House of Wines, Inc. v. Sumter
| Decision Date | 30 May 1986 |
| Docket Number | No. 85-273.,85-273. |
| Citation | 510 A.2d 492 |
| Parties | HOUSE OF WINES, INC., Appellant, v. Beata J. SUMTER, et al., Appellees. |
| Court | D.C. Court of Appeals |
Robert O. Johnston, with whom Ashley Joel Gardner, Silver Springs, Md., was on brief, for appellant.
A. Slater Clarke, with whom Mitchell I. Alkon, Bethesda Md., was on brief, for appellees.
Before NEWMAN, TERRY and ROG-ERS, Associate Judges.
Appellees sued appellant for an accounting and a money judgment for the amount due from the sale of appellees' wines. Pursuant to appellant's motion, the trial court referred four issues to the Auditor-Master. The Auditor-Master prepared a report and a jury trial followed. The jury awarded appellees $41,661.89 plus prejudgment interest of $20,000.00 and costs. On appeal appellant raises a number of contentions regarding the scope of the Auditor-Master's authority under the order of reference. We hold that the order of reference was not confined, as appellant contends, to four limited factual issues, and that appellant failed to preserve objections to admission of the Auditor-Master's findings of fact, conclusions of law and summary of evidence. Similarly, appellant failed to preserve objections to the Auditor-Master's testimony about his report.
Appellant also contends that appellees are not entitled to recover prejudgment interest under D.C. Code § 15-109 (1981) because there was a five-year delay between filing the complaint and judgment, the damages were unliquidated and the lawsuit was not for breach of contract. These contentions are without merit. The statute allows an award of interest "necessary fully to compensate the plaintiff," appellees' claim arose out of a contract, and the trial court instructed the jury to consider the pretrial delay occasioned by the Auditor-Master's delay in submitting his report to the court. Accordingly, we affirm.
In 1973, appellees William Russell and Beata Sumter, along with Seymour Dubroff,1 formed a joint venture called "Hyland Associates" to buy and sell valuable wines for profit. Both Hyland Associates, as a group, and Dubroff, individually, stored wines at Security Storage Company. In September 1974, Hyland entered into an unwritten agreement with appellant House of Wines, Inc., a liquor wholesaler, to store and resell its, and Dubroff's, wines for a "reasonable compensation," and authorized House of Wines, Inc. to receive the wines from Security Storage Company. House of Wines contends that a $50,000 lien on the wines prevented their release and that it therefore loaned that sum to Dubroff to extinguish the lien.
House of Wines retrieved the wines and prepared an inventory. Russell and Sumter sent House of Wines a letter asking it to proceed with the sale of wines on a "best efforts" basis, and to send any proceeds of a sale to Sumter. House of Wines did not sell a significant amount of the wines within a five month period but did deliver, to Dubroff, a check in the amount of $5,000 payable to Hyland Associates.
Subsequently, Sumter arranged with a liquor retailer, MacArthur Liquors, Inc., to dispose of the Hyland Associates wines for $100,000, payable in one installment of $10,000 and three installments of $30,000 each thirty days thereafter. Hyland received the first $10,000 payment, the first $30,000 payment, and an additional $17,858.98 from Dubroff's attorney. MacArthur Liquors claimed that it paid the entire $100,000 either to House of Wines or to Hyland Associates. In November 1975, appellees demanded payment from House of Wines.
House of Wines, which had written to MacArthur Liquors in June 1975, directing that payment be made to it rather than Hyland Associates, admitted receiving $42,932.44 in a series of nine payments from MacArthur Liquors, but claimed that it could not identify whether the payments were for Hyland Associates wines or Dubroff wines. House of Wines also claimed that it had no duty to account for proceeds of wine sales, and that it was entitled to apply the monies received toward the preexisting $50,000 indebtedness. It admitted that it had kept no records of the sales and delivery of these wines to MacArthur Liquors or of whose wines it was selling.
