United Bank of Pueblo v. Hartford Acc. & Indem. Co.

• Decision Date: 30 January 1976
• Docket Number: No. 74--1875,74--1875
• Citation: 529 F.2d 490
• Parties: UNITED BANK OF PUEBLO, Plaintiff-Appellee, v. HARTFORD ACCIDENT & INDEMNITY COMPANY, Defendant-Third-Party Plaintiff-Appellant, v. UNITED BANK OF DENVER, Third-Party Defendant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 490

529 F.2d 490

UNITED BANK OF PUEBLO, Plaintiff-Appellee, v. HARTFORD ACCIDENT & INDEMNITY COMPANY, Defendant-Third-Party Plaintiff-Appellant, v. UNITED BANK OF DENVER, Third-Party Defendant.

No. 74--1875.

United States Court of Appeals,

Tenth Circuit.

Argued Sept. 2, 1975.

Decided Jan. 30, 1976.

Andrew J. Friedrich, Denver, Colo. (H. Gayle Weller and John R. Hickisch, Weller, Friedrich, Hickisch & Hazlit, Denver, Colo., on the brief), for appellant.

James V. Phelps, Pueblo, Colo. (Faricy, Tursi, Phelps, Shepherd & Ballas, Pueblo, Colo., on the brief), for appellee.

Before LEWIS, Chief Judge and SETH and McWILLIAMS, Circuit Judges.

LEWIS, Chief Judge.

This case arose from Hartford's denial of coverage under a banker's blanket bond issued to the United Bank of Pueblo (Pueblo bank) for a cash letter stolen while being transported to the United Bank of Denver (Denver bank). The district court for the District of Colorado held that the loss was covered by insurance and entered judgment against Hartford for $51,963.37, later reduced by $2,500.00, the amount of the bond's deductible.

The case was submitted on stipulated facts. On August 24, 1970, the Pueblo bank prepared a cash letter of around 2,200 checks worth $891,228.32 for delivery to the Denver bank. Prior to sending the cash letter, a transit letter deposit slip, filled out in triplicate, was addressed: 'To: Check Processing Center, United Bank of Denver National Association, P.O. Box 5848, Denver, Colorado 80217.' The Pueblo bank retained one copy of the deposit slip, sealed the other two in the bag with the cash letter, and delivered the bag to Continental Trailways in Pueblo, for shipment to the 'Denver U.S. National Bank, Denver, Colorado' as consignee.

When the sealed bag arrived at the Continental Trailways' office in Denver, employees of the bus line notified the Denver bank of its presence. The Denver bank sent Mr. Blinde, an employee in the bank's mail room, to retrieve the bag. Blinde left from the bank's Lincoln Street entrance and proceeded to the bus company's office at Seventeenth and Broadway, a distance of approximately 150 yards.

After executing a receipt to the bus company, Blinde commenced his return to the bank via the bank's outdoor mall. Since it was approximately 11:00 p.m., the only entrance open was the Lincoln Street entrance. Before reaching this entrance, Blinde was assaulted by two unknown men who stole the cash letter. While the cash letter was never recovered, the Pueblo bank was able to reduce its loss to $46,931.71, expending $5,031.66 to do so.

The issue before the trial court which is the subject of this appeal was:

(W)ere the checks, at the time they were stolen, in the custody of a person acting as a messenger, as required by the 'In Transit' clause, as Plaintiff contends, or, as contended by the Defendant, did the delivery of the checks at the bus station to Mr. Blinde, a mail room employee of the Denver U.S. National Bank, constitute a delivery of the checks 'at destination', and, at that point, terminate the policy liability?

In response to this issue, the trial court made the following conclusion of law:

2. At the time the checks were stolen they were 'in transit' within the meaning of the policy. The transit letter (Exhibit 'C') stated the destination for delivery to be 'Check Processing Center' of the Denver United States National Bank. The checks never reached the processing center and the delivery of the checks to a mail room employee of the Denver U.S. National Bank was a delivery to him as a messenger and cannot properly be construed as a delivery 'at destination'.

I

Initially, Hartford filed a third-party complaint against the United Bank of Denver which was severed from the original complaint for purposes of the trial. In October 1974, more than 10 months after judgment had been entered against Hartford in the original action, the third-party action had yet to go to trial and the Pueblo bank moved for an entry of final judgment pursuant to Rule 54(b) of the Federal Rules of Civil Procedure, a motion which was granted. Hartford contends that the trial court erred in granting the Pueblo bank's motion for entry of a final judgment pursuant to Rule 54(b). In directing the entry of a final judgment as to the claim between United Bank of Pueblo and Hartford, the trial court 'expressly determined . . . that there was no just reason for delay.' We note that the trial court correctly followed the outlined procedures in certifying a final judgment under Rule 54(b), but this does not necessarily indicate that the certification was proper. On review, this court may examine whether the district court's conclusion that there was not just reason for delay was an abuse of the trial court's discretion. Gas-A-Car, Inc. v. American Petrofina, Inc., 10 Cir., 484 F.2d 1102, 1104--05; F & D Property Co. v. Alkire, 10 Cir., 385 F.2d 97, 101.

No precise test has been developed for determining whether just cause exists for delay, but generally courts have weighed Rule 54(b)'s policy of preventing piecemeal appeals against the hardship or injustice that might be inflicted on a litigant because of the delay. Gas-A-Car, Inc. v. American Petrofina, Inc., 10 Cir., 484 F.2d at 1105. The record reveals several factors upon which the trial court seemed to rely in granting the Pueblo bank's Rule 54(b) motion. For example, the court emphasized the separate nature of the principal claim and the third-party claim, commenting that the two claims had been severed for trial and that the claims were not similar except as to their factual basis. Furthermore, the district court appeared concerned that pending a final judgment in the action, the Pueblo bank was being paid 6 percent interest on its $50,000 judgment, whereas the prime interest rate was 11 percent. Undoubtedly, the then 10-month delay in collecting its judgment was creating a financial injustice for the Pueblo bank.

Finally, the court concluded that since the third-party action between Hartford and the United Bank of Denver depended on whether Hartford was liable to the Pueblo bank, it would facilitate the trial on the third-party action if final judgment was entered in the principal claim. If the trial court's finding that Hartford was liable was reversed on appeal, the third-party action would be moot. If, on the other hand, the trial court's determination was upheld, then the issues for the third-party action would be clearly focused and not muddled by a potential reversal of the determination in the principal claim. In a similar situation, this court determined that it is proper to grant a Rule 54(b) motion where a failure to do so 'would necessitate a piecemeal approach at the trial level.' Gas-A-Car, Inc. v. American Petrofina, Inc., 10 Cir., 484 F.2d at 1105. We conclude from the factors utilized by the court that it did not abuse its discretion in granting the Rule 54(b) motion.

II

The main question raised by Hartford on this appeal is whether the district court properly interpreted the meaning of the 'in transit' clause of the banker's blanket bond, specifically the meaning of 'messenger' and 'delivery at...