B & M Coal Corp. v. United Mine Workers of America

• Citation: 501 N.E.2d 401
• Decision Date: 12 December 1986
• Docket Number: No. 74S04-8612-CV-1036,74S04-8612-CV-1036
• Parties: B & M COAL CORPORATION, Appellant (Plaintiff Below), v. UNITED MINE WORKERS OF AMERICA and David R. Norrick, Individually and as a Member of the United Mine Workers of America et al., Defendants Below, The Spencer County Clerk, Spencer County Auditor, Spencer County Council, and the Spencer County Board of Commissioners, Appellees (Intervenors Below).
• Court: Indiana Supreme Court

Page 401

501 N.E.2d 401

B & M COAL CORPORATION, Appellant (Plaintiff Below), v. UNITED MINE WORKERS OF AMERICA and David R. Norrick Individually and as a Member of the United Mine Workers of America et al., Defendants Below The Spencer County Clerk, Spencer County Auditor, Spencer County Council, and the Spencer County Board of Commissioners, Appellees (Intervenors Below).

No. 74S04-8612-CV-1036.

Supreme Court of Indiana.

Dec. 12, 1986.

Dennis M. Stark, Richard S. Eynon, Richard S. Eynon, P.C., Columbus, for B & M Coal Corporation.

David O. Kelley, Boonville, for United Mine Workers of America.

Jack R. Robinson, Rockport, for Spencer County Clerk, Spencer County Auditor, Spencer County Council and Spencer County Board of Commissioners.

Linley E. Pearson, Atty. Gen., Thomas D. Strodtman, Deputy Atty. Gen., Indianapolis, amicus for appellees.

ON CIVIL PETITION TO TRANSFER

DICKSON, Justice.

Intervenors-appellees, the Spencer County Clerk, Spencer County Auditor, Spencer County Council and The Board of Commissioners of the County of Spencer ("Spencer County"), petition to transfer seeking review of an adverse decision of the Court of Appeals. See, B & M Coal Corp. v. United Mine Workers (1985), Ind.App., 480 N.E.2d 227. This case involves a dispute over interest earned on money deposited as an appeal bond with the Clerk of the Spencer Circuit Court and subsequently invested pursuant to Indiana law. Spencer County retained the interest earned on the investment pursuant to Ind.Code Sec. 5-13-1-3.5(b). The trial judge approved of the county's retention of the accrued interest. The Court of Appeals reversed, holding that the litigants retained a protectable property right in the interest accrued on the invested funds, and thus the county's retention of that interest represented an impermissible taking under the Indiana and United States Constitutions. Petitioner contends that by holding Ind.Code Sec. 5-13-1-3.5(b) As amicus curiae, the State Board of Accounts urges that the decision of the Court of Appeals has essentially destroyed the incentive for county clerks throughout the state to invest moneys on deposit. The State argues that it is possible to address the issue of impermissible taking of private property without declaring the entire statute unconstitutional. We agree.

unconstitutional, the Court of Appeals erroneously decided a new question of law.

The material facts of this case were well summarized by the Court of Appeals as follows:

FACTS

The present dispute is between Spencer County (County) and B & M but it arose out of litigation initiated by B & M against the United Mine Workers (U.M.W.). In December 1977, a labor dispute arose between B & M and its employees affiliated with U.M.W. The U.M.W. called a nationwide strike paralyzing coal mining in Indiana except for non-union operations along the Ohio River. These non-union operations precipitated unprovoked harassment from the union and B & M obtained a temporary restraining order to protect the workers. On January 7, 1978, B & M was raided by approximately 400 to 500 individuals, in violation of the court order, who caused extensive property damage to the premises. B & M sued the 191 people arrested at the scene and recovered a $173,873.09 judgment plus $10,117.72 in fees. The defendants sought to stay enforcement pending appeal and the court granted the stay on condition that $200,000 be deposited as an appeal bond. The U.M.W. and union members deposited a total of $160,363.00 with the clerk. The Fourth District Court of Appeals affirmed the decision in part but remanded for a further hearing on damages. Cause number 1-379 A 63 (Ind.App.1980) 405 N.E.2d 82. Ultimately, B & M received a total judgment of $222,232.43.

