USCA1 Opinion
United States Court of Appeals
For the First Circuit
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No. 95-1104
JOHN P. MURRAY, ET AL.,
Plaintiffs - Appellants,
v.
ROSS-DOVE COMPANY, INC.,
Defendant - Appellee.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
[Hon. Ronald R. Lagueux, U.S. District Judge]
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Before
Torruella, Chief Judge,
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Cyr and Lynch, Circuit Judges.
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Robert M. Duffy, with whom Michael P. Defanti and Hinckley, Allen
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& Snyder were on brief, for plaintiffs.
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Michael B. Waitzkin, with whom Russell M. Frank, Robert S.
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Whitman, Nussbaum & Wald, Marc C. Hadden and Gidley, Sarli & Marusak
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were on brief, for defendant.
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December 21, 1995
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Per Curiam. In its second appearance before this
Per Curiam.
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court, this case involves an attempt by investors who
invested several millions into a failing company to recover
their losses from the appraisal company on whose valuation
they relied. Because the amount awarded by the jury may have
been the result of a misapprehension of the nature of joint
tortfeasor liability aided by an incomplete and therefore
misleading jury instruction, we reverse and remand for a new
trial on damages.
We once again repeat what we said earlier in this case,
which is now almost five years old: "On remand this case
should be settled, if humanly possible. . . . Money spent on
further litigation is a loss to both sides regardless of the
outcome . . . . We think counsel would not be serving the
interests of their clients if they failed to make an earnest
effort to settle this case." Murray v. Ross-Dove Co., Inc.,
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5 F.3d 573, 581 (1st Cir. 1993) (paragraph structure
omitted).
The facts of this case are set forth in our earlier
opinion. Id. at 575-76. In short, plaintiffs, a group of
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investors (the "Crawford Group"), charged Ross-Dove Company,
Inc. ("Ross-Dove"), an industrial appraiser, with negligence
and negligent misrepresentation as to the value of the assets
of a company, Bevmar Industries, Inc. ("Bevmar"), in which
the group invested in reliance on the appraisal. At the
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second trial, after our remand of the case following the
first trial, the jury found that Ross-Dove was liable to
plaintiffs on both the negligence and negligent
misrepresentation theories and awarded damages of $753,800.
Ross-Dove was not the only potential tortfeasor.
Also potentially responsible were the promoters of the
venture and the attorneys who had provided counseling on the
deal, none of whom is a party in this case. By agreement
between the parties, Ross-Dove was to be treated as a joint
tortfeasor with the promoters and the attorneys. The parties
agreed that any damages against Ross-Dove would be later
reduced by the court by a $1.55 million settlement the
plaintiffs had previously entered into with the attorneys.
After the jury returned its damages award, the court reduced
the $753,800 by the $1.55 million settlement, effectively
reducing the plaintiffs' award to zero.
The plaintiffs claim that the jury award was the
result of confusion that may have been caused by the court's
jury instructions. The court instructed on damages as
follows:
The measure of damages in this case
is basically simple. The measure of
damages is the monetary loss that
plaintiffs suffered as a proximate result
of defendant's wrongful conduct. So the
investment, or part of the investment,
that plaintiffs made in Bevmar, because
of the defendant's wrongful conduct,
minus any returns on that investment, is
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the maximum amount that plaintiffs can
recover in this case.
So if you find for plaintiffs in
this matter, then you shall award to
plaintiffs a sum of money which will
fairly and reasonably compensate them for
losses suffered by them that were
proximately caused by the wrongful
conduct of the defendant. If you find
that defendant was at fault, but that its
fault was not the proximate cause of the
financial loss to the extent claimed by
plaintiffs, then plaintiffs may recover
only that portion of their financial loss
which resulted proximately from
defendant's wrongful conduct.
Although plaintiffs concede that these instructions
were not incorrect, they say they were incomplete and so
misleading. They argue that the instructions potentially
suggested to the jury that it was entitled to apportion
damages among all three groups of tortfeasors and award only
that which they apportioned to Ross-Dove's negligence.
According to the plaintiffs, such an apportionment was not
appropriate for the jury to do given that the parties had
agreed to treat Ross-Dove as a joint tortfeasor. The
plaintiffs had asked for an additional jury instruction that
the measure of damages should be the total amount of damages
and should not be reduced by amounts attributable to others'
wrongdoing. The district court declined to give this
instruction.
We believe that the failure to instruct the jury to
award total damages was erroneous and necessitates a new
trial on damages because the instructions given to the jury,
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taken as a whole, may have confused or misled the jury on the
measure of damages. See Sullivan v. National Football
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League, 34 F.3d 1091, 1106-07 (1st Cir. 1994), cert. denied,
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115 S. Ct. 1252 (1995); Jerlyn Yacht Sales, Inc. v. Wayne R.
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Roman Yacht Brokerage, 950 F.2d 60, 69 (1st Cir. 1991)
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(requiring new trial where instructions could have misled
jury as to fraudulent misrepresentation claim); see also
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Allen v. Chance Mfg. Co., Inc., 873 F.2d 465, 469 (1st Cir.
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1989) (requiring reversal if the error in the instructions
could have affected the result of the jury's deliberations).
On the record as a whole, we cannot say that the jury would
have awarded the same amount of damages had the plaintiffs'
instructions been given. See Jerlyn Yacht Sales, 950 F.2d at
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69.
