USCA1 Opinion
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 97-1361
YVONNE GIL-DE-REBOLLO,
Plaintiff - Appellant,
v.
THE MIAMI HEAT ASSOCIATIONS, INC., ET AL.,
Defendants - Appellees.
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Nos. 97-1622
97-1830
YVONNE GIL-DE-REBOLLO,
Plaintiff - Appellee,
v.
THE MIAMI HEAT ASSOCIATIONS, INC., ET AL.,
Defendants - Appellants.
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APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Jos Antonio Fust , U.S. District Judge]
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Before
Lynch, Circuit Judge,
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Cyr, Senior Circuit Judge,
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and DiClerico, Jr.,* District Judge.
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* Of the District of New Hampshire, sitting by designation.
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Kevin G. Little, Jr., with whom David Efr n and Law Offices
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David Efr n were on brief for appellant.
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Ricardo F. Casellas, with whom Rodr guez & Casellas was on
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brief for appellees.
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March 5, 1998
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DICLERICO, District Judge. The plaintiff-appellant,
DICLERICO, District Judge.
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Yvonne Gil Bonar de Rebollo, was injured by defendant-appellee,
Wes Lockard, who portrays "Burnie," the mascot of co-defendant-
appellee, Miami Heat Limited Partnership.1 The plaintiff brought
a tort action seeking damages. In the first trial, the jury
awarded the plaintiff $10,000 but the trial court found that the
verdict was most likely the result of bias or compromise and set
it aside. After a second trial, the jury awarded the plaintiff
$50,000. The district court also awarded the defendants costs
which they incurred after an offer of judgment had been made and
awarded costs to the plaintiff as a prevailing party. In this
appeal, the plaintiff contends that she should have been granted
a third trial because the $50,000 damage award was insufficient
and the trial judge improperly excluded evidence. In their
cross-appeal, the defendants contend that (1) the district court
erred in granting a second trial; (2) given the fact that the
plaintiff ultimately received less than the amount the defendants
had proposed in an offer of judgment, they are entitled to
attorney's fees incurred after the offer; and (3) the trial court
should not have awarded the plaintiff costs incurred after an
offer of judgment. We agree with the district court's
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1 Florida Basketball Associates, Inc. is also a defendant to the
action. The record does not make clear the relationship between
defendant Miami Heat Limited Partnership and defendant Florida
Basketball Associates, Inc., but the parties have not
distinguished between them on appeal. Therefore, the court
refers to the Miami Heat Limited Partnership and Florida
Basketball Associates, Inc. throughout the remainder of this
opinion collectively as "the Heat."
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disposition of the case in all respects with the exception of its
ruling awarding costs to the plaintiff incurred after an offer of
judgment. Therefore, we affirm in part and reverse in part.
Factual and Procedural Background2
Factual and Procedural Background
_________________________________
On October 21, 1994, the plaintiff attended an
exhibition basketball game between the Miami Heat and the Atlanta
Hawks at the Roberto Clemente Coliseum. She was seated in the
front row as part of a group that had received complementary
tickets to the game. She had attended another exhibition game
under similar circumstances the prior year.
During a time-out, defendant Lockard, dressed as
Burnie, approached the plaintiff and grabbed her hand. He had
selected her at random to participate in a routine he planned to
perform as entertainment during the time-out. When he attempted
to pull her onto the floor, she resisted and loudly told him no.
He persisted, however, grabbing her left arm with both hands and
pulling, because in his experience people often were reluctant at
first but later changed their minds. Unbeknownst to either
party, the plaintiff's purse strap had fallen over the back of
her seat and was providing additional resistance to Lockard's
efforts. He pulled the plaintiff with such force, however, that
her purse strap broke and as a result she surged forward, falling
to the floor. Lockard took the plaintiff's sudden movement as a
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2 Because the plaintiff has challenged the sufficiency of the
damages awarded by the second jury, the court recounts the facts
relevant to damages in the light most favorable to the verdict.
See Molloy v. Blanchard, 115 F.3d 86, 88 (1st Cir. 1997).
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sign that she had changed her mind about participating and
dragged her by the arm to the center of the court. When he saw
that the plaintiff still did not wish to participate, he did not
further coerce her. She stood up, composed herself, and walked
off the court while he completed the routine alone. The
plaintiff was extremely upset by the incident and left the game
prior to its conclusion. She felt as though she had been
humiliated in front of the entire crowd.
The plaintiff suffered both physically and emotionally
as a result of the incident. She felt pain in her left arm and
shoulder as well as pain to a lesser extent throughout her body.
She also suffered a bruise on her left thigh. She did not,
however, break any bones or suffer any neurological damage.
