Opinion ID: 170933
Heading Depth: 2
Heading Rank: 1

Heading: Cost of Settling with Robinson

Text: The jury awarded GIT damages for the cost of settling with its subcontractors. It also awarded damages for the accounting, legal, clerical and other expenses associated with these settlements. In 1999, Robinson sued GIT and obtained a judgment in the amount of $4,699,674 (Robinson Judgment). [22] GIT's surety, Fireman's Fund, paid Robinson $3,200,000. Robinson later filed a claim in GIT's bankruptcy case for $3,805,866. GIT asked the jury to award $7,005,886 plus overhead, profit, and bond costs for its settlement with Robinson. MK filed a Rule 50(a) motion requesting judgment as a matter of law as to GIT's claims regarding the Robinson Judgment. The district court denied that motion. The jury awarded $5,831,485 for the settlement with Robinson and $715,451 for accounting, legal, and clerical expenses associated with Robinson's termination and settlement. Following the verdict, MK filed a Rule 50(b) motion, or alternatively, requested a remittitur. The court denied the motion. On appeal, MK claims as a matter of law, judgment should be entered for MK on all claims arising out of the Robinson Judgment. MK argues GIT has no obligation to pay Robinson or Fireman's Fund, and thus, it cannot recover from MK any sums related to the Robinson Judgment. Further, it states GIT has not incurred any costs associated with the Robinson Judgment. This argument mischaracterizes the procedural history of this case and the law. Robinson's and Fireman's Fund's claims against GIT were discharged in GIT's bankruptcy proceedings. A bankruptcy discharge operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover, or offset any such debt as a personal liability of the debtor whether or not discharge of such debt is waived. 11 U.S.C. § 524(a)(2); see also 11 U.S.C. § 1141(d)(1) (providing that a Chapter 11 reorganization discharges debtor from any debt arising before the date reorganization). As part of GIT's reorganization, however, Robinson's claims against GIT were discharged in exchange for a percentage of GIT's claim against MK. Thus, GIT has incurred a cost and obligation to Robinson. See Morrison Knudsen I, 175 F.3d at 1250 (explaining that payment of a settlement is not a prerequisite to incurring a cost). This obligation is still in effect today. Although GIT's obligations to Robinson and Fireman's Fund are contingent on the outcome of this litigation, that contingency has in fact occurred. GIT was awarded $5,831,485 for the costs associated with Robinson. Per the agreement, the proceeds will be distributed to Fireman's Fund to compensate it for the $3.2 million it paid to Robinson to satisfy the Robinson Judgment and to Robinson itself for amounts it has still not been compensated. Thus, the district court did not err in denying MK's motion for judgment as a matter of law.