Opinion
No. 12–P–861.
2013-08-20
Crystal SALVAS & another v. WAL–MART STORES, INC.
By the Court (GREEN, HANLON & AGNES, JJ.).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The appellants,
certain counsel in an underlying class action involving Wal–Mart Stores, Inc. (Wal–Mart) and some of its employees, appeal the denial of their emergency motion to confirm assessment of what they describe as mandatory statutory interest. We affirm.
The Mills Law Firm; the Gordon Law Group, LLP; Gunning & LaFazia, Inc.; and the Lietz Law Firm.
After extensive litigation, a settlement of the class action was approved and entered on June 25, 2010, including an allocation of costs among class counsel. On July 15, 2010, the judge issued an order allocating $15.2 million in attorneys' fees among class counsel. The law firm Bonsignore & Brewer (B & B) appealed the entire allocation based on what it alleged were errors of law in calculating the distribution.
On December 9, 2011, this court affirmed the judge's allocation and, determining that B & B's appeal was frivolous, we ordered an award of appellate attorneys' fees and costs to the remaining class counsel. See Salvas v. Wal–Mart Stores Inc., 81 Mass.App.Ct. 1103 (2011).
On January 13, 2011, the Superior Court judge ordered that more than $3.2 million be held in reserve from the total allocation amount while the appeal was pending; the remaining (i.e., undisputed) amount allocated for attorneys' fees and costs was to be distributed in accordance with the June 25 and July 15 orders. A single justice of this court stayed the January 13 disbursement order pending resolution of the appeal. On December 14, 2011, five days after we issued our memorandum and order affirming the allocation on appeal, the judge ordered the release to class counsel of the undisputed fees and costs. After the period for further appeal ran its course, the remaining $3.2 million was released for distribution on March 6, 2012.
Following issuance of the rescript to the Superior Court, Attorney Philip Gordon, on behalf of “the Burton Group,”
filed an emergency motion to confirm assessment of mandatory statutory interest at the rate of twelve percent pursuant to G.L. c. 231, §§ 6C or 6H (prejudgment interest), or, alternatively, G.L. c. 235, § 8 (postjudgment interest). The interest sought was upon the escrowed fees and costs whose disbursements to the Burton Group were delayed by B & B's appeal. (See note 3, supra.) The judge denied the motion, ruling that interest on the attorneys' fees and costs could not be awarded under G.L. c. 231, §§ 6C or 6H, because there was no award of damages against B & B. The judge also concluded that, although his June, 2010, order concerning costs
The Burton Group consists of Attorneys Carolyn Beasley Burton and Robert Mills of The Mills Law Firm, Kevin J. Holley of Gunning & LaFazia, Inc., David Lietz of The Lietz Law Firm, and Philip Gordon of the Gordon Law Group, LLP.
and his January, 2011, order for disbursement of attorneys' fees were effectively “judgments or adjudications since they reflect the Court's final word on the subjects of the Court's Orders,” the statute, G.L. c. 235, § 8, does not provide for postjudgment interest because that statute “does not obviate the need for [a] damages verdict or finding against or [an] order for payment of money from B & B based upon an adjudication against B & B .” On appeal the appellants argue primarily that the judge erred in failing to assess postjudgment interest to which they were entitled under G.L. c. 235, § 8, or, alternatively, interest pursuant to G.L. c. 231, §§ 6C (interest on damages in contract actions) or 6H (interest on damages where interest not otherwise provided by law).
We refer to the “Order and Final Judgment Approving Settlement,” dated June 25, 2010, which included an allocation of litigation costs; the judge noted therein that B & B had withdrawn its requests for costs at an April 28, 2010, hearing.
They contend that the computing of interest was a ministerial task automatically triggered by issuance of the above orders, providing them with compensation for the delay caused by B & B. In the appellants' view, the interest statutes apply equally whether the funds were held in escrow or in B & B's possession.
The appellant Mills Law Firm also argues that the appeal of Carolyn Beasley Burton should be dismissed; however, based on this court's docket, Burton does not appear to have perfected an appeal in the first place, so there is nothing to dismiss.
Section 8 of chapter 235 provides that “[e]very judgment for the payment of money shall bear interest from the day of its entry at the same rate per annum as provided for prejudgment interest in such award, report, verdict or finding.” G.L. c. 235, § 8, as amended through St.1983, c. 652, § 2. Although the allocation and disbursement orders here were the final adjudication of the distribution of attorneys' fees and costs for purposes of triggering the timetable for appellate review, none is a “judgment for the payment of money” from B & B to the appellants. See Fronk v. Fowler, 81 Mass.App.Ct. 326, 330 (2012). The over $15.2 million in escrowed funds was part of the total of approximately $40 million paid by Wal–Mart, without delay, as damages to the class members; the escrowed funds were not supplied by B & B to compensate the appellants as prevailing damaged parties. Compare Conway v. Electro Switch Corp., 402 Mass. 385, 390 (1988).
Nor is B & B a “judgment debtor,” delaying payment of a sum certain in money damages to the “judgment creditor[s]” (appellants), and thus warranting the application of interest to compensate for the “time value of money.” Osborne v. Biotti, 404 Mass. 112, 114–115 (1989). Instead, the orders at issue entailed the “transfer[ ][of] specifically identified property” or funds to various class counsel to effectuate the allocation of attorneys' fees and costs based on the submission of attorney time and expense records; “Such [ ] order[s][are] not judgment[s] for the payment of money and would not automatically bear interest.” Karellas v. Karellas, 54 Mass.App.Ct. 469, 472 (2002). The matter at hand stems from a dispute over property—a cash fund for distribution; it is, in effect, a quasi in rem action, see Gulda v. Second Natl. Bank of Boston, 323 Mass. 100, 104 (1948), to which statutory interest does not ordinarily apply. See National Lumber Co. v. United Cas. & Sur. Ins. Co., 440 Mass. 723, 729–730 (2004). Based on the foregoing, neither the allocation orders of June 25, 2010, and July 15, 2010, nor the January 13, 2011, disbursement order, should be considered a judgment for the purposes of § 8. Cf. Fronk v. Fowler, supra.
Similarly, because this action does not involve the breach of a contractual obligation by B & B, or an award of damages against B & B, neither § 6C nor § 6H of G.L. c. 231 applies. See National Lumber Co. v. United Cas. & Sur. Ins. Co., supra. We conclude that the emergency motion for mandatory statutory interest was properly denied.
Order denying emergency motion to confirm assessment of mandatory statutory interest affirmed.