After arriving at home, the plaintiff took pain medication and
applied ointment to her body. A few days later, she consulted an
orthopedist and a physiatrist in connection with her physical
injuries. She undertook physical therapy which had been
prescribed for her. Surgery was neither recommended nor
undertaken.
The plaintiff has been diagnosed with post-traumatic
tendonitis in her left shoulder, the primary symptom of which is
pain. She continues to experience pain in her left arm and
shoulder, which affects her when she engages in everyday
activities. The plaintiff takes pain medication on a regular
basis, and her condition is not expected to improve further. The
plaintiff's condition has required her to modify her behavior in
-5-
order to avoid tasks and activities that will exacerbate the
pain, particularly heavy lifting and certain repetitive
movements. However, she has a pre-existing condition in her back
that also periodically causes her pain for which she had
previously sought treatment. This pre-existing condition imposed
similar restrictions on her ability to perform certain activities
such as lifting heavy objects.
The plaintiff consulted with a psychiatrist for her
emotional distress. She feels that the event has had a
profoundly negative effect on her mental and emotional well-
being, which she attributes in part to her traditional
conservative upbringing. The plaintiff avoids large gatherings
and feels that her privacy and dignity have been injured by the
incident. She now takes anti-anxiety medications on a regular
basis. The defendants' expert testified that the emotional
difficulties experienced by the plaintiff were not permanent, but
instead represented a normal reaction to an adverse situation.
Experts for both parties agree that the plaintiff's condition
does not rise to the level of a recognized psychological
disorder. In addition to the distress caused by the incident,
the plaintiff had pre-existing emotional stressors, including
marital difficulty, that could account for some of her dysphoria.
Subsequent to the incident, the plaintiff brought
criminal charges against Lockard. She felt the need to confront
the people who she felt had wronged her. Lockard was found
guilty of misdemeanor battery. The plaintiff also brought this
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civil action against both Lockard and the Heat, Lockard's
employer. Her claim, brought pursuant to the court's diversity
jurisdiction, alleged that Lockard had negligently injured her in
violation of Puerto Rico law and that the Heat, as Lockard's
employer, was responsible for that injury.
Prior to the civil trial, the trial court ruled that
evidence of Lockard's criminal conviction would be unduly
prejudicial and precluded the plaintiff from introducing it. On
October 30, 1996, the plaintiff's case went to trial for the
first time. After approximately one and one-half hours of
deliberation, the jury returned a verdict in the amount of
$100,000 in favor of the plaintiff, but it found only the Heat
liable and not Lockard. The trial judge rejected the verdict
because the plaintiff had pursued only a theory of respondeat
superior liability against the Heat, and thus the Heat could not
have been found liable unless Lockard was liable as well. The
judge reinstructed the jury on the issue of liability and
directed it to continue deliberating.
After another hour, the jury sent a note to the court
requesting guidance on the amount of damages to which the
plaintiff was entitled. The trial judge instructed the jury to
review the instruction on damages the court had already given.
The jury deliberated for approximately another hour and then
returned a verdict that held both Lockard and the Heat liable.
However, the jury awarded the plaintiff only $10,000 in damages.
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The plaintiff filed a motion for a new trial and for
relief from judgment on November 14, 1996. On December 16, 1996,
the district court ruled that the jury's verdict was most
probably an impermissible verdict based on compromise or bias and
granted a new trial. See Gil de Rebollo v. Miami Heat Ltd.
___ _______________ ________________
Partnership, 949 F. Supp. 62, 64-65 (D.P.R. 1996). The trial
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court reasoned that three possibilities explained the jury's
reduction of the damage award to one-tenth the figure it had
selected initially: (1) the jury may have rationally
reconsidered its decision on damages when it was sent back to
deliberate further; (2) the jury may have thought Lockard
unaccountable for his interaction with the plaintiff but wanted
to compensate her anyway from the corporate deep pocket, and when
confronted with the requirements of respondeat superior, the jury
lowered the amount of damages which Lockard might be required to
pay, reflecting an improper compromise; or (3) the jury may have
thought that the plaintiff had suffered $100,000 damages but
tried to shield Lockard from having to pay because of an improper
bias in his favor, and when it realized it could not shield
Lockard, it lowered the amount of the verdict so that his
liability would be minimized. See id. at 64. The court found
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that the latter two alternatives, both improper, were more likely
than the first, which was proper, and granted a new trial. See
___
id. at 65.
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The second trial commenced on February 10, 1997. On
February 14, 1997, the jury returned a verdict for the plaintiff
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in the amount of $50,000, finding that both Lockard and the Heat
were liable. The plaintiff again filed a motion for a new trial,
asserting that the damages were insufficient, but the trial court
denied the motion.
