Redondo Construction Corp. v. Puerto Rico Highway & Transportation Authority
700 F.3d 39
1st Cir.2012Background
- Redondo Construction Corporation filed an adversary proceeding in bankruptcy court against the Puerto Rico Highway and Transportation Authority for work performed on five projects.
- The bankruptcy court awarded Redondo nearly $10.25 million in damages and 6% per year interest from each project’s payment due date.
- The district court affirmed the judgment; the Authority appeals challenging the interest award.
- The parties disputed (i) postjudgment interest rate, (ii) prejudgment interest under Rule 44.3(b) or Article 1061, and (iii) an excessive amount for a patent and excise taxes claim on one project.
- The court remanded for clarifications and adjustments: postjudgment interest period/rate, possible prejudgment interest basis, and a revised tax-related claim amount.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Postjudgment interest rate | Redondo | Authority | Remand to assess postjudgment interest at §1961 rate from judgment date to deposit |
| Prejudgment interest under Rule 44.3(b) obstinacy | Redondo | Authority | Remand to district court to vacate award and return to bankruptcy court for proper basis/rate/period |
| Prejudgment interest under Article 1061 basis | Redondo contend basis permitted | Authority | Cannot determine entitlement without further factual showing; remand for determination |
| Excess tax claim amount | Redondo | Authority | Remand for entry of revised judgment reflecting correct tax-claim amount and 15% profit adjustment |
Key Cases Cited
- Kaiser Aluminum & Chem. Corp. v. Bonjorno, 494 U.S. 827 (1989) (postjudgment interest rate fixed by statute)
- Cordero v. De Jesus-Mendez, 922 F.2d 11 (1st Cir. 1990) (postjudgment interest accrues until funds deposited with court)
- In re Advanced Cellular Sys., Inc., 483 F.3d 7 (1st Cir. 2007) (standard of review for bankruptcy decisions; de novo on law)
- Dopp v. Pritzker, 38 F.3d 1239 (1st Cir. 1994) (obstinacy threshold for Rule 44.3(b) prejudgment interest)
- In re Redondo Constr. Corp., 678 F.3d 115 (1st Cir. 2012) (precedent on prejudgment interest under Puerto Rico law)