USCA1 Opinion

United States Court of Appeals

For the First Circuit
____________________

No. 95-1104

JOHN P. MURRAY, ET AL.,

Plaintiffs - Appellants,

v.

ROSS-DOVE COMPANY, INC.,

Defendant - Appellee.

____________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF RHODE ISLAND

[Hon. Ronald R. Lagueux, U.S. District Judge]

___________________

____________________

Before

Torruella, Chief Judge,

___________

Cyr and Lynch, Circuit Judges.

_______________

____________________

Robert M. Duffy, with whom Michael P. Defanti

_______________
__________________

and Hinckley, Al
____________

& Snyder were on brief, for plaintiffs.

________
Michael B. Waitzkin,
_____________________

with

whom

Russell M. Frank,
_________________

Robert
_______

Whitman, Nussbaum & Wald, Marc C. Hadden and Gidley, Sarli & Maru
_______ _______________ _______________
_____________________
were on brief, for defendant.

____________________

December 21, 1995

____________________

Per Curiam.
Per Curiam.
__________

In its second

appearance before this

court,

this

case

invested several

involves

an

attempt

millions into a failing

by

investors

who

company to recover

their losses

from the

they relied.

Because the amount awarded by the jury may have

been the result of

tortfeasor

appraisal company on

whose valuation

a misapprehension of the nature

liability aided

by an

of joint

incomplete and

therefore

misleading jury instruction, we reverse and remand

for a new

trial on damages.

We

which is

once again repeat what we said earlier in this case,

now almost five

years old:

"On remand

should be settled, if humanly possible. . . .

further

this case

Money spent on

litigation is a loss to both sides regardless of the

outcome . .

. .

We

think counsel would not

be serving the

interests

effort

of their clients if they failed to make an earnest

to settle this case."

F.3d

573,

581

(1st

Murray v. Ross-Dove Co., Inc.,

______
___________________

Cir.

1993)

(paragraph

structure

omitted).

The facts of this case are set forth in our earlier

opinion.

Id. at
___

575-76.

investors (the "Crawford

Inc.

In short,

plaintiffs, a group of

Group"), charged Ross-Dove Company,

("Ross-Dove"), an industrial appraiser, with negligence

and negligent misrepresentation as to the value of the assets

of a

the

company, Bevmar

group invested

Industries, Inc. ("Bevmar"),

in reliance

-22

on the

appraisal.

in which

At the

second

first

trial,

after our

trial, the

plaintiffs

remand of

jury found

on

both

the

that

the case

following the

Ross-Dove was

negligence

and

liable to

negligent

misrepresentation theories and awarded damages of $753,800.

Ross-Dove

Also

potentially

venture and the

was not

the only

responsible

were

potential tortfeasor.

the

promoters

of

the

attorneys who had provided counseling on the

deal,

none of whom

is a party

between the parties, Ross-Dove

in this case.

By agreement

was to be treated as

tortfeasor with the promoters and the attorneys.

agreed

that any

reduced

by

damages

the court

plaintiffs had

against Ross-Dove

by

previously entered

After the jury returned its

the

$753,800

$1.55 million

by the

into with

a joint

The parties

would be

later

settlement

the

the attorneys.

damages award, the court reduced

$1.55 million

settlement, effectively

reducing the plaintiffs' award to zero.

The plaintiffs

result

jury

claim that

the jury award

was the

of confusion that may have been caused by the court's

instructions.

follows:

The

court instructed

on

damages

as

The measure of
is

basically

damages

damages in this case

simple.

is

the

The

monetary

measure of
loss

that

plaintiffs suffered as a proximate result

of defendant's wrongful conduct.
investment,

or

part of

that plaintiffs made

of

the

minus

defendant's

So the

the investment,

in Bevmar,

because

wrongful

conduct,

any returns on that investment, is

-33

the

maximum

amount that

plaintiffs can

recover in this case.