During the course of the litigation, the parties made
several attempts to settle their dispute without a trial. The
plaintiff's initial demand in the case was for $1,000,000. On
October 7, 1996, the defendants made a written offer of judgment
under Federal Rule of Civil Procedure 68 ("Rule 68") to have
judgment entered against them in the amount of $80,000. The
plaintiff rejected the offer and countered with a demand of
$600,000 and a public apology. The defendants rejected this
proposal and the first trial began on October 30, 1996.
After the first trial, the defendants made a second
offer of judgment on January 14, 1997, in the amount of $70,000.
The plaintiff rejected the offer and countered with a demand of
$250,000, which the defendants rejected. On January 23, 1997,
the defendants made a third offer of judgment in the amount of
$100,000. The plaintiff also rejected that offer, demanding
$180,000. The $50,000 verdict obtained by the plaintiff in the
second trial was less than all three offers of judgment.
After the second trial, the district court awarded the
defendants $8,271.71 for costs incurred after the offer of
judgment pursuant to Rule 68. It denied the defendants' request
for attorney's fees under Puerto Rico Rule of Civil Procedure
44.1 ("Rule 44.1"), finding that the plaintiff had not conducted
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her case with temerity. The court awarded the plaintiff costs as
a prevailing party under Federal Rule of Civil Procedure 54 in
the amount of $7,894.84.
At the conclusion of this legal imbroglio, the
plaintiff filed a timely appeal. The defendants have raised
several issues on cross-appeal.
Discussion
Discussion
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The parties raise the following issues on appeal: (1)
the defendants claim that the trial court abused its discretion
by setting aside the $10,000 verdict in the first trial and
granting a new trial; (2) the plaintiff asserts that the jury's
verdict of $50,000 damages in the second trial was insufficient
and the trial court therefore abused its discretion by failing to
grant her motion for a third trial; (3) the plaintiff claims that
the trial court impermissibly excluded evidence of Lockard's
criminal misdemeanor conviction; and (4) the defendants assert
that the trial court erred in its award of costs and in its
failure to award attorney's fees. We discuss these claims
seriatim.
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I. Grant of the Second Trial
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The trial court granted the plaintiff's motion for a
second trial after it found that the jury possibly could have
properly reconsidered the amount of damages to be awarded, but
more likely had acted for an improper reason. The defendants
argue that the trial court should have accepted the $10,000
verdict and erred by granting the plaintiff's motion for a new
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trial. The court, they urge, should not have endeavored to
choose among the possible explanations for the jury's behavior.
As long as there was a plausible explanation for the jury's
conduct that was permissible, the defendants contend, the trial
court should not have granted a new trial.
This argument is unpersuasive. See Phav v. Trueblood,
___ ____ __________
Inc., 915 F.2d 764, 766 (1st Cir. 1990) (denial of new trial
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reviewed only for abuse of discretion). As the defendants
acknowledge, First Circuit precedent distinguishes between cases
where a jury's verdict is challenged as improper based only on a
damage award that allegedly fails to bear any rational relation
to the evidence of the damages presented at trial, see, e.g.,
___ ____
Correa v. Hospital San Francisco, 69 F.3d 1184, 1197-98 (1st Cir.
______ ______________________
1995) (verdict alleged to be excessive), cert. denied, 116 S.
____________
Ct. 1423 (1996); Milone v. Moceri Family, Inc., 847 F.2d 35, 37
______ ___________________
(1st Cir. 1988) (verdict alleged to be insufficient), and cases
where there is some evidence of an improper verdict based on
factors other than the amount of the damage award, see, e.g.,
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Skinner v. Total Petroleum, Inc., 859 F.2d 1439, 1446 (10th Cir.
_______ _____________________
1988), cited with approval in Phav, 915 F.2d at 768; Mekdici ex
_______________________ ____ __________
rel. Mekdici v. Merrell Nat'l Lab., 711 F.2d 1510, 1514 (11th
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Cir. 1983) (same). Where the allegation of an improper verdict
is based solely on the amount of the damage award, the
circumstances under which a trial court may overturn a verdict
are more limited. See, e.g., CIGNA Fire Underwriters Co. v.
