Castles Auto & Truck Service, Inc. v. Exxon Corp. ( 2001 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
CASTLES AUTO AND TRUCK SERVICE, 
INCORPORATED,
Plaintiff-Appellee,
v.  No. 00-1453
EXXON CORPORATION, d/b/a Exxon
Company, USA,
Defendant-Appellant.

CASTLES AUTO AND TRUCK SERVICE, 
INCORPORATED,
Plaintiff-Appellant,
v.  No. 00-1543
EXXON CORPORATION, d/b/a Exxon
Company, USA,
Defendant-Appellee.

CASTLES AUTO AND TRUCK SERVICE, 
INCORPORATED,
Plaintiff-Appellee,
v.  No. 00-1991
EXXON CORPORATION, d/b/a Exxon
Company, USA,
Defendant-Appellant.

Appeals from the United States District Court
for the Western District of North Carolina, at Charlotte.
Richard L. Voorhees, District Judge.
(CA-90-166-3-V)
2 CASTLES AUTO AND TRUCK SERVICE v. EXXON CORP.
Argued: June 5, 2001
Decided: August 2, 2001
Before WILKINS, LUTTIG, and GREGORY, Circuit Judges.
Affirmed in part and remanded by unpublished per curiam opinion.
COUNSEL
ARGUED: Richard Edwin Morton, KILPATRICK STOCKTON,
L.L.P., Charlotte, North Carolina, for Appellant. Allen C. Brotherton,
KNOX, BROTHERTON, KNOX & GODFREY, Charlotte, North
Carolina, for Appellee. ON BRIEF: David G. Redding, Arthur H.
Jones, Jr., KILPATRICK STOCKTON, L.L.P., Charlotte, North Car-
olina, for Appellant.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
OPINION
PER CURIAM:
Castles Auto and Truck Service, Incorporated brought this action
against Exxon Corporation, asserting various claims arising from
Exxon’s alleged contamination of Castles’ property. Castles having
obtained a jury verdict, Exxon appeals primarily a district court order
reconsidering a prior order granting Exxon a new trial. Castles cross-
appeals the denial of its request for an award of prejudgment interest.
We affirm in part and remand for an award of prejudgment interest.
CASTLES AUTO AND TRUCK SERVICE v. EXXON CORP. 3
I.
Castles operated an automobile repair business adjacent to an
Exxon petroleum storage facility on property Castles purchased from
Exxon in 1981. In April 1989, Exxon discovered a discharge of petro-
leum into the soil at its facility and began efforts to clean up the leak
and monitor its effects. Subsequently, it was determined that Castles’
property also was contaminated with petroleum.
Castles brought this action against Exxon, claiming that its prop-
erty had been contaminated by the discharge of petroleum at Exxon’s
facility and alleging negligence, fraudulent misrepresentation, tres-
pass, nuisance, and statutory strict liability pursuant to the North Car-
olina Oil Pollution and Hazardous Substances Control Act
(OPHSCA) of 1978, see N.C. Gen. Stat. §§ 143-215.75 to -215.104
(1999). Exxon defended by asserting that Castles had contaminated its
own property.
At the conclusion of the trial,1 the jury returned a special verdict
form indicating that (1) Exxon negligently stored or handled petro-
leum products on its property, and its negligence proximately caused
damage to Castles; (2) Castles discharged petroleum or hazardous
products onto its own property, but was not negligent in so doing; (3)
Exxon did not trespass on Castles’ property; (4) Exxon did not create
a nuisance; and (5) Castles was entitled to recover $500,000 in com-
pensatory damages.
The trial judge subsequently granted Exxon’s motion for judgment
as a matter of law and set aside the jury verdict. As is relevant here,
the judge held that the finding of the jury that Exxon had not tres-
passed on Castles’ property compelled the conclusion that none of the
petroleum entered onto or physically affected Castles’ property. The
trial judge therefore concluded that the jury must have found that the
only injury suffered by Castles was a reduction in the market value
of its property, which would not support the recovery under North
Carolina law.
1
The district judge heard the OPHSCA claims as nonjury matters
simultaneously with the jury trial of the legal claims and found for Exxon
on the statutory claims.