So if
this

you

find for

matter, then

plaintiffs

you

sum

plaintiffs
shall

of money

award
which

in
to
will

fairly and reasonably compensate them for

losses

suffered

proximately
conduct of

by

caused

them
by

that

the

the defendant.

were

wrongful

If you

find

that defendant was at fault, but that its

fault was not the
financial

proximate cause of the

loss to the

plaintiffs,

extent claimed by

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,

misleading.

suggested to

damages among

they

They argue

the

say they

that the

jury that

it

were incomplete

and so

instructions potentially

was entitled

to

apportion

all three groups of tortfeasors and award only

that

which

they

According to

apportioned

the plaintiffs,

appropriate for the

agreed

to

treat

jury to

Ross-Dove

plaintiffs had asked for

the

to

Ross-Dove's

negligence.

such an apportionment

do given that

as

joint

was not

the parties

tortfeasor.

had

The

an additional jury instruction that

measure of damages should be the total amount of damages

and should not

wrongdoing.

be reduced by amounts attributable to others'

The

district

court

declined

to

give

this

instruction.

We believe that the failure to instruct the jury to

award

total damages

was

erroneous and

trial on damages because the

necessitates a

new

instructions given to the jury,

-44

taken as a whole, may have confused or misled the jury on the

measure

of

damages.

See Sullivan
___ ________

League, 34 F.3d 1091, 1106-07

______

v.

National Football
__________________

(1st Cir. 1994), cert. denied,

____________

115 S. Ct. 1252 (1995); Jerlyn Yacht Sales, Inc. v.

________________________

Roman Yacht Brokerage, 950

_______________________

(requiring

new trial

F.2d

60,

where instructions

69 (1st

Wayne R.
________

Cir.

could have

1991)

misled

jury

Allen
_____

as to

fraudulent

misrepresentation

v. Chance Mfg. Co., Inc., 873

_____________________

1989) (requiring

reversal if

could have affected the

On the record as a

have awarded the

claim); see also

_________

F.2d 465, 469 (1st Cir.

the error in

the instructions

result of the jury's deliberations).

whole, we cannot say that the

same amount of damages

instructions been given.

jury would

had the plaintiffs'

See Jerlyn Yacht Sales, 950 F.2d at

___ __________________

69.

The

instructions

damages based on

"portion of

the jury

to find

the "part of the investment" loss or on the

the investment"

defendant's negligent

that where a joint

given invited

loss proximately caused

conduct.

by the

They did not inform the jury

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.,

_________ _______
____________

765 F.2d 240, 249-50 (1st Cir.

the

facts

jury on

of

this point

this

case

1985).

The failure to inform

was troublesome

because

on the

Ross-Dove

had

particular

presented

considerable evidence and argument about the wrongful actions

-55

of the

other tortfeasors.

was presented for the

defense to

injury),

While this

sole purpose of sustaining Ross-Dove's

liability (i.e., that it

_________ ____

the

evidence technically

evidence,

when

was not a cause

combined

with

of the

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

the jury on

that the case was tried to

an

apportionment theory.

We

read the

record differently.

Before trial, the parties had agreed that Ross-Dove would

treated as a joint tortfeasor and

tanto reduction in damages

_____

the jury verdict

with

wrongdoing of the

Ross-Dove's

to be granted by the

Ross-Dove reserved

or to

judge after

only the

cross-examine on

other tortfeasors in

appraisal

Group's injuries.

would be entitled to a pro

___

in the amount of the plaintiffs' settlement

the attorneys.

present evidence

be

was not

Ross-Dove

the

did not

the

right to

topic of

order to prove

cause

the

that

of the

Crawford

reserve the

right to

argue that the evidence of the other wrongdoers could be used

to apportion damages, nor

was tried.

could it have, given how

the case

-66

The

tortfeasor

parties,

district court

theory.

ran

under a

joint

When presented with the agreement of the

the court responded "I'm

reduction in

the trial

the total

amount

satisfied that .

of damages

. . the

suffered by

the

plaintiff because

comes off the

of a

settlement with a

verdict. . . .

