United States Court of Appeals

For the First Circuit

No. 03-2356

BYRON A. CROWE,

Plaintiff, Appellee,

v.

J.P. BOLDUC,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MAINE

[Hon. David M. Cohen, U.S. Magistrate Judge]

Before

 Selya, Circuit Judge,

Stahl, Senior Circuit Judge,

and Lynch, Circuit Judge.

Michael J. Gartland, with whom Lee H. Bals and Marcus, Clegg

& Mistretta, P.A. were on brief, for appellant.

John M.R. Paterson, with whom Jennifer D. Sawyer and

Bernstein, Shur, Sawyer & Nelson were on brief, for appellee.

April 22, 2004
1Following the procedure described in Gallagher v. Wilton

Enterprises, Inc., 962 F.2d 120, 124 n.4 (1st Cir. 1992) (per

curiam), the proposed panel opinion in this case has been

circulated to all active judges of the court prior to publication,

and none has interposed an objection to the panel's overruling of

Aubin. We caution that this procedure does not convert this

opinion to an en banc decision nor does it preclude a suggestion of

rehearing en banc on any issue in the case, whether or not related

to the panel's treatment of Aubin.

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SELYA, Circuit Judge. This is, as Yogi Berra might say,

déjà vu all over again. Not long ago, we affirmed a verdict

awarding plaintiff-appellee Byron A. Crowe $86,381.98 in his

indemnity action against defendant-appellant J.P. Bolduc. Crowe v.

Bolduc, 334 F.3d 124 (1st Cir. 2003) (Crowe II). Flush from his

appellate triumph, Crowe repaired to the district court and

successfully petitioned for incremental awards of prejudgment

interest and attorneys' fees. Bolduc challenges both awards.

The prejudgment interest issue requires us to revisit

prior circuit precedent, specifically, Aubin v. Fudala, 782 F.2d

287 (1st Cir. 1986). Aubin held that the proper vehicle for the

initial assessment of mandatory prejudgment interest, wholly

omitted from an earlier judgment, is a motion to correct the

judgment pursuant to Fed. R. Civ. P. 60(a) rather than a motion to

alter or amend the judgment pursuant to Fed. R. Civ. P. 59(e). Id.

at 290. Recognizing that an intervening Supreme Court decision has

undermined Aubin's resolution of this point, we overrule that

determination and hold that, in such circumstances, resort should

be made to Rule 59(e).1 However, since Crowe justifiably relied
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upon, and faithfully followed, existing circuit precedent, we

direct that this holding operate in a purely prospective fashion.

Consequently, we affirm the award of prejudgment interest even

though Crowe failed to file his motion within the ten-day period

delineated in Rule 59(e).

The remaining question involves Crowe's entitlement vel

non to attorneys' fees. The answer to that question depends

principally on contractual arrangements entered into by and between

the parties. Fairly read, those agreements authorize fee-shifting

in the circumstances of this case. Thus, we affirm the award of

attorneys' fees as well.

I. BACKGROUND

We do not write on a pristine page. This appeal is an

offspring of a transaction that has been mired in litigation for

several years. That litigation has inspired two published circuit

court opinions, each of which recounts pertinent aspects of the

factual background. See Crowe II, 334 F.3d at 128-30; Achille

Bayart & Cie v. Crowe, 238 F.3d 44, 45-46 (1st Cir. 2001) (Crowe

I). We refer the reader who hungers for further details to those

opinions. For present purposes, we offer only an overview.

Crowe was the president and sole shareholder of Andrew

Crowe & Sons, Inc. d/b/a Crowe Rope Company (Crowe Rope). Once an

industry leader, Crowe Rope fell upon hard times. By December of

1995, the company owed over $8,600,000 to its prime commercial
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lender, Fleet Bank. To secure this debt, Fleet held mortgages on,

and security interests in, all the assets of Crowe Rope. When

Crowe Rope defaulted on its obligations to Fleet, Bolduc emerged as

a white knight.