4 CASTLES AUTO AND TRUCK SERVICE v. EXXON CORP.
This court reversed, holding that a new trial, not judgment as a
matter of law, is the proper remedy for inconsistent verdicts. See Cas-
tles Auto & Truck Serv., Inc. v. Exxon Corp., 125 F.3d 847, 1997 WL
585748, at **2 (4th Cir. 1997) (per curiam) (unpublished table deci-
sion). We therefore remanded for consideration of whether a new trial
was warranted. See id. We also rejected Exxon’s argument on cross-
appeal that the trial judge abused his discretion in admitting Castles’
expert testimony concerning the cost to clean up the contamination.
See id. at **2 n.3.
On remand, Castles moved for entry of judgment in its favor in the
amount of the verdict plus prejudgment interest. However, the trial
judge granted a new trial pursuant to Federal Rule of Civil Procedure
49(b) on the ground that the answers of the jury to the interrogatories
were inconsistent with each other and with the verdict. See Fed. R.
Civ. P. 49(b). The judge alternatively granted a new trial pursuant to
Federal Rule of Civil Procedure 59(a) on the ground that the jury
award would otherwise create a miscarriage of justice. As is relevant
here, the trial judge decided that Castles’ expert’s testimony concern-
ing the cost of remediation was too speculative to support the jury
verdict. See Fed. R. Civ. P. 59(a).
Before a new trial could be had, the trial judge recused himself and
a second judge was assigned to the case. Castles then moved before
the second judge for reconsideration of the trial judge’s grant of a new
trial and again sought entry of judgment in its favor for the amount
of the jury verdict plus prejudgment interest. The second judge con-
cluded that Exxon had waived the right to any relief under Rule 49
by not timely objecting to the inconsistency that it raised in its appeal
before this court. Nevertheless, this judge concluded that Exxon
would be entitled to a new trial pursuant to Federal Rule of Civil Pro-
cedure 50 if he determined that the interrogatory answers and jury
verdict were indeed inconsistent. See Fed. R. Civ. P. 50(b)(1)(B). As
for the trial judge’s ruling that the speculative nature of Castles’
expert testimony warranted the grant of a new trial under Rule 59, the
second judge determined that Exxon’s failure to make a timely
motion under that rule precluded any possible Rule 59 relief.
In a subsequent order, the second judge granted Castles’ motion to
reconsider the order granting a new trial. The second judge retreated
CASTLES AUTO AND TRUCK SERVICE v. EXXON CORP. 5
from his earlier conclusion that he had no authority to consider
Exxon’s entitlement to a new trial under Rule 59, stating that despite
the concern he had expressed previously regarding "the potential
applicability of Rules 49, 50, 51, and 59," he did "have the authority
to order a new trial under one or more of the above-mentioned Fed-
eral Rules of Civil Procedure."2 J.A. 199. Despite this change of opin-
ion, the second judge addressed only the issue of the reconcilability
of the verdicts, concluding that the findings submitted by the jury
could be reconciled with each other and with the damages award by
assuming that the jury was not aware that a subsurface invasion into
property could constitute a trespass on property. The second judge did
not explicitly discuss the trial judge’s alternative ruling that the specu-
lative nature of Castles’ expert testimony warranted the grant of a
new trial under Rule 59.
As a result of his reconsideration of the order granting Exxon a
new trial, the second judge "direct[ed] the Clerk to enter the judgment
upon the jury’s finding of negligence by [Exxon] and an award of
$500,000.00 to [Castles]." Id. at 202. Accordingly, judgment was
entered in that amount, and no prejudgment interest was awarded.
Exxon appealed to this court the order reconsidering the grant of
a new trial, and Castles cross-appealed the second judge’s failure to
award prejudgment interest. Castles subsequently moved the second
judge to amend the judgment to award prejudgment interest, see Fed.
R. Civ. P. 60(a), and Exxon moved the judge for relief from judgment
and for a new trial on the basis of newly discovered evidence and on
the basis that it was no longer equitable for the judgment to have pro-
spective application, see Fed. R. Civ. P. 60(b)(2), (5). The judge
denied Exxon’s Rule 60 motion but granted Castles’ motion, ruling
that the failure to award prejudgment interest was inadvertent. The
judge stated that he would amend the judgment to reflect an award of
prejudgment interest if afforded an opportunity to do so through a
limited remand from this court. Castles then moved this court for a
2
The judge correctly reconsidered his conclusion that the time avail-
able for Rule 59 relief had expired. A motion for new trial under Rule
59 may be made "no later than 10 days after entry of the judgment." Fed.