___ ____ _____________________________
MacDonald & Johnson, Inc., 86 F.3d 1260, 1267 (1st Cir. 1996)
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(grant of a new trial appropriate where damages were easily
calculable and damage award exceeded maximum value of damages
claimed and did not take into account offset to damages); Torres-
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Troche v. Municipality of Yauco, 873 F.2d 499, 501 & n.6 (1st
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Cir. 1989) (suggestion that allegedly low damage award indicated
compromise verdict was speculation not meeting heavy burden of
showing entitlement to new trial). However, where evidence of an
improper verdict exists other than the amount of the jury award,
such as when a jury answers special questions in an inconsistent
manner, the trial court's discretion to grant a new trial is
broader. In such cases the court can consider all of the
circumstances surrounding the jury's verdict, including the
amount of the damage award, in determining whether or not the
jury reached an improper verdict. See Phav, 915 F.2d at 768-69.3
___ ____
The defendants acknowledge the distinction between
cases where the only evidence of a compromise verdict is an
allegedly insufficient damage award and cases where additional
evidence indicates a compromise, but they attempt to cast this
case as falling into the former rather than the latter category.
However, in this case the trial court's determination did not
turn solely on the amount of the verdict that the jury ultimately
returned. Rather, the ten-fold reduction by the jury of its
initial award of damages and the circumstances surrounding its
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3 Prior First Circuit cases, however, do not endorse the
proposition propounded by the defendants that an inadequate
damage award is an indispensable element of a compromise verdict.
See Phav, 915 F.2d at 768-69 (inadequate damages are potential
___ ____
evidence of compromise verdict, as are additional factors).
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determination of Lockard's liability provided the primary basis
for the trial court's determination that the verdict as finally
returned was motivated by compromise or sympathy. The verdict
form ultimately completed by the jury was free of any internal
inconsistency because it held Lockard and the Heat liable for
$10,000 damages suffered by the plaintiff. However, the sequence
of events preceding that verdict was properly considered by the
trial court as an indication that the jury reached the verdict
based on compromise or bias. See id. at 768 (odd chronology of
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jury deliberations one "telltale sign of a compromise verdict").
Therefore, the trial court had more latitude in this case in
exercising its discretion to overturn the jury's verdict than it
would have had in a case where the only basis for the grant of a
new trial was the alleged insufficiency of a damage award. See
___
Mekdici, 711 F.2d at 1513, cited with approval in Phav, 915 F.2d
_______ ______________________ ____
at 768.
The trial court determined that the sequence of events
leading up to the jury's final verdict in the first trial most
likely indicated that the jury had reached its verdict
improperly. The jury initially had assessed $100,000 in damages
against the Heat but did not find Lockard liable. A short time
after being told to deliberate further and requesting additional
guidance the jury determined that Lockard was liable but reduced
the amount of damages to $10,000. Based on the jury's behavior,
it was logical for the trial court to conclude that the jury
wanted to give the plaintiff something but it did not want to
-13-
hold Lockard personally liable for a $100,000 award. There is no
indication that the trial judge, who observed the trial, the
timing of the questions, and the results of the deliberations,
abused his discretion in arriving at this determination.4 See
___
Phav, 915 F.2d at 766. We therefore decline to overturn the
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trial court and to reinstate the initial $10,000 verdict.
II. Insufficiency of the Jury Verdict
_________________________________
The plaintiff's main contention on appeal is that the
trial court erred by failing to grant her motion for a new trial
following the second verdict, on the grounds that the damage
award of $50,000 is insufficient. As noted above, it is
comparatively more difficult to justify overturning a jury's
verdict where the only evidence that something has gone awry is
an allegedly insufficient damages award. Indeed, the jury "is
free to run the whole gamut of euphonious notes -- to harmonize
the verdict at the highest or lowest points for which there is a
sound evidentiary predicate, or anywhere in between -- so long as
the end result does not violate the conscience of the court or
strike such a dissonant chord that justice would be denied were
the judgment permitted to stand." Milone, 847 F.2d at 37. "At
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best, plaintiff's verdicts in personal injury cases are not
models of mathematical exactitude. Thus, the fact that a
particular award is a few dollars long or short would rarely (if
ever) translate into a manifest miscarriage of justice." Id. at
___
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4 In reaching this decision we intend no comment on the
sufficiency of the $10,000 damage award.
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41 n.7. We view the evidence in the light most favorable to the
jury's verdict, see Molloy v. Blanchard, 115 F.3d 86, 88 (1st
___ ______ _________
Cir. 1997), and will only overturn the jury's award and the trial
judge's ensuing refusal to grant a new trial for abuse of
discretion, see Correa, 69 F.3d at 1197.
