Philadelphia Gear Corp. v. FDIC

• Decision Date: 17 May 1984
• Docket Number: No. CIV-82-1191-W.,CIV-82-1191-W.
• Citation: 587 F. Supp. 294
• Parties: PHILADELPHIA GEAR CORPORATION, Plaintiff, v. FEDERAL DEPOSIT INSURANCE CORPORATION, a national corporation, in its official capacity as Receiver of Penn Square Bank, N.A. and Deposit Insurance National Bank of Oklahoma City, a national banking association, Defendants.
• Court: U.S. District Court — Western District of Oklahoma

587 F. Supp. 294

PHILADELPHIA GEAR CORPORATION, Plaintiff, v. FEDERAL DEPOSIT INSURANCE CORPORATION, a national corporation, in its official capacity as Receiver of Penn Square Bank, N.A. and Deposit Insurance National Bank of Oklahoma City, a national banking association, Defendants.

No. CIV-82-1191-W.

United States District Court, W.D. Oklahoma.

May 17, 1984.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Walter B. Stuart, IV and Gerald F. Slattery, Jr., Gordon, Arata, McCollam & Stuart, New Orleans, La., William B. Rogers and R. Steven Haught, Ames, Daugherty, Black, Ashabranner, Rogers & Fowler, Oklahoma City, Okl., for plaintiff.

James Vogt and Ross A. Plourde, Reynolds, Ridings & Hargis, Oklahoma City, Okl., Donald B. McKinley, Sr. Atty., Federal Deposit Ins. Corp., Washington, D.C., for defendants.

ORDER

LEE R. WEST, District Judge.

This matter was tried to the bench on September 20 and 21, 1983, and the Court entered its Findings of Fact and Conclusions of Law and Judgment on February 9, 1984. Before the Court now are two post-trial motions. Specifically, the plaintiff has moved to alter or amend the judgment pursuant to Federal Rule of Civil Procedure 59(e) and for an award of attorneys' fees. The defendants have responded in opposition to both. For the reasons that follow, the former motion is granted in part and denied in part, and the latter motion is denied.

I

First, the plaintiff seeks to alter or amend the judgment in two respects: to specify the date of the maturity of the credit, from which time it is entitled to interest from the FDIC in its corporate capacity, and to order the FDIC in its capacity as receiver to remit to the plaintiff a receiver's certificate in the amount of $624,728.50, instead of $45,200.00. Each aspect of the motion is analyzed in turn.

A

As to the latter, the plaintiff in effect requests the Court to abandon its determination that letter of credit 1042 is limited to $145,200.00. Findings of Fact and Conclusions of Law 8-11 (Feb. 9, 1984). Rather, the plaintiff contends that the credit covered the entire amount of the underlying sales contract with Orion Manufacturing Corporation and, consequently, that all of the drafts (less the insured amount of $100,000.00) constitute a claim against the receiver. The Court is unconvinced; accordingly, this aspect of the motion to alter or amend is denied.

B

Next, in the judgment, the Court directed the FDIC in its corporate capacity to pay interest on the award of deposit insurance "from the date of the maturity of the credit ..." Judgment (Feb. 9, 1984). The plaintiff correctly argues that that date is July 12, 1982. As this Court previously found, on Wednesday, July 7, 1982, the plaintiff presented to the receiver for payment three complying drafts on letter of credit 1042 in the total amount of $242,370.00. Findings of Fact and Conclusions of Law, supra, at 4-5. Under the Oklahoma Commercial Code, see id. at 6-8, the receiver had until the close of the third banking day following receipt of the drafts within which to honor them, unless the presenter expressly or impliedly consented to more time.¹ 12A Okla.Stat. § 5-112(1). Failure to honor within this time frame constitutes dishonor of the drafts and of the credit itself. Id. Thus, the receiver had until Monday, July 12, 1982, to honor the plaintiff's drafts. At that time, the credit matured.

C

Finally, the Court notes sua sponte that the rate of prejudgment interest is not specified in the judgment. That rate is six percent (6%). In the absence of a federal statute setting the rate of prejudgment interest, federal courts look to the law of the forum state to give substance to the federal common law. See Tosco Corp. v. FDIC, 723 F.2d 1242, 1249 (6th Cir. 1983); Dependahl v. Fallstaff Brewing Corp., 653 F.2d 1208, 1219 (8th Cir.1981); First Empire Bank-New York v. FDIC, 634 F.2d 1222, 1224-25 (9th Cir. 1980); West v. Harris, 573 F.2d 873, 882-84 (5th Cir.1978). See generally Note, Interest in Judgments Against the Federal Government: The Need for Full Compensation, 91 Yale L.J. 297, 306-309 (1981). In Oklahoma, prejudgment interest on a contract claim, when allowable, is set by law at six percent. See 15 Okla.Stat. § 266 (1981); 23 Okla.Stat. § 6. See generally Note, Prejudgment Interest in Oklahoma, 34 Okla.L.Rev. 643 (1981).

II

Second, the plaintiff seeks from the defendants an award of attorneys' fees incurred in connection with this action. This request is without merit and is denied.