The instructions given invited the jury to find
damages based on the "part of the investment" loss or on the
"portion of the investment" loss proximately caused by the
defendant's negligent conduct. They did not inform the jury
that where a joint tortfeasor causes harm and is found to be
liable, it is liable for all of the harm even if others also
contributed to the harm. See, e.g., McInnis v. A.M.F., Inc.,
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765 F.2d 240, 249-50 (1st Cir. 1985). The failure to inform
the jury on this point was troublesome on the particular
facts of this case because Ross-Dove had presented
considerable evidence and argument about the wrongful actions
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of the other tortfeasors. While this evidence technically
was presented for the sole purpose of sustaining Ross-Dove's
defense to liability (i.e., that it was not a cause of the
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injury), the evidence, when combined with the jury
instructions, potentially misled the jury into believing that
it should apportion the damages among the three groups of
tortfeasors.
This, agree the parties, exactly may have happened.
Even Ross-Dove's justification for the damages award relies
in considerable part on an apportionment theory. Indeed,
Ross-Dove has argued that the case was tried to the jury on
an apportionment theory. We read the record differently.
Before trial, the parties had agreed that Ross-Dove would be
treated as a joint tortfeasor and would be entitled to a pro
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tanto reduction in damages to be granted by the judge after
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the jury verdict in the amount of the plaintiffs' settlement
with the attorneys. Ross-Dove reserved only the right to
present evidence or to cross-examine on the topic of the
wrongdoing of the other tortfeasors in order to prove that
Ross-Dove's appraisal was not the cause of the Crawford
Group's injuries. Ross-Dove did not reserve the right to
argue that the evidence of the other wrongdoers could be used
to apportion damages, nor could it have, given how the case
was tried.
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The district court ran the trial under a joint
tortfeasor theory. When presented with the agreement of the
parties, the court responded "I'm satisfied that . . . the
reduction in the total amount of damages suffered by the
plaintiff because of a settlement with a joint tort-feasor
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comes off the verdict. . . . I know how to apply the Joint
Tort-Feasor's Contribution Act. . . . The correct way to
apply the settlement amount paid by a joint-tort feasor [sic]
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is to determine what the total amount of damages is against
the tort-feasor being sued, and then that award is reduced by
the amount of the settlement, or 50% whichever is higher
[emphases added]." In a Memorandum and Order after the
verdict, the court denied the defendant's motion for judgment
as a matter of law and proceeded to reduce the verdict by the
settlement amount, stating: "Since the plaintiffs settled
with a joint tortfeasor for $1,500,000 on a joint tortfeasor
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release, the parties agreed before trial[] that the Court
would reduce any verdict for plaintiffs by the amount of that
settlement [emphasis added]."1
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1. At oral argument, Ross-Dove argued that the references to
a joint tortfeasor reduction were not controlling because the
parties had agreed specifically to allow Ross-Dove the
benefit of both a joint tortfeasor reduction in damages and
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an apportionment of damages. Not only does the record not
support such a novel theory of the agreement, but it is
difficult to see what, if anything, plaintiffs would have
gained under such an agreement. Ross-Dove has argued that
the plaintiffs gained because Ross-Dove waived its right to a
pro rata reduction in damages under the Rhode Island joint
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tortfeasor statutes (it was entitled to a reduction in
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Given that Ross-Dove was a joint tortfeasor and the
case, by agreement, was tried on a joint tortfeasor theory,
the failure to instruct the jury to award total damages
likely misled the jury into thinking it could apportion
damages. Under these circumstances, there is no reason for
any confidence that the jury instructions did not affect the
results of the jury's deliberations as to damages. The
liability finding is unscathed. Liability and damages are
not so interwoven in this case that one cannot be determined
without the other. See Fed. R. Civ. P. 59(a) (permitting a
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damages in the amount of the settlement or the proportion of
reduction provided for in the joint tortfeasor release,
whichever was higher, under R.I. Gen. Laws 10-6-7 (1985),
which the district court suggested, without objection from
the parties, would otherwise apply). This justification,
however, is something of a non sequitur. The decision to
choose between a pro tanto or a pro rata reduction does not
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change the fact that some type of joint tortfeasor
arrangement was made. If the case had been tried on an
apportionment theory, there should have been no joint
tortfeasor reduction in damages at all. See R.I. Gen. Laws
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10-6-7 (reduction only for joint tortfeasor release);
Restatement (Second) of Torts 433A, 433B, 434, 879, 881,
885 (1964 & 1977) (if harm can be apportioned, liable party
is not a joint tortfeasor and there is no reduction in
liability); see also McInnis v. A.M.F., Inc., 765 F.2d 240,
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250 (1st Cir. 1985) (applying Rhode Island law in holding
that damages cannot be segregated between joint tortfeasors,
who by definition have caused the same harm). Furthermore,
the parties thought that their agreement "seem[ed] to dispose
of the joint tort-feasor issue with the exception of [how to
treat interest]." The record as to the agreement shows only
that the defendant was concerned that evidence of the
settlement should not come before the jury. If the agreement
indeed permitted defendant to pursue a trial strategy
inconsistent with the joint tortfeasor reduction in damages,
the record should have reflected that. We decline to give
any weight to defendant's post-trial recharacterization of
the case.
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new trial on "all or part of the issues"); cf. Allen, 873
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F.2d at 473 (court remanded for retrial of liability, but not
damages). After two trials already, we take as settled the
question of Ross-Dove's liability and we thus remand for a
new trial on damages alone.
The judgment of damages is vacated, and the case is
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remanded for proceedings not inconsistent with this opinion.
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