SHEAR v. GABOVITCH (2000)

Following our decision in Shear v. Gabovitch, 43 Mass.App.Ct. 650, 685 N.E.2d 1168 (1997), and the denial of further appellate review, 426 Mass. 1105 (1997), a judge ordered entry of an amended judgment on June 4, 1998, that attempted to track the rescript.   In relevant part, the rescript, incorporating language from our decision, 43 Mass.App.Ct. at 691-692, 685 N.E.2d 1168, read:  “The judgment on count XI, surcharging the trustees $260,975, jointly and severally, for trustee fees ․ is affirmed․   The judgment is amended by adding a provision to the effect that the sums that were removed from the escrow account pursuant to the order on the motion of January 31, 1994,[¹ ] are to be credited against the $260,975 surcharged to  Gabovitch and Woodrow, jointly and severally, by the judgment on count XI.” ² Relying on that language, the amended judgment, entered after a hearing, stated:  “On Count [XI] [³ ] of the complaint, judgment shall enter for the plaintiff against the defendants, jointly and severally, in the amount of $260,975.00 for trustee fees, against which is to be credited legal expenses in the sum of $261,439.57, paid and removed from the escrow account established under an [o]rder entered following the filing on January 31, 1994 [,] of a motion in this action.”

After entry of the amended judgment, Shear moved that the amended judgment be amended to add interest to the part of the judgment calling for damages of $260,975 to Shear for the excess trustee fees the defendants Gabovitch and Woodrow had drawn.   Shear tallied the amount due by treating the $261,439.57 released from escrow on behalf of Shear on February 4, 1994 (see notes 1 and 2, supra ), as a partial payment to be subtracted on the release date from the sum of the damages (i.e., the excess trustee fees) and prejudgment and postjudgment interest accrued to that date.   Compare Boston Edison Co. v. Tritsch, 370 Mass. 260, 266 n. 10, 346 N.E.2d 901 (1976), which held that a contribution against a damage award, in the form of a postverdict partial payment by a joint tortfeasor, is not directly subtracted from the damage award prior to calculating interest, but is credited, when actually paid, against the then total of the damage award plus accrued interest.   Shear's calculation left Gabovitch owing Shear $372,914 as of January 22, 1998, with further interest accruing  at the rate of $83 per day.   Details of the computation are set out in the margin.⁴

Gabovitch brought this appeal after the judge determined at the motion hearing that the amended judgment would be read and enforced in accordance with Shear's method of calculation.   The appeal raises the question whether the amended judgment, as interpreted by the judge, conforms to our rescript.   See Wheatley v. Planning Bd. of Hingham, 10 Mass.App.Ct. 884, 885, 409 N.E.2d 247 (1980).   See also Carilli v. Hersey, 303 Mass. 82, 84, 20 N.E.2d 492 (1939) (“If new questions, not previously determined in the suit, arise in carrying out the mandate of the rescript, ․ they can be brought here by appeal from [the new final decree after rescript] ․”).

We answer the question in the negative.   Our earlier decision effectively diminished the award to Shear on count XI by the amount released on behalf of Shear from the escrow account.   In so doing, it treated the released escrow balance as damages awarded to Gabovitch, which, for lack of a count (in the nature of a counterclaim⁵ ) to attach them to, were to be offset against the damages for Shear on count XI.   Thus, the decision treated the escrow release not as a later partial payment against an earlier monetary judgment and the interest accrued thereon in the interim, as in Boston Edison Co. v. Tritsch, supra, but as a direct and simultaneous reduction of the initial amount of the judgment-i.e., an offset, see Shear v. Gabovitch, 43 Mass.App.Ct. at 691 n. 38, 685 N.E.2d 1168-to be made before interest would begin accruing.   If there were a judgment balance owed to Shear, prejudgment interest would be assessed on that balance from the date of the commencement of Shear's action to the date of  the original judgment, with postjudgment interest thereafter.   See G.L. c. 231, §§ 6B, 6H;  G.L. c. 235, § 8;  Patry v. Liberty Mobilehome Sales, Inc., 394 Mass. 270, 273, 475 N.E.2d 392 (1985);  Peak v. Massachusetts Bay Transp. Authy., 20 Mass.App.Ct. 726, 729, 482 N.E.2d 859 (1985);  Thomas O'Connor & Co. v. Medford, 20 Mass.App.Ct. 761, 766, 482 N.E.2d 877 (1985).   However, as there turned out to be no net damages owed to Shear ($260,975 minus $261,439.57 being less than zero), no interest can be assessed.⁶

