Life Ins. Co. of Georgia v. Johnson

• Decision Date: 21 August 1998
• Citation: 725 So.2d 934
• Parties: LIFE INSURANCE COMPANY OF GEORGIA v. Daisey L. JOHNSON.
• Court: Alabama Supreme Court

725 So.2d 934

LIFE INSURANCE COMPANY OF GEORGIA v. Daisey L. JOHNSON.

1970037.

Supreme Court of Alabama.

August 21, 1998.

Rehearing Denied November 20, 1998.

J. Mark Hart of Olschner & Hart, P.C., Birmingham; and Davis Carr and Kathleen Cobb Kaufman of Carr, Alford, Clausen & McDonald, Mobile, for appellant.

Sidney W. Jackson III and Robert J. Hedge of Jackson, Taylor & Martino, P.C., Mobile; and Wyman O. Gilmore, Jr., of Gilmore & Gilmore, Grove Hill, for appellee.

SHORES, Justice.

This is the third time this case has been before this Court. The issue now concerns postjudgment interest.

Daisey L. Johnson's action against the Life Insurance Company of Georgia resulted in a jury verdict awarding Ms. Johnson $250,000 in compensatory damages and $15 million in punitive damages. The trial court entered a judgment on that verdict on June 2, 1994. At that time, the parties agreed that interest on the punitive damages portion of the judgment would be waived for 30 days to allow the trial court to rule on various posttrial motions filed by Life of Georgia. In disposing of those motions, the trial court remitted the punitive damages award to $12.5 million. On appeal, this Court affirmed, on the condition that Ms. Johnson accept a remittitur of the punitive damages award to $5 million. Life Ins. Co. of Georgia v. Johnson, 684 So.2d 685 (Ala.1996) (Johnson I).

Following this Court's ruling in Johnson I, Life of Georgia conceded its obligation to pay the compensatory damages portion of the judgment. On June 18, 1996, Life of Georgia tendered to Ms. Johnson's counsel a check in the amount of $306,142.60, in satisfaction of the $250,000 compensatory damages portion of the judgment, plus interest accrued on that amount through May 18, 1996. Ms. Johnson accepted the money, without objection, but did not sign any document indicating that the check was accepted as partial satisfaction of the entire judgment.

Meanwhile, Life of Georgia sought certiorari review by the United States Supreme Court, contending that the punitive damages award violated the Due Process Clause of the Fourteenth Amendment to the United States Constitution. On October 15, 1996, the United States Supreme Court granted Life of Georgia's petition for certiorari review, vacated the judgment of this Court, and remanded the case for reconsideration in light of that Court's opinion in BMW of North America v. Gore, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996). Life Ins. Co. of Georgia v. Johnson, ___ U.S. ___, 117 S.Ct. 288, 136 L.Ed.2d 207 (1996) (memorandum). On remand, this Court issued an opinion, on August 15, 1997, again affirming the trial court's judgment, conditioned upon Ms. Johnson's accepting a remittitur of the punitive damages award to $3 million, alternatively ordering a new trial should she fail to accept that amount. Life Ins. Co. of Georgia v. Johnson, 701 So.2d 524 (Ala.1997) (Johnson II). On August 20, 1997, Ms. Johnson accepted the remittitur of the punitive award. On August 21, 1997, Life of Georgia tendered to Ms. Johnson checks for $3 million and $986.30, in satisfaction of the punitive damages award and the interest accruing upon it from August 20 to August 21, 1997. This Court issued its certificate of judgment on September 3, 1997, which provided in pertinent part: "IT IS NOW CONSIDERED, ORDERED AND ADJUDGED that the judgment of the circuit court for punitive damages be reduced to $3,000,000 and, as thus reduced, the judgment of the circuit court is hereby affirmed, with interest and costs."

Thereafter, a dispute arose between the parties regarding postjudgment interest. On September 8, 1997, Ms. Johnson filed in the circuit court a motion pursuant to Rule 65.1, Ala. R. Civ. P., to "calculate interest, enter judgment and enforce surety's liability to pay $1,129,315 in accrued interest," claiming that Life of Georgia and its sureties still owed interest in that amount on the $3 million punitive damages award from June 2, 1994, the date the trial court entered its judgment. On September 11, 1997, Life of Georgia filed in the circuit court an objection to Ms. Johnson's motion and filed a motion requesting this Court to amend its September 3, 1997, certificate of judgment to specify that postjudgment interest began accruing on August 20, 1997, the date Ms. Johnson filed her acceptance of the remittitur. On September 18, 1997, Ms. Johnson filed in the circuit court a supplemental motion, contending that the payment of $306,142.60 on June 18, 1996, and the payments of $3 million and $986.30 on August 21, 1997, should be applied first to interest on the entire $3.25 million judgment, leaving a principal balance of $1,167,278.45, which, she claimed, continued to accrue interest at 12% per annum.

