Allianz Versicherungs v. Profreight Brokers Inc. , 99 F. App'x 10 ( 2004 )

United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT May 7, 2004
Charles R. Fulbruge III
Clerk
No. 03-20253
ALLIANZ VERSICHERUNGS, AG,
Plaintiff - Appellant,
versus
PROFREIGHT BROKERS INC., ET AL
Defendants,
PROFREIGHT BROKERS INC.,
Defendant - Appellee.
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Appeal from the United States District Court
for the Southern District of Texas
USDC No. H-00-2332
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Before HIGGINBOTHAM, DENNIS, and CLEMENT, Circuit Judges.
PER CURIAM:*
Appellant Allianz Versicherungs, AG, appeals from a judgment
limiting its recovery from Profreight Brokers, Inc. to fifty
dollars based on a contractual limitation of liability. Allianz
asserted below that Profreight waived its contractual limitation of
liability defense because it did not plead it as an affirmative
defense pursuant to FED. R. CIV. P. 8(c). Assuming Profreight’s
limitation of liability defense constituted an affirmative defense
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
No. 03-20253
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subject to Rule 8(c), the magistrate judge found that the defense
was not waived because Allianz was not prejudiced by Profreight’s
late assertion of it.
On appeal, Allianz claims that the court erred by (1) finding
that Profreight’s failure to plead limitation of liability as an
affirmative defense did not result in waiver; (2) applying the
contractual limitation of liability to limit its damages because
the magistrate judge based the damage recovery on negligence, not
contract; (3) admitting a contract into evidence that, while
providing the same limitation of liability, was not the actual
contract governing the transaction at issue; (4) finding that
Allianz failed to present admissible and competent evidence of its
recoverable damages; and (5) granting Profreight’s bill of costs.
For the following reasons, we AFFIRM.
FED. R. CIV. P. 8(c) provides that parties must plead all
affirmative defenses, and it is well-established that “[f]ailure to
follow this rule generally results in a waiver.”1 This rule,
however, is not without exception: “Although failure to raise an
affirmative defense under rule 8(c) in a party’s first responsive
pleading ‘generally results in a waiver . . . ., [w]here the matter
is raised in the trial court in a manner that does not result in
1
FED. R. CIV. P. 8(c); Allied Chem. Corp. v. Mackay, 695 F.2d
854, 855-56 (5th Cir. 1983).
No. 03-20253
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unfair surprise . . . technical failure to comply precisely with
Rule 8(c) is not fatal.’”2
Assuming without deciding that contractual limitation of
liability is an affirmative defense subject to FED. R. CIV. P. 8(c),
Profreight’s failure to plead it did not result in waiver because
no prejudice to Allianz resulted. The facts do not support
Allianz’s contention that prejudice resulted because it was denied
the benefit of discovery and it incurred unnecessary legal fees.
Profreight first raised this contention in its Joint Pretrial Order
on December 26, 2001, and trial occurred on March 18-19, 2002,
nearly three months later. The magistrate issued its final
judgment on February 11, 2003. The fact that Allianz had three
months to consider and prepare for the limitations defense and
adequate time after judgment to move to alter or amend the judgment
refutes Allianz’s assertion that it was prejudicially surprised.3
Moreover, the fact that the applicability of a contract provision
is a pure question of law belies Allianz’s assertion that it needed
more time for discovery. Finally, Allianz provides no authority
for its contention that a plaintiff can be prejudiced by incurring
more legal fees than it would have incurred if a defense fatal to
2
Giles v. General Elec. Co., 245 F.3d 474, 491-92 (5th Cir.
2001) (citing Allied Chem. Corp., 695 F.2d at 855-56).
3
See Giles, 245 F.3d at 492 (holding that no unfair surprise
could have resulted from a defense raised and heard “as a contested
issue of law in the joint pretrial order”).
No. 03-20253
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its claim had been raised earlier. With these considerations in
mind, we hold that the defense was not waived.