Acting through a web of holding companies, Bolduc

purchased the Fleet debt and stepped into Fleet's shoes as Crowe

Rope's principal secured creditor. Crowe Rope then transferred all

of its assets to one of Bolduc's nominees (the Operating Company)

and Crowe and his wife transferred some business-related real

estate held in their names to another of Bolduc's nominees. In

exchange, Bolduc and/or the Operating Company agreed to (i) cancel

the existing debt and release the Crowes from any personal

liability, (ii) pay the Crowes (or the survivor of them) a $40,000

lifetime annuity, (iii) pay Crowe a $60,000 one-time fee for

consulting services and for agreeing not to compete, and (iv) hold

the Crowes harmless should creditors cry foul. We discuss below

the various documents that memorialize this transaction.

The deal left Crowe Rope's trade creditors barking up a

defoliated tree. On May 6, 1998, one such creditor, Achille Bayart

& Cie, brought suit against the Crowes seeking to set aside the

$40,000 annuity as a fraudulent transfer. See Crowe I, 238 F.3d at

46. After some preliminary skirmishing, not relevant here, the

district court granted the Crowes' motion for judgment as a matter

of law. We affirmed that decision. Id. at 49.
2The fee award included some expenses incurred by Crowe's

lawyers in prosecuting Crowe II. We see no need to differentiate

between the components of that award for purposes of this opinion.

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In Crowe's view, certain provisions in the agreements

between the parties bound Bolduc to defray the legal fees that he

had expended in defending Crowe I. Accordingly, he brought suit

against Bolduc in a Maine state court to recoup those fees. Bolduc

removed the case to the district court based on diversity of

citizenship and the existence of a controversy in the requisite

amount. 28 U.S.C. §§ 1332(a)(1), 1441(a). The parties proceeded

by consent before a magistrate judge. See id. § 636(c). After a

two-day trial, a jury accepted Crowe's view of the arrangement and

awarded him $86,381.98. Crowe II, 334 F.3d at 130. We affirmed

that award on July 3, 2003. Id. at 139.

That did not end the case, but, rather, set the stage for

further proceedings. On July 25, 2003, Crowe invoked Fed. R. Civ.

P. 60(a) and moved to correct the judgment by adding prejudgment

interest. He also moved for an award of attorneys' fees pursuant

to Fed. R. Civ. P. 54(d)(2). The magistrate judge granted both

motions, tacking on $3,437.44 in prejudgment interest and

$67,872.50 in attorneys' fees.2 This appeal ensued.

II. PREJUDGMENT INTEREST

Bolduc's challenge to the prejudgment interest award

turns on abstract questions of law. We therefore review the lower

court's decision de novo. Disola Dev., LLC v. Mancuso, 291 F.3d
3The district court originally entered judgment on September

19, 2002 in the amount of the jury verdict ($86,381.98). On

November 12, 2002, the court entered an amended judgment in the

same amount following the denial of Bolduc's post-trial motion for

judgment as a matter of law under Fed. R. Civ. P. 50(b). For

consistency's sake, we refer throughout to the judgment entered on

November 12, 2002 (noting, however, that it makes no difference

here which of these two judgments started the clock for purposes of

filing other post-trial motions).

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83, 86 (1st Cir. 2002); R.I. Charities Trust v. Engelhard Corp.,

267 F.3d 3, 5 (1st Cir. 2001).

When a plaintiff obtains a jury verdict in a diversity

case in which the substantive law of the forum state supplies the

rules of decision, that state's law governs the plaintiff's

entitlement to prejudgment interest. See R.I. Charities Trust, 267

F.3d at 8; Roy v. Star Chopper Co., 584 F.2d 1124, 1135 (1st Cir.

1978). Maine law broadly entitles prevailing civil plaintiffs to

prejudgment interest as a matter of right. Me. Rev. Stat. Ann.

tit. 14, § 1602 (repealed and replaced by Me. Rev. Stat. Ann. tit.

