Mark A. Schaefer v. Spider Staging Corp. , 275 F.3d 735 ( 2002 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 01-1008
No. 01-2216
No. 01-2594
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Mark A. Schaefer, *
*
Plaintiff - Appellant, *
*
v. *
*
Spider Staging Corporation, *
*
Defendant - Appellee/Cross- *
Appellant, *
*
v. *
*
Schaefer & Sons Roofing, Inc., * Appeals from the United States
* District Court for the
Third Party Defendant - * Eastern District of Missouri.
Appellant/Cross-Appellee. *
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No. 01-1617
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Spider Staging Corporation, *
*
Appellee, *
*
v. *
Schaefer & Sons Roofing, Inc., *
*
Appellant. *
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Submitted: September 11, 2001
Filed: January 7, 2002
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Before LOKEN, RICHARD S. ARNOLD, and FAGG, Circuit Judges.
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LOKEN, Circuit Judge.
These four consolidated appeals arose out of an accident in which roofers Mark
Schaefer and Wayne Rothgeb, employees of Schaefer and Sons Roofing, Inc.
(“Schaefer Roofing”), were injured when a scaffolding platform rented from Spider
Staging Corporation (“Spider Staging”) collapsed. Rothgeb fell twenty-five feet
before safety equipment stopped his fall. Schaefer fell four feet and then struck the
side of the building they were re-roofing. Schaefer and Rothgeb filed separate
negligence actions against Spider Staging in the Eastern District of Missouri. The
cases were assigned to different District Judges. Spider Staging filed a third party
claim against Schaefer Roofing in each action, seeking indemnity under a provision
of the equipment rental agreement.
After trial of Mark Schaefer’s case, the jury found Spider Staging seventy-five
percent at fault and Schaefer twenty-five percent at fault. The jury awarded damages
of $1,750,000, for a net award of $1,313,000. District Judge E. Richard Webber
concluded the verdict was excessive and granted Spider Staging’s motion for new
trial or a remittitur, ordering a new trial unless Schaefer accepted a net award of
$200,000. Schaefer refused to accept $200,000, and the case was retried. The second
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jury awarded Schaefer $30,000. In Case No. 01-1008, Schaefer appeals the district
court’s order granting a remittitur or a new trial.
Prior to Schaefer’s first trial, Judge Webber granted summary judgment on
Spider Staging’s indemnity claim against Schaefer Roofing. Following the second
trial, Judge Webber awarded Spider Staging $315,358.62 for the costs and attorney’s
fees incurred by Spider Staging in defending Schaefer’s action. In Case No. 01-2216,
Schaefer Roofing appeals these rulings. In Case No. 01-2594, Spider Staging cross
appeals the district court’s refusal to grant prejudgment interest on this award.
Wayne Rothgeb settled with Spider Staging before trial. District Judge Carol
E. Jackson granted summary judgment on Spider Staging’s indemnity claim against
Schaefer Roofing, relying on Judge Webber’s earlier ruling construing the same
equipment rental agreement. Judge Jackson awarded Spider Staging $185,752.34 for
its loss in defending Rothgeb’s claim -- $130,000 to fund the Rothgeb settlement plus
$55,752.34 in costs and attorney’s fees in defending the Rothgeb lawsuit. Judge
Jackson allowed prejudgment interest on the total award. In Case No. 01-1617,
Schaefer Roofing appeals the grant of indemnity, the amount of attorney’s fees
awarded, and the award of prejudgment interest.
We affirm all but the award of prejudgment interest in Case No. 01-1617.
I. The Remittitur Issue.
Following Mark Schaefer’s first trial, Judge Webber granted Spider Staging
relief from the jury’s $1,750,000 compensatory damage award by ordering a
remittitur to $200,000 or a new trial. In reaching that decision, the court applied
Missouri substantive law to determine whether the jury’s award was excessive. But
the court looked at all the trial evidence, consistent with federal law standards
governing trial court review of a jury verdict. See Dominium Mgmt. Serv., Inc. v.
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Nationwide Housing Group, 195 F.3d 358, 366 (8th Cir. 1999) (“the district court
may rely on its own reading of the evidence and grant a new trial even where
substantial evidence exists to support the verdict”).
On appeal, Mark Schaefer argues the district court erred by failing to review
the evidence in the light most favorable to the verdict holder, as Missouri law
requires. He cites no direct authority for the contention that state law governs this
issue. The argument is without merit. In Gasperini v. Center for Humanities, 518
U.S. 415, 426-38 (1996), the Supreme Court confirmed that state law substantive
standards that do not conflict with the commands of the Seventh Amendment must
be followed in reviewing jury verdicts in diversity cases. But the decision whether
to grant a remittitur -- unlike the legal standard to be applied in making that decision
-- “is a procedural matter governed by federal, rather than state, law.” Parsons v. First
Investors Corp., 122 F.3d 525, 528 (8th Cir. 1997) (quotation omitted). As the
Supreme Court explained in the context of a punitive damages award:
In a diversity action . . . the propriety of an award of punitive damages
for the conduct in question, and the factors the jury may consider in
determining their amount, are questions of state law. Federal law,
however, will control on those issues involving the proper review of the
jury award by a federal district court . . . . [T]he role of the District Court
is to determine whether the jury’s verdict is within the confines set by
state law, and to determine, by reference to federal standards developed
under Rule 59, whether a new trial or remittitur should be ordered.
