International Fidelity Ins. Co. v. Gilliam
| Decision Date | 13 January 1995 |
| Parties | INTERNATIONAL FIDELITY INSURANCE COMPANY v. Clyde H. GILLIAM, Jr. PINNACLE INSURANCE COMPANY v. Clyde H. GILLIAM, Jr. 1930914, 1930915. |
| Court | Alabama Supreme Court |
Eugene P. Stutts and Edward M. Weed of Spain, Gillon, Grooms, Blan & Nettles, Birmingham, for Intern. Fidelity Ins. Co.
Robert B. Huie, Birmingham, for Pinnacle Ins. Co.
Samuel Maples, Birmingham, for appellee.
These appeals are from a summary judgment in favor of Clyde H. Gilliam, Jr., in an interpleader action. The trial court denied a motion to stay and ordered that the monies that had been paid into the court be paid to Gilliam. International Fidelity Insurance Company and Pinnacle Insurance Company (hereinafter together referred to as "International") appeal.
In 1984, Gilliam got a judgment based on a jury verdict against R.B. Ethridge; that judgment awarded Gilliam over $60,000 in damages. In 1992, Gilliam secured a writ of garnishment issued to Met-Pro Corporation ("Met-Pro"), a closely held corporation of which Ethridge was president and vice-president and Ethridge's wife was secretary. The trial court held that Met-Pro was the alter ego of Ethridge and entered a verdict in favor of Gilliam and against Met-Pro for $71,372.
The present lawsuit began when, in order to execute upon the judgment against Met-Pro, Gilliam secured a writ of garnishment issued to the University of Alabama at Birmingham ("UAB"). UAB answered, listing the "balance in contract" that UAB owed Met-Pro on a number of construction projects. UAB also wrote a letter stating that UAB "is or will become indebted to Met-Pro in an amount exceeding the $71,372 listed on the process of garnishment." However, UAB later refused to honor the writ of garnishment. Gilliam then filed a motion with the trial court requesting that certain UAB officials show cause why a judgment should not be imposed against UAB. UAB paid the money into the court and filed an interpleader action. The interpleader action and the garnishment proceeding were consolidated and set for a hearing.
International intervened, contending that it, as surety for Met-Pro, was entitled to the interpleaded funds, because, it alleged, its claims were superior to Gilliam's. International had issued performance bonds and labor and material bonds on behalf of Met-Pro. Met-Pro, a general contractor, performed construction work at UAB on various projects. International contended that it had been informed that Met-Pro was going to be "voluntarily defaulting on [certain] projects due to financial problems."
Gilliam moved to dismiss the interpleader action, contending that when he secured the writ of garnishment the projects at issue at UAB were not in default and that Met-Pro had materially complied with its obligations by substantially completing each project. He contended that International had made no payments under the payment bonds and had performed no work under the performance bonds with respect to the specifically mentioned projects.
The trial court heard the arguments of the parties and entered a comprehensive order that, in part, provided as follows:
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