14, § 1602-B, effective for judgments entered on or after July 1,

2003); Sawyer v. Walker, 572 A.2d 498, 499 (Me. 1990). It is,

therefore, beyond serious question that Crowe's success in Crowe II

carried with it an entitlement to prejudgment interest so long as

that entitlement was properly preserved.

Despite Crowe's right to recover prejudgment interest,

the district court's judgment in Crowe II made no mention of

interest, but simply confirmed the damage award. That judgment

entered no later than November 12, 2002.3 On July 25, 2003 — more
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than eight months thereafter — Crowe filed a motion to augment the

judgment by adding prejudgment interest. Crowe brought this motion

under Fed. R. Civ. P. 60(a), which provides in pertinent part that

"[c]lerical mistakes in judgments . . . and errors therein arising

from oversight or omission may be corrected by the court at any

time . . . on the motion of any party."

Bolduc opposed Crowe's motion, asseverating that Rule

60(a) was the wrong procedural vehicle and that recourse to the

proper vehicle — Fed. R. Civ. P. 59(e) — was time-barred. Rule

59(e) governs motions to alter or amend a judgment and explicitly

provides that all such motions "shall be filed no later than 10

days after entry of judgment." Because Crowe had filed his motion

to add prejudgment interest more than 250 days after the entry of

judgment, the ten-day deadline, if applicable, had long since

expired.

The district court rejected Bolduc's importunings. It

found this case "indistinguishable in all material respects" from

our earlier decision in Aubin, 782 F.2d at 290. Relying

principally on that precedent, the court anointed Rule 60(a) as an

acceptable vehicle for adding prejudgment interest and adjudged

Crowe's motion timely. Aubin, however, was a weaker reed than the

district court thought. We explain briefly.

In Aubin, the plaintiff won a jury verdict in New

Hampshire's federal district court and, thus, became entitled to
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prejudgment interest as a matter of New Hampshire law. Id. at 289

(citing N.H. Rev. Stat. Ann. § 524:1-b). The court entered a

judgment that referred only to the amount of damages and the

plaintiff subsequently moved to add prejudgment interest. The

district court allowed the motion even though it had been filed

more than ten days after entry of the judgment. We affirmed,

holding that a Rule 60(a) motion was an appropriate vehicle for

correcting a final judgment that omitted mandatory prejudgment

interest and that, therefore, the plaintiff's motion was not

subject to the temporal strictures of Rule 59(e). Id. at 290.

This court decided Aubin in 1986. Three years later, the

Supreme Court decided Osterneck v. Ernst & Whinney, 489 U.S. 169

(1989). In that case, the Court held that a motion to augment a

previously entered judgment by adding discretionary prejudgment

interest is properly classified as a motion to alter or amend the

judgment, and, thus, must be brought under Rule 59(e). Id. at 175.

The Court reasoned from the premise that the use of Rule 59(e) is

appropriate when a motion involves "reconsideration of matters

properly encompassed in a decision on the merits." Id. at 174

(quoting White v. N.H. Dep't of Emp. Sec., 455 U.S. 445, 451

(1982)). It then noted two considerations pertinent to

discretionary prejudgment interest: (i) prejudgment interest

traditionally has been regarded as a make-whole remedy and as a

part of the plaintiff's complete compensation, and (ii) motions to
4Fed. R. App. P. 4(a)(4) renders ineffective notices of appeal

filed during the pendency of a timely Rule 59(e) motion.

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add prejudgment interest to a verdict neither raise issues "wholly

collateral to the judgment in the main cause of action" nor require

an inquiry "wholly separate from the decision on the merits." Id.

at 175-76 (citations and internal quotation marks omitted). Based

largely on these two considerations, the Court concluded that

motions for the addition of discretionary prejudgment interest

involve "the kind of reconsideration of matters within the merits

of a judgment to which Rule 59(e) was intended to apply." Id. at

176. And as a policy matter, requiring resort to Rule 59(e) for

this purpose "further[s] the important goal of avoiding piecemeal

appellate review of judgments." Id. at 177 (discussing Fed. R.