Browning-Ferris Indus. of Vermont, Inc. v. Kelco Disposal, Inc., 492 U.S. 257, 278-
79 (1989). Thus, in this case, Judge Webber applied the correct substantive and
procedural standards in determining that a remittitur was required. His order of
March 23, 2000, granting Spider Staging a remittitur or new trial is affirmed.
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II. Indemnity Issues.
The equipment rental agreement between Spider Staging and Schaefer Roofing
included an indemnity provision in which Schaefer Roofing agreed to indemnify
Spider Staging, even for Spider Staging’s own negligence.
[Schaefer Roofing] agrees to indemnify [Spider Staging] and to hold
[Spider Staging] harmless from any and all claims, actions, suits,
proceedings, costs, expenses, damages and liabilities, including costs of
suits and attorney’s fees, asserted by any person . . . arising out of, or
connected with the use, erection, maintenance and possession of
equipment by [Schaefer Roofing], including, without limitation,
improper use or lack of use of proper safety equipment, and also
including any acts of negligence by [Spider Staging] in connection with
the equipment, and for any defects in said equipment for which [Spider
Staging] might otherwise be liable which may be claimed to have
caused, contributed to, or be a concurrent cause of any claimed injury or
damage. This indemnification includes the claims of any employees of
[Schaefer Roofing] . . . .
(Emphasis added.) In Mark Schaefer’s lawsuit, Judge Webber granted summary
judgment in favor of Spider Staging on its indemnity claim against Schaefer Roofing,
applying the proper standards for the grant of summary judgment and concluding that
(i) the indemnity provision is enforceable because the agreement to indemnify Spider
Staging for its own negligence was “clear and unequivocal,” as Missouri law requires,
see Kansas City Power & Light Co. v. Federal Construction Corp., 351 S.W.2d 741,
745 (Mo. 1961); (ii) the provision clearly applies to Schaefer’s claim; and (iii) the
rental equipment agreement was not signed by Mark Schaefer on behalf of Schaefer
Roofing under duress or undue influence. Schaefer Roofing appeals those rulings.
After careful review of the record, we reject Schaefer Roofing’s contentions for the
reasons stated in Judge Webber’s thorough Memorandum and Order dated October
7, 1999. See 8th Cir. Rule 47B; United States Fid. & Guar. Co. v. Housing Auth. of
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the City of Poplar Bluff, 114 F.3d 693, 695-98 (8th Cir. 1997) (affirming summary
judgment enforcing an indemnity agreement).
In Wayne Rothgeb’s lawsuit, Schaefer Roofing appeals Judge Jackson’s grant
of summary judgment in favor of Spider Staging on its indemnity claim, based upon
Judge Webber’s earlier decision. In the two cases, Spider Staging seeks indemnity
under the same equipment rental agreement for two personal injury claims arising out
of the same accident. We have now affirmed Judge Webber’s grant of summary
judgment on Spider Staging’s indemnity claim in the Mark Schaefer case. Judge
Jackson’s parallel ruling is likewise affirmed.
III. Attorney’s Fee Issues.
The indemnity provision in the equipment rental agreement entitled Spider
Staging to recover its “costs of suits and attorney’s fees.” In Mark Schaefer’s lawsuit,
Judge Webber awarded Spider Staging $315,358.62 in costs and fees. In Wayne
Rothgeb’s lawsuit, Judge Jackson awarded $185,752.34, including $55,752.34 in
costs and attorney’s fees.
1. Reasonableness. Schaefer Roofing appeals both awards, arguing the
amounts awarded were unreasonable. See Missouri ex rel Chase Resorts, Inc. v.
Campbell, 913 S.W.2d 832, 835 (Mo. App. 1996) (“reasonableness is an implied term
in every contract for attorney’s fees”). Though acknowledging that we review
attorney’s fee awards for abuse of discretion, Schaefer Roofing urges us “to scrutinize
the services rendered . . . and make a finding based upon a reasonable valuation of the
services.” We decline to do so. In each case, Spider Staging submitted detailed
billing records to the district court. Judge Webber and Judge Jackson carefully
considered those submissions under the standards prescribed for determining the
reasonable value of legal services under Missouri law. See Manfield v. Auditorium
Bar & Grill, Inc., 965 S.W.2d 262, 268 (Mo. App. 1998). Schaefer Roofing made no
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specific challenge to those records except an unsupported assertion that the hourly
billing rates were excessive. Lacking any detailed challenge, the District Judges did
not abuse their discretion in accepting Spider Staging’s submissions as reasonable for
the reimbursement of Spider Staging’s costs of suit and attorney’s fees in each case.