On September 22, 1997, the trial court issued an order stating in relevant part as follows:

"The Court finds that as of this date, Life of Georgia, Safeco Insurance Company of America, and General Insurance Company of America [the latter two companies being the sureties on the supersedeas bond] still owe $1,167,278.45 in principal, with an additional $10,142.74 in interest to date, for a total sum of $1,177,421.19. This calculation takes into consideration Life of Georgia's three previous partial payments. Additionally, interest continues to accrue at 12% per annum on the $1,167,278.45 principal balance remaining."

This order adopted Ms. Johnson's position that interest on the judgment began accruing on June 2, 1994, the date of the original judgment on the jury's verdict, but was suspended for 30 days pursuant to the parties' agreement; thus, the trial court calculated interest beginning July 2, 1994. The trial court's order also accepted Ms. Johnson's argument that Life of Georgia's payments on June 18, 1996, and August 21, 1997, were "partial payments" to be applied first to interest and then to principal on the entire amount of the judgment, without respect to any division of the judgment as to punitive versus compensatory damages. Thus, the trial court's order held as ineffective Life of Georgia's attempt to stop the accrual of interest on the compensatory damages portion of the judgment via its $306,142.60 payment on June 18, 1996.

Life of Georgia appeals the trial court's order. Life of Georgia has also filed a motion to consolidate its appeal with its motion of September 11, 1997, requesting this Court to amend its September 3, 1997, certificate of judgment. We grant the motion to consolidate, and we consider together the appeal and the motion to amend the certificate of judgment.

I.

Life of Georgia concedes that 12% per annum postjudgment interest applies to the punitive damages award.¹ However, it maintains that interest began to accrue on August 20, 1997, the date upon which Ms. Johnson filed her acceptance of the remittitur of the punitive damages award following our decision in Johnson II, rather than on July 2, 1994 (30 days after the entry of the original judgment), as the trial court held. In fact, Life of Georgia asserts that the trial court had no authority to enter an order awarding postjudgment interest before August 20, 1997, because this Court's certificate of judgment, while allowing Ms. Johnson to recover "interest," did not specify the date on which interest would begin to accrue.

In support of its position, Life of Georgia directs our attention to a line of federal decisions emanating from the United States Supreme Court's ruling in Briggs v. Pennsylvania R.R., 334 U.S. 304, 68 S.Ct. 1039, 92 L.Ed. 1403 (1948). The plaintiff in Briggs obtained a jury verdict awarding money damages, but the trial court held that the defendant was, as a matter of law, entitled to a judgment of dismissal. The court of appeals reversed and directed the trial court to reinstate the jury's verdict and to enter a judgment in favor of the plaintiff, but the appellate court's mandate made no mention of interest. The Supreme Court held that the trial court was bound to follow the mandate of the appellate court and was therefore powerless to award interest for the period before the entry of the judgment on remand, where the appellate court's mandate did not authorize such action. 334 U.S. at 307-08.

Life of Georgia also emphasizes the importance of Ala. R.App. P. 37, which provides:

"Unless otherwise provided by law, if a judgment for money in a civil case is affirmed or the appeal is dismissed, whatever interest is provided by law shall be payable from the date the judgment was entered in the trial court. If a judgment is modified or reversed with a direction that a judgment for money be entered in the trial court, the certificate of judgment shall contain instructions with respect to allowance of interest."

This rule is virtually identical to the federal rule, F.R.App. P. 37, and this Court has noted that an interpretation of a federal rule is persuasive authority for our interpretation of a corresponding state rule. See, e.g., Smith v. MBL Life Assur. Corp., 604 So.2d 406, 407-08 (Ala.1992). The Advisory Committee's Comments to F.R.App. P. 37 state:

"The second sentence of [Rule 37] is a reminder to the court, the clerk and counsel of the Briggs rule.... [A] party who conceives himself entitled to interest from a date other than the date of entry of judgment in accordance with the mandate should be entitled to seek recall of the mandate for determination of the question."

See also DeLong Equipment Co. v. Washington Mills Electro Minerals Corp., 997 F.2d 1340, 1341 (11th Cir.1993) (stating that Rule 37, F.R.App. P., "codifies" the result in Briggs).

Life of Georgia claims that, for the purposes of Ala. R.App. P. 37, our judgment in Johnson II, affirming the trial court's judgment, conditioned upon Ms. Johnson's accepting a remittitur, effectively "modified" the trial court's initial judgment "with a direction that a judgment for money be entered in the trial court." Life of Georgia contends that the second sentence of...