Dow Chemical Co. v. M/V Gulf Seas, 78-3124

• Decision Date: 19 April 1979
• Docket Number: No. 78-3124,78-3124
• Citation: 593 F.2d 613
• Parties: The DOW CHEMICAL COMPANY, Plaintiff-Appellee, v. M/V GULF SEAS, Its Tackle, etc., In Rem, Defendant, Gulf Mississippi Marine Corporation, Defendant-Appellant. Summary Calendar. * United States Court of Appeals, Fifth Circuit
• Court: U.S. Court of Appeals — Fifth Circuit

Page 613

593 F.2d 613

The DOW CHEMICAL COMPANY, Plaintiff-Appellee, v. M/V GULF SEAS, Its Tackle, etc., In Rem, Defendant Gulf Mississippi Marine Corporation, Defendant-Appellant.

No. 78-3124

Summary Calendar. ^*

United States Court of Appeals,

Fifth Circuit.

April 19, 1979.

Richard B. Foster, Atty., George A. Frilot, III, New Orleans, La., for defendant.

Eikel & Davey, Attys., Robert Eikel, Houston, Tex., for plaintiff-appellee.

Appeal from the United States District Court for the Western District of Louisiana.

Before COLEMAN, FAY and RUBIN, Circuit Judges.

PER CURIAM:

In 1971 Dow's barge and cargo, while in custody of Gulf Mississippi's tug, sank. Dow sued for damages, and Gulf Mississippi denied liability. The trial judge eventually found mutual fault and divided liability evenly between the parties. In a separate trial on damages, the court found replacement of the barge to cost $980,000. Dow had alleged its value at $1,500,000. Other damages were not seriously disputed. The judge found no "peculiar circumstances" justifying denial of prejudgment interest, citing Socony Mobil Oil Co. v. Texas Coas. & Intern., Inc., 5 Cir. 1977, 559 F.2d 1008.

Gulf Mississippi objected to the interest award, and the issue was briefed on motion for rehearing. The trial court affirmed its initial award.

On appeal Gulf Mississippi contends that the award of prejudgment interest was error. Dow contends that the appeal is without merit and merely a delaying technique, and seeks damages, including attorney's fees and double costs, under Rule 38, F.R.A.P. and 28 U.S.C. § 1912.

The general rule in admiralty cases is that prejudgment interest should be awarded, Nat G. Harrison Overseas Corp. v. American Tug Titan, 5 Cir. 1975, 516 F.2d 89, 97. Certain "peculiar circumstances," however, may justify denial of interest as an award. Id.

A recent explanation of factors to be considered in withholding interest in an award appears in Socony Mobil. In that case the trial court had denied interest for four reasons: complexity of the case, need for extensive discovery, stay pending resolution of a related case, and delay due to crowded docket. The trial court reasoned that such delays could not be attributed to the defendant. This Court found those considerations irrelevant, noting that they were also not attributable to the plaintiff. As prejudgment interest is a form of compensation, rather than a penalty, it was an abuse of discretion to withhold it. 559 F.2d at 1014.

Appellant correctly notes that denial of prejudgment interest has been upheld on appeal where "peculiar circumstances" are present. Some of these circumstances appear in the case at bar. E. g., Nat G. Harrison Overseas Corp., 97 (legitimate dispute as to liability, finding of mutual fault); Sinclair Ref. Co. v. SS GREEN ISLAND, 5 Cir. 1970, 426 F.2d 260, 262 (inflated damages demand). These cases, however, do not require a ruling that interest may not be awarded where these factors are present. In GREEN ISLAND appellant had contended that, where there was mutual fault (stipulated in that case) or a serious dispute as to liability, interest could not be awarded. The Court disagreed, stating that these were only factors for consideration in the exercise of the judge's discretion. 426 F.2d at 262.

Although appellant claims that the trial court abused his discretion in failing properly to consider what it terms the peculiar circumstances of the case, the court's decision was repeated on rehearing after the facts and applicable law had been exhaustively briefed. Additionally, the trial court relied on Socony Mobil in making its initial ruling that there were no such circumstances justifying withholding of interest. It was not an abuse of discretion to apply the general rule to the facts in this case.

An appeal is not patently frivolous merely because the trial court is affirmed. The facts of the case might well support a denial of prejudgment interest. As the matter is...