Shawmut Community Bank, N.A. v. Zagami

• Decision Date: 20 December 1994
• Citation: 419 Mass. 220,643 N.E.2d 448
• Parties: SHAWMUT COMMUNITY BANK, N.A. v. Domenic T. ZAGAMI.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 448

643 N.E.2d 448

419 Mass. 220

SHAWMUT COMMUNITY BANK, N.A. v. Domenic T. ZAGAMI.

Supreme Judicial Court of Massachusetts,

Middlesex.

Argued Sept. 12, 1994.

Decided Dec. 20, 1994.

Edward J. Collins, Wayland, for defendant.

Michael C. Gilleran, Boston, for plaintiff.

Before LIACOS, C.J., and WILKINS, ABRAMS, NOLAN and LYNCH, JJ.

ABRAMS, Justice.

After our decision in Shawmut Community Bank, N.A. v. Zagami, 411 Mass. 807, 586 N.E.2d 962 (1992), the question arose as to the appropriate date from which postjudgment interest should run on the judgment on the defendant's counterclaims. The defendant in counterclaim, Shawmut Community Bank, N.A. (Shawmut), claimed that the appropriate date was September 1, 1988, the date final judgment entered. Zagami claimed postjudgment interest should be computed from September 2, 1986, the date the jury verdict on the common law fraud claim was returned. A judge in the Superior Court agreed with Shawmut and ordered postjudgment interest to be paid from September 1, 1988. The plaintiff in counterclaim, Domenic T. Zagami, appeals. We transferred the case on our own motion. We affirm.

We set forth the facts. In 1979, Shawmut Community Bank, N.A., filed a complaint, claiming that Zagami had failed to pay money due on a promissory note. Zagami filed a counterclaim against Shawmut, alleging fraud and violations of G.L. c. 93A (1992 ed.). On August 25, 1986, a jury returned a verdict for Zagami on his counterclaim for fraud. The docket indicates that a "judgment" on this claim entered on September 2, 1986. The judgment reflected prejudgment interest running from April 17, 1979, to the date of the jury's verdict. At a subsequent jury-waived trial, Zagami prevailed on his c. 93A claim. Concluding that Shawmut had not violated the statute wilfully or knowingly, the judge did not award multiple damages under c. 93A, but did order the bank to pay Zagami's attorney's fees and costs. The docket indicates that judgment entered on this claim on September 1, 1988.

On the first appeal, we declined to consider most of the issues raised based on the poor quality of the record. See Shawmut Community Bank, N.A. v. Zagami, supra at 810-811, 586 N.E.2d 962. We did, however, order reversal of the judgment for Zagami pursuant to c. 93A. Id. at 815-816, 586 N.E.2d 962. We also said that the award of prejudgment interest at a rate of twelve per cent on the common law fraud claim was proper under G.L. c. 231, § 6B (1992 ed.). Id. at 813, 586 N.E.2d 962.

A deputy assistant clerk entered judgment after rescript. In that judgment, the clerk calculated prejudgment interest from the date of the filing of Zagami's counterclaim on April 17, 1979, until the date of entry of the judgment on the jury verdict on September 2, 1986, and calculated postjudgment interest from September 3, 1986, to the date of the judgment after rescript.

Shawmut filed a motion to alter or amend the judgment on the ground that postjudgment interest should run from the date that a final judgment, adjudicating all claims, entered, which was September 1, 1988. A Superior Court judge allowed Shawmut's motion.

On appeal, Zagami alleges that: (1) it was not proper for Shawmut to challenge the clerk-entered judgment by filing a motion to alter or amend under Mass.R.Civ.P. 59(e), 365 Mass. 827 (1974), or Mass.R.Civ.P. 60(a) and (b), 365 Mass. 828 (1974), rather than proceeding by appeal under Mass.R.App.P. 4(a), as amended, 395 Mass. 1110 (1985); (2) consideration of the postjudgment interest issue is precluded by the prior litigation between the parties; and (3) under G.L. c. 235, § 8 (1992 ed.), ¹ postjudgment interest should be computed on the common law fraud claim verdict from the date it was returned, and not from the date that judgment adjudicating all claims in the case entered.

1. The motion to alter or amend the judgment. Zagami contends that Shawmut did not properly challenge the clerk's computation of postjudgment interest because it did not appeal from the entry of the judgment after rescript within thirty days as required under Mass.R.A.P. 4(a). However, "[t]he action of a clerk in adding interest to a judgment is not a ruling of law, to which the time limits for appeal ... would apply." Worsnop v. Texaco, Inc., 386 Mass. 1005, 1006, 436 N.E.2d 1227 (1982).

Rule 59(e) "is designed for precisely such situations" where the judgment is incorrect because it lacks both legal and factual justification. Page v. New England Tel. & Tel. Co., 383 Mass. 250, 252, 418 N.E.2d 1217 (1981), quoting Mumma v. Reading Co., 247 F.Supp. 252, 260 (E.D.Pa.1965). A motion to alter or amend a judgment under rule 59(e) applies to the "erroneous computation of interest." ² See J.W. Smith & H.B. Zobel, Rules Practice § 59.15, at 454 (1977). Within ten days of the entry of the judgment after rescript, Shawmut contested the clerk's calculation of interest by filing a motion to alter or amend the judgment under rule 59(e). ³ There was no error.