A

The general, so-called "American rule" is that attorneys' fees are not recoverable by the prevailing litigant in the absence of statutory authorization or an enforceable contract allowing them. Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 247-57, 95 S.Ct. 1612, 1616-21, 44 L.Ed.2d 141 (1975). Accord Garner v. City of Tulsa, 651 P.2d 1325 (Okl.1982); Puckett v. Southeast Plaza Bank, 620 P.2d 461 (Okl.App.1980). In analyzing the allowability of fees in the instant case, it must be noted that the FDIC is being sued in two different capacities, as receiver and as corporate insurer of deposits, and that judgments against them are satisfied from two different sources, the estate of the failed Bank and the federal deposit insurance fund, respectively. Consequently, the two must be examined separately.

B

First, there is no legal basis for an award of fees against the FDIC as receiver. The plaintiff's suit against the receiver is based on its wrongful dishonor of a letter of credit issued by Penn Square Bank prior to its collapse. Although this action is "deemed" to arise under federal law, 12 U.S.C. § 1819 (fourth), the substantive right involved originates in state law under the Commercial Code and is only then incorporated into the federal common law. Findings of Fact and Conclusions of Law, supra, at 6-8. Having looked to state law for guidance as to the rights of the plaintiff and the receiver, it is logical to look there as to their remedies as well. See generally 19 C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure § 4513 (1982).

Significantly, letter of credit 1042 at issue here does not by its terms permit an award of attorneys' fees in a wrongful dishonor action. Plaintiff's Exhibit 1; Findings of Fact and Conclusions of Law, supra, at 2-3.

Further, Oklahoma law does not provide for an award of attorneys' fees in an action for the wrongful dishonor of a letter of credit. Initially, the Commercial Code does not itself provide for such an award. 12A Okla.Stat. § 5-115(1). See Bossier Bank & Trust Co. v. Union Planters National Bank, 550 F.2d 1077, 1083-84 (6th Cir.1977). Secondly, neither of the two costs statutes on which the plaintiff relies allow for an award of fees in this case. Section 936 of Title 12 of the Oklahoma Statutes provides:

In any civil action to recover on an open account, a statement of account, account stated, note, bill, negotiable instrument, or contract relating to the purchase or sale of goods, wares, or merchandise, or for labor or services, unless otherwise provided by law or the contract which is the subject of the action, the prevailing party shall be allowed a reasonable attorney fee to be set by the court, to be taxed and collected as costs.

12 Okla.Stat. § 936 (1981). Section 937 of Title 12 likewise permits an award of attorneys' fees to a prevailing party:

in any civil action to enforce payment of or to collect upon a check, draft, or similar bill of exchange drawn on a bank or otherwise, payment upon which said instrument has been refused because of insufficient funds or no account ...

12 Okla.Stat. § 937.

Neither statute expressly refers to a letter of credit, which is a unique commercial instrument. See generally J. White & R. Summers, Handbook of the Law Under the Uniform Commercial Code § 18-2 (2d ed. 1980). Moreover, these statutes cannot properly be interpreted to include an action on a letter of credit. First, these statutes are in derogation of the common law rule against awarding fees, see Garner v. City of Tulsa, supra, 651 P.2d 1325; Puckett v. Southeast Plaza Bank, supra, 620 P.2d 461, so they should be narrowly construed, see e.g., In re Adoption of Graves, 481 P.2d 136, 138 (Okl.1971). Cf. Florida National Bank v. Alfred & Ann Goldstein Foundation, Inc., 327 So.2d 110, 111 (Fla.App.1976) (interpreting Florida fees and costs statutes in a wrongful dishonor action). See generally 2A Sutherland, Statutes and Statutory Construction §§ 50.01, 50.02 (4th ed. 1973). Second, the statutes clearly enumerate the particular instruments to which they apply, and under the principle of statutory construction expressio unius est exclusio alterius, they should not be broadened by the Court to include others well outside their terms unless the legislature intends otherwise. See In re Arbuckle Master Conservancy District v. Petitti, 474 P.2d 385, 391-92 (Okl.1970). See generally 2A Sutherland, supra, §§ 46.23-46.25. Cf. Edwards v. Walden, 595 P.2d 445 (Okl.1979) (suit to enforce a settlement agreement of a contract claim not within § 936); Goodman v. Norman Bank of Commerce, 565 P.2d 372 (Okl.1977) (action on bank's failure to meet its midnight deadline not within § 936); Security Bank & Trust Co. v. Federal National Bank & Trust Co. of Shawnee, 554 P.2d 119 (Okl. App.1976) (action challenging sufficiency of notice of dishonor of check not within § 936). But cf. Hardesty v. Andro Corp.-Webster Division, 555 P.2d 1030, 1035-36 (Okl.1976) (action for breach of an implied warranty is within Section 936 as a "contract relating to" the purchase or sale of goods or wares).

The plaintiff contends that this is an action on a "contract relating to the purchase or sale of goods, wares, or merchandise" under Section 936 or, alternatively, one "to enforce payment of or to collect upon a check, draft, or similar bill of exchange" under Section 937. Motion to Assess Attorney's Fees and Brief in Support...