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The record demonstrates that most of the damages
suffered by the plaintiff were intangible. "An appellate court's
normal disinclination to second-guess a jury's evaluation of the
proper amount of damages is magnified where, as here, the damages
entail a monetary valuation of intangible losses, and the trial
judge, having seen and heard the witnesses at first hand, accepts
the jury's appraisal." Id. Even accepting the plaintiff's
___
complaints uncritically, which the jury was not required to do,
her primary claims for damages are that (1) she suffers from
pain; (2) the quality of her life has been reduced because of her
pain and because of the measures she must take to avoid pain; and
(3) her dignity, self-image, and sense of well-being have been
adversely affected by the incident.
In addition to the intangible nature of the plaintiff's
injuries, the evidence in this case permitted the jury to find
that her injuries were not as severe as she claimed. The jury
could also have found that most of the plaintiff's physical pain
was caused not by the incident in question but by the plaintiff's
failure to obey her doctor's orders not to move heavy objects,
which orders were given in connection with her pre-existing back
injury. The jury was free to disbelieve as much of the
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plaintiff's expert and lay testimony as it wished. In short, the
plaintiff has provided no support for the proposition that the
jury's $50,000 verdict was so far beyond the range of acceptable
verdicts, based on the evidence presented at trial, that it
constituted a manifest miscarriage of justice. The district
court did not abuse its discretion by denying her motion for a
new trial.
III. Failure to Admit Evidence of Lockard's Conviction
_________________________________________________
The trial court ruled that evidence of Lockard's
criminal misdemeanor conviction was inadmissible because its
prejudicial effect substantially outweighed its probative value.
See Fed. R. Evid. 403. The plaintiff asserts that this ruling
___
was error. We review the district court's determination that the
evidence of Lockard's conviction should have been excluded for
abuse of discretion. See Kowalski v. Gagne, 914 F.2d 299, 306
___ ________ _____
(1st Cir. 1990).
The plaintiff places undue reliance on Kowalski, a case
________
which stands for the proposition that the district court has
discretion to admit evidence such as this. See id. However,
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Kowalski does not support the notion that the district court
________
abused its discretion in this case by failing to admit this
evidence. Indeed, as Kowalski makes clear, the district court's
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decision that the evidence was substantially more prejudicial
than probative was well within its discretion. See id.
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Here, the jurors were presented with sufficient
evidence to gauge the seriousness of Lockard's actions and their
-16-
effect on the plaintiff. In addition to the testimony of the
plaintiff and other witnesses, the episode was recorded by a
television camera and the tape was made available for the jury to
watch. The parties stipulated that Lockard was portraying the
mascot Burnie throughout the incident. The jury did not need
evidence of Lockard's criminal conviction to assess his role in
the incident. Under the circumstances, admission of Lockard's
criminal conviction would have allowed the jury to substitute the
judgment reached in the criminal proceeding for its own.
Furthermore, even assuming arguendo that the exclusion
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of the evidence was error, the error had no effect on the outcome
of the case. The only issue on which Lockard's conviction was
probative was the issue of his liability for the plaintiff's
injury. Both juries found Lockard liable for the plaintiff's
injuries. Lockard's conviction had relevance neither to the
issue of the plaintiff's injuries nor to the amount of damages
necessary to compensate her for those injuries.
The plaintiff's reliance on Kowalski for the
________
proposition that a criminal conviction is, as a matter of course,
relevant to the issue of damages in an ensuing civil trial is
also misplaced. Kowalski dealt with a Massachusetts wrongful
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death statute which provides that damages should be "assessed
with reference to the degree of [the defendant's] culpability."
914 F.2d at 306. For that reason, the defendant's conviction of
the crime of second degree murder was relevant to the issue of
culpability, and thus the issue of damages. See id. The
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-17-
plaintiff's cause of action here was for negligence and she was
entitled only to compensatory damages. For these reasons, the
district court did not abuse its discretion by failing to admit
evidence of Lockard's conviction, and the plaintiff is not
entitled to a new trial.
IV. The Award of Costs & Failure to Award Attorney's
__________________________________________________
Fees
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The trial court awarded the defendants costs incurred
after their first offer of judgment but declined to award the
defendants their attorney's fees. It found that the plaintiff
had not been obstinate at any point in the proceedings. In
addition, it awarded the plaintiff costs as a prevailing party.
The defendants contend that (1) the district court erred by
failing to award attorney's fees incurred after the offer of
judgment; (2) the court erred in finding that the plaintiff was
not obstinate under Rule 44.1; and (3) the court erred when it
awarded the plaintiff costs incurred after their offer of
judgment. We discuss these claims seriatim.
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A. Attorney's Fees Incurred After the Offer of Judgment
________________________________________________________
The trial court declined the defendants' request that
they be awarded attorney's fees that were incurred after their
offer of judgment. The defendants assert that it was error to do
so. Resolution of this issue requires that we carefully analyze
the relationship between two rules of civil procedure, Federal
Rule 68 and Puerto Rico Rule 35.1, both of which ostensibly
govern the situation at hand.
