Travelers Indemnity Co. v. United States

81 Fed. Cl. 508, 2008 U.S. Claims LEXIS 97, 2008 WL 920382
United States Court of Federal Claims·Decided April 2, 2008·No. No. 05-1252C·Published·Cited by 1 cases

Opinion

OPINION AND ORDER

LETTOW, Judge.

This surety ease has returned to the court because somewhat unusual circumstances have arisen. Defendant has filed a motion for relief from judgment, relying on Rule 60(b)(5) of the Rules of the United States Court of Federal Claims (“RCFC”). The motion is predicated on the fact that the judgment previously entered by this court in this surety case awarding $32,718.99 to plaintiff (“Travelers”), see Travelers Indem. Co. v. United States, 72 Fed.Cl. 56, 68 (2006), has been satisfied through payment of a claim by plaintiff in a bankruptcy proceeding.

BACKGROUND

Judgment was entered on July 27, 2006, and this case had been briefed on appeal and scheduled for oral argument before the U.S. Court of Appeals for the Federal Circuit when plaintiff recovered its claimed amount in a bankruptcy proceeding styled In re M.J.H. Leasing, Inc., M.A.T. Marine, Inc., Nos. 04-18802, 04-19106 (Bankr.D.Mass). On November 19, 2007, the government moved in the court of appeals to vacate the judgment. In reliance on U.S. Bancorp Mortgage Co. v. Bonner Mall P’ship, 513 U.S. 18, 115 S.Ct. 386, 130 L.Ed.2d 233 (1994), the court of appeals remanded the case to this court to address the request for vacatur. See Order of Remand, Travelers Indem. Co. v. United States, No. 2006-5143 (Fed.Cir. Jan. 9, 2008).

ANALYSIS

The judgment in this case was appropriate when issued. The chief point in contention was a matter of law, viz. whether a surety on a payment bond had a right under the doctrine of equitable subrogation to recover contract funds that remained after performance of the contract had been accepted by the government. See Travelers Indem., 72 Fed.Cl. at 60-66. The court ruled that Travelers had such a right and could enforce it in this court. Id. at 66-67. A subsequent decision by the Federal Circuit in a case raising the same legal question reaches the same result. See National Am. Ins. Co. v. United States, 498 F.3d 1301 (Fed.Cir.2007). However, although the decision and judgment were proper when rendered in this case, now to allow the judgment to retain its force when Travelers has received payment via other means would countenance a double recovery. The government’s motion seeks to forestall that result.

As a general matter, “a motion for a credit on a judgment should be treated as a Rule 60(b)(5) motion for relief from a judgment which has been satisfied, released or discharged.” Kassman v. American Univ., 546 F.2d 1029, 1033 (D.C.Cir.1976) (awarding de[510] fendant a credit on the judgment against him in the amount plaintiff received from his settlement of another related suit against defendant); see also Sunderland v. City of Philadelphia, 575 F.2d 1089, 1090-91 (3d Cir. 1978) (defendant entitled to relief from judgment under Fed.R.Civ.P. 60(b)(5), to the extent the judgment was satisfied by payment by defendant to plaintiffs insurer on account of insurer’s subrogated claim against defendant). RCFC 60(b)(5), the counterpart in this court to Fed.R.Civ.P. 60(b)(5),1 provides in pertinent part that a party may be relieved from a final judgment where “the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application.” The first of the three alternative prongs of RCFC 60(b)(5), ie., satisfaction of the judgment, is “fairly straightforward.” 12 James Wm. Moore, et al., Moore’s Federal Practice, § 60.45 at 60-155 (3d ed.2007). Where this first prong of Fed.R.Civ.P. 60(b)(5) is invoked, the question typically posed is whether the judgment from which relief is being sought actually has been satisfied in whole or in part. See Federal Deposit Ins. Corp. v. United Pac. Ins. Co., 152 F.3d 1266, 1275 (10th Cir.1998) (to extent FDIC obtained double recovery of loss on loan, fidelity insurer entitled to credit based on net post-trial recovery by FDIC); Torres-Troche v. Municipality of Yauco, 873 F.2d 499, 501 & n. 7 (1st Cir.1989) (settlement payment by defendant’s insurer credited against jury verdict obtained by plaintiffs against defendant). The fact of satisfaction is not at issue in this case.2

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Travelers Indemnity Co. v. United States, 81 Fed. Cl. 508, 2008 U.S. Claims LEXIS 97, 2008 WL 920382 (uscfc 2008).

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