The original deposit of $160,363 by the defendants was invested by the Spencer County Clerk from May 1979 to the time of the bench trial in May 1984. Until 1982, all interest accruing on the fund was deposited by the clerk into the County general fund pursuant to statutory authorization. On February 24, 1982, the court ordered that from this date interest accruing must be returned to the fund. From February 1982 on, interest accordingly was added to the principal and as of the date of the bench trial the bond totalled $191,876.97 which has since been paid to B & M. However, the balance of the judgment remains unpaid and uncollectible.

The parties agree that the only amount at issue is $34,440.43 which represents accrued interest from 1979 until the court's 1982 order. At the 1984 bench trial, B & M argued this amount belonged to it because of its unsatisfied judgment. However, the trial court agreed with the county, which intervened in 1982, and found the $34,440.43 belonged to the county pursuant to a provision in the Indiana Code.

Spencer County contends that it is entitled to retain the $34,440.43 pursuant to Ind.Code Sec. 5-13-1-3.5(b) which provides:

(b) The clerk of any circuit court of this state may invest any or all of his total moneys on deposit. He shall invest this money in any or all of the kinds of investments permitted in this chapter. He shall credit interest on these investments to the county general fund of his county. [IC 5-13-1-3.5, as added by Acts 1975, P.L. 45, Sec. 1; 1979, P.L. 38, Sec. 1.]

In construing the above statute, we are guided by well known fundamental principles of Indiana law. Every statute stands before this Court cloaked with a presumption of constitutionality. American National Bank and Trust Co. v. Indiana Dept. of Highways (1982), Ind., 439 N.E.2d 1129; State v. Cooper (1839), Ind., 5 Blckf. 258. The statute should be construed so as to ascertain and give effect to the intentions of the legislature expressed in the statute. City of Indianapolis v. Evans (1940), 216 Ind. 555, 24 N.E.2d 776. However, if there are two possible interpretations of a statute, and by one interpretation the statute would be valid but by the other invalid, the Court should adopt the interpretation which will uphold the statute. Book v. Board of Flood Control Comm'rs City of Indpls. (1959), 239 Ind. 160, 156 N.E.2d 87.

We must determine whether a county's retention of interest earned from funds deposited with the clerk, as permitted by statute, amounted to a "taking" prohibited by our federal and state constitutions. The Fifth Amendment of the Constitution of the United States includes the following prohibition:

... Nor shall private property be taken for public use, without just compensation.

Similarly, Article I, Section 21 of the Constitution of the State of Indiana includes the following:

No person's property shall be taken by law, without just compensation; nor, except in case of the State, without such compensation first assessed and tendered.

A similar issue was the subject of the recent unanimous opinion of the Supreme Court of the United States in Webb's Fabulous Pharmacies, Inc. v. Beckwith (1980), 449 U.S. 155, 101 S.Ct. 446, 66 L.Ed.2d 358.

The Webb's case involved a dispute over interest earned on an interpleader fund deposited with a Florida circuit court while creditor's rights were being litigated. It held unconstitutional a Florida statute providing that all interest accruing from invested monies deposited with the court would become income to the office of the clerk of the circuit court. The decision in Webb's was expressly limited in application.

We hold that under the narrow circumstances of this case--where there is a separate and distinct state statute authorizing a clerk's fee "for services rendered" based upon the amount of principal deposited; where the deposited fund itself concedely is private; and where the deposit in the court's registry is required by state statute in order for the depositor to avail itself of statutory protection from claims of creditors and others--Seminole county's taking unto itself, under Section 28.33 and 1973 FLA Laws, ch 73-282, the interest earned on the interpleader fund while it was in the registry of the court was a taking violative of the Fifth and Fourteenth Amendments. We express no view as to the constitutionality of a statute that prescribes a county's retention of interest earned, where the interest would be the only return to the county for services it renders.

449 U.S. at 164, 165, 101 S.Ct. at 452, 66 L.Ed.2d at 367. Preceding this narrow limitation of its holding, however, the opinion reasoned that when the deposited funds are strictly private in nature, and deposited with the court either voluntarily, by stipulation, or by order of the court,...