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In Erie Railroad Co. v. Tompkins, the United State
__________________ ________
Supreme Court set forth the general doctrine by which federal
courts in diversity cases determine whether state or federal law
will apply to a controversy. See 304 U.S. 64 (1938). In Hanna
___ _____
v. Plumer, the Supreme Court set forth the test for determining
______
how a court should choose between a federal procedural rule and a
conflicting state substantive rule. See 380 U.S. 460, 471
___
(1965). Where a Federal Rule is "sufficiently broad to control
the issue" but conflicts with a state law, the court applies the
Federal Rule unless it transgresses the limits of the Rules
Enabling Act, 28 U.S.C. 2072, or the Constitution. Id. at 471-
___
72; see also Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29-
_________ __________________ ___________
31 (1988).5 In most cases where a conflict exists, the Federal
____________________
5 Since the Hanna decision, the Supreme Court has clarified the
_____
focus of the inquiry for determining whether a state law and a
Federal Rule conflict. Early cases indicated the necessity for a
"direct collision." See, e.g., Walker v. Armco Steel Corp., 446
___ ____ ______ _________________
U.S. 740, 749-51 (1980); Hanna, 380 U.S. at 472. Subsequent
_____
cases make clear, however, that the "direct collision" analysis
does not involve the narrowest possible reading of the relevant
Federal Rule. See Stewart, 487 U.S. at 26 n.4; Walker, 446 U.S.
___ _______ ______
at 751 & n.9. In Stewart, the Supreme Court stated the
_______
following:
Our cases at times have referred to the
question at this stage of the analysis as an
inquiry into whether there is a "direct
collision" between state and federal law.
Logic indicates, however, and a careful
reading of the relevant passages confirms,
that this language is not meant to mandate
that federal law and state law be perfectly
coextensive and equally applicable to the
issue at hand; rather, the "direct collision"
language, at least where the applicability of
a federal statute is at issue, expresses the
requirement that the federal statute be
sufficiently broad to cover the point in
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Rule will be applied because the Federal Rules are presumptively
valid. See Burlington N. R.R. v. Woods, 480 U.S. 1, 5 (1987); 17
___ __________________ _____
James Wm. Moore et al., Moore's Federal Practice 124.03[1] (3d
________________________
ed. 1997).
Rule 35.1 of the Puerto Rico Rules of Civil Procedure
("Rule 35.1") addresses offers of judgment. It provides, in
pertinent part, as follows:
At least ten (10) days before the trial
begins, a party defending against a claim may
serve upon the adverse party an offer to
allow judgment to be taken against him for
the money or property or to the effect
specified in his offer, with costs then
accrued. . . . If [the offer is rejected
and] the judgment finally obtained by the
offeree is not more favorable than the offer,
the offeree must pay the costs, expenses and
attorney's fees incurred after the making of
the offer.
P.R. Laws Ann. tit. 32, App. III, Rule 35.1 (1983). The Supreme
Court of Puerto Rico has held that this rule applies not only
when the plaintiff/offeree prevails at trial and attains a
verdict that is less than the offer of judgment but also when the
plaintiff/offeree loses the suit in its entirety. See Ganapolsky
___ __________
v. Keltron Corp., 823 F.2d 700, 701 (1st Cir. 1987) (citing
_____________
____________________
dispute. It would make no sense for the
supremacy of federal law to wane precisely
because there is no state law directly on
point.
487 U.S. at 26 n.4 (citations omitted). Subsequent First Circuit
cases confirm that the relevant inquiry for evaluating a
potential conflict is whether the Federal Rule is "sufficiently
broad to control the issue." See Commercial Union Ins. Co. v.
___ __________________________
Walbrook Ins. Co., 41 F.3d 764, 772 (1st Cir. 1994); Daigle v.
_________________ ______
Maine Med. Ctr., Inc., 14 F.3d 684, 689 (1st Cir. 1994).
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Hermandad Unida de Carpinteros y Ebanistas de America v. V. & E.
______________________________________________________ _______
Eng'g Constr. Co., 115 D.P.R. 711 (1984)).
_________________
Rule 68 provides, in pertinent part, as follows:
At any time more than 10 days before the
trial begins, a party defending against a
claim may serve upon the adverse party an
offer to allow judgment to be taken against
the defending party for the money or property
or to the effect specified in the offer, with
costs then accrued. . . . If [the offer is
rejected and] the judgment finally obtained
by the offeree is not more favorable than the
offer, the offeree must pay the costs
incurred after the making of the offer.
