Emmett C. Worley v. Columbia Gas of Kentucky, Inc., Kentucky Gas Transmission Corporation, Emmett C. Worley, Plaintiff-Cross-Appellant v. Columbia Gas of Kentucky, Inc., Defendants-Cross-Appellees. Emmett C. Worley v. Mutual Pipeline Contractors, Inc.

491 F.2d 256
CourtCourt of Appeals for the Sixth Circuit
DecidedFebruary 1, 1974
Docket73-1204
StatusPublished
Cited by2 cases

This text of 491 F.2d 256 (Emmett C. Worley v. Columbia Gas of Kentucky, Inc., Kentucky Gas Transmission Corporation, Emmett C. Worley, Plaintiff-Cross-Appellant v. Columbia Gas of Kentucky, Inc., Defendants-Cross-Appellees. Emmett C. Worley v. Mutual Pipeline Contractors, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Emmett C. Worley v. Columbia Gas of Kentucky, Inc., Kentucky Gas Transmission Corporation, Emmett C. Worley, Plaintiff-Cross-Appellant v. Columbia Gas of Kentucky, Inc., Defendants-Cross-Appellees. Emmett C. Worley v. Mutual Pipeline Contractors, Inc., 491 F.2d 256 (6th Cir. 1974).

Opinion

491 F.2d 256

Emmett C. WORLEY, Plaintiff-Appellee,
v.
COLUMBIA GAS OF KENTUCKY, INC., Kentucky Gas Transmission
Corporation, Defendants-Appellants.
Emmett C. WORLEY, Plaintiff-Cross-Appellant,
v.
COLUMBIA GAS OF KENTUCKY, INC., et al., Defendants-Cross-Appellees.
Emmett C. WORLEY, Plaintiff-Appellee,
v.
MUTUAL PIPELINE CONTRACTORS, INC., et al., Defendants-Appellants.

Nos. 73-1204, 73-1205, 73-1207.

United States Court of Appeals, Sixth Circuit.

Argued Oct. 3, 1973.
Decided Dec. 27, 1973, Rehearing Denied Feb. 1, 1974.

Joseph L. Arnold, Lexington, Ky., and Thomas E. Morgan and H. Raymond Andrews, Jr., Charleston, W. Va., on brief, for Kentucky Gas Transmission Corporation and Columbia Gas of Kentucky, Inc.

Arthur L. Brooks, Lexington, Ky., and Leslie W. Morris, II, Stoll, Keenon & Park, Lexington, Ky., on brief, for Mutual Pipeline Contractors, Inc., John T. Dix and Chester Nowicke.

David C. Graves, Jr., Lexington, Ky., on brief, for Emmett C. Worley.

Before WEICK, EDWARDS and CELEBREZZE, Circuit Judges.

WEICK, Circuit Judge.

Mutual Pipeline Contractors, Inc. (hereinafter referred to as Mutual), John T. Dix and Chester Nowicke (Mutual's principal officers), Columbia Gas of Kentucky, Inc. (hereinafter referred to as Columbia Gas), and Kentucky Gas Transmission Corporation (hereinafter referred to as Kentucky Gas Transmission), have appealed from a Judgment entered in the District Court against them in favor of the plaintiff Worley, in the amount of $800,000, on a complaint charging the defendants with conspiring to maliciously prosecute plaintiff Worley for the offense of issuing checks drawn on a bank, which checks were not paid because of lack of sufficient funds. In the testimony these checks were referred to as cold checks.

Motions were made by defendants for a directed verdict at the close of plaintiff's evidence, and were renewed at the close of all the evidence, and were denied by the Court. The Court submitted the issues to the jury which returned a verdict against all defendants, in the sum of $750,000 for compensatory, and $750,000 for punitive damages. The Court denied defendants' motions for judgments notwithstanding the verdicts, but granted their motions for new trials unless Worley agreed to a remittitur of $700,000 in the punitive damage award. Worley agreed and judgment was entered on the verdict in the amount of $800,000.

The principal error assigned by the appellants is that the Court should have directed a verdict in their favor. Worley appealed from the order of remittitur, although he had consented to it without protest.