App. P. 4(a)(4)).4

Strictly speaking Osterneck is distinguishable. The

Court there was dealing with a belated attempt to secure a

discretionary award of prejudgment interest. See id. at 175.

Crowe seizes on this distinction, pointing out that this case —

like Aubin — involves a motion to add mandatory prejudgment

interest. That distinction carries little weight. For one thing,

the considerations relied upon by the Osterneck Court apply with

equal force to augmentations involving mandatory prejudgment

interest. For another thing, the Osterneck Court took pains to

note:
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We do not believe the result should be

different where prejudgment interest is

available as a matter of right. It could be

argued that where a party is entitled to

prejudgment interest as a matter of right, a

reexamination of issues relevant to the

underlying merits is not necessary, and

therefore the motion should be deemed

collateral in the sense we have used that

term. However, mandatory prejudgment

interest, no less than discretionary

prejudgment interest, serves to "remedy the

injury giving rise to the [underlying]

action," and in that sense is part of the

merits of the district court's decision.

Moreover, . . . "[w]hat is of importance here

is not preservation of conceptual consistency

in the status of a particular [type of motion]

as 'merits' or 'nonmerits,' but rather

preservation of operational consistency and

predictability . . . ." "Courts and litigants

are best served by the bright-line rule . . .

that a motion for prejudgment interest

implicates the merits of the district court's

judgment."

Id. at 176 n.3 (citations omitted).

To be sure, this footnote is dictum, but it is much more

than an offhand comment. We have recognized before, and today

reaffirm, that "[c]arefully considered statements of the Supreme

Court, even if technically dictum, must be accorded great weight

and should be treated as authoritative." United States v. Santana,

6 F.3d 1, 9 (1st Cir. 1993); accord McCoy v. MIT, 950 F.2d 13, 19

(1st Cir. 1991). The Osterneck footnote is purposeful,

straightforward, and soundly reasoned. All nine Justices

subscribed to it. And, finally, the footnote remains unblemished;

it has not been scarred by any subsequent Supreme Court
5We use the adjective "initial" inasmuch as we limit our

holding to those cases in which the judgment, prior to the

attempted revision, is altogether silent as to prejudgment

interest. We do not address the somewhat different scenario in

which the judgment awards interest but either fails to quantify the

amount or erroneously computes the amount. It may well be that, in

those circumstances, Rule 60(a) is an appropriate vehicle for a

subsequent motion to fix the size of the interest award. See,

e.g., Pogor, 135 F.3d at 388; Kosnoski, 33 F.3d at 379. This case

does not pose that question, and we leave it for another day.

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pronouncement. In these circumstances, we are unwilling to turn a

blind eye to the clear import of footnote 3.

Following Osterneck's lead, we conclude that Rule 59(e)

is the proper procedural vehicle for motions seeking to revise a

judgment to include an initial award of prejudgment interest

(whether mandatory or discretionary). This holding aligns us with

the three other courts of appeals that have addressed the question

post-Osterneck. The Tenth Circuit has held squarely, as do we,

that Rule 59(e), rather than Rule 60(a), is the proper vehicle for

motions seeking an initial award of mandatory prejudgment interest,

Capstick v. Allstate Ins. Co., 998 F.2d 810, 813 (10th Cir. 1993),

and two other circuits have indicated their assent to that

proposition, see Pogor v. Makita U.S.A., Inc., 135 F.3d 384, 388

(6th Cir. 1998) (dictum); Kosnoski v. Howley, 33 F.3d 376, 378 (4th

Cir. 1994) (dictum).5 To the extent that our earlier decision in

Aubin is inconsistent with this holding, it is overruled. See

supra note 1.
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Despite this square holding, our journey must continue.