R. Civ. P. 59(b). Here, no judgment was entered against Exxon prior to
the trial judge’s ruling that a new trial was warranted under Rule 59.
6 CASTLES AUTO AND TRUCK SERVICE v. EXXON CORP.
limited remand to correct the judgment to add an award of prejudg-
ment interest, but we denied the motion.
Exxon appealed the order denying its Rule 60(b) motion as well as
the order in which the second judge stated his intention to amend the
judgment if given an opportunity to do so. That appeal was consoli-
dated with the parties’ other appeals.
II.
A.
Exxon first contends that the second judge erred in concluding that
the interrogatory answers submitted by the jury could be reconciled
with each other and with the verdict. Exxon argues in this regard that
the jury finding that Exxon did not "commit a wrongful trespass on"
Castles’ property is inconsistent with its award of damages to Castles
for negligence. J.A. 114. And, Exxon further maintains that the find-
ing of no trespass demonstrates that the jury did not find that Exxon
had physically invaded Castles’ property, an essential element in Cas-
tles’ negligence cause of action. We do not accept Exxon’s logic.
"When the use of a special verdict form leads to apparently con-
flicting jury findings, the court has a duty under the seventh amend-
ment to harmonize the answers, if it is possible to do so under a fair
reading of them." Gosnell v. Sea-Land Serv., Inc., 782 F.2d 464, 466
(4th Cir. 1986). "Where there is a view of the case that makes the
jury’s answers to special interrogatories consistent, they must be
resolved that way." Atlantic & Gulf Stevedores, Inc. v. Ellerman
Lines, Ltd., 369 U.S. 355, 364 (1962). For purposes of determining
reconcilability, it is immaterial that the interpretation of the jury
charge made by the jury "may have been legally incorrect." City of
Richmond v. Madison Mgmt. Group, Inc., 918 F.2d 438, 458 n.19 (4th
Cir. 1990). Whether special interrogatories and verdicts can be recon-
ciled is a question of law that we review de novo. See Norris v. Sysco
Corp., 191 F.3d 1043, 1047 (9th Cir. 1999), cert. denied, 528 U.S.
1182 (2000).
To reconcile the finding that Exxon did not trespass "on" Castles’
property with a finding that Exxon’s petroleum spread into Castles’
CASTLES AUTO AND TRUCK SERVICE v. EXXON CORP. 7
property, we need only assume, as did the second judge, that the jury
was not aware that a subsurface invasion into property could consti-
tute a trespass "on" the property. J.A. 114. Although Exxon argues
that North Carolina law provides that even a subsurface invasion can
constitute a trespass, that legal proposition is irrelevant here since the
jury was not so informed. See City of Richmond, 918 F.2d at 458 n.19.
Accordingly, the second judge correctly concluded that the findings
of the jury were not inconsistent with each other or with the general
verdict.
B.
Exxon next contends that the second judge erred in reconsidering
the trial judge’s grant of a new trial because the trial judge correctly
based his ruling in part on a reconsideration of the admissibility of
Castles’ expert’s testimony, and the second judge should have
deferred to that decision. Castles maintains that the trial judge did not
reconsider his decision to admit its expert’s testimony, and therefore
argues that whether such a ruling would have been within the trial
judge’s discretion is irrelevant.
We agree with Castles that the trial judge never reconsidered his
evidentiary ruling. In his order granting a new trial, the trial judge
stated that a new trial was required because "the damage award was
based on mere speculation." J.A. 145. The trial judge explained,
The only estimate of damages was a guess from one of
plaintiff’s experts, whom this court doubts would survive as
a witness if his testimony were examined under Daubert v.
Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993).
Forcing a party to pay damages that were supported only by
the guess of one witness would loose a miscarriage of jus-
tice to which this court shall not be a willing party.
Id. (emphasis added). As the emphasized text indicates, the trial judge
explicitly stated that he had not reexamined the admissibility of the
testimony. Rather, his concern was that a damages award based only
on that unpersuasive testimony would work a miscarriage of justice
to Exxon. Having rejected both of Exxon’s arguments on which it
8 CASTLES AUTO AND TRUCK SERVICE v. EXXON CORP.
bases its contention that the second judge erred in reconsidering the
grant of a new trial, we affirm the second judge’s order.