I know

Tort-Feasor's Contribution Act.

joint tort-feasor
_________________

how to apply the Joint

. .

The

correct way

to

apply the settlement amount paid by a joint-tort feasor [sic]

_________________

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

[emphases

the settlement,

added]."

In

or

50% whichever

a Memorandum

and

is higher

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

_________________
________________

release,

the parties

agreed before

trial[] that

the Court

would reduce any verdict for plaintiffs by the amount of that

settlement [emphasis added]."1

____________________

1.

At oral argument, Ross-Dove argued that the references to

a joint tortfeasor reduction were not controlling because the

parties

had

agreed

specifically

benefit of both a joint

____
an

Ross-Dove

the

tortfeasor reduction in damages

and
___

apportionment of damages.

support

such

difficult

a novel

to see

gained under such

allow

Not only does

theory of

what, if

to

the

the record not

agreement, but

anything, plaintiffs

an agreement.

it is

would have

Ross-Dove has argued

that

the plaintiffs gained because Ross-Dove waived its right to a

pro rata reduction in
_________
tortfeasor

statutes

damages under the

(it

was

-77

entitled to

Rhode Island joint

a

reduction

in

Given that Ross-Dove was a joint tortfeasor and the

case, by agreement,

the

failure to

likely

damages.

misled

was tried on a joint

instruct

the jury

Under

the jury

into

to

thinking

tortfeasor theory,

award total

it could

these circumstances, there is

of

the jury's

liability finding

not

deliberations

is unscathed.

as to

apportion

no reason for

any confidence that the jury instructions did not

results

damages

affect the

damages.

Liability and

The

damages are

so interwoven in this case that one cannot be determined

without the other.

See Fed. R. Civ. P.

___

59(a) (permitting a

____________________

damages

in the amount of the settlement or the proportion of

reduction provided

for

whichever was higher,

which the

in

would

fact

of a

arrangement

was

apportionment

that

theory,

type

If the
there

(reduction

only

is

not a

joint

for

that damages

of

joint

have

at all.
joint

tortfeasor and

been

on an

no

joint

See R.I.
___

Gen. Laws

tortfeasor

release);

is no

McInnis v. A.M.F., Inc.,

_______
____________

1985) (applying

not

433A, 433B, 434, 879,

there

to

tortfeasor

been tried

(if harm can be apportioned,

liability); see also

________
250 (1st Cir.

justification,
The decision

case had

should

Restatement (Second) of Torts

885 (1964 & 1977)

from

a pro rata reduction does

________

tortfeasor reduction in damages

10-6-7

10-6-7 (1985),

This

non sequitur.

some

made.

release,

suggested, without objection

choose between a pro tanto or

_________
the

tortfeasor

otherwise apply).

however, is something

change

joint

under R.I. Gen. Laws

district court

the parties,

the

Rhode Island

881,

liable party
reduction

in

765 F.2d 240,

law in

holding

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]."

that

the

The record as to the agreement shows only

defendant

was

concerned

that

evidence

settlement should not come before the jury.

indeed

permitted

defendant

to

pursue

record should have reflected

any

weight to

that.

defendant's post-trial

the

If the agreement
a

trial

inconsistent with the joint tortfeasor reduction

the

of

We

strategy

in damages,

decline to give

recharacterization of

the case.

-88

new trial

on "all or

part of the

issues"); cf.
___

Allen, 873
_____

F.2d at 473 (court remanded for retrial of liability, but not

damages).

After two

trials already, we take as

question of Ross-Dove's

liability and we

settled the

thus remand for

new trial on damages alone.

The judgment of damages is vacated, and the case is

___________________________________________________

remanded for proceedings not inconsistent with this opinion.

____________________________________________________________

-99