Crowe asserts that he nonetheless was entitled to rely upon Aubin

because that decision had not been expressly overruled (and,

indeed, had been followed by the federal district court in Maine

even after the Osterneck decision). Any abrogation of Aubin

should, he suggests, be purely prospective, and should not have

force in this case.

As a general rule, judicial decisions are retroactive in

the sense that they apply both to the parties in the case before

the court and to all other parties in pending cases. James B. Beam

Distilling Co. v. Georgia, 501 U.S. 529, 535 (1991); Amann v. Town

of Stow, 991 F.2d 929, 934 (1st Cir. 1993) (per curiam). This rule

is absolute in the criminal context. Griffith v. Kentucky, 479

U.S. 314, 328 (1987). In civil cases, however, the rule admits of

a narrow equitable exception. See Chevron Oil Co. v. Huson, 404

U.S. 97, 106-07 (1971); see also Am. Trucking Ass'ns, Inc. v.

Smith, 496 U.S. 167, 178 (1990) (plurality op.) (reaffirming

preeminence of Chevron Oil in the civil context post-Griffith).

The exception works along the following lines. A court

in a civil case may apply a decision purely prospectively, binding

neither the parties before it nor similarly situated parties in

other pending cases, depending on the answers to three questions.

First: does the court's decision announce a new and unexpected

rule of law, by, say, overruling settled precedent on which the
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parties may have relied? Second: does the history of the

jurisprudence in the affected area of the law, together with the

new rule's purpose and effect, counsel for or against retroactive

application? Third: would retroactive application give rise to a

substantial inequity? Chevron Oil, 404 U.S. at 106-07. Selective

prospectivity, however, is not permissible; if a new rule is

applied to the parties in the rule-creating case, then it must be

applied retroactively to similarly situated parties in all pending

cases. Harper v. Va. Dep't of Tax., 509 U.S. 86, 97 (1993). In a

civil case, then, a court has only two available options: pure

prospectivity or full retroactivity. Glazner v. Glazner, 347 F.3d

1212, 1218 (11th Cir. 2003) (en banc); George v. Camacho, 119 F.3d

1393, 1399 n.9 (9th Cir. 1997) (en banc).

We find this case a suitable candidate for purely

prospective application of a new rule. In jettisoning Aubin, we

set aside binding circuit precedent that authorized submission of

initial motions for mandatory prejudgment interest under Rule

60(a). Although the Osterneck dictum presaged the demise of the

Aubin rule, Osterneck did not expressly abrogate Aubin. Thus,

Aubin remained good law in this circuit. Bolduc has pointed to no

opinion at either the circuit or district level that raised the

possibility that Aubin was lingering on life support. Typical

cases, such as the decisions in Mirra Co. v. Maine School

Administrative District No. 35, No. 01-165, 2003 WL 21026786, at *2
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(D. Me. May 6, 2003) and Lewis v. City of Brockton, Civ. No. 85-

1158, 1990 WL 26840, at *1 (D. Mass. Feb. 23, 1990), cite

confidently to Aubin, and proceed to apply it with no mention of

the Osterneck dictum. Under these circumstances, Crowe's reliance

on Aubin was understandable and the first prong of the Chevron Oil

test is, therefore, satisfied. See Glazner, 347 F.3d at 1220;

George, 119 F.3d at 1401.

The second Chevron Oil factor also counsels against

retrospective application here. The newly minted requirement that

mandatory prejudgment interest motions must be brought pursuant to

Rule 59(e) is meant to provide parties with clear direction and

certainty in litigating their claims. Applying the rule

retroactively to parties who justifiably have relied on a previous

rule does not advance any discernible goal.

The final Chevron Oil signpost points in the same

direction. We think that it would be patently unfair to subject a

party to a forfeiture for assiduously following binding circuit

precedent. See George, 119 F.3d at 1399 ("[N]o court has ever

applied a change to a procedural rule in a manner that serves to

forfeit a litigant's substantive rights when that litigant had

fully complied with the provisions of the rule as it existed at the

time he acted.") (emphasis in original); see also Wagner v. Daewoo

Heavy Indus. Am. Corp., 314 F.3d 541, 544-45 (11th Cir. 2002) (en
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banc) (refusing to apply new rule restricting right to amend

pleadings retroactively).