III.
Following remand from this court, Exxon deposed Castles’ expert.
When questioned concerning the existence of a drain pipe crossing
Castles’ property, the expert testified that if such a pipe existed, there
would be reason to suspect that there was a source of contamination
of Castles’ property for which Exxon was not responsible. Exxon sub-
sequently moved for a new trial in light of this newly discovered evi-
dence and on the ground that it was no longer equitable for the
judgment against it to have prospective application. See Fed. R. Civ.
P. 60(b)(2), (5). It now challenges the denial of that motion by the dis-
trict court. We will address the application of subsections (b)(2) and
(b)(5) seriatim.
A.
First, the second judge correctly denied any relief under Rule
60(b)(2), which provides for relief based on "newly discovered evi-
dence which by due diligence could not have been discovered in time
to move for a new trial under Rule 59(b)." Fed. R. Civ. P. 60(b)(2).
Exxon concedes that by March 28, 2000, it possessed the evidence
that it claims was "newly discovered." Because that date was only six
days after the judgment was entered, Exxon was still within the 10-
day time period within which it could have moved for a new trial. See
Fed. R. Civ. P. 59(b).
B.
The second judge also correctly held that Rule 60(b)(5) provided
no basis for relief. As is relevant here, Rule 60(b)(5) allows a district
court to relieve a party from a judgment when "it is no longer equita-
ble that the judgment should have prospective application." Fed. R.
Civ. P. 60(b)(5). Here, however, the judgment had no prospective
application, but rather, was only a simple money judgment. See 12
James Wm. Moore et al., Moore’s Federal Practice § 60-47[1][b] (3d
ed. 2000) (explaining that simple money judgments have no prospec-
CASTLES AUTO AND TRUCK SERVICE v. EXXON CORP. 9
tive application, even when they have not yet been satisfied, and
therefore are not subject to Rule 60(b)(5) motions). We therefore con-
clude that the second judge properly denied Exxon’s Rule 60 motion.3
IV.
On cross-appeal, Castles argues that the second judge erred in fail-
ing to award prejudgment interest. Exxon maintains that this issue is
not properly preserved for our review because no district judge ever
explicitly denied Castles’ request for prejudgment interest and Castles
made no timely post-trial motion requesting a ruling. We disagree
with Exxon and hold that Castles adequately raised the issue by
repeatedly requesting prejudgment interest in its motions for judg-
ment in the years following remand from this court. See Bel-Bel Int’l
Corp. v. Community Bank of Homestead, 162 F.3d 1101, 1111 (11th
Cir. 1998). Having requested an award of prejudgment interest on
several occasions, Castles was not required to seek a post-trial ruling
in order to preserve the issue for appeal. See Charter Co. v. United
States, 971 F.2d 1576, 1581 (11th Cir. 1992).
As for the merits of the issue, Castles’ entitlement to an award of
prejudgment interest is clear. See N.C. Gen. Stat. § 24-5(b) (1999)
(stating that an award of compensatory damages in a non-contract
action "bears interest from the date the action is commenced until the
judgment is satisfied"). Although Exxon inexplicably maintains that
§ 24-5(b) is discretionary, we conclude that the statute is unambigu-
ously mandatory. We therefore remand to the district court for an
award of prejudgment interest.4
3
We note that even if Rule 60(b)(2) or 60(b)(5) otherwise applied,
Exxon still would not be entitled to relief. "[B]efore a party may seek
relief under Rule 60(b), a party first must show timeliness, a meritorious
defense, a lack of unfair prejudice to the opposing party, and exceptional
circumstances." Dowell v. State Farm Fire & Cas. Auto. Ins. Co., 993
F.2d 46, 48 (4th Cir. 1993) (internal quotation marks omitted). Exxon
clearly has not made these showings.
4
Because of our disposition of this issue, we do not address Exxon’s
argument that the district court erred in its "attempt to add prejudgment
interest under Rule 60." Supp. Br. of Appellant Exxon Mobil Corp. at 12.
10 CASTLES AUTO AND TRUCK SERVICE v. EXXON CORP.
V.
For all the foregoing reasons, we affirm the order reconsidering the
grant of a new trial, affirm the denial of Exxon’s Rule 60 motion, and
remand to the district court for an award of prejudgment interest.
AFFIRMED IN PART AND REMANDED