BIRMINGHAM PAIN CENTER, INC. v. Cosgrove

• Decision Date: 25 June 2004
• Citation: 896 So.2d 538
• Parties: The BIRMINGHAM PAIN CENTER, INC. v. David W. COSGROVE.
• Court: Alabama Court of Civil Appeals

896 So.2d 538

The BIRMINGHAM PAIN CENTER, INC. v. David W. COSGROVE.

2030003.

Court of Civil Appeals of Alabama.

June 25, 2004.

Certiorari Denied September 17, 2004

Susan S. Wagner of Christopher C. Haug of Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Birmingham, for appellant.

Stephen J. Bumgarner and Scott A. Boykin of Burr & Forman, LLP, Birmingham, for appellee.

Alabama Supreme Court 1031544.

MURDOCK, Judge.

On April 26, 2002, the trial court entered a final judgment on a jury verdict against the defendant, The Birmingham Pain Center, Inc. ("BPC"), awarding the plaintiff, David W. Cosgrove, damages in the amount of $150,000. On July 18, 2002, following the trial court's denial of BPC's postjudgment motion, BPC appealed the judgment to the Supreme Court of Alabama. BPC did not, however, post a supersedeas bond in connection with that appeal.

On June 28, 2002, Cosgrove filed in the trial court a garnishment proceeding against AmSouth Bank in an effort to enforce the judgment against BPC. A writ of garnishment was issued, and, as a result, on July 31, 2002, while the appeal was pending, $150,276 was deposited into the trial court on behalf of BPC. On August 23, 2002, Cosgrove filed a motion asking the trial court to order the investment of those funds in an interest-bearing account; the trial court granted that motion on August 28, 2002.

On October 24, 2002, BPC filed a "Motion for Determination of Judgment Amount and Entry of Satisfaction of Judgment." With this motion, BPC tendered to the trial court $4,735.03, representing the postjudgment interest that was due through October 24, 2002, but which had not been paid by the funds that had been garnished and the interest earned on those funds. In that motion, BPC contended that it had paid the amounts due under the judgment, plus postjudgment interest due through the date of the motion, and that it should not be held responsible for the accrual of any additional postjudgment interest. On November 4, 2002, the trial court denied BPC's October 24, 2002, motion as "premature." The additional $4,735.03 tendered by BPC was not accepted by the trial court.

On May 23, 2003, our Supreme Court, without issuing an opinion, affirmed the trial court's April 26, 2002, judgment. See Birmingham Pain Center, Inc. v. Cosgrove (No. 1012012, May 23, 2003), 883 So.2d 271 (Ala.2003) (table). The Supreme Court entered its certificate of judgment on June 10, 2003. Several days later, on June 13, 2003, Cosgrove filed a motion in the trial court seeking the distribution of the funds held in the trial court. The trial court entered an order on June 20, 2003, in which it ordered the funds, including the interest that had accrued on the original judgment amount, to be distributed to Cosgrove. In that June 20, 2003, order, the trial court specifically stated that it had made no determination on the issue of whether the judgment had been satisfied.

On June 31, 2003, BPC renewed its motion seeking to have the April 26, 2002, judgment deemed satisfied as of October 24, 2002. In that motion, BPC argued that the amount that had been deposited into the trial court (along with the interest earned thereon) plus the $4,735.03 tendered to the trial court on October 24, 2002, equaled the total principal amount of the judgment and all interest due thereon as of that date pursuant to § 8-8-10, Ala.Code 1975, and that, subject to its retender of the $4,735.03, BPC was not liable for any more interest under that statute. On August 18, 2003, the trial court entered an order denying that motion and determining that BPC owed Cosgrove an additional $18,266.87 in postjudgment interest. BPC appealed.

On appeal, BPC repeats the argument it made to the trial court, i.e., it takes the position that the judgment against it should be deemed to have been satisfied on October 24, 2002. Accordingly, BPC contends that the trial court erred in its August 18, 2003, order in requiring BPC to pay Cosgrove any additional postjudgment interest.

Rule 37, Ala. R.App. P., provides:

"Unless otherwise provided by law, if a judgment for money in a civil case is affirmed or the appeal is dismissed, whatever interest is provided by law shall be payable from the date the judgment was entered in the trial court. If a judgment is modified or reversed with a direction that a judgment for money be entered in the trial court, the certificate of judgment shall contain instructions with respect to allowance of interest."

