Grinnell Mut. Reinsurance Co. v. Walters

• Court: Missouri Supreme Court
• Writing for the Court: Per Curiam
• Citation: Grinnell Mut. Reinsurance Co. v. Walters, 194 S.W.3d 830 (Mo. 2006)
• Decision Date: 30 June 2006
• Docket Number: No. SC 87199.,SC 87199.
• Parties: GRINNELL MUTUAL REINSURANCE COMPANY, Respondent, v. Cathy S. WALTERS, et al., Defendants, John Best, Tammy Best, and Trenton Best, a minor, Appellants.

Page 830

194 S.W.3d 830

GRINNELL MUTUAL REINSURANCE COMPANY, Respondent, v. Cathy S. WALTERS, et al., Defendants John Best, Tammy Best, and Trenton Best, a minor, Appellants.

No. SC 87199.

Supreme Court of Missouri, En Banc.

June 30, 2006.

Benjamin S. Creedy, Susan K. Montee, Timothy J. Davis, St. Joseph, Ed G. Dougherty, Kansas City, for appellants.

Jeremiah W. (Jay) Nixon, Atty. Gen., David A. Johnston, Asst. Atty. Gen., Jefferson City, for movant.

Wendell E. Koerner, Jr., Kansas City, for respondent.

PER CURIAM.

Trevor and Trenton Best, John and Tammy Best's children, were passengers in a boat that collided with another boat piloted by William Logston. Trevor died and Trenton was injured. Logston was insured by Grinnell Mutual, which filed this interpleader action to determine the distribution of the insurance proceeds among the various claimants. Grinnell Mutual deposited the policy limits into the registry of the court. While the suit was pending, interest accumulated.

The parties eventually reached agreement on distribution of the insurance proceeds, and the accumulated interest, to at least 12 parties. The circuit clerk then claimed the accumulated interest pursuant to section 483.310.¹ The court awarded the interest to the circuit clerk.

The Bests appeal, contending that section 483.310 is invalid as it deprives them of their property without just compensation contrary to the Fifth and Fourteenth amendments of the United States Constitution.²

It is only if a party fails timely to request investment of the funds under section 483.310 that the party fails to receive the interest. The action of nonstate parties is not state action, which is necessary to invoke the Fourteenth Amendment. The Bests failed to request investment of the funds. The judgment is affirmed.

Discussion

Section 483.310 provides for the investment of registry funds.³ If timely application is made by one of the parties, the statute clearly declares, "The net income so derived shall be added to and become a part of the principal." Section 483.310.1. The statute is equally clear that the court clerk is entitled to the interest in "the absence of . . . an application by one of the parties within sixty days from the payment of such funds into the registry of the court." Section 483.310.2.

The Takings Clause of the Fifth Amendment prohibits the government from taking private property for public use without just compensation. Palazzolo v. Rhode Island, 533 U.S. 606, 617, 121 S.Ct. 2448, 150 L.Ed.2d 592. It is applicable to the states through the Fourteenth Amendment, which prohibits states from denying federal constitutional rights and which guarantees due process. Id.; Rendell-Baker v. Kohn, 457 U.S. 830, 837, 102 S.Ct. 2764, 73 L.Ed.2d 418 (1982). The Fourteenth Amendment applies to acts of the states, not to acts of private persons or entities, and is only offended by action of the state. Rendell-Baker, 457 U.S. at 837, 838, n. 6, 102 S.Ct. 2764.

State action requires both action taken pursuant to state law and significant state involvement. Specifically, state action requires both: (1) an alleged constitutional deprivation caused by the exercise of some right or privilege created by the State or by a rule of conduct imposed by the State or by a person for whom the State is responsible and (2) that the party charged with the deprivation must be a person who may fairly be said to be a state actor. Mottl v. Missouri Lawyer Trust Account Foundation, 133 S.W.3d 142, 146 (Mo.App.2004).

Analysis of the second requirement for state action begins with identifying the specific conduct of which the Bests complain. They frame the issue as one where the interest earned on their principal was taken by the court clerk. In fact, a private party, Grinnell Mutual, deposited the principal into the court's registry. A second private party, the Bests, voluntarily chose to leave the funds in the registry and declined to seek investment of the funds and to claim the interest derived therefrom, despite ample opportunity to do so. It is only because of the Bests' failure to act that the interest earned on the registry proceeds was not available for distribution to them. That the interest remained with the clerk is not attributable to the state. See Mottl at 147-48.

The judgment is affirmed.

All concur.

1. All statutory references are to RSMo 2000.

2. This Court has jurisdiction. Mo. Const. article V, section 3.

3. In pertinent part section 483.310 states:

1. Whenever any funds other than court costs collected and disbursed pursuant to subsection 2 of section 488.012, RSMo, are paid into the registry of any circuit court and the court determines, upon its own finding or after application by one of the parties, that such funds can be reasonably expected to remain on deposit for a period sufficient to provide income through investment, the court may make an order directing the clerk to deposit such funds as are...