2. Prejudgment Interest. Under Missouri law, prejudgment interest is
awarded “for all moneys after they become due and payable, on written contracts, and
on accounts after they become due and demand is made . . . .” MO. REV. STAT.
§ 408.020. In the Mark Schaefer case, Judge Webber awarded prejudgment interest
from November 22, 2000, when Spider Staging first filed a claim for attorney’s fees
in the lawsuit. In the Wayne Rothgeb case, Judge Jackson awarded pre-judgment
interest from March 20, 1995, the date Spider Staging first demanded that Schaefer
Roofing defend the lawsuit under the indemnity agreement.
On appeal, Spider Staging argues that Judge Webber erred in refusing to order
prejudgment interest from March 20, 1995. This contention is without merit. Spider
Staging is correct that Missouri law allows prejudgment interest “on unliquidated
claims for the reasonable value of services rendered,” including legal services.
Farmland Indus., Inc. v. Frazier-Parrott Commodities, 111 F.3d 588, 592 (8th Cir.
1997). But the purpose of that rule is to compensate the claimant for the loss of the
use of money:
If the defendant is liable for the reasonable value of services he is under
a legal duty to liquidate the sum due and interest should be allowed
from the time when he should have paid.
Laughlin v. Boatmen’s Nat’l Bank of St. Louis, 189 S.W.2d 974, 979 (Mo. 1945)
(emphasis added). Here, although Spider Staging demanded that Schaefer Roofing
defend the Mark Schaefer lawsuit in March 1995, Spider Staging did not incur the
indemnified costs and attorney’s fees until much later. Moreover, so far as the record
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before us reveals, Spider Staging made no demand for the reimbursement of its costs
and attorney’s fee as these expenses were incurred. Thus, Judge Webber was well
within his discretion in limiting the award of prejudgment interest to the date Spider
Staging first filed its demand for reimbursement in the lawsuit. Accord Monsanto Co.
v. Gould Electronics, Inc., 965 S.W.2d 314, 318 (Mo. App. 1998) (prejudgment
interest limited to date claimant first submitted legal bills for reimbursement).
In the Rothgeb appeal, Schaefer Roofing argues that Judge Jackson erred in
awarding prejudgment interest on the entire judgment ($185,752.34) from March 20,
1995. Spider Staging correctly notes that Schaefer Roofing failed to preserve this
issue by objecting to the request for prejudgment interest in the district court. But we
may still review for plain error, that is, one that “seriously affects the fairness,
integrity, or public reputation of judicial proceedings.” United States v. Olano, 507
U.S. 725, 736 (1993). Judge Jackson did not discuss the prejudgment interest issue.
Spider Staging’s damages consisted of the amount paid to settle Rothgeb’s claim
($130,000), which was not incurred until some time after the May 2000 settlement,
and Spider Staging’s costs and attorney’s fees in defending the Rothgeb lawsuit
($55,752.34), which were incurred after March 20, 1995, and for which no demand
was apparently made until Spider Staging filed its demand for reimbursement in the
district court. In these circumstances, we conclude it was plain error to award
prejudgment interest that goes well beyond the compensatory purpose underlying MO.
REV. STAT. § 408.020. Cf. Decker v. Sullivan, 976 F.2d 456, 459 (8th Cir. 1992)
(though issue not properly raised, “fairness to the parties requires an accurately
calculated attorney’s fees award”).
IV. Conclusion
The judgment of the district court in the Mark Schaefer lawsuit (E.D. Mo. Case
No. 4:98CV01389 ERW) is affirmed. The judgment of the district court in the
Wayne Rothgeb lawsuit (E.D. Mo. Case No. 4:98CV1833 CEJ) is vacated, and the
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case is remanded for further consideration of the prejudgment interest issue; in all
other respects, the judgment is affirmed.
Finally, the record on appeal reflects that, on May 16, 2000, Mark Schaefer and
Schaefer Roofing’s liability insurer entered into a settlement agreement in which the
insurer agreed to pay Mark Schaefer $370,000. Mark Schaefer was an owner of
Schaefer Roofing, and Spider Staging has alleged, though not in the context of these
appeals, that this settlement rendered Schaefer Roofing insolvent and was therefore
a fraudulent transfer of its assets to avoid liability to Spider Staging under its
indemnity judgment. Nothing in our decision should be construed as a determination
of this issue. Any dispute between Spider Staging, Mark Schaefer, and Schaefer’s
attorney regarding which creditor had the prior or superior right to Schaefer
Roofing’s insurance proceeds must be decided in a proceeding other than these
diversity cases.
A true copy.
Attest:
CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.
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