Judgments such as the one at issue in this case are subject to a statutory interest rate of 12%. § 8-8-10, Ala.Code 1975. "Section 8-8-10 authorizes the payment of post-judgment interest as compensation for the loss of use of money as a result of the nonpayment of a liquidated sum for which liability has already been determined." Elmore County Comm'n v. Ragona, 561 So.2d 1092, 1093 (Ala.1990) ("Ragona II") (emphasis added). Interest continues to accrue on any final judgment or any portion thereof that remains unsatisfied, including any judgment that is affirmed on appeal, until the same is satisfied. Schulte v. Smith, 708 So.2d 138 (Ala.1997). Partial payments on a liability for a judgment are credited first to accrued interest and then to any remaining principal. § 8-8-11, Ala.Code 1975; Schulte, 708 So.2d at 141.

In Elmore County Commission v. Ragona, 540 So.2d 720 (Ala.1989) ("Ragona I"), a case relied upon heavily by Cosgrove in his brief to this court, a jury awarded the plaintiff, Ragona, $136,750 on her claim against all of the defendants; the trial court entered a judgment on that verdict on October 16, 1986. Our Supreme Court affirmed the judgment, but it concluded, in pertinent part, that "the verdict and judgment will support a recovery by Ms. Ragona against the County defendants only in the amount of $100,000." Ragona I, 540 So.2d at 727. Thereafter, on May 17, 1989, the County defendants paid $100,000 into the trial court and filed a document specifying that the $100,000 paid into the court was a "`full satisfaction of the judgment rendered against them.'" Ragona II, 561 So.2d at 1098. Ragona moved to have the funds released to her and to have postjudgment interest awarded pursuant to § 8-8-10. On June 27, 1989, the trial court released the $100,000 to Ragona and awarded her postjudgment interest that had accrued up to that date; that postjudgment interest totaled $32,317.81. In calculating the amount of postjudgment interest due, the trial court computed interest from the October 16, 1986, judgment through June 27, 1989, the date on which it released the $100,000 to Ragona. Ragona II, 561 So.2d at 1098.

On appeal, the County defendants argued that the trial court erred in computing postjudgment interest. The Supreme Court affirmed the judgment of the trial court, however, holding that postjudgment interest began to accrue from the date of the judgment that established the County defendants' liability, i.e., October 16, 1986, and that the $100,000 paid into the trial court could not be deemed to have satisfied at least part of the judgment because of the condition the County defendants had placed on Ragona's acceptance of those funds. The Supreme Court explained:

"Interest runs on a judgment until the judgment is paid. § 8-8-10; Hunt v. Ward, 262 Ala. 379, 79 So.2d 20 (1955). The payment of money into the court is a proper means of satisfying a judgment. In the present case, however, the County, by paying the $100,000 into the court as full satisfaction of the judgment, sought to satisfy not only Ms. Ragona's claim that had been liquidated by the judgment (i.e., $100,000), but also her unliquidated claim for post-judgment interest. Had Ms. Ragona accepted the $100,000, an accord and satisfaction would have resulted and the interest would not have been recoverable. See O'Neal v. O'Neal, 284 Ala. 661, 227 So.2d 430 (1969); Boohaker v. Trott, 274 Ala. 12, 145 So.2d 179 (1962); see, also, 1 Am.Jur.2d Accord and Satisfaction, §§ 6, 21 (1962). Even though the $100,000 was paid by the County into the court, the condition that was attached to its acceptance placed it out of the reach of Ms. Ragona, until the trial court ordered its release on June 27, 1989."

Ragona II, 561 So.2d at 1098. See generally Rule 67, Ala. R. Civ. P.; Committee Comments on 1973 Adoption of Rule 67 (noting that among the "principal reasons" for depositing money with the court pursuant to Rule 67 is "to stop the further accrual of interest").

Thus, in Ragona II, although the defendants paid money damages into court, the availability of those funds for use by the plaintiff was accompanied by a condition that was not included in the judgment purportedly being satisfied. Specifically, the obligation of the defendant to pay postjudgment interest was implicitly (indeed, by law) a part of the trial court's final judgment in that case; yet, the defendants attempted to condition the plaintiff's access to and use of the $100,000 payment it made ($100,000 being the full, principle amount of the trial court's judgment in that case) on being relieved of any obligation to pay postjudgment interest on that amount. Accordingly, Ragona II is not a case in which the payment of moneys into court made those moneys available to the plaintiff (i.e., brought an end to the plaintiff's "loss of use" of those moneys) free of any condition not imposed by the judgment itself. The present case, however, is such a case. The garnished funds were deposited into court unaccompanied by any effort to condition Cosgrove's access to those funds on a waiver by Cosgrove of his right to postjudgment interest that would otherwise accrue after the date of that deposit, and neither that deposit nor BPC's subsequent tender of $4,735.03 was accompanied by any effort on the part of BPC to impose on Cosgrove some condition to his access to and use of those funds not found in the trial court's judgment. See, e.g., Pinkstaff v. Pennsylvania R.R., 31 Ill.2d...