This result was only just.   Gabovitch had in effect been made in 1991 to pay, from his own resources, a sum later found to have been inappropriately ordered paid.   That money with interest had been paid in early 1994 on behalf of Shear, who had the benefit of it thereafter.   In the circumstances, an offset was appropriate.   Our earlier opinion did not envision fine tuning damages or interest to take account of the precise times when sums were paid and received.   Compare Kuppens v. Davies, 38 Mass.App.Ct. 498, 501 n. 8, 649 N.E.2d 164 (1995).   As we said of the allocation of counsel fees in our earlier decision, “[w]e prefer not to do that in the present case, where we think rough justice can be done without further hearings.   The litigation has been extraordinarily extended already, and the parties are, if we sense the situation correctly, quite prepared to turn what should be a relatively perfunctory [calculation] into major ancillary litigation.”  Shear v. Gabovitch, 43 Mass.App.Ct. at 691, 685 N.E.2d 1168.

In any event, the only question on appeal is whether the amended judgment, as construed by the judge, conformed to our rescript.   Regrettably, the attempt to conform perpetuated the ambiguity that characterized our rescript and misled the judge in her interpretation of its meaning.   In order to reflect our original decision more clearly, paragraph 2 of the amended judgment shall be amended to read as follows:  “On count XI of the complaint, damages are awarded for the plaintiff against the defendants, jointly and severally, in the amount of $260,975, for excess trustee fees, which amount is offset wholly by damages for defendant Gabovitch in the amount of $261,439.57, the sum paid and removed from the escrow account pursuant to the order on the motion of January 31, 1994.”   The parties shall bear their own costs of appeal.

So ordered.

FOOTNOTES

1.   On April 19, 1991, the trial judge had ordered the defendant trustees to place into an escrow account pending judgment the sum of $193,486.48.   The trustees had withdrawn that amount from the trust to pay costs of their defense.   See Shear v. Gabovitch, 43 Mass.App.Ct. at 685 n. 31, 690 n. 36, 685 N.E.2d 1168. Pursuant to the order on the January 31, 1994, motion, the escrow balance was paid out on behalf of Shear on February 4, 1994.   We later determined that the trustees, not Shear, had been entitled to those funds.   See id. at 689-691, 685 N.E.2d 1168.

2.   In our decision, we had explained that “[t]he sum withdrawn from the escrow account ․ presumably $193,486.48 plus accumulated interest ․ is to be offset against the sum of $260,975, ordered repaid to the trusts by the judgment on count XI.” Shear v. Gabovitch, 43 Mass.App.Ct. at 691 n. 38, 685 N.E.2d 1168.   When the escrow funds were released on February 4, 1994, the balance and interest totaled $261,439.57.   At the time of our original decision, however, we were not aware of that figure.  (Unlike the Superior Court docket sheet in the record appendix for this appeal, that accompanying the first appeal had not been updated to reflect the precise figure.)   Thus, in the decision we referred to the offset amount as the initial escrow deposit ($193,486.48) plus accrued interest to the release date.

3.   In what appears to be an error in translation from Arabic to Roman numerals, the amended judgment incorrectly referred to this count as count “II.”

4.   Taking the $260,975 surcharge for excess trustee fees as her starting point, Shear added prejudgment interest of $151,094 from the date her action commenced (March 17, 1987) to the date the original judgment was entered (January 13, 1992).   To this total ($412,069), she added $102,012 in postjudgment interest up to the escrow release date of February 4, 1994, the day the funds were withdrawn.   She then subtracted from that total ($514,081) the sum released from escrow ($261,439.57, the original $193,486.48 deposit plus interest) as a partial payment or credit against the total of damage principal and interest due her on the release date (applied first to interest, then to principal).   Finally, she added to that difference ($252,642) the postjudgment interest (of $120,272) thereafter accruing to the date of the motion hearing (January 22, 1998), for a total of $372,914.

5.   Gabovitch had a counterclaim, but it was framed before he had been ordered to pay the $193,486.48 into the escrow account.   It dealt with different claims and was dismissed.

6.   Gabovitch has not claimed that he was entitled to a judgment for the negligible balance.

ARMSTRONG, C.J.