Oliver v. Hayes Intern. Corp.

• Decision Date: 11 July 1984
• Citation: 456 So.2d 802
• Parties: Angus OLIVER v. HAYES INTERNATIONAL CORPORATION, a Corporation. Civ. 4152.
• Court: Alabama Court of Civil Appeals

Page 802

456 So.2d 802

Angus OLIVER v. HAYES INTERNATIONAL CORPORATION, a Corporation.

Civ. 4152.

Court of Civil Appeals of Alabama.

July 11, 1984.

Rehearing Denied Aug. 15, 1984.

Certiorari Denied Oct. 19, 1984

Alabama Supreme Court 83-1369.

Harold E. Hayden, Dothan, for appellant.

William L. Lee, III, Peter A. McInish, and William G. Hause of Hardwick, Hause, Segrest & Northcutt, Dothan, for appellee.

HOLMES, Judge.

The plaintiff (Hayes International Corporation) sued the defendant (Angus Oliver) for money paid by mistake. The defendant counterclaimed. The trial court, after both parties rested, granted plaintiff's motion for a directed verdict and entered a judgment for $7,429.40.

The defendant, through able counsel, appeals, contending the trial court erred in excluding (by a motion in limine ) evidence on his counterclaims and in granting plaintiff's motion for directed verdict, thereby rejecting defendant's estoppel, laches, mutuality, and waiver defenses.

We find no error requiring reversal and affirm.

The record reveals the following facts:

The defendant had worked for Hayes International since 1962, first cleaning parts and then later as shop manager. The defendant, who is sixty-seven years old, retired from Hayes in 1982 after some twenty years of service.

Hayes paid the defendant weekly, by a computer-issued check which was mailed to defendant's home address. Oliver was paid by the hour, receiving time-and-one-half, double time, and triple time for overtime, Sunday, and holiday work, respectively.

In 1979, Oliver received checks totaling $11,103.11. In 1980, the checks totaled $12,572.95. In mid-1981, Oliver's pay scale was raised from $6.71 per hour to $7.31 per hour; however, his total pay for that year almost doubled to $23,008.56. John M. Summerford, who as treasurer of Hayes was responsible for the issuance of pay checks, testified that $11,128.00 of this amount was overpayment made by computer error. Summerford testified that in addition to the amounts properly due the defendant by applying his hourly rates to hours worked each week, the computer added into the defendant's check an extra $214.00 per week during all of 1981. Summerford testified that of the 3200 to 3500 Hayes employees, Oliver was the only person whose check was misdrawn and that the company had researched the computer error, but was unable to explain its origin.

By the time Oliver retired in early 1982, Hayes had discovered the error and had, apparently to no avail, asked Oliver to repay the $11,128.00. At that time, the company still owed Oliver two checks totaling $1,336.91, part of this amount representing vacation pay earned under the union contract but not yet paid. The company withheld the two checks as a credit against the repayment it contended it was due from Oliver. It also credited against the overpayment $2,361.69 in excess withholding taxes, which it apparently did not remit to the Internal Revenue Service, to reduce the amount allegedly due from Oliver to $7,429.40.

Oliver, who had dropped out of school before finishing the third grade and who could not read anything other than his name, testified at trial that both he and his wife realized something was wrong with his check from the first pay period of 1981 because the net pay exceeded the gross pay by five dollars. Oliver brought this to the attention of a Billy Myers who sent for Oliver to come to the office and who had a replacement check issued.

After Mr. Myers corrected the check for the first pay period of 1981, Oliver never brought another check to the company's attention, as the following testimony established:

"Q [Defendant's attorney] After you complained to Mr. Billy Myers on that first occasion about your check being wrong and you said he kind of laughed at you, did you make any further complaints about your check being correct or incorrect?

"A [Defendant] No sir. I didn't know whether to go back there or not.

"Q Why is that, Angus?

"A Because, see, you are not allowed to talk to the main bossmen there.

"Q They have got a system you have to go through to get to talk to those people?

"A Yes.

"Q Well, didn't you attempt to follow that system to find out if any of your checks were right or wrong?

"A Well, wasn't no way to find out."

Hayes International filed its complaint against Oliver on May 10, 1982, seeking to recover the $11,128.00. (On the date of trial, plaintiff reduced its demand to $7,429.40 to reflect the credits discussed above.) Oliver filed an answer raising the defenses of equitable estoppel, laches, no mutuality of mistake, and waiver. He also counterclaimed, alleging that plaintiff converted to its own use $2,361.69 originally withheld for payment to the Internal Revenue Service as taxes from the defendant's check and $643.20 which defendant was due as vacation pay, regular wages, and overtime.

On the date of trial, the trial court judge granted Hayes's motion in limine which sought to exclude defendant's evidence on the conversion of the withholding taxes counterclaim and the counterclaim which alleged conversion of the $643.20 allegedly due the defendant for vacation pay and wages. Then, after both plaintiff and defendant were given the opportunity to present evidence, the trial judge granted plaintiff's motion for a directed verdict and dismissed defendant's counterclaims.

Under Alabama law, more specifically the principle of unjust enrichment, one may recover money paid to another under mistake of fact, even if the payor could have discovered the proper facts but was not diligent in doing so. See, e.g., Sherrill v. Frank Morris Pontiac-Buick-GMC, Inc., 366 So.2d 251, 257 (Ala.1978). This the defendant does not question. However, as set out above, the defendant contends that the trial court erred in 1) rejecting defendant's counterclaims and 2) not allowing the jury to consider the defenses of estoppel, laches, mutuality of mistake or waiver.

As discussed above, the trial court granted plaintiff's motion in limine, thereby excluding all defendant's evidence on the counterclaim alleging conversion of the $643.20 vacation pay and regular wages check due defendant.

Plaintiff's arguments given on appeal to support exclusion of evidence on the conversion of the paycheck counterclaim are premised upon the technical definition of conversion and the recent Alabama Supreme Court case of McCain v. P.A. Partners Ltd., 445 So.2d 271 (Ala.1984). In that case the supreme court held that a not yet delivered paycheck could not support an action for conversion because 1) conversion requires the wrongful detention of property in which another has a general or special property right or an immediate right of possession, and 2) a negotiable instrument, such as a paycheck, has no valid existence until it has been delivered. As the allegations of the instant case come squarely within the McCain ruling, they do not support a conversion counterclaim.

On plaintiff's motion in limine the trial court also excluded evidence on defendant's counterclaim that plaintiff converted to its own use amounts withheld from defendant's check as withholding taxes. On appeal, plaintiff relies upon Chandler v. Perini Power Constructors, Inc., 520 F.Supp. 1152 (D.N.H.1981), to support exclusion of all evidence regarding money withheld by an employer from an employee's paycheck for federal income taxes. The employee/plaintiff in Perini also sued his employer for conversion, seeking to recover amounts deducted from his wages, but his complaint was dismissed. In that action the trial court reasoned that 1) the Anti-Injunction Act, 26 U.S.C.A. § 7421(a) (West Supp.1984), prohibits taxpayers from bringing suits to restrain the collection of taxes and 2) that suits by employees against employers based upon taxes withheld are statutorily barred by 26 U.S.C.A. § 3403 (West 1979). Cf. United States Fidelity & Guaranty Co. v. U.S., 201 F.2d 118, 119 (10th Cir.1952) (amount withheld from employee's wages is allowed to him as a credit on his tax liability even though the employer fails to remit such...