Hoover, Inc. v. McCullough Industries, Inc., Civ. A. No. 6981-72.
| Decision Date | 15 November 1972 |
| Docket Number | Civ. A. No. 6981-72. |
| Parties | HOOVER, INC., Plaintiff, v. McCULLOUGH INDUSTRIES, INC. et al., Defendants. |
| Court | U.S. District Court — Southern District of Alabama |
Sam W. Pipes, III, Mobile, Ala., Judson Harwood, Nashville, Tenn., for plaintiff.
J. Edward Thornton, Mobile, Ala., Robert McD. Smith, Birmingham, Ala., G. Hamp Uzzelle, III, C. S. White-Spunner, Jr., U. S. Atty., Mobile, Ala., William Clay McGehee, Dept. of Justice, Washington, D. C., for defendants.
This action was commenced by a Bill of Interpleader filed on January 21, 1972, by Hoover, Inc., naming as defendants McCullough Industries, Inc., the United States of America, and Louisiana Materials Co., Inc. Hoover is a corporation organized under the laws of the State of Tennessee with its principal place of business in Nashville, Tennessee. McCullough is a corporation organized under the laws of Alabama with its principal place of business in Birmingham, Alabama. Louisiana Materials is a corporation organized under the laws of the State of Louisiana with its principal place of business in New Orleans, Louisiana. The government is a sovereign and its claim to the funds herein interpleaded has been made through the Internal Revenue Service.
Hoover deposited in the Registry of the Court the sum of $34,403.16, representing $32,911.19 principal plus interest thereon at six per cent per annum from April 29, 1971, until the date this action was filed. This money was payment by Hoover to McCullough on a judgment rendered by this court in Civil Action No. 2585.
This case had its genesis in 1961 when McCullough Industries filed a suit in Conecuh County, Alabama, seeking to recover damages for the breach of a contract by Hoover, Inc., which action was removed to this court where it became Civil Action No. 2585. On October 11, 1965, the District Court rendered judgment in favor of McCullough and against Hoover for $19,176.60 plus interest from December 15, 1961. That judgment was appealed to the Fifth Circuit which rendered its opinion on July 13, 1967. Hoover, Inc. v. McCullough Industries, Inc., 380 F.2d 798 (5th Cir. 1967). The Fifth Circuit affirmed Hoover's liability but reversed as to the computation of one item of damages.
The District Court on remand held a hearing on the question of the credit and on September 30, 1970, rendered a judgment against Hoover and in favor of McCullough Industries in the sum of $29,208.82. No mention of interest was made in this judgment.
Hoover filed a Motion to Amend, Alter or Revise the judgment of September 30, 1970, which was heard by the court, and on April 29, 1971, a new judgment was entered by the court in the sum of $32,911.19 in favor of McCullough. This judgment makes no mention of interest, but does state that "the net amount due McCullough in this case is $32,911.19." This decision was appealed and Hoover filed a supersedeas bond in the amount of $52,700.00. The Fifth Circuit affirmed the District Court's decision on December 9, 1971. Their decision also made no provision for interest. On January 21, 1972, Hoover filed this Bill of Interpleader and deposited $34,403.16 in court which sum represents the principal amount of the judgment of April 29, 1971, plus interest from that date.
The United States and Louisiana Materials Co., Inc. were joined as defendants to this action as they have claims against the fund interpleaded. In addition, the attorneys of record for McCullough Industries, J. Edward Thornton and Robert McD. Smith, in the case against Hoover, Case No. 2585, supra, have made a claim to the interpleaded fund for attorneys' fees.
This court is called on to resolve the following issues:
(1) whether Hoover owes McCullough an additional sum for interest on the $32,911.19 judgment for the period from December 15, 1961 to April 29, 1971 (it is not contested that interest is due on the judgment from April 29, 1971 until January 21, 1972, when plaintiff made a deposit in this court on the judgment in excess of the principal amount);
(2) the priority among the various claimants to the interpleaded fund;
(3) the amount of any attorney fees due and owing to McCullough, Louisiana Materials, and Hoover's attorneys.