Our conclusion in favor of purely prospective application

fits well with cases that change the allotted time in which to make

a filing, but refuse to apply the new rule retroactively. For

example, when a decision replaces a limitations period previously

established in circuit precedent with a new, less generous rule of

timeliness, courts regularly have refused to apply the new rule

retroactively if doing so would bar an action timely brought under

the prior law. See, e.g., St. Francis Coll. v. Al-Khazraji, 481

U.S. 604, 608-09 (1987); Chevron Oil, 404 U.S. at 107. Another

example is George, in which the Ninth Circuit overturned circuit

precedent that had allowed litigants in the Northern Mariana

Islands an additional seven days within which to file notices of

appeal. Despite the fact that the overruled precedent was based on

a flat misreading of the applicable local rule, the George court

made its decision purely prospective and refused to apply the new

interpretation to bar the appellant's appeal. 119 F.3d at 1395-96.

That ends this aspect of the matter. Although we hold

that motions to augment previously entered judgments by adding

mandatory prejudgment interest must be brought under Rule 59(e) and

therefore must meet that rule's ten-day filing requirement, we

direct that our holding be applied in a purely prospective manner.

Consequently, this holding does not affect Crowe. And because
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Crowe's motion was timely under then-binding circuit precedent, we

affirm the district court's award of prejudgment interest.

III. ATTORNEYS' FEES

We turn next to the decision awarding Crowe the

attorneys' fees incurred in prosecuting Crowe II. The American

rule, followed in Maine, generally requires that each party

compensate his or her own lawyers. Alyeska Pipeline Serv. Co. v.

Wilderness Soc'y, 421 U.S. 240, 247 (1975); Jackson v. Inhabitants

of Searsport, 456 A.2d 852, 855-56 (Me. 1983). This rule, like

almost every general rule, admits of various exceptions. One

exception is that prevailing parties are entitled to attorneys'

fees if the parties agreed by contract to a fee-shifting

arrangement. Jackson, 456 A.2d at 856.

In this case, the district court concluded that the

documents memorializing the transaction authorized the shifting of

fees. Bolduc challenges this conclusion.

There are three agreements which, taken together, govern

the arrangements between Crowe and Bolduc. The centerpiece is an

agreement dated December 8, 1995 among the Crowes, Bolduc, and the

Operating Company. In it, Crowe agreed to transfer all of Crowe

Rope's assets to the Operating Company and the real estate to

another of Bolduc's nominees in satisfaction of the Fleet debt.

The same agreement bound Bolduc and the Operating Company to pay

the Crowes the $40,000 lifetime annuity and the $60,000
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consulting/noncompetition fee. The second document, executed on

the same date, is a letter agreement between the Crowes and Bolduc.

The letter agreement is, broadly speaking, an indemnity agreement.

It imposed two obligations on Bolduc. First, it bound him to hold

the Crowes harmless against any loss in the event that a court

decree interrupted the payment of either the $40,000 annual stipend

or the $60,000 one-time fee. Second, it obligated Bolduc to defend

the Crowes against creditor suits or, alternatively, reimburse them

for the reasonable cost of defending such actions. See Crowe II,

334 F.3d at 135-38 (approving a jury finding that the letter

agreement imposed that obligation on Bolduc).

The third document is a guaranty (the Guaranty), executed

one week after the other two agreements. The Crowes, Bolduc, and

the Operating Company are parties to the Guaranty. In the portion

of the Guaranty that is of interest here, Bolduc guaranteed payment

to the Crowes of certain obligations due to them under the December

8 agreements.

