Herzog Contracting Corp. v. McGowen Corp., 91-2896

• Citation: 976 F.2d 1062
• Decision Date: 01 October 1992
• Docket Number: No. 91-2896,91-2896
• Parties: , 18 UCC Rep.Serv.2d 1170 HERZOG CONTRACTING CORPORATION, Plaintiff-Appellee, v. McGOWEN CORPORATION, Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

Page 1062

976 F.2d 1062

23 Fed.R.Serv.3d 765, 18 UCC Rep.Serv.2d 1170

HERZOG CONTRACTING CORPORATION, Plaintiff-Appellee, v. McGOWEN CORPORATION, Defendant-Appellant.

No. 91-2896.

United States Court of Appeals, Seventh Circuit.

Argued April 17, 1992.

Decided Oct. 1, 1992.

John C. Trimble, Lewis, Bowman, St. Clair & Wagner, Indianapolis, Ind. and Jeffrey B. Davison (argued), and Steven L Stevenson, Liles, Davison, Stevenson & Davis, St. Joseph, Mo., for plaintiff-appellee.

Cheryl M. Knodle, Michael J. Stapleton (argued) and Warren N. Eggleston, Ball, Eggleston, Bumbleburg & McBride, Lafayette, Ind., for defendant-appellant.

Before POSNER and KANNE, Circuit Judges, and WOOD, Jr., Senior Circuit Judge.

POSNER, Circuit Judge.

The district judge granted summary judgment in favor of Herzog Contracting Corporation in its diversity suit to enforce two promissory notes, aggregating $400,000, against the issuer, McGowen Corporation. The appeal raises a tangle of jurisdictional and substantive questions, the latter governed, the parties agree, by Indiana law.

The district court's original judgment order (see Fed.R.Civ.P. 58), entered on June 28 of last year, merely stated that the plaintiff's motion for summary judgment was granted. It did not mention a sum of money. The plaintiff filed a motion under Rule 59(e) to amend the judgment by stating the dollar amount to which it was entitled. The judge granted the motion and entered an amended judgment on July 26 awarding Herzog $400,000 plus almost $70,000 in prejudgment interest, but he designated the new judgment order a "nunc pro tunc" (now for then) order. The defendant filed its notice of appeal on August 7, which was within thirty days of the amended judgment but not of the original one.

The plaintiff argues that the order of July 26 did not really amend the judgment, but in effect merely corrected a clerical error--the omission of a dollar amount from the original judgment--and that this is shown by the judge's action in making the "amendment" or correction retroactive to the date of the original judgment; for what else could his intention have been in designating the order "nunc pro tunc"? King v. Ionization International, Inc., 825 F.2d 1180, 1188 (7th Cir.1987). The defendant responds that the original judgment was not a final judgment, precisely because it omitted the dollar amount of the plaintiff's entitlement--to which the plaintiff ripostes that in a suit to enforce a promissory note the plaintiff's damages are mechanically computable from the face of the note, and a judgment is not nonfinal merely because a mechanical computation is required to determine the exact relief to which the plaintiff is entitled. United States v. F. & M. Schaefer Brewing Co., 356 U.S. 227, 233-34, 78 S.Ct. 674, 678-79, 2 L.Ed.2d 721 (1958); Mauriello v. University of Medicine and Dentistry, 781 F.2d 46, 49 (3d Cir.1986); Ram v. Paramount Film Distributing Corp., 278 F.2d 191, 193-94 (4th Cir.1960) (per curiam).

We think the original judgment was final, because the process of reducing it to a sum certain was indeed mechanical. This is true even though the promissory notes provided for interest at the rate of 11.5 percent per annum plus "costs of collection, including reasonable attorney's fees." Id.; G. & T. Terminal Packaging Co. v. Hawman, 870 F.2d 77, 80 (2d Cir.1989) (dictum). The amount of interest was computable simply by multiplying the face amount of the notes by the interest rate for the period between when the notes matured and when the judgment was entered. It is true that prejudgment interest is part of the judgment, not collateral to it, like attorneys' fees. Osterneck v. Ernst & Whinney, 489 U.S. 169, 109 S.Ct. 987, 103 L.Ed.2d 146 (1989). But all that that means, so far as bears on this case, is that if the judge had not awarded prejudgment interest, Herzog would have had to file a Rule 59(e) motion in order to get him to do so. Id. The omission of prejudgment interest would not have detracted from the finality of the original judgment; it just would have made it erroneous. As a matter of fact there was no omission; the best reading of the original judgment is that it gave Herzog judgment on the notes, which included prejudgment interest at the rate specified in them. However that may be, the original judgment would not have been final only if it had deferred determination of Herzog's entitlement to prejudgment interest and it did not; it gave Herzog judgment for the value of the notes, which included the interest.