The plaintiff, Hoover, contends that where the mandate of the Circuit Court makes no provision for interest, the District Court is without power to modify or change that mandate to include interest to a date other than the date judgment is entered on remand; therefore, interest cannot begin to run until the entry of the judgment of April 29, 1971, as that is the date of the final judgment. In support of this position the plaintiff cites Briggs v. Pennsylvania R. R. Co., 334 U.S. 304, 68 S.Ct. 1039, 92 L.Ed. 1403 (1948). In that case the District Court entered a judgment n. o. v. following a jury verdict for the plaintiff. On appeal the Circuit Court reversed and ordered that judgment be entered on the jury verdict. The District Court on remand then entered judgment on the verdict plus interest from the date of the original judgment. The Supreme Court held that the District Court had no authority to modify or alter the mandate of the Circuit Court and therefore was without authority to add interest to the verdict.
Unfortunately for the plaintiff, the Briggs decision is not applicable to the factual setting of the present case. The 1967 holding by the Fifth Circuit, Hoover, Inc. v. McCullough Industries, Inc., 380 F.2d 798 (5th Cir. 1967), affirmed the entire 1965 judgment of the District Court which awarded interest from December 15, 1961, except for one aspect of damages; "It is necessary, therefore, that the matter be reversed and remanded on this one item of damages." Id. at 803. Thus, on remand the District Court did not have before it the issue of when the interest would begin. The 1971 judgment only determined the original amount of damages.
The instant case is similar to Brown & Root v. American Home Assurance Company, 321 F.2d 814 (5th Cir. 1963). In Brown, the Fifth Circuit remanded the case to the District Court for recalculation of damages and after recalculation the District Court entered judgment with interest from the date of the original decree (the original decree had specified interest from that date). The defendant appealed, arguing that according to the Circuit Court's mandate, final judgment was not entered until the recalculation and therefore interest should run only from the latter date. The Fifth Circuit adopted the holding of the District Court and held:
"`The Circuit Court, by stating that "in all other respects the judgment of the District Court will be affirmed," the District Court decree allowing the Libelant, Insurance Company, the sum of $20,507.49 plus interest from the date of the entry of the decree, which was February 20, 1959, was held to be correct and in all things affirmed.'"
"`This court concludes, that it is not necessary for the Circuit Court, when it uses language of the type noted above, to have to specifically state that it is allowing interest.'" Id. at 815.
It should also be noted that when the District Court, in the instant case, referred to "the net amount due," it had reference to the fact that the recalculation of damages involved a credit owing to the defendant. On reconsideration, the credit was reduced and the judgment to plaintiff increased on that item, arriving at what the court termed a "net amount." On reconsideration, no mention was made of interest.
Therefore, interest is due on the judgment from December 15, 1961.
The following is a listing of pertinent events in chronological order:
January 24, 1963
Jury verdict on issue of liability for McCullough Industries against Hoover. Damages issue referred to Special Master.
Deficiency assessed by the Government against McCullough Industries in the amount of $75,738.30.
Government served notice of levy upon Hoover.
Deficiency assessed by Government against McCullough in the amount of $9,796.45.
Deficiency assessed by Government against McCullough in the amount of $78,028.10.
Government served notice of levy upon Hoover.
Deficiency assessed by Government against McCullough in amount of $63,567.70.
Deficiency assessed by Government against McCullough in amount of $5,334.73.
Final judgment for McCullough against Hoover set at $19,176.60 plus interest.
Government filed notice of federal tax lien upon McCullough with Judge of Probate, Shelby County, Alabama, for $210,221.77.
Government filed notice of federal tax lien upon McCullough with Judge of Probate, Etowah County, Alabama, for $210,221.77.
Government filed notice of tax lien upon McCullough with Probate Judge, St. Clair County, Alabama, for $210,221.77.
Fifth Circuit affirmed in part and reversed in part the judgment of the District Court entered on October 11, 1965.
Louisiana Materials given verdict for $31,000.00 against McCullough in Florida United States District Court.
Government refiled notice of federal tax lien upon McCullough with Judge of Probate, Shelby County, Alabama, for $210,221.77.
Alabama United States District Court reconsidered damages as per Fifth Circuit ruling and awarded $32,911.19 to McCullough against Hoover.
Certified copy of Florida United States District Court judgment of Louisiana Materials against McCullough registered in United States District Court for the Southern District of Alabama; Writ of Garnishment issued by United States District Court for the Southern District of Alabama to Hoover.
Return of service of writ of garnishment.
January 21, 1972
Present interpleader action filed by Hoover.
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