Second, Allianz’s claim that the court erred by applying the
contractual limitation of liability to damages based on
Profreight’s extra-contractual actions was not properly presented
below. Therefore, we review for plain error.4 “Under a plain
error analysis, the court can correct an error not raised at trial
only if there is (1) error, (2) that is plain, and (3) that affects
the appellant’s substantial rights, and further, if all three of
these conditions are met, the court may exercise its discretion to
notice the forfeited error only if (4) the error seriously affects
the fairness, integrity, or public reputation of judicial
proceedings.”5 Under this standard, even if the court erred in
applying the contractual limitation, the error did not affect
4
Industrias Magromer Cueros y Pieles S.A. v. Louisiana Bayou
Furs Inc., 293 F.3d 912, 921 (5th Cir. 2002). Allianz’s contention
that it properly raised the argument below by “object[ing] to the
application of the limitation provision generally” is insufficient
to preserve error. To preserve error, a party must put a court on
notice regarding the substance of the issue. See Nelson v. Adams
USA Inc., 529 U.S. 460, 469 (2000) (“It is indeed the general rule
that issues must be raised in lower courts in order to be preserved
as potential grounds of decision in higher courts. But this
principle does not demand the incantation of particular words;
rather, it requires that the lower court be fairly put on notice as
to the substance of the issue.”). Although Allianz argued below
that (1) Profreight’s contract defense was waived because not
pleaded, (2) the contractual provision was invalid because not
bargained for, and (3) Profreight, as a broker, could not limit its
liability, Allianz never argued that it was improper for the court
to limit “extra-contractual” damages based on a contract provision.
As a result, the argument was not properly preserved for plenary
review.
5
United States v. Solis, 299 F.3d 420, 449 (5th Cir. 2002).
No. 03-20253
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substantial rights and seriously affect the fairness, integrity, or
public reputation of judicial proceedings.
Third, Allianz claims that the court erred by enforcing the
limitation of liability because the contract was improperly
admitted into evidence, resulting in insufficient evidence to
support the court’s application of the contract. These claims were
not properly raised below, and are therefore reviewed for plain
error.6 Allianz concedes that it did not object to the contract’s
admission when it was offered, but contends that its later
objection to the contract as irrelevant is sufficient because the
contract’s inadmissibility was only established later during cross-
examination. FED. R. CIV P. 46 makes clear that “if a party has no
opportunity to object to a ruling or order at the time it is made,
the absence of an objection does not thereafter prejudice the
party.”7 The facts surrounding this case do not establish that
Allianz had no opportunity to object when the evidence was offered.
Allianz based its objection on the dates of the document, which
revealed that while the contract offered by Profreight may include
the same boilerplate limitation of liability as the contract
governing the disputed transaction, it was not the specific
contract at issue. The date of the offered contract appeared on
its face, and the date of the actual transaction was undisputed.
The grounds for the objection were not “revealed” during cross-
6
Louisiana Bayou Furs Inc., 293 F.3d at 921.
7
FED. R. CIV. P. 46.
No. 03-20253
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examination and Allianz cannot now seek plenary review.8 Because
any error did not affect substantial rights and seriously affect
the fairness, integrity, or public reputation of judicial
proceedings, there is no plain error.
Allianz next argues that the district court erred in rejecting
its evidence of recoverable damages. However, we need not consider
this issue because the contract’s limitation of liability clause
limits Allianz’s recovery to fifty dollars.
Finally, Allianz claims that the court erred by awarding costs
to Profreight as a prevailing party under Fed. R. Civ. P. 54(d)(1).
The “prevailing party” determination is a clear, mechanical one;
when a judgment is entered in favor of a party, it is the
prevailing party.9 Given that the court entered judgment for
Allianz, it is the prevailing party, and Profreight is not entitled
to costs under Fed. Rule Civ. P. 54(d)(1).
AFFIRMED in part, and REMANDED for consideration of Allianz’s
costs.
8
Allianz’s actions also violated Local Rule 46 of the
Southern District of Texas, requiring that “[o]bjections to
admissibility of exhibits must be made at least three business days
before trial by notifying the Court in writing of the disputes,
with copies of the disputed exhibit and authority.”
9
See Baker v. Bowen, 839 F.2d 1075, 1081, (5th Cir. 1988);
see also 10 James Wm. Moore et al., Moore’s Federal Practice ¶
54.101[3] (3d ed. 1998) (“[T]he prevailing party is the party in
whose favor judgment was entered, even if that judgment does not
fully vindicate the litigant’s position in the case.”).