C & H Nationwide v. Norwest Bank TX

• Decision Date: 08 March 2000
• Docket Number: No. 99-10121,No. 99-10381,99-10121,99-10381
• Citation: 208 F.3d 490
• Parties: (5th Cir. 2000) C & H NATIONWIDE, INC Plaintiff - Appellant v. NORWEST BANK TEXAS NA, Garnishee; ET AL Defendants WESLEY KENNEMER; CURLEY JOE TRUCKING Appellees C & H NATIONWIDE INC Plaintiff - Appellant v. NORWEST BANK TEXAS NA; ET AL Defendants WESLEY KENNEMER; CURLEY JOE TRUCKING, INC Appellees
• Court: U.S. Court of Appeals — Fifth Circuit

Page 490

208 F.3d 490 (5th Cir. 2000)

C & H NATIONWIDE, INC Plaintiff - Appellant v. NORWEST BANK TEXAS NA, Garnishee; ET AL Defendants WESLEY KENNEMER; CURLEY JOE TRUCKING Appellees C & H NATIONWIDE INC Plaintiff - Appellant v. NORWEST BANK TEXAS NA; ET AL Defendants

WESLEY KENNEMER; CURLEY JOE TRUCKING, INC Appellees

No. 99-10121 No. 99-10381

IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

March 8, 2000

Appeals from the United States District Court for the Northern District of Texas

Before KING, Chief Judge, and DUHE and DeMOSS, Circuit Judges.

KING, Chief Judge:

Plaintiff-Appellant C & H Nationwide, Inc., appeals from the district court's judgment dismissing C & H's garnishment action against Appellees Wesley Kennemer and Curley Joe Trucking, Inc. (No. 99-10121), and the district court's subsequent award of attorney's fees to Appellees (No. 99-10381). We dismiss appeal 99-10121 as moot, reverse the district court's award of attorney's fees to Appellees, and deny all motions carried with the case.

I. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff-Appellant C & H Nationwide, Inc. ("C & H"), and Appellees Wesley Kennemer and Curley Joe Trucking, Inc. ("Appellees"), make another appearance before us, albeit with a much smaller entourage. In this latest battle in an ongoing feud, we are called upon, ultimately, to answer one simple question: Are Appellees entitled to $1,472.50 in attorney's fees? Unfortunately, answering that question requires that we navigate through a rather dense and often confusing history.

C & H used to operate a motor carrier business. As we understand the arrangement, C & H entered into contracts with others, including Appellees (the "Owners-Operators"), to supply the trucks and drivers for the enterprise. Under these contracts, C & H forked over a portion of its take in exchange for the equipment and services. Unfortunately, C & H did not fare so well in the trucking business and consequently closed its doors in late 1988.

In 1989, we decided, in an unrelated case, that motor carriers who had billed at negotiated rates lower than tariff rates filed with the Interstate Commerce Commission could bill shippers for the difference. See Supreme Beef Processors v. Yaquinto, 864 F.2d 388 (5th Cir. 1989). C & H, like many others, had billed at negotiated rates and, after our decision in Supreme Beef, sent out undercharge claims. A group of Owners-Operators, including Appellees, decided that they had a right under the contracts they had entered into with C & H to a portion of the undercharge claims. It appears that C & H agreed, but the two sides could not agree on whether the Owners-Operators were entitled to a cut of the gross claims or the net collected revenues.

The disgruntled Owners-Operators filed suit in state court seeking damages for C & H's failure to pay the contracted amount of the claims and for its failure to give proper notice before terminating the contracts when it closed down in 1988. The Owners-Operators dismissed their suit, however, as part of settlement negotiations between the two sides. The negotiations proved fruitless, and eventually C & H filed suit seeking a declaration of the parties' rights and obligations under the contracts. The Owners-Operators counterclaimed.

After a bench trial, the Owners-Operators were awarded damages, and C & H was awarded a total of $213,847.64 in costs and attorney's fees. See District Court Order entered Dec. 8, 1998, at 1. In a subsequent appeal, we reversed the district court as to $105,884.05 of this amount. See C & H Nationwide, Inc. v. McDonald, No. 98-10564, at 4, 200 F.3d 815 (5th Cir. Nov. 2, 1999) (unpublished).

Prior to our decision in C & H v. McDonald, C & H sought to enforce its awards by garnishing accounts held by Appellees at Defendant Norwest Bank - Texas, N.A. ("Norwest"). At the time, Kennemer had over $4,000 on deposit in a checking account at Norwest, which amount Norwest sequestered in its garnished funds account. Appellees moved to dismiss the garnishment action, alleging that it was prohibited by section 31.008 of the Texas Finance Code. ¹ The district court agreed and dismissed the garnishment action without prejudice; Kennemer's funds were consequently released from Norwest's garnished funds account. C & H timely appealed the district court's judgment (No. 99-10121). The court allowed Appellees to apply for attorney's fees and recoverable costs. The court eventually awarded Appellees $1,472.50 in attorney's fees. ² See Order entered Mar. 19, 1999, at 6. C & H timely appealed this order (No. 99-10381). After the district court awarded attorney's fees in this case, the state of Texas repealed section 31.008 and replaced it with Texas Finance Code section 59.007. ³

Appellees have moved this court for damages and costs for a frivolous appeal under Federal Rule of Appellate Procedure 38; C & H responded to each motion and moved the court to award it attorney's fees in the amount of $500 for effort expended in responding to Appellees' frivolous motions. These motions have been carried with the cases.