On September 28, 1977, appellees sued House of Wines for an accounting of funds generated from the sale of their wines and for a judgment for $100,000, or the amount found due, and for interest from the date of demand, and costs. House of Wines answered, demanded a jury trial,2 and following a pretrial conference, filed a motion for reference to the Auditor-Master of the amount in dispute in order to simplify the jury's task of understanding "complicated issues concerning the amount in dispute." The trial court granted the motion and, on October 30, 1978 issued an order of reference stating:
Upon consideration of defendant's motion for reference and a continuance it is this 30 day of October, 1978
ORDERED that the following issues are hereby referred to the office of the Auditor-Master:
a. the value of wines transferred to defendant;
b. the amount of proceeds realized by the sale of wines through defendant;
c. the amount of proceeds received by the defendant; and
d. the amount of proceeds received by plaintiffs or their alleged agents or representatives
and it is
FURTHER ORDERED that trial of this matter set for November 2, 1978 be continued until such time as proceedings before the Master are resolved.
After reviewing the case file and meeting with counsel, the Auditor-Master heard four days of testimony, reviewed 48 exhibits offered by the parties, and submitted a tentative report to them. House of Wines filed a number of suggested changes to the report, including deletion of the master's fifth conclusion, that House of Wines owed $46,661.89 to appellees and judgment be entered in favor of appellees and against appellant for this amount, on the ground that the conclusion exceeded the scope of the order of reference. On November 30, 1982, the Auditor-Master submitted a final report to the court.3 At trial, House of Wines objected to the Auditor-Master's report on the ground that the Auditor-Master had failed to conduct an independent audit.4
D.C.Code § 11-1724 (1981) provides in pertinent part:
Auditor-Master. There shall be an Auditor-Master of the Superior Court who shall (1) audit and state fiduciary accounts, (2) execute orders of reference referred by the Superior Court and perform duties in connection with the execution of such orders in accordance with Rule 53 of the Federal Rules of Civil Procedure or other applicable rule, and (3) perform such other functions as may be assigned by the Superior Court.
Under Super.Ct.Civ.R. 53(b),5 reference to a master is limited in jury trials to exceptional cases in which the issues are complicated and involve matters of account and difficult computation of damages. The master's authority in a particular case is defined by the order of the trial court referring specific matters to the master.
Rule 53(c) provides in pertinent part that when reference to a master is made,
[t]he order of reference to the master may specify or limit his powers and may direct him to report only upon particular issues or to do or perform particular acts or to receive and report evidence only. . . . Subject to the specifications and limitations stated in the order, the master has and shall exercise the power to regulate all proceedings in every hearing before him and to do all acts and take all measures necessary or proper for the efficient performance of his duties under the order.
Appellant contends that the trial court erred in allowing the Auditor-Master to testify and in admitting his report into evidence because the Auditor-Master exceeded his authority under the order of reference. Appellant reads the order to limit the Auditor-Master's power to the narrow function of reporting four limited facts. However, contrary to appellant's reading, the language of the order is broad, stating "the following issues are hereby referred to the Office of the Auditor-Master." The court did not order the Auditor-Master to perform or not perform any particular function with regard to these four issues. Accordingly, under Rule 53(c), it was appropriate for the Auditor-Master to hold hearings, review exhibits, find facts relevant to the four issues referred to him, and to draw conclusions of law where necessary for his factual determination.6
The question, then, is whether the master's findings were confined to the scope of the court's order. Appellant contends five findings of fact exceeded the scope of the order.7 However, appellee responds that appellant is raising these objections for the first time on appeal. The record indicates that appellant objected to the draft report in suggestions submitted to the master, and objected generally at trial, prior to admission of the Auditor-Master's report, to the master's testimony about the report and also objected specifically because of the absence of an independent audit.8 This court will not consider, in the absence of circumstances amounting to manifest injustice, issues which are raised for the first time on appeal. Gillespie v. Washington, 395 A.2d 18, 21 (D.C. 1978); Miller v. Aviron, 127 U.S.App.D.C. 367, 370-71, 384 F.2d 319, 321-22 (1967). We find no manifest injustice; during the six day trial appellant introduced evidence to dispute the Auditor-Master's findings and conclusions, and so argued to the jury in closing argument. Accordingly, we consider only whether appellant's general objection to the master's testimony and specific objection to the absence of an independent audit are a sufficient basis on which this court can hold that the trial court erred.
The Auditor-Master's task was to determine the amount of the proceeds realized by the sale of the wines, and the respective amounts received by the parties. To do so, he reviewed...
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