Merit Ins. Co. v. Leatherby Ins. Co., 82-2885

• Decision Date: 28 February 1984
• Docket Number: No. 82-2885,82-2885
• Citation: 728 F.2d 943
• Parties: MERIT INSURANCE COMPANY, Plaintiff-Appellant, v. LEATHERBY INSURANCE COMPANY a/k/a Western Employers Insurance Company, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 943

728 F.2d 943

MERIT INSURANCE COMPANY, Plaintiff-Appellant, v. LEATHERBY INSURANCE COMPANY a/k/a Western Employers

Insurance Company, Defendant-Appellee.

No. 82-2885.

United States Court of Appeals, Seventh Circuit.

Submitted Jan. 12, 1984.

Decided Feb. 28, 1984.

Charles J. O'Laughlin, Jenner & Block, Robert A. Holstein, Holstein, Mack & Associates, Chicago, Ill., for plaintiff-appellant.

Mitchell S. Rieger, Schiff, Hardin & Waite, Chicago, Ill., for defendant-appellee.

Before CUMMINGS, Chief Judge, POSNER, Circuit Judge, and FAIRCHILD, Senior Circuit Judge.

PER CURIAM.

On December 1, 1980, a panel of arbitrators awarded Merit Insurance Company $10,675,000 in a dispute with Leatherby Insurance Company. The district judge confirmed this award by order of November 19, 1981, and incorporated in that order an award of interest on the $10,675,000 at the rate of 8 percent per annum from December 1, 1980. On September 2, 1982, however, on Leatherby's motion under Fed.R.Civ.P. 60(b), the district judge set aside the arbitrators' award. Merit appealed to us, and on July 12, 1983, we reversed and directed the district judge "to reinstate the previous judgment," i.e., the judgment of November 19 confirming the arbitrators' award and adding to it interest to that date at 8 percent per annum. 714 F.2d 673, 683 (7th Cir.1983). We suspended our mandate, however, while Leatherby unsuccessfully sought certiorari. Merit now asks us to modify our mandate (1) to raise the interest rate for the period September 14 to November 19, 1981, from 8 to 12 percent; and (2) to give it post-judgment interest from November 19, 1981, to whenever the judgment is satisfied, at the rate of either 12 or 13.159 percent, the latter being the applicable rate if the 1982 amendment of 28 U.S.C. Sec. 1961 applies to judgments entered before the date of the amendment. But we agree it does not, and therefore reject the suggestion of 13.159 percent.

With respect to pre-judgment interest, the parties agreed in the district court that New Jersey law governed and that 8 percent was the applicable rate under that law; but Merit has belatedly discovered that, effective September 14, 1981, two months before the district court issued the judgment that we have ordered reinstated, New Jersey had raised the interest rate to 12 percent. The proper route for amending a judgment to correct an error is by motion under Rule 59(e) (within 10 days) or 60(b)(1) (within one year). Although no such motion has been made, we could treat the present motion as a Rule 60(b)(1) motion to correct the judgment that we have ordered the district court to reinstate, a motion based on a mistake in the judgment, and we could grant the motion ourselves, without remand to the district court, Byrd v. Hunt Tool Shipyards, Inc., 650 F.2d 44, 49 (5th Cir.1981)--provided it is timely. It comes of course much more than a year after the judgment was originally entered, and a year is the outside limit for a motion under Rule 60(b)(1). But within a year of that judgment the district court had set it aside and Merit had appealed, and perhaps the one-year period was tolled during this interval. However, the appeal itself would not have tolled it. Bershad v. McDonough, 469 F.2d 1333, 1336 (7th Cir.1972); Carr v. District of Columbia, 543 F.2d 917, 926 and n. 70 (D.C.Cir.1976). This is because, even while the case was on appeal, Merit could have asked the district court to correct its original judgment, and if the district court had expressed willingness to do so we would have remanded the case. True, this would have interrupted the appellate proceedings; and if the purpose of the one-year limitation is, as it appears to be, to safeguard the finality of civil judgments, that purpose is not engaged when as in this case the judgment sought to be corrected has not yet become final. But as arguments of this sort have been unavailing when the question was whether an appeal tolled the one-year deadline applicable to Rule 60(b)(1), we must reject the argument that the district judge's action in setting aside his original order tolled the period for seeking correction of that order in case it was reinstated, as indeed it has been.

In any event, the one-year deadline for Rule 60(b)(1) motions is just an outside limit; the interior limit is reasonableness. See, e.g., Bank of California v. Arthur Andersen & Co., 709 F.2d 1174, 1176-77 (7th Cir.1983). This limit is intended not only to safeguard the finality of judgments but to encourage orderly procedure, which requires the prompt rectification of any mistakes. Two and a half years is too much....