II. STANDARD OF REVIEW

Resolution of this case turns on the district court's interpretation of section 31.008 of the Texas Finance Code. This court reviews questions of law, such as the proper construction of a statute, de novo. See Woodfield v. Bowman, 193 F.3d 354, 358 (5th Cir. 1999).

III. JURISDICTION

Ours is a court of limited jurisdiction. Among the limitations is the requirement that there be a live case or controversy between the parties. See Hope Medical Group for Women v. Edwards, 63 F.3d 418, 422 (5th Cir. 1995); Howard Gault Co. v. Texas Rural Legal Aid, Inc., 848 F.2d 544, 557 (5th Cir. 1988). In their brief in No. 99-10121, Appellees asserted that they had filed a cash and supersedeas bond, thereby rendering any question regarding the garnishment action moot. C & H replied that no supersedeas bond had been filed. Concerned that factors other than the bond issue raised by the parties may have rendered one or both of these appeals moot, we sua sponte requested briefing on the subject and now determine our jurisdiction to entertain these appeals. See Webb v. B.C. Rogers Poultry, Inc., 174 F.3d 697, 699 (5th Cir. 1999).

The "case or controversy" requirement of Article III of the United States Constitution prohibits federal courts from considering questions "that cannot affect the rights of litigants in the case before them." North Carolina v. Rice, 404 U.S. 244, 246 (1971). Federal courts are not in the business of rendering advisory opinions. See, e.g., United States v. Texas Tech Univ., 171 F.3d 279, 286 (5th Cir. 1999). "The mootness doctrine requires that the controversy posed by the plaintiff's complaint be 'live' not only at the time the plaintiff files the complaint but also throughout the litigation process." Rocky v. King, 900 F.2d 864, 866 (5th Cir. 1990). "This means that, throughout the litigation, the plaintiff 'must have suffered, or be threatened with, an actual injury traceable to the defendant and likely to be redressed by a favorable judicial decision.'" Spencer v. Kemna, 523 U.S. 1, 7, 118 S.Ct. 978, 140 L.Ed.2d (1998) (quoting Lewis v. Continental Bank Corp., 494 U.S. 472, 477, 110 S.Ct. 1249, 108 L.Ed.2d 400 (1990)).

A. Appeal 99-10121

Appeal 99-10121 deals directly with the issue at the heart of this case, whether the district court correctly concluded that section 31.008(b) precludes C & H from garnishing Appellees' bank accounts. As far as we can tell, there is no answer that we could give to this question that would affect the right of C & H to enforce its remaining judgment against Appellees. The district court dismissed C & H's garnishment action without prejudice, leaving C & H free to reapply for a writ of garnishment under section 59.007 at any point since it became effective in September of last year. ⁴ Moreover, the funds sequestered by Norwest have been released and are, we assume, long gone. Any ruling we might hand down regarding those funds, and we are at a loss for what that ruling might be, would neither add to nor detract from C & H's judgment underlying the writ of garnishment. When all the wrapping has been stripped away, we are being asked simply to decide what a repealed statute upon which no one, let alone the parties before us, may rely meant when it was in force. Because a decision by this court regarding the construction of section 31.008 can have no effect on the rights of the litigants before us, appeal 99-10121 is most assuredly moot and must be dismissed.

B. Appeal 99-10381

Appeal 99-10381 asks whether, under Texas law, Appellees are entitled to attorney's fees in this case as parties against whom a garnishment action was wrongfully initiated. ⁵ The garnishment action was only wrongful, in this case, if section 31.008 prohibited it. Addressing that question requires us to determine whether the district court correctly construed section 31.008, the very issue we decided was moot in appeal 99-10121. We have previously held however that we can reach a now-moot substantive issue when necessary to determine whether the district court correctly awarded attorney's fees under state law. See Wilfed Academy of Hair and Beauty Culture v. Southern Ass'n of Colleges and Sch., 957 F.2d 210, 213 (5th Cir. 1992). We are bound by the decision in Wilfred, see Campbell v. Sonat Offshore Drilling, Inc., 979 F.2d 1115, 1121 n.8 (5th Cir. 1992), and therefore proceed to construe section 31.008.

IV. SECTION 31.008

At the time of the district court's ruling, section 31.008(a) provided, inter alia, that a "writ of garnishment may not be . . . served on a financial institution . . . to collect a money judgment . . . against the financial institution before . . . all appeals have been foreclosed by law." Tex. Fin. Code § 31.008(a) (repealed 1999). Section 31.008(b) further provided that "[t]his section affects a[] . . . writ of garnishment . . .served...