ALAN R. GALLOTTA & Another v. JEFFREY G. BURNS.

• Court: Massachusetts Appeals Court
• Decided: October 3, 2024
• Docket: 23-P-1317
• Status: Unpublished

Opinion

NOTICE: Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule 23.0, as appearing in 97 Mass. App. Ct. 1017 (2020) (formerly known as rule 1:28, as amended by 73 Mass. App. Ct. 1001 [2009]), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 23.0 or rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260 n.4 (2008).

COMMONWEALTH OF MASSACHUSETTS

APPEALS COURT

23-P-1317

ALAN R. GALLOTTA & another1

vs.

JEFFREY G. BURNS.2

MEMORANDUM AND ORDER PURSUANT TO RULE 23.0

The plaintiffs, Alan and Dianne Gallotta, filed a motor

vehicle negligence action in Superior Court. Following a trial,

the jury returned a verdict for the plaintiffs against the

defendant. Judgment entered awarding the plaintiffs $360,000 in

compensatory damages, $109,557 in prejudgment interest, and

$3,760.87 in statutory costs, for a total of $473,317.87. On

February 8, 2023, the defendant's insurer paid the plaintiffs

$168,199.45, in partial satisfaction of the judgment. The

defendant then moved pursuant to Mass. R. Civ. P. 59 (e), 365

Mass. 827 (1974) (rule 59 [e]), to amend the judgment based on

1 Dianne M. Gallotta.

2 Codefendant Marcia A. Burns is not a party to this appeal. this partial satisfaction, arguing that "reduction of the

judgment is necessary so that any post-judgment interest may be

properly calculated by the court going forward." The judge

allowed the motion, which he treated as one under Mass. R. Civ.

P. 60 (b) (6), 365 Mass. 828 (1974), and directed the clerk to

issue a new judgment providing that the defendant would pay

postjudgment interest on "the sum of $360,000.00 . . . from May

4, 2020 up to Feb. 8, 2023 (the date of the payment in the sum

of $168,199.45)" and that after February 8, 2023, postjudgment

interest would "run on the sum of $191,800.55." An amended

judgment entered computing the specific costs owed.

The plaintiffs moved for reconsideration, arguing that the

judge erred in ordering that the partial payment be applied only

to the damages portion of the judgment, and not first against

the accrued postjudgment interest. A second judge denied their

motion, stating that "awarding interest on money [the

plaintiffs] now do have would comprise an undue windfall."

We agree with the plaintiffs that, as amended, the judgment

contained "a particular and demonstrable error." M.K. v. D.B.,

102 Mass. App. Ct. 183, 187 (2023), quoting Audubon Hill S.

Condominium Ass'n v. Community Ass'n Underwriters of Am., Inc.,

82 Mass. App. Ct. 461, 470 (2012).3 In general, "trial judges

3 We reject the defendant's argument that the plaintiffs waived their challenge to the allocation of the partial payment

2 have discretion to consider the circumstances of each case . . .

when deciding whether and how to halt the accrual of

postjudgment interest." H1 Lincoln, Inc. v. South Washington

Street, LLC, 104 Mass. App. Ct. 256, 266 (2024). However, in

City Coal Co. of Springfield v. Noonan, 434 Mass. 709, 710

(2001) (City Coal III), the Supreme Judicial Court addressed how

a partial payment of a monetary judgment must be allocated among

principal, prejudgment interest, and postjudgment interest. In

that case, although the defendant contended that his partial

payment should be applied to "the principal portion of the

amount due" under the original judgment, the trial judge ordered

that it "be applied to the outstanding interest obligation

first, then to the principal." Id. at 713. The Supreme

Judicial Court agreed, citing the "well established" rule that

"when a debtor pays money to a creditor, absent any express

agreement to the contrary, the payment is first applied to the

outstanding interest obligation and then to principal." Id.,

by failing to raise the issue in their opposition to the defendant's rule 59 (e) motion. The defendant did not request in that motion that the partial payment be applied only to the $360,000 damages award. Rather, the issue arose only when the judge directed the clerk to apply the payment in that manner. The plaintiffs filed a timely motion for reconsideration of that decision and then appealed from its denial and the amended judgment.

3 quoting City Coal Co. of Springfield v. Noonan, 424 Mass. 693,

696 (1997) (City Coal II).

The holding in City Coal III is controlling here. Because

there is no "express agreement" between the parties "designed to

govern the allocation of funds among various sections of the

judgment," City Coal III, 434 Mass. at 713, it was error for the

first judge to order that the partial judgment be applied

exclusively to the $360,000 damages award, so that the defendant

would no longer have to pay postjudgment interest on that

portion of the damages award. Instead, the partial payment

should have been applied "to postjudgment interest first and

then to the remainder of the sum of the principal and

prejudgment interest." Id.4

We similarly disagree with the second judge's statement

that applying the partial payment in the manner required by City

Coal III will amount to an "undue windfall." Postjudgment

4 While the plaintiffs contend at one point that the partial payment should "first be applied against the statutory pre- judgment interest accrued, then accrued post-judgment interest, and finally . . . against the underlying judgment," City Coal III required only that the partial payment be initially applied to the accrued postjudgment interest and did not distinguish between "the remainder of the sum of the principal and prejudgment interest." City Coal III, 434 Mass. at 713. That is understandable because, under the Supreme Judicial Court's earlier holding in City Coal II, 424 Mass. at 695, postjudgment interest must be "calculated on the amount of the entire judgment (including prejudgment interest)."

4 interest "serves to compensate the prevailing party for any

delay in payment," and it "accrues daily . . . until the

judgment is fully satisfied" (citations omitted). Governo Law

Firm LLC v. Bergeron, 487 Mass. 188, 201 (2021). Here,

postjudgment interest will continue to accrue on only that

portion of the judgment that the defendant has not yet paid, not

on money that the plaintiffs have received.

Conclusion. We vacate the amended judgment dated May 5,

2023, and remand the matter to the Superior Court for entry of a

new amended judgment consistent with this memorandum and order.

So ordered.

By the Court (Meade, Hershfang & Toone, JJ.5),

Clerk

Entered: October 3, 2024.

5 The panelists are listed in order of seniority.