Davis v. Peerless Insurance Co.

• Decision Date: 21 March 1958
• Docket Number: No. 14167.,14167.
• Citation: 103 US App. DC 125,255 F.2d 534
• Parties: Archie Bradsher DAVIS, Appellant, v. PEERLESS INSURANCE CO. et al., Appellees.
• Court: U.S. Court of Appeals — District of Columbia Circuit

103 US App. DC 125, 255 F.2d 534 (1958)

Archie Bradsher DAVIS, Appellant, v. PEERLESS INSURANCE CO. et al., Appellees.

No. 14167.

United States Court of Appeals District of Columbia Circuit.

Argued January 23, 1958.

Decided March 21, 1958.

Mr. David I. Abse, Washington, D. C., with whom Mr. James I. Heinz, Washington, D. C., was on the brief, for appellant.

Mr. John A. Curtiss, Washington, D. C., with whom Mr. Alexander M. Heron, Washington, D. C., was on the brief, for appellee Peerless Ins. Co.

Messrs. Oliver Gasch, U. S. Atty., and Lewis Carroll and Nathan J. Paulson, Asst. U. S. Attys., were on the brief for appellee Carlton G. Beall.

Before WASHINGTON, DANAHER and BURGER, Circuit Judges.

DANAHER, Circuit Judge.

The District Judge, having concluded that a judgment in excess of $3,000 would not be justified, entered an order certifying to the Municipal Court for trial,¹ the appellant's action brought upon an attachment bond in the penal sum of $8,400.² Appellant argues here that the District Judge misapprehended the basis of his claim and applied an erroneous rule of law in deciding that appellant could not recover damages in excess of $3,000. We will set forth the facts in juxtaposition to the points under consideration.

Appellee, of course, asks us to affirm the order of certification. Initially, it wants us to overrule Barnard v. Schneider³ and to decide that the order of transfer is not subject to review as not a final order. This division of the court is not free to overrule so recent a decision as that in the Barnard case, for only by action of the entire court, sitting en banc, will such a step be taken. Appellee next claims that the record discloses a rational foundation for the conclusion of the trial judge, and accordingly, we must affirm his order as not arbitrary. To be sure, the exercise of the trial court's discretion normally will not be disturbed on appeal unless it is arbitrary, but it becomes arbitrary if that discretion has been exercised for an erroneous reason.⁴ Accordingly we inquire into the basis for the order under attack.

One Stein had sued Davis, a non-resident of the District, who operated a sightseeing business. Stein caused the Clerk of the District Court to issue an attachment before judgment in accordance with D.C.Code § 16-301 (1951),⁵ after filing an attachment bond for $8,400 conditioned that if Stein "and Peerless Insurance Company shall make good to the said Davis all costs and damages which he may sustain by reason of the wrongful suing out of said Attachment, then this obligation shall be void; otherwise the same shall be and remain in full force and virtue." After a trial, Stein's complaint was dismissed with prejudice, and a cross claim by Davis was dismissed "without prejudice to the defendant to bring suit on the bond." The attachment upon Davis' bus and car having thereafter been released, Davis filed with the Peerless Insurance Company a demand which was rejected, whereupon Davis commenced this suit. His motion for summary judgment was denied after the trial judge concluded, as his memorandum discloses, that there is no remedy by statute for wrongful attachment in the District and that Davis must be relegated to a common law action in which Stein's malice and want of probable cause must be shown. On his own motion, the trial judge ordered the case transferred to the Municipal Court, "it appearing to the court that the plaintiff's action will not justify a judgment in excess of $3,000 for the reasons stated in the Court's memorandum opinion of March 28, 1957."⁶

Appellant Davis, alleging no special damage except that his sightseeing bus and Cadillac limousine had been stored carelessly, claimed only that the property could be refurbished for use in his business at a cost of $900. While the complaint added that an itemized list of the damages sustained by Davis had been furnished to the surety, neither party has brought any such memorandum to this court.⁷ We cannot know what, if any, attention the judge paid to the items listed since he concluded that a possible recovery by Davis could be predicated only upon malice or want of probable cause in the procurement of the attachment.⁸

Appellant argues that he "is entitled to judgment in the full penal sum upon breach of condition of the bond, subject to execution in the amount of damages; it simply limits the surety's liability to the penal sum." He claims that, without more, he is entitled to recover $8,400 to the payment of which the surety was bound by the terms of the attachment bond. He relies upon United States v. New Amsterdam Casualty Co.⁹ There, however, the bond had run to the Government to require the payment of estimated duties on a cargo, and the statute expressly required that upon suit by the Government, judgment in its favor was to be entered unless the defendant in open court made oath as to and demonstrated error in the liquidation of the duties demanded upon the bond. In view of the statute, the court distinguished an action upon such a bond, "from bonds given, with an arbitrary penal sum, to secure the performance of an undertaking, where the damages to the plaintiff may be, and generally are, much less than the penal sum of the bond."¹⁰

D.C.Code § 28-2401 (1951) reads:

"A bond, when required or referred to, in the provisions of this code, shall be understood to signify an obligation in a certain sum or penalty, subject to a condition, on breach of which it is to become absolute and to be enforceable by action." (Emphasis added.)

This action properly rests upon that section. The condition here was that the surety "shall make good to the said defendant all costs and damages which he may sustain by reason of the wrongful suing out of said attachment."

That Stein's failure of success resulted in a "wrongful suing out of the attachment," as the term is used in our Code is not to be doubted. This result is not only recognized in practice over the years in the District of Columbia,¹¹ but Stein's case was fully tried on the merits with judgment adverse to the claims of the plaintiff-in-attachment. The court concluded that the contract and note in suit were illegal and contrary to public policy. That judgment established the wrongfulness of Stein's deprivation to Davis of the full use and enjoyment of his property under the attachment,¹² and even expressly reserved to Davis the right to pursue his remedy on the attachment bond.

While Davis may sue on the bond, he is quite in error in supposing he may automatically recover the full penal sum therein named.¹³ He is limited to, and the surety is bound only to pay, such costs and damages as Davis can show were sustained because of the dentention of his property. Perhaps his itemized list of damages exhibited to the appellee already includes loss of business use of the vehicles, loss of profits, depreciation, and the like.¹⁴ Perhaps he has shown a basis for a claim for attorney fees for procuring the return of the vehicles or of personal expenses attributable to the attachment.¹⁵ The District Judge correctly observed that there had been set up no basis for punitive damages,¹⁶ but he erred in concluding that appellant had no statutory right of action, and hence was limited to such relief as might have been sought at common law for mala fides.

Under the circumstances we will remand this case. We expect appellant will be permitted to amend his complaint to permit his going forward upon a basis consistent with this opinion. His complaint, so amended, may then be reconsidered by the District Judge who thus will have the opportunity to determine whether or not the damages claimed meet the jurisdictional requirement. If not, it may follow that certification to the Municipal Court is in order.¹⁷

Remanded.

1 D.C.Code § 11-756 (Supp. V 1956) provides for such a transfer form the District Court when "it shall appear to the satisfaction of the court * * * that the action will not justify a judgment in excess of $3,000." After...