Fed. R. Civ. P. 68. Rule 68 does not itself supply a definition
of "costs." Instead, it incorporates the definition of "costs"
found in the relevant substantive statute of the jurisdiction
whose substantive law applies to the case. Therefore, when the
definition of "costs" in the relevant substantive statute
includes attorney's fees, attorney's fees incurred after the
offer of judgment must be paid by the offeree. See Marek v.
___ _____
Chesny, 473 U.S. 1, 9 (1985). In addition, Rule 68 applies only
______
when a plaintiff/offeree obtains an award that is less than the
offer of judgment, and not when the plaintiff/offeree loses the
suit in its entirety. See Delta Air Lines, Inc. v. August, 450
___ _____________________ ______
U.S. 346, 352 (1981); Ganapolsky, 823 F.2d at 701-02.
__________
Rule 68 would not allow the defendants to recover
attorney's fees in this case unless the underlying substantive
law defines attorney's fees as a part of costs. See Marek, 473
___ _____
U.S. at 9. The substantive law underlying this action is Puerto
Rico's law of negligence. See P.R. Laws Ann. tit. 31, 5141 ("A
___
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person who by an act or omission causes damage to another through
fault or negligence shall be obliged to repair the damage so
done."). Puerto Rico law makes no provision for the award of
attorney's fees as any part of "costs" in such cases. Compare
_______
Rule 44.1(a) ("Costs shall be allowed to the prevailing party,
except when otherwise directed by law or by these rules. The
costs which may be allowed by the court are those expenses
necessarily incurred in prosecuting an action or proceeding
which, according to law or to the discretion of the court, one of
the parties should reimburse to the other."), with Rule 44.1(d)
____
("In the event any party or its lawyer has acted obstinately or
frivolously, the court shall, in its judgment, impose on such
person the payment of a sum for attorney's fees which the court
decides corresponds to such conduct.").
The only other source of Puerto Rico law that might
supply a definition of costs that includes attorney's fees is
Rule 35.1 itself.6 However, Rule 35.1 allows for the award of
"costs, expenses and attorney's fees." P.R. Laws Ann. tit. 32,
App. III, Rule 35.1 (1983). On its face, the rule treats costs
and attorney's fees as separate items; it does not define
attorney's fees as part of costs. See id.; see also, e.g.,
___ ___ ________ ____
Knight v. Snap-On Tools Corp., 3 F.3d 1398, 1405 (10th Cir. 1993)
______ ___________________
____________________
6 We accept, arguendo, the proposition that the Puerto Rico
________
Rules of Civil Procedure may supply substantive legal standards
in some circumstances. See Ganapolsky, 823 F.2d at 702 (Rule
___ __________
35.1); V lez v. Crown Life Ins. Co., 599 F.2d 471, 474 (1st Cir.
_____ ___________________
1979) (earlier enactment of current Rule 44.1); Pan Am. World
______________
Airways v. Ramos, 357 F.2d 341, 342 (1st Cir. 1966) (earlier
_______ _____
enactment of current Rule 44.1).
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("[T]he fee-shifting provision clearly identifies attorney's fees
separately from costs."); Oates v. Oates, 866 F.2d 203, 206-07
_____ _____
(6th Cir. 1989). Therefore, the "costs" to which the defendants
would be entitled under Rule 68 are those detailed in 28 U.S.C.
1920, which do not include attorney's fees.
Rule 35.1 and Rule 68 both ostensibly apply to this
case and would result in a different award.7 The two rules are
in "direct collision" despite the fact that they are not
"perfectly coextensive" because Rule 68 is "sufficiently broad to
cover the point in dispute." See Stewart, 487 U.S. at 26 n.4;
___ _______
Burlington, 480 U.S. at 4-5. Compare Aceves v. Allstate Ins.
__________ _______ ______ _____________
Co., 68 F.3d 1160, 1167-68 (9th Cir. 1995) (Rule 68 and federal
___
law on expert witness fee compensation controlled despite similar
California offer of judgment law and conflicting California
expert witness law), with S.A. Healy Co. v. Milwaukee Metro.
____ _______________ ________________
Sewerage Dist., 60 F.3d 305, 310 (7th Cir. 1995) (Rule 68 not in
______________
direct conflict with Wisconsin statute governing rejected
settlement offers by plaintiffs), and Tanker Mgm't, Inc. v.
___ ____________________
Brunson, 918 F.2d 1524, 1528 (11th Cir. 1990) (Rule 68 not in
_______
____________________
7 The defendants urge, based on our decision in Ganapolsky, that
__________
the district court should have applied Rule 35.1 to award them
attorney's fees. See 823 F.2d at 702. Ganapolsky, however, did
___ __________
not involve an actual conflict between Rule 68 and Rule 35.1.
