to alter or amend the judgment on two grounds. First, MSI challenged the $78,000 judgment on the contract claim as duplicative of the judgment on the negligence claim. The district court agreed and vacated the jury's award of $78,000. BP did not appeal that decision. Second, MSI argued that BP's award on the negligence claim should be reduced by the $50,000 that BP received from St. Paul. The district court rejected this argument and denied the motion, reasoning that BP's claims against MSI and St. Paul were based on different injuries and thus were not subject to Ohio's statutory setoff rule. MSI appeals from the court's denial of its motion as to the $50,000 setoff.
As the prevailing party, BP moved for pre-judgment interest, post-judgment interest, and costs. The district court denied pre-judgment interest, awarded post-judgment interest, and granted a portion of BP's costs. On August 7, 2001, MSI tendered payment to BP in the amount of $603,695.54, along with a letter explaining that the check "represents full payment of the judgment rendered against Maintenance Services ... along with costs and applicable post-judgment interest through Tuesday, August 7, 2001." Approximately one month later, BP returned the check to MSI, citing its fear that acceptance of "partial payment" could be construed as "payment in full or an accord and satisfaction." BP also expressed difficulty understanding MSI's computations and suggested that MSI should pay the funds into the district court pending resolution of the case. A few days later, MSI re-tendered the check along with an explanation of its computations. MSI refused to pay the money over to the court, but expressed its belief that acceptance of the payment would not jeopardize either party's appeal of the judgment. BP returned the check a second time, again communicating concern that acceptance of payment could threaten its pending appeal.
Eventually, MSI asked the district court to allow it to pay the amount into a court-maintained account. The district court granted the motion, but held that post-judgment interest had ceased to accrue as of August 7, 2001, the date MSI first tendered payment to BP. The district court reasoned that "[t]he purpose of post-judgment interest is to encourage payment by defendants." According to the court, "[o]nce Maintenance Services made the payment, the purpose for post-judgment interest cease[d]." BP appeals the order declaring that post-judgment interest ceased to accrue as of the date MSI first tendered payment.
The first issue is whether the district court erred in denying MSI's motion to alter or amend the judgment by reducing the damages award by $50,000 that BP received in settlement from St. Paul. "We generally review a denial of a motion to alter or amend the judgment under Rule 59(e) for an abuse of discretion." Wilkins v. Baptist Healthcare Sys., Inc., 150 F.3d 609, 613 (6th Cir.1998).
MSI contends that the district court abused its discretion by failing to reduce BP's damages award. According to MSI, any claim by BP against St. Paul arose only as a result of MSI's negligence in repairing Tank 20. Pursuant to Ohio's common law "single satisfaction" rule, the settlement proceeds must be deducted from the damages award to prevent a duplicative recovery. BP responds that MSI is not entitled to a setoff because St. Paul was not "liable in tort for the same injury" as MSI,...
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