515 B.R. 410
Bankr. D.P.R.2014Background
- This is a Rule 52(b)/Rule 7052 motion by defendant Puerto Rico Highway and Transportation Authority (PRHTA) seeking amended findings or to alter the court’s judgment awarding Redondo Construction pre-judgment interest and other relief; Redondo opposed.
- The factual record relied on a Joint Stipulation of Uncontested Facts; the Opinion and Order being challenged is Docket No. 282.
- PRHTA argued the court erred in applying Puerto Rico Civil Code Article 1061 interest past entry of judgment and contended federal post-judgment interest under 28 U.S.C. § 1961 should apply after the first judgment.
- PRHTA raised related arguments: (a) the court improperly awarded interest from dates of substantial completion (1993) though Redondo’s claim was filed in 2000, (b) the court should have sought certification to the Puerto Rico Supreme Court on unsettled state-law questions, (c) Redondo waived pre-judgment interest, and (d) the court relied improperly on intermediate Puerto Rico Court of Appeals decisions.
- The court applied the manifest-error standard for Rule 52(b) motions, found PRHTA’s motion advanced legal arguments rather than proposed factual amendments, and denied the motion in full.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Article 1061 prejudgment interest may continue to accrue past entry of the first judgment or whether post-judgment interest is governed exclusively by 28 U.S.C. § 1961 | Redondo: Article 1061 is an independent remedy that applies while the obligation remains in default and may be awarded into judgment | PRHTA: After first judgment, federal § 1961 controls post-judgment interest; Article 1061 cannot be treated to extend to post-judgment period | Court: Denied PRHTA — Article 1061 is independent and applies until obligation is no longer in default; § 1961 does not displace Article 1061 in this respect |
| Proper accrual date for prejudgment interest (dates of substantial completion vs. date claim filed) | Redondo: Contractor is entitled to payment at substantial completion; interest accrues from that date | PRHTA: Interest should not run from substantial completion years before claim filing | Court: Denied PRHTA — parties stipulated substantial completion dates; Puerto Rico law awards rights at substantial completion |
| Whether the court should have sought certification to the Puerto Rico Supreme Court on unsettled state-law questions | Redondo: did not seek certification; federal court may decide state-law issues | PRHTA: Court should have certified unsettled state-law questions due to alleged uncertainty | Court: Denied PRHTA — certification is discretionary, parties never sought it earlier, no abuse of discretion shown |
| Whether Redondo waived pre-judgment interest and whether citing intermediate appellate decisions was improper | Redondo: timely sought pre-judgment interest in post-trial filings; intermediate appellate decisions are persuasive | PRHTA: Redondo waived interest; intermediate court decisions are nonbinding and should not be relied upon | Court: Denied PRHTA — pre-judgment interest was requested in post-trial filings and permitted by precedent; use of intermediate-court decisions is appropriate when predicting state-law outcomes |
Key Cases Cited
- National Metal Finishing Co. v. BarclaysAmerican/Commercial, Inc., 899 F.2d 119 (1st Cir.) (Rule 52(b) is limited to correction of manifest errors and not to relitigation)
- Fontenot v. Mesa Petroleum Co., 791 F.2d 1207 (5th Cir.) (Rule 52(b) should not be used to present evidence available at trial or to relitigate issues)
- In re Braithwaite, 197 B.R. 834 (Bankr. N.D. Ohio) (discussing standards for Rule 52(b) relief)
- In re Novak, 223 B.R. 363 (Bankr. M.D. Fla.) (motions to amend findings require manifest error or substantial reasons)
- In re Redondo, 678 F.3d 115 (1st Cir.) (pre-judgment interest arguments may be raised in post-trial motions)
- Lehman Bros. v. Schein, 416 U.S. 386 (1974) (certification to state court rests in federal court's discretion)
- Díaz v. Jiten Hotel Mgmt., Inc., 671 F.3d 78 (1st Cir.) (standard of review for denial of certification is abuse of discretion)
- Commissioner v. Estate of Bosch, 387 U.S. 456 (1967) (federal courts must predict how state supreme court would rule and may consider intermediate appellate decisions)