Opinion ID: 482453
Heading Depth: 2
Heading Rank: 2

Heading: Granting of Second Motion: Increase in Post-Judgment Interest

Text: 27 When the district court awarded damages to appellees on their counterclaim for money owed under the franchise agreements and the Gatlinburg lease, Judgment and Order, Sept. 3, 1982, the judgment was in a form submitted by appellees in February, 1982. It provided for post-judgment interest at the rate of six percent, the statutory rate when appellees submitted their proposed judgment in February. However, the controlling statute, D.C. Code Sec. 28-3302, was amended in March, 1982, and the applicable interest rate was actually fourteen percent when the court entered judgment in September. No one raised the issue of the statutory change in the interest rate. 28 In October, 1984, after the first appeal and our remand to the district court, appellants paid the judgment in full, including interest calculated at six percent. By this time, over two years had passed since entry of the judgment. One month later, appellees apparently realized their oversight and filed a motion asking the district court to amend its earlier judgment to provide for interest of fourteen percent. Appellants opposed this motion as being untimely under Fed.R.Civ.P. 60(b)(1), which establishes a one year deadline for any motion for relief from operation of a judgment on the grounds of mistake or inadvertence. The district court granted appellees' motion, ordering appellants to pay over $105,000 in additional interest. Memorandum Order, May 22, 1985. The court conceded that the error was due to inadvertence but reasoned that post-judgment interest was a creature of statute and therefore not subject to judicial modification. Id. at 5-6. It stated that, since it was undisputed that fourteen percent was the statutory rate at the time judgment was entered, and since the court in no way intended to limit appellees' recovery to less than the statutory rate, the proper remedy was to amend the judgment to conform with the statute. Id. In response to appellants' Rule 60(b)(1) argument, the court stated that it had the power to consider the motion under Rule 60(b)(6), which has no time limit. Id. at 6 n. 5. 29 We agree at the outset that post-judgment interest is a creature of statute. See 28 U.S.C. Sec. 1961 (1982). The version of Section 1961 in effect at all relevant times stated that such interest shall be calculated ... at the rate allowed by state law. The state law in question was D.C. Code Sec. 28-3302, which, as previously indicated, provided for six percent interest when appellees submitted their proposed judgment, but which had been subsequently amended and which provided for fourteen percent interest at the time judgment was entered. 30 However, the statutory nature of post-judgment interest does not, in and of itself, compel relief in all circumstances in which a judgment fails to conform to the statute. Under Fed.R.Civ.P. 60(b)(1), a court may relieve a party from a judgment that is based on mistake, inadvertence, surprise, or excusable neglect, but only on a motion made within one year of entry of the judgment. In the instant case, as the district court admitted and as seems readily apparent, the error was based on inadvertence. Thus, Rule 60(b)(1), with its one year time limitation, clearly applied. 31 The district court attempted to circumvent the apparent harshness of the one year limitation by reading Rule 60(b)(6) as permitting it to act in these circumstances. But the district court's interpretation of Rule 60(b)(6) is contrary to established law. Rule 60(b)(6) permits a court to grant relief from a final judgment for any other reason justifying relief.... (Emphasis added.) The courts have universally interpreted other to mean other than the reasons specified in subsections 60(b)(1)-60(b)(5), see, e.g., Klapprott v. United States, 335 U.S. 601, 614-15, 69 S.Ct. 384, 390-91, 93 L.Ed. 266 (1949), and it is generally accepted that cases clearly falling under Rule 60(b)(1) cannot be brought within the more generous Rule 60(b)(6) in order to escape the former's one year time limitation. See, e.g., Gulf Coast Building and Supply Co. v. International Brotherhood of Electrical Workers, 460 F.2d 105 (5th Cir.1972) (holding that when the district court mistakenly ordered pre-judgment interest and a motion to amend was made more than one year after entry of judgment, no relief was available under Rule 60(b)(6) because Rule 60(b)(1) clearly applied); see also Wright & Miller, 11 Federal Practice and Procedure Sec. 2864 (1973). Therefore, because Rule 60(b)(1) plainly applied, and because the motion for relief came over one year after the entry of judgment, we conclude that the district court could not properly entertain the motion, and hereby vacate the district court's order amending its earlier judgment. 32 Although we find that Rule 60(b)(1) fully and sufficiently supports our decision to vacate the district court's order, we do not view the decision as harsh to appellees. Appellees drafted and submitted the judgment to the district court, so they in fact caused the mistake in the first place. They accepted payment of that judgment without protest, and they did not raise the issue when the case was before this court on appeal the first time. Consequently, they could be deemed to have waived any statutory right to higher interest that they might have had. See Feaster Trucking Service, Inc. v. Kindsvater, Inc., 460 F.2d 180 (10th Cir.1972) (holding that where the proper rate of interest was eight percent but the court ordered six percent, movant had waived right to higher rate by not raising the issue earlier, in its petition for review); Clinton v. Joshua Hendy Corp., 264 F.2d 329 (9th Cir.1959) (holding that where interest was supposed to have run from the date of judgment, but movant never asked for it and had accepted full payment of the judgment without it, movant had forever waived his right to receive it). 33 Finally, we adamantly reject appellees' attempt to justify the district court's action by denominating the increase payment ordered as damages for delay. Regardless of whether they might be entitled to such relief, appellees never moved for damages (resulting from appellant's delay in satisfying the judgment while the first appeal was pending) and never submitted any evidence of such damages. Moreover, the district court never considered this issue. What was at issue was post-judgment interest. 34 Interest, like any other item of a judgment, must be sought and awarded. The statutory rate of interest serves as a ceiling; it does not operate as an automatic inflexible award that must accompany every money judgment. The denial effected by Rule 60(b)(1) in these circumstances is not unjust. 35