2. The effect of earlier litigation. Zagami argues that consideration of the clerk's computation of postjudgment interest is barred by our decision in Shawmut Community Bank, N.A. v. Zagami, supra. In that case, we said that the award of prejudgment interest on the fraud judgment under G.L. c. 231, § 6B, was valid. Id., 411 Mass. at 813, 586 N.E.2d 962. Zagami claims that we also ruled that the clerk was correct in computing postjudgment interest on the fraud claim from the date of the 1986 jury verdict. There is no merit to that contention.

This issue concerns the appropriate judgment entered after the rescript from this court. The parties obviously could have had no opportunity in the prior appeal to address that issue. Restatement Judgments § 1 (1942), states: "Where a reasonable opportunity has been afforded to the parties to litigate a claim before a [judge] ... and the [judge] has finally decided the controversy, the interests of the State and the parties require that the validity of the claim and any issue actually litigated in the action shall not be litigated again by them." Comment (c) to § 1 is to the same effect. See Trustees of the Boston & Me. Corp. v. Massachusetts Bay Transp. Auth., 367 Mass. 57, 64, 323 N.E.2d 870 (1975) (no res judicata effect because the issue was irrelevant to prior litigation). Accordingly, consideration of the correct date for summary of postjudgment interest was not precluded.

3. The date for determining postjudgment interest. Zagami contends that postjudgment interest on the fraud claim should be computed from the date the jury verdict was docketed as a "judgment," September 2, 1986. We do not agree. "The nature of a paper entered on the record of a court must be determined according to its essential characteristics and not by its name." Kingsley v. Fall River, 280 Mass. 395, 398, 182 N.E. 841 (1932). A judgment "will be treated on the footing of its substance and not of its name." Check v. Kaplan, 280 Mass. 170, 176, 182 N.E. 305 (1932). "Finality does not hinge on the label that is placed on the judge's action." Borman v. Borman, 378 Mass. 775, 779 n. 8, 393 N.E.2d 847 (1979). Thus, the fact that the paper was labeled a judgment does not aid Zagami.

"A [judgment] and a counterclaim are different causes of action combined in one case, and ordinarily a [judgment] disposing of only one of them is not a final [judgment]." Blume v. Oil-O-Chron, Inc., 287 Mass. 52, 55, 191 N.E. 131 (1934). Federal law reaches a similar result. See Explosives Corp. of Am. v. Garlam Enters. Corp., 817 F.2d 894 (1st Cir.), cert. denied, 484 U.S. 925, 108 S.Ct. 286, 287, 98 L.Ed.2d 247 (1987) (it is inappropriate to allow postjudgment interest to begin running before entry of final judgment); Hooks v. Washington Sheraton Corp., 642 F.2d 614, 617 (D.C.Cir.1980) (without a Fed.R.Civ.P. 54(b) determination, clerk-entered judgment was not valid judgment to which interest could attach). See also Kaszuk v. Bakery & Confectionery Union & Indus. Int'l Pension Fund, 791 F.2d 548, 553 (7th Cir.1986). Because the September 2, 1986, jury trial did not dispose of the G.L. c. 93A portion of Zagami's claim, no final judgment could be entered. Indeed, there was no appeal until the G.L. c. 93A (1992 ed.) counterclaim was heard and decided. See Shawmut Community Bank, N.A. v. Zagami, supra, 411 Mass. at 814-815, 586 N.E.2d 962.

General Laws c. 235, § 8, provides that "[e]very judgment for the payment of money shall bear interest from the day of its entry...." We read the statute in concert with Mass.R.Civ.P. 54(a), 365 Mass. 820 (1974), which defines "judgment" and "final judgment" as "the act of the trial [judge] finally adjudicating the rights of the parties affected by the judgment." In cases involving multiple claims by multiple parties, rule 54(a) is subject to the provisions of rule 54(b), which allow a judge, in certain circumstances, to direct entry of final judgment as to fewer than all of the claims. ⁴

Absent a rule 54(b) determination, the term "judgment" refers to the final adjudicating act of the judge "disposing of all claims against all the parties to the action." Gibbs Ford, Inc. v. United Truck Leasing Corp., 399 Mass. 8, 11, 502 N.E.2d 508 (1987), quoting Bragdon v. Bradford O. Emerson, Inc., 19 Mass.App.Ct. 420, 422-423, 475 N.E.2d 76 (1985); Stokosa v. Waltuch, 378 Mass. 617, 619-620, 393 N.E.2d 350 (1979); School Comm. of Agawam v. Agawam Educ. Ass'n, 371 Mass. 845, 846, 359 N.E.2d 956 (1977). The requirement that all claims be adjudicated prior to entry of a judgment is to avoid piecemeal appeals. See, e.g., Curtiss-Wright Corp. v. General Elec. Co., 446 U.S. 1, 10, 100 S.Ct. 1460, 1466, 64 L.Ed.2d 1 (1980). The record reflects the fact there was no rule 54(b) determination. ^{5 5} Thus, there was no basis for entry of a final judgment after the jury verdict on the fraud claim.

Relying on Turner v. Japan Lines, Ltd., 702 F.2d 752 (9th Cir.1983), Zagami contends that...