National Union Fire Ins. Co. v. Spillars

552 So. 2d 627, 1989 WL 134345
CourtLouisiana Court of Appeal
DecidedNovember 6, 1989
Docket20,752-CA
StatusPublished
Cited by20 cases

This text of 552 So. 2d 627 (National Union Fire Ins. Co. v. Spillars) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Union Fire Ins. Co. v. Spillars, 552 So. 2d 627, 1989 WL 134345 (La. Ct. App. 1989).

Opinion

552 So.2d 627 (1989)

NATIONAL UNION FIRE INSURANCE COMPANY OF PENNSYLVANIA, Appellee,
v.
Kenneth W. SPILLARS, Johnny Hodge dba Hodge Auto Supply and Crow-Burlingame Company, Appellants.

No. 20,752-CA.

Court of Appeal of Louisiana, Second Circuit.

November 6, 1989.
Writs Denied January 12, 1990.

*628 Theus, Grisham, Davis & Leigh by David H. Nelson and Brian Crawford, Monroe, for appellee/Nat. Union Fire Ins. Co.

Davenport, Files & Kelly by Thomas W. Davenport, Jr., Monroe, for appellant/Kenneth W. Spillars.

Barnes, Jefferson, Robertson & Green by Stephen A. Jefferson, Monroe, for appellant/Johnny Hodge.

Shotwell, Brown & Sperry by Marshall T. Napper, Monroe, for appellee/Crow-Burlingame Co.

Before HALL, MARVIN and NORRIS, JJ.

NORRIS, Judge.

This is a suit by an insurance company to recover from the alleged tortfeasors the proceeds it paid on a policy against embezzlement. The insured, Wickes Co. d/b/a Howard Brothers Discount ("Howard"), absorbed *629 the first $50,000 of the loss and assigned its rights to the plaintiff, National Union Fire Ins. Co., who sued for the entire loss, $98,841.57. The trial court overruled exceptions of prescription and rendered judgment against two defendants, Kenneth Spillers (misspelled as Spillars in the caption; hereinafter "Spillers") and Johnny Hodge d/b/a Hodge Auto Supply ("Hodge") for $67,397.28. The court dismissed claims against a third defendant, Crow-Burlingame Co. After Hodge's motion for a new trial was denied, Hodge and Spillers separately took devolutive appeals, urging the trial court erred in finding:

(1) Prescription did not bar the suit;
(2) Spillers committed fraud;

(3) Hodge was a civil coconspirator with Spillers; and

(4) Quantum.
For the reasons expressed, we affirm.

Facts

Spillers was shop foreman at the Howard Distribution Center in Monroe from 1981 to 1986. He was in charge of maintaining their fleet of tractor-trailer rigs and had complete authority to buy parts and labor on Howard's account.

According to the company's Director of Loss Prevention, Mr. Barry Nichols, Howard received an anonymous phone tip in November 1984. Nichols notified the Associate Director, Mr. Ray Hughes, and began reviewing all of Howard's "paid invoice register" records. After about a month Nichols noticed a large number of invoices from Johnny Hodge. This was odd, as Hodge specialized in 4-wheel drive vehicles; Howard's fleet did not have any 4-wheel drives. Nichols telephoned Hodge, who verified he serviced 4-wheel drives. Nichols also apoke with Mr. Talmadge Simpson of Crow-Burlingame, whose invoices also seemed unusual. Nichols began to entertain doubts that parts listed on many of Hodge's and Crow-Burlingame's invoices were actually being delivered to Howard.

On February 18, 1985 Nichols met with Dep. Gary Brooks of the Ouachita Parish Sheriff's Office, saying he had questions about possible illegal activity. Dep. Brooks could not interpret the invoices; he testified that Nichols suspected Spillers of paying fraudulent invoices because Spillers "was the most logical person." In order to clear things up, Dep. Brooks subpoenaed Hodge's records on February 25 and interviewed him the next day. One paper in Dep. Brooks's file listed the date of the interview as February 20 but he was certain this was a typographical error. After their meeting, Dep. Brooks consulted the D.A. and offered Hodge immunity from prosecution if he would give a statement. Hodge did so on February 26, admitting in general terms a conspiracy to misappropriate Howard funds. Hodge eventually identified about 40 invoices for which no parts had been sent to Howard but Howard remitted payment. Hodge applied these monies to Spillers's personal account. Dep. Brooks felt that with receipt of Hodge's statement there was enough evidence to prosecute.

Immediately after obtaining Hodge's statement on February 26, Nichols and Hughes went to the Distribution Center, picked up Spillers and brought him to the Home Office. There they questioned him most of the day. By day's end, Spillers had signed two statements in which he admitted having an agreement with Hodge to sell Howard rearends he had rebuilt at his shop, and that most rearend charges billed to Howard were not legitimate. Nichols and Hughes clearly understood this to mean that invoices were submitted and paid, but no parts delivered. The statements are both dated February 26, 1985, and set the amount of taking at $75,000 and $103,000 respectively. After giving these statements, Spillers was arrested on charges of theft. After Dep. Brooks took him into custody and Mirandized him, Spillers voluntarily remarked that he was "involved with Hodge" to get fraudulent benefits worth about $125,000 from Howard. Spillers then asked for a lawyer.

National Union filed the instant suit on February 24, 1986. At trial National Union showed that Spillers was an avid 4-wheel drive mud-truck racer. He always went to *630 Hodge for maintenance and repair of his personal racing truck and Broncos; the racing truck carried a Howard Brothers logo. During racing season his bills with Hodge could total several thousand dollars a month. He would periodically telephone Hodge and tell him to invoice Howard for a rebuilt 18-wheeler part, usually a front or rear rearend. Hodge would send the invoice to Howard, where Spillers, as foreman, would approve it and send it to accounts payable. When Hodge received the check from Howard, he would apply the money to Spillers's account. Spillers's trucks represented the majority of Hodge's business during this time.

In his defense, Spillers testified he was pressured or coerced into giving the statements. We will discuss his testimony in greater depth later, but in essence he admitted that Hodge did not supply all the rearend parts for which he submitted bills, at Spillers's request, to Howard. He asserted, however, that he himself was rebuilding the parts at his own shop and selling them to Howard at a fair price; he used Hodge as a middleman only to avoid a company policy against buying from its own employees. For this reason the situation might look like fraud, but it was not.

Hodge's testimony was evasive but he ultimately admitted he had not supplied many parts for which he billed Howard. He was also unaware whether Spillers or anyone else was actually supplying them. Rather, he assumed that Howard was "sponsoring" Spillers's mud racing activities, and that the cost of repairs to the truck and Broncos was something "given to him." Hodge admitted that the majority of his work was derived from Spillers's trucks.

In written reasons for judgment the trial court found National Union had established by a preponderance of evidence that Spillers and Hodge engaged in a scheme to charge Howard for parts that were not delivered. It then considered and rejected their explanations as incredible and rendered judgment for the total of the fictitious invoices identified by Hodge.

Discussion: Prescription

By their first assignments, Spillers and Hodge claim the trial court erred in overruling the exceptions of prescription. They contend the action had prescribed before suit was filed on February 24, 1986.

The suit is based on misappropriation or wrongful taking. It is therefore a delictual action and subject to liberative prescription of one year. LSA-C.C. art. 3492. Ordinarily prescription begins to run on the day the injury or damage is sustained.

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Bluebook (online)
552 So. 2d 627, 1989 WL 134345, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-union-fire-ins-co-v-spillars-lactapp-1989.