Total Petroleum, Inc. v. Davis

• Decision Date: 12 August 1987
• Docket Number: No. 86-2392,86-2392
• Citation: 822 F.2d 734
• Parties: TOTAL PETROLEUM, INC., Appellant, v. Gary J. DAVIS, d/b/a Gary J. Davis Oil Company, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 734

822 F.2d 734

TOTAL PETROLEUM, INC., Appellant, v. Gary J. DAVIS, d/b/a Gary J. Davis Oil Company, Appellee.

No. 86-2392.

United States Court of Appeals,

Eighth Circuit.

Submitted April 15, 1987.

Decided June 25, 1987.

As Amended on Denial of Rehearings Aug. 12, 1987.

Arthur L. Smith, Washington, D.C., for appellant.

James E. Reeves, Caruthersville, Mo., for appellee.

Before LAY, Chief Judge, ARNOLD and WOLLMAN, Circuit Judges.

LAY, Chief Judge.

In Total Petroleum, Inc. v. Davis, 788 F.2d 476 (8th Cir.1986), we affirmed a jury verdict and general damages of $732,000 for Gary Davis on his counterclaim for fraudulent misrepresentation but reversed and remanded for a new trial on Total's claim against Davis. In the subsequent proceeding, Davis raised the defense of estoppel by fraud, claiming that for purposes of assessing the amount of his liability, Total should be held to the truth of its fraudulent misrepresentation that Davis' company owed Total $333,705.31 on September 21, 1981. This amount did not reflect additional petroleum products that Davis had received before that date. The district court summarily found for Davis on this issue and allowed Total to set off only $18,143.54 from Davis' damage award for money he owed for petroleum products received after September 21. The court awarded Davis postjudgment interest on the amount remaining, $713,856.46, and denied prejudgment interest to Total because the amount of its claim was not ascertainable with reasonable certainty prior to judgment in the proceeding after remand. Total appeals.

Equitable Estoppel

The relevant facts are set out in detail in our first opinion. Briefly, Total sued Davis to collect $173,742.46 it alleged he owed for petroleum products received by his company after September 21, 1981. Davis counterclaimed, alleging that Total had fraudulently misrepresented the amount his company owed at the time Davis bought out his partner and assumed the rights and responsibilities incident to distributor marketing agreements with Total. ¹ After Davis bought out his partner on September 21, 1981, Total informed him that he owed an additional $155,598.92 for petroleum products received before September 21. Davis paid this amount under protest and allegedly directed Total to apply the money to purchases made after September 21 and not to the newly-discovered indebtedness. Total applied the payment to Davis' account. During the next two months, Davis obtained petroleum products from Total valued at $173,742.46, which he refused to pay. Total sued to recover the debt, Davis counterclaimed, and following our remand, the district court held that Total's proven fraud estops it from collecting the entire $173,742.46. The court set off $18,143.54 from Davis' damages, the difference between $173,742.46 and $155,598.92. ²

At the subsequent proceeding, ³ the district court determined that Total's proven fraudulent misrepresentation estopped it from now claiming that the amount it represented to Davis was incorrect, 647 F.Supp. 1059. In other words, Total must accept the "truth" of its misrepresentation for purposes of assessing the amount of Davis' liability. Total argues that notwithstanding the finding of a fraudulent misrepresentation, it is entitled to a set-off of the full $173,742.46 because the doctrine of election of remedies prevents Davis from relying upon inconsistent factual allegations first to prove Total's fraud and then to reduce the amount of his liability. The effect of the trial court's order allowing only the $18,143.54 set-off, Total maintains, improperly permits Davis to change in midstream the factual allegations he successfully relied upon in his counterclaim. ⁴

Although the election of remedies doctrine is not applicable in this case, we agree with Total that Davis is attempting to rely upon inconsistent factual allegations in support of his estoppel by fraud defense. ⁵ Total seeks to prevent Davis from denying a state of facts that he alleged in his counterclaim to be true and were judicially determined to be true. Under these circumstances, Davis is precluded by the doctrine of equitable estoppel from disavowing the factual position he successfully maintained in his counterclaim.