This appeal centers on the district court's recension of

the Guaranty. In this inquiry, Maine law supplies the substantive

rules of decision (the agreements so stipulate, and the parties

concede the point). The district court held that the Guaranty was,

in pertinent part, unambiguous, and that the indemnity provisions

encompassed the costs incurred by Crowe. Whether a contract is

unambiguous presents a question of law subject to plenary review.
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Blackie v. Maine, 75 F.3d 716, 721 (1st Cir. 1996). So too the

interpretation of unambiguous contract terms. Id.

The interpretive principles that guide our decision are

familiar. A guarantee is simply a specialized form of contract

and, as such, is subject to the same canons of construction that

apply to other types of contracts. Handy Boat Serv., Inc. v.

Prof'l Servs., Inc., 711 A.2d 1306, 1308 (Me. 1998). Thus, the

language of the Guaranty should be interpreted "to effect the

parties' intentions as reflected in the written instrument,

construed with regard for the subject matter, motive, and purpose

of the agreement, as well as the object to be accomplished." Id.

Where, as here, the parties entered into several contracts in the

same time frame and for the purpose of completing a unitary

transaction, the contracts ought to be construed together. Bumila

v. Keiser Homes of Me., Inc., 696 A.2d 1091, 1094 (Me. 1997).

With these tenets in mind, we turn to the specific

provisions at issue here. Pertinently, the Guaranty provides in

paragraph 4:

Bolduc hereby unconditionally and irrevocably

guarantees the payment by the Operating

Company of all payments due to the Crowes or

either of them from the Operating Company

under and on account of the December 8, 1995

Agreement and pursuant to a certain letter

agreement also dated December 8, 1995 from

Bolduc to the Crowes, a true copy of which is

attached hereto and made a part hereof, as and

when said payments are due, including without

limitation, all compensation for
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noncompetition and consulting services and

[annuity] payments . . . .

The Guaranty also includes a fee-shifting provision stating that

"Bolduc agrees to pay all o [sic] the Crowe's [sic] reasonable

legal fees, costs, and expenses in collecting the Obligations or in

enforcing this Guaranty." The question before us reduces to

whether this fee-shifting provision, when read together with the

remainder of paragraph 4 and the December 8 agreements, obligates

Bolduc to pay Crowe the legal fees incurred in prosecuting Crowe

II.

The parties offer competing interpretations of the feeshifting provision. Crowe begins from the premise that he is

entitled to recoup legal fees expended in "enforcing this

Guaranty." In paragraph 4, Bolduc guarantees the making of

payments "pursuant to [the] letter agreement." One payment due

under the letter agreement was for the cost of defending Crowe I.

See Crowe II, 334 F.3d at 138. Since Bolduc initially refused to

make that payment and Crowe only recovered the sums due after

bringing suit, Crowe II should be characterized as an action to

enforce Bolduc's obligation under paragraph 4. Hence, Crowe is

entitled to recover legal fees expended in prosecuting that action.

Bolduc begins from the same premise — that Crowe is

entitled to legal fees expended in "enforcing this Guaranty" — but

reaches the opposite conclusion. Under paragraph 4, Bolduc

"guarantees the payment by the Operating Company of all payments
6Leaving considerations of waiver to one side, such a

conclusion might have consequences. When a contract is ambiguous,

its interpretation becomes a question of fact, and the court

typically will look to extrinsic evidence to determine the parties'

intent. See Fashion House, Inc. v. K Mart Corp., 892 F.2d 1076,

1083 (1st Cir. 1989); Acadia Ins. Co. v. Buck Constr. Co., 756 A.2d

515, 517 (Me. 2000).

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due to the Crowes or either of them from the Operating Company

under and on account of the December 8, 1995 Agreement and pursuant

to [the] letter agreement." Bolduc reads this language as

restricting his liability to payments due from the Operating

Company to the Crowes. Since Crowe II was an action to collect a

payment Bolduc individually owed Crowe under the letter agreement

(not to collect a payment due from the Operating Company), it

should not be characterized as an action to enforce the Guaranty.