Kentucky Gas Transmission is a Delaware corporation, authorized to do business in Kentucky. Columbia Gas is a Kentucky corporation, and is a public utility, subject to the jurisdiction of the Kentucky Public Service Commission, and is engaged in selling gas at retail in the Commonwealth of Kentucky.

The case arose out of the Kentucky Gas Transmission pipeline construction project in Brachin, Lewis and Mason Counties in Kentucky, in 1969. The prime contractor for construction of the pipeline was Mutual, whose major responsibility was to dig ditches for the pipe. Mutual awarded a subcontract to Worley, doing business as Inland Pipeline Construction Company, to do the work of bending, laying and welding the pipe furnished by Kentucky Gas.

The contract provided that Mutual was to be paid twice a month by Kentucky Gas, based on estimates prepared at the middle and end of each month. Worley was to receive payment from Mutual on a fixed price per foot. Worley's total expected payment for the contract was to be $158,000; he was also to be paid for extra work done beyond the terms of the contract. Worley needed funds to commence operations, and Mutual arranged to and did advance to him about $25,000, in two installments.

Problems immediately arose over welds made by Worley's employees, which welds were rejected by Kentucky Gas inspectors. Worley's position was that these rejects were due to faulty pipe; Kentucky Gas contended that the fault was in improper welding.

Originally, Worley was to be paid by Mutual after the estimate procedure with Kentucky Gas had been completed; however, because of the reject problem, a pattern developed in which Mutual was assisting in meeting Worley's payroll by making advances to Worley, often before payment by Kentucky Gas on the estimates.

On August 14, 1969 Worley opened a bank account with First Security National Bank and Trust Company in Lexington. Prior to this time Worley had been meeting his payroll on an account which he had with an Iowa bank.

Worley contended that Mutual, through Dix, promised him that he could write payroll checks as he saw fit, and that Mutual had made arrangements with First Security National Bank in Lexington, to cover such checks. Dix denied making any such promise. In addition Gerald Hodges, the bank official responsible for such arrangements, testified that he had no knowledge of any such authorization.

Mutual gave as the reason for their ceasing advances that they thought their prior advances reached the point where they were approaching Worley's total expected payment on the project. Indeed, Mutual claimed it had already paid Worley $60,000 beyond the contract price.

In August and September, 1969, Worley and other Inland officers issued 150 payroll checks totaling $34,000, which checks were dishonored by the bank for insufficient funds. Eleven of these checks were issued in August, the remainder in September. On September 10, 1969 the bank sent Worley a notice informing him of his balance and listing the returned checks. An additional notice was sent on September 12, 1969.

On September 13, 1969 Oral Curtis, a sawmill operator, personally contacted Worley concerning a lumber bill for $2,600, on which payment was overdue; thereupon Worley paid him with two checks post-dated September 27, 1969 and October 11, 1969, because Worley knew he had insufficient funds to cover such checks as of September 13th, the date of actual issuance.

More payroll checks were issued on September 13, 14, 15, 16, 17, and 18. Of the 150 checks written, some were signed by Worley himself, some were signed by his employee, Richard Given, and some were signed by his employee and son-in-law, Douglas Hammock. Most of the checks were for labor; some checks were for material furnished to Worley.

When Dix became aware of Worley's actions, he consulted an attorney, John H. Clarke, Jr., in Maysville, Kentucky, a town near the project site. Clarke advised Dix that under Kentucky law the payees of the cold checks issued by Worley could obtain mechanic's liens against the project, which liens Mutual would eventually have to pay off.

Clarke set up a procedure to pay off the checks in return for releases to prevent subsequent lien claims. Clarke began this payment program on September 18. On the preceding day Roy Clark, Patrick Sappington and Tommy Coker (all employees of Worley) brought their payroll checks to Clarke's office. Clarke told these men that in his opinion an offense had been committed and that they were entitled to obtain warrants.

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Bluebook (online)
491 F.2d 256, Counsel Stack Legal Research, https://law.counselstack.com/opinion/emmett-c-worley-v-columbia-gas-of-kentucky-inc-kentucky-gas-ca6-1974.