The defendant in Ganapolsky prevailed because the plaintiff's
__________
case was dismissed as a sanction. See id. at 701. Therefore,
___ ___
Rule 68 did not apply. See Delta Air Lines, 450 U.S. at 352;
___ ________________
Ganapolsky, 823 F.2d at 701-02. Rule 35.1, on the other hand,
__________
did apply. See id. at 701 (citing Hermandad). This case differs
___ ___ _________
from Ganapolsky, because here the plaintiff received a verdict
__________
less favorable than the defendants' offer of judgment and thus
Rule 68 applies.
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"direct collision" with Florida statute governing attorney's
fees, offers of judgment, and settlement offers). The parties
have not suggested and the court cannot discern any infirmity in
Rule 68 sufficient to defeat the presumption of validity and
constitutionality mandated by Burlington Northern Railroad, 480
_____________________________
U.S. at 5. See S.A. Healy Co., 60 F.3d at 312 ("[T]here cannot
___ ______________
be any doubt that Rule 68 is within the scope of the Rules
Enabling Act."). Therefore, Rule 68, rather than Rule 35.1,
applies in this case and the defendants are entitled only to
costs. The district court did not err in refusing to award the
defendants their attorney's fees as part of costs.
B. Obstinacy
_____________
The district court found that the plaintiff was not
obstinate under Rule 44.1(d) and declined to award attorney's
fees.8 A finding of obstinacy is reviewed for abuse of
discretion. See De Le n L pez v. Corporaci n Insular de Seguros,
___ _____________ ______________________________
931 F.2d 116, 126-27 (1st Cir. 1991). The defendants urge that
the plaintiff's conduct was obstinate because she refused to
____________________
8 Rule 44.1(d) provides that:
In the event any party or its lawyer has
acted obstinately or frivolously, the court
shall, in its judgment, impose on such person
the payment of a sum for attorney's fees
which the court decides corresponds to such
conduct.
P.R. Laws Ann. tit. 32, App. III, Rule 44.1(d) (Supp. 1992).
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accept multiple offers of judgment which they assert were
reasonable.9 The fact that the plaintiff was eventually awarded
less than the amount of the offers, the defendants contend, is
evidence of their reasonableness. The defendants ask that we
adopt a rule that failure to accept an offer of judgment, when
the verdict at trial turns out to be less than the offer, be
considered obstinate per se.
______
The presumption requested by the defendants lacks
support in Puerto Rico law, and we decline to adopt it. The
district court judge, who observed the proceedings as they
unfolded, made a finding that the plaintiff was not obstinate.
Because we find no evidence that the trial judge abused his
discretion in that determination, we decline to overturn the
district court on this issue.
C. Plaintiff's Expert Fees Incurred After the Offer of Judgment
________________________________________________________________
The defendants finally contend that the court erred by
awarding the plaintiff expert fees incurred after the offer of
judgment. Such an award expressly contravenes the terms of Rule
68, which provides that, if an offer of judgment is rejected and
"the judgment finally obtained by the offeree is not more
favorable than the offer, the offeree must pay the costs incurred
after the making of the offer." Fed. R. Civ. P. 68. The
district court erred in making this award. Although the
____________________
9 The defendants argue that the plaintiff was obstinate under
the standards of either Rule 44.1 or Rule 35.1. However, because
we have determined that Rule 35.1 does not apply in this case,
see section IV.A supra, we consider here only the defendants'
___ _____
argument with respect to Rule 44.1.
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plaintiff did not distinguish between costs incurred pre- and
post-offer, the defendants have only contested the award of
$3,950 paid for the testimony of two experts at the two trials.
Because such amounts were clearly incurred after the offer of
judgment and the defendants have not challenged the other
components of the trial court's initial award of costs, we reduce
the plaintiff's award of costs by that amount.
Conclusion
Conclusion
__________
To conclude, we find the parties' remaining arguments
and claimed errors to be without merit and unworthy of extended
discussion. For the reasons stated above, the judgment of the
district court is affirmed as to the grant of the second trial,
affirmed
________
the exclusion of evidence of Lockard's conviction, the refusal to
grant a third trial, and the refusal to grant attorney's fees as
part of costs incurred after the first offer of judgment. The
district court's award to the plaintiff of costs incurred after
the offer of judgment in the amount of $3,950 is reversed, and
reversed
________
the plaintiff's award of costs shall be reduced by that amount.
Because the plaintiff's appeal was wholly without merit, costs of
the appeal are awarded to the defendants.
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