Hence, Crowe is not entitled to recover attorneys' fees for

prosecuting that action.

At first blush, it may seem that we are faced with an

ambiguous contract (although neither Crowe nor Bolduc subscribes to

that view).6 On further examination, however, that is not the

case. After all, a contract need not "negate every possible

construction of its terms in order to be unambiguous." Waxler v.

Waxler, 458 A.2d 1219, 1224 (Me. 1983). Nor is a contract

ambiguous "merely because a party to it . . . disputes an

interpretation that is logically compelled." Blackie, 75 F.3d at

721. In the last analysis, a contract is ambiguous only when its

terms, fairly construed, yield more than one reasonable
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interpretation. Lexington Ins. Co. v. Gen. Accid. Ins. Co., 338

F.3d 42, 47 (1st Cir. 2003); Blackie, 75 F.3d at 721.

In this instance, Bolduc's interpretation of the feeshifting provision is unreasonable. A contract ordinarily should

be interpreted so as to give force to all of its provisions.

Blackie, 75 F.3d at 722; Acadia Ins. Co. v. Buck Constr. Co., 756

A.2d 515, 517 (Me. 2000). It follows that an inquiring court

should, whenever possible, avoid an interpretation that renders a

particular word, clause, or phrase meaningless or relegates it to

the category of mere surplusage. Acadia Ins., 756 A.2d at 517. 

Here, the fatal flaw in Bolduc's argument is that it renders

nugatory paragraph 4's reference to the letter agreement.

According to Bolduc, his only obligation under paragraph

4 is to ensure payments due from the Operating Company. This

interpretation overlooks the fact that paragraph 4 applies not only

to payments "under and on account of the December 8, 1995

Agreement" but also to payments required "pursuant to [the] letter

agreement." The Operating Company is liable, under the main

December 8 agreement, to make the annuity and

consulting/noncompetition payments, and the Guaranty clearly

applies to those payments. But the Operating Company is not liable

for any payments under the letter agreement (it is not even a party

to that agreement). If we were to accept Bolduc's thesis,

paragraph 4's reference to payments "pursuant to [the] letter
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agreement" would be meaningless. That would contravene the rule

that, whenever possible, contracts should be construed to give

effect to every word, clause, and phrase. See Blackie, 75 F.3d at

722; Acadia Ins., 756 A.2d at 517.

Bolduc has offered nothing that would square his

construction of the Guaranty with the reference to the letter

agreement; he would simply have us read that reference out of the

contract. But we are not so struthious as to ignore plain

language, nor are we at liberty to disregard terms purposefully

inserted into an agreement by experienced businessmen. See

Mathewson Corp. v. Allied Marine Indus., Inc., 827 F.2d 850, 856

(1st Cir. 1987).

These principles apply with especial force when, as now,

an alternative reading exists that gives meaning to every word,

clause, and phrase. Blackie, 75 F.3d at 722. Crowe's

interpretation of paragraph 4 is an entirely plausible reading of

the language chosen by the parties. Because there is no room for

any reasonable difference of opinion as to the meaning of paragraph

4 in the context of this case, we hold that the Guaranty

unambiguously covers the indemnity payment due under the letter

agreement. That seals the deal: Crowe's successful prosecution of

Crowe II and his collection of a payment secured by the Guaranty
7Crowe's motion for fees was made pursuant to Fed. R. Civ. P.

54(d)(2), and the timing of the motion was dictated by the terms of

an agreement between the parties. In this proceeding, Bolduc has

not questioned either the amount of the fee award or the procedural

vehicle used to obtain it. We therefore eschew any discussion of

these matters.

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triggered Bolduc's duty to defray Crowe's attorneys' fees. The

district court did not err in awarding those fees to Crowe.7

IV. CONCLUSION

We need go no further. For the reasons elucidated above,

we affirm both the award of prejudgment interest and the award of

attorneys' fees.

Affirmed.