Art Midwest, Incorporated v. David Clapper
2015 U.S. App. LEXIS 19524
| 5th Cir. | 2015Background
- ART entities contracted with Clapper entities to buy apartment complexes through a Partnership (ART Midwest L.P.); disputes arose when ART attempted to terminate the deal.
- Clapper entities countersued for breach; a jury initially cleared ART, but this court reversed in Art Midwest I and remanded.
- On remand the district court entered summary judgment against ART on several claims, tried remaining issues, and awarded damages including two separate Partnership contribution figures (as of Feb. 1, 2001 and Feb. 1, 2002).
- The district court combined the 2001 and 2002 figures, applied a 19% prejudgment interest rate, and applied federal postjudgment interest beginning the day after the final (post-remand) judgment.
- This court in Art Midwest II held the district court double‑counted the contribution damages and remanded to let the district court choose the appropriate (2001 or 2002) figure and “taking into account interest, recalculate the award.”
- On remand the district court selected the 2002 amount but refused to reconsider the 19% prejudgment rate as barred by law‑of‑the‑case/mandate; the Fifth Circuit reviewed whether ART waived objections and whether interest should run from the first or second judgment.
Issues
| Issue | Plaintiff's Argument (ART) | Defendant's Argument (Clapper) | Held |
|---|---|---|---|
| Whether ART waived challenge to district court’s general application of 19% prejudgment interest, compounding, and calculating prejudgment interest through date of judgment | ART argued the 19% rate, compounding, and post-judgment cutoff were improper and should be reviewed now | Clapper argued ART failed to raise those issues on the prior appeal and thus waived them | Court held ART waived those objections by not adequately raising them on prior appeal; waiver bars relitigation |
| Whether federal or Texas law governs when prejudgment/postjudgment interest runs after remand | ART urged Texas law: 19% should apply only through first judgment date (Oct. 11, 2011) | Clapper urged federal law allows calculating interest through the second (post-remand) judgment date | Court held federal law governs postjudgment interest under 28 U.S.C. § 1961 and analyzed when interest should run given multiple judgments |
| Whether district court could recalculate postjudgment interest on awards the Fifth Circuit had affirmed in Art Midwest II | ART argued interest should run from the first judgment for affirmed awards | Clapper argued district court properly recalculated interest from the later judgment | Court held Masinter and Appellate Rule 37 require postjudgment interest for affirmed portions to run from the date of the first judgment; district court erred in recalculating those portions |
| Proper start date for interest on section 4.02(d) (contribution) award vacated in Art Midwest II | ART argued interest should be calculated with reference to the first judgment per the mandate | Clapper argued Rule 37/Briggs line authorizes running interest from the post-remand judgment | Court held the appellate mandate and opinion required the district court to “take into account interest” when choosing the 2001 or 2002 amount; because the damages choice was between pre-determined jury amounts and the original judgment largely remained intact, interest on the section 4.02(d) award must be calculated with reference to the first judgment |
Key Cases Cited
- Art Midwest, Inc. v. Atl. Ltd. P’ship XII, 742 F.3d 206 (5th Cir. 2014) (vacated double‑counted damages and remanded to choose 2001 or 2002 figure and recalculate taking interest into account)
- Masinter v. Tenneco Oil Co., 929 F.2d 191 (5th Cir. 1991) (postjudgment interest for affirmed awards runs from date of first judgment)
- Nissho‑Iwai Co. v. Occidental Crude Sales, Inc., 848 F.2d 613 (5th Cir. 1988) (federal law controls postjudgment interest in diversity cases and interest runs from date of judgment)
- Briggs v. Pennsylvania Railroad Co., 334 U.S. 304 (1948) (appellate mandate can constrain district court’s authority to alter amounts ordered on remand)
- Reaves v. Ole Man River Towing, Inc., 761 F.2d 1111 (5th Cir. 1985) (district court lacks authority on remand to calculate interest from a date prior to the remand decision absent appellate direction)
- Loughman v. Consol‑Penn. Coal Co., 6 F.3d 88 (3d Cir. 1993) (postjudgment interest start date depends on extent to which original judgment was upheld or invalidated on appeal)
- Lewis v. Whelan, 99 F.3d 542 (2d Cir. 1996) (Section 1961 silent where multiple judgments exist; courts must decide appropriate start date)