Equitable estoppel prevents a party from denying a state of facts that he has previously asserted to be true if the party to whom the representation was made has acted in reliance on the representation and will be prejudiced by its repudiation. Konstantinidis v. Chen, 626 F.2d 933, 937 (D.C.Cir.1980). The doctrine estops a party who has full knowledge of the facts from accepting the benefits of a transaction, contract, or order and subsequently taking an inconsistent position to avoid corresponding obligations. DeShong v. Seaboard Coast Line R.R., 737 F.2d 1520, 1522 (11th Cir.1984); see also lB J. Moore, J. Lucas & T. Currier, Moore's Federal Practice, p 0.405, at 238-39 (2d ed. 1984) [hereinafter cited as Moore's Federal Practice]. ⁶ Davis' counterclaim was based upon an implicit admission that Rushin-Davis in fact owed Total more than $333,705.11. Total relied on this assertion when it defended by denying any misrepresentation and attempting to show that Davis had failed to prove the essential elements of his counterclaim. Total was unsuccessful and now owes Davis on his judgment. Davis is estopped from denying the truth of his prior, proven factual allegation for purposes of reducing the amount he owes for petroleum products admittedly received. The district court erred when it failed to set off from Davis' damages Total's claim for $173,742.46.

Postjudgment Interest

Total also claims that the court erred in allowing Davis postjudgment interest on his damage award from April 4, 1985, the date of the original judgment, instead of October 6, 1986, the date of this court's first opinion affirming Davis' damages on his counterclaim. Postjudgment interest awards in federal cases are governed by 28 U.S.C. Sec. 1961, which provides that interest "shall be allowed on any money judgment in a civil case recovered in a district court," to be "calculated from the date of the entry of the judgment." When a district court's judgment in favor of a party is affirmed in whole or in part on appeal, the date of entry of the judgment under Sec. 1961 is the date on which the original judgment was entered in the initial trial court proceeding and not the date of affirmance on appeal or the date of judgment on remand. Turner v. Japan Lines, Ltd., 702 F.2d 752, 754 (9th Cir.1983); see also Buck v. Burton, 768 F.2d 285, 287 (8th Cir.1985) (adopting Turner v. Japan Lines, Ltd. in case reversing district court's judgment notwithstanding the verdict and reinstating jury verdict and damages). In our first opinion, we affirmed the jury's verdict and damages on Davis' counterclaim. ⁷ We have already held that the $732,000 award must be reduced by $173,742.46, the amount of Total's claim. Davis is entitled to postjudgment interest on the remaining $558,257.54 from April 4, 1985, at the applicable rate under Sec. 1961.

Prejudgment Interest

Total finally urges error in the trial court's refusing to award it prejudgment interest on Davis' debt. State law governs the question of prejudgment interest. California & Hawaiian Sugar Co. v. Kansas City Terminal Warehouse Co., 788 F.2d 1331, 1333 (8th Cir.1986). In Missouri, the issue is controlled by statute. See Mo.Ann.Stat. Sec. 408.020 (Supp.1987). Missouri law provides for prejudgment interest whenever the amount due is liquidated or, although not strictly liquidated, is readily ascertainable by reference to recognized legal standards. St. Joseph Light & Power Co. v. Zurich Ins. Co., 698 F.2d 1351, 1355 (8th Cir.1983). A dispute as to liability does not make the amount unliquidated for purposes of denying prejudgment interest. Knight v. DeMarea, 670 S.W.2d 59, 64 (Mo.App.1984).

Total claims that the invoices it supplied to Davis for petroleum products received after September 21, 1981, establish a liquidated amount subject to an award of prejudgment interest. For two reasons, we disagree. First, although a recognized legal standard exists for measuring Total's damages, the amount of those damages was uncertain, in light of Davis' estoppel by fraud defense, until the district court ruled after remand on the validity of Davis' position or until this court reviewed the case again on appeal. See Cedar Point Apartments, Ltd. v. Cedar Point Inv. Corp., 756 F.2d 629, 635-36 (8th Cir.1985). ⁸ Second, when questioned by the district court, Total's counsel admitted that there was a question as to the amount of Davis' debt. After our remand, the parties stipulated to certain facts but could not agree on the amount Davis owed. Davis disputed the $173,742.46 amount and claimed that at most he owed $18,143.54. Of this amount, Davis also challenged a credit adjustment of $14,000, which Total claimed it did not owe. Given these uncertainties, we cannot say that the amount of Total's damages was either liquidated or ascertainable at the time the district court made its ruling.

Davis' award of $732,000 is reduced by $173,742.46, leaving $558,257.54. He is entitled to...