As for the "costs of collection, including reasonable attorney's fees," attorneys' fees we know are a collateral item, Budinich v. Becton Dickinson & Co., 486 U.S. 196, 199-203, 108 S.Ct. 1717, 1720-22, 100 L.Ed.2d 178 (1988), and they were the only collection costs for which Herzog seeks reimbursement. In any event, the major costs incurred in collecting a promissory note are attorneys' fees, and the other costs are also legal expenses of a kind to which a plaintiff is entitled in a collateral proceeding when a statute or contract entitles him to recover the expenses of suit if he prevails. We have held that "attorney's fees" as it appears in statutes is shorthand for "attorney's fees plus all other reasonable expenses of suit," Heiar v. Crawford County, 746 F.2d 1190, 1203-04 (7th Cir.1984); Henry v. Webermeier, 738 F.2d 188, 192 (7th Cir.1984), and have reached the same conclusion when the entitlement was contractual rather than statutory. Id. at 191-92.

So the original judgment was final. But provided the plaintiff's motion to amend it was a valid invocation of Rule 59(e)--and we think it was--it stopped the appeal clock. Fed.R.App.P. 4(a)(4). The motion was not merely one to correct a clerical error, in which event it would not be a motion to alter or amend the judgment within the meaning of Rule 59(e); clerical errors are corrected by motion under Rule 60(a). United States v. Griffin, 782 F.2d 1393, 1396 (7th Cir.1986). There was no error, clerical or otherwise, in the original judgment. It just lacked explicitness. Although the monetary implications of the judgment could indeed be read off from the face of the complaint, the plaintiff may have feared that the defendant would interpose some objection if the plaintiff tried to collect on a judgment that did not specify an amount due.

Our cases say that a postjudgment motion is a motion under Rule 59(e), regardless of its caption, if it is filed within ten days (as this one was) and is "substantive." Lac du Flambeau Band v. Wisconsin, 957 F.2d 515, 517 (7th Cir.1992); Charles v. Daley, 799 F.2d 343, 347 (7th Cir.1986). Or, alternatively, if it is not "purely procedural." Lorenzen v. Employees Retirement Plan, 896 F.2d 228, 231 (7th Cir.1990). Debatable cases are to be shoveled into the substantive bin in order to avoid the "endless hassles over proper characterization" that would ensue if appellees thought they had a good shot at defeating an appeal by pointing to ambiguities or irregularities in a postjudgment motion that the appellant had thought postponed the deadline for his appeal--indeed postponed the earliest time at which he could appeal. Western Industries, Inc. v. Newcor Canada, Ltd., 709 F.2d 16, 17 (7th Cir.1983) (per curiam).

A motion to make a judgment more explicit and therefore clearer is not "substantive" in the usual sense of the word, but we must have regard for the context in which the term is used in relation to postjudgment motions. (Recall the special meanings that "substantive" and "procedural" bear in other parts of law, for example in the application of the Erie doctrine.) A party ought not be able to postpone the deadline for taking an appeal by filing a motion that doesn't actually ask for a change in the judgment. The classic example is a motion for an extension of time within which to file a motion to amend the judgment. Western Transportation Co. v. E.I. Du Pont de Nemours & Co., 682 F.2d 1233, 1236 (7th Cir.1982). It was to distinguish such cases that Charles v. Daley introduced the notion of a "substantive" Rule 59(e) motion. The motion in this case, filed as it was by a prevailing plaintiff, can hardly be thought a frivolous effort to postpone the time at which the judgment became final. It was a bona fide effort to alter the judgment, albeit not to change the amount of relief that the judgment provided. We think it fell on the "substantive" side of the line drawn in Charles, and therefore tolled the time for appeal. The judge's action in designating his amendment of the judgment "nunc pro tunc" could not alter the effect of a Rule 59(e) motion in tolling the time for an appeal. Otherwise in any case in which such a motion was filed the district judge could destroy the losing party's right to appeal by sitting on the motion until the time to appeal from the original judgment had passed and then granting the motion "nunc pro tunc." Latin is a wonderful language but it is not properly used to destroy people's legal rights. King v. Ionization International, Inc., supra, 825 F.2d at 1188.

We may seem to have overlooked a more direct route to the conclusion that the appeal was timely: that by designating its motion as one under Rule 59(e) the plaintiff should be estopped to invoke the thirty-day limit on appeals. That would be fine if the time for taking an appeal were not jurisdictional, and could therefore be waived by the parties. But of course it is jurisdictional, Browder v. Director, 434 U.S. 257, 264, 98 S.Ct. 556, 560, 54 L.Ed.2d 521 (1978), and therefore it cannot be waived or, what amounts to the same thing, forfeited by conduct giving rise to an estoppel. Rennie v. Garrett, 896 F.2d 1057, 1060 (7th Cir.1990).

The next jurisdictional issue requires us to delve into the facts. In 1989 Herzog, the plaintiff, bought the assets of Tru-Flex Metal Hose Corporation from McGowen, the defendant, and formed a wholly owned subsidiary of Herzog (also...