Opinion ID: 2535269
Heading Depth: 2
Heading Rank: 3

Heading: Matters Applicable to the Escrow Fund Before the Trial Court

Text: Because the conclusion that the trial court erred in declaring the retroactive tax authorized by Act No. 2009-811 unconstitutional does not eliminate the escrow fund, nor does it necessitate vacatur of the order transferring the escrow fund to a special master charged with administering the fund, [5] we must reach the additional issues raised by the County dealing with those aspects of the order compelling the transfer of the escrowed funds as it relates to computation of the amount included in the fund and the accrual of interest pursuant to § 8-8-10, Ala.Code 1975.
The trial court's order of December 23, 2009, resolved a dispute between the parties as to the amount Jefferson County had collected in taxes between January 12 and August 14, 2009. The County calculated the total amount collected during that period, with interest, as $37,796,302.06; the taxpayers calculated the total amount collected during that period as $47,812,627.95. The trial court adopted the taxpayers' method of calculation and ordered the County to pay the additional $10,016,325.89 to the special master within 15 days of its order. The County complied with that order. The County argues that the amount of the escrow fund should include only those taxes Jefferson County levied between January 12, the date of the trial court's injunction, and August 14, the effective date of Act No. 2009-811. The County contends that the trial court used an irrational methodology for calculating the amount collected, but it also contends that even under the trial court's methodology, the court miscalculated the amount of the refund and required the County to pay more than $10 million too much. The taxpayers argue that the total proceeds of Jefferson County's occupational taxing activities after the trial court's order of January 12 and before any new tax was authorized by the legislature should be included in the escrow fund. It is factually undisputed, the taxpayers say, that Jefferson County collected a total of $47,812,627.95 in occupational taxes and business-license fees attributed to the injunction ordering the moneys to be deposited to the escrow fund. It is unnecessary for this Court to decide whether the trial court erred in using the methodology argued by the taxpayers rather than the methodology argued by the County because we agree with the County that under either method, the trial court erred in including approximately $10 million in the escrow fund. According to the trial court's order of January 12, which has become the law of the case, Jefferson County had the authority to levy an occupational tax before January 12 and after August 13. Under the when received approach as used by the trial court, the taxes paid after January 12 as a result of a valid levy and taxes paid after August 13 as a result of an invalid levy are both refunded. Requiring a refund of approximately $10 million in taxes levied before January 12, 2009, and received thereafter, while also requiring a refund of approximately $10 million in taxes levied before August 13, 2009, and received thereafter is inconsistent and allows the taxpayers a double recovery. If the tax was legal when levied, then those tax receipts received after January 12 but levied before that date should not be included in the escrow fund. By the same token, however, those taxes levied before August 13, 2009, but received thereafter should be included in the escrow fund.
The trial court's December 23 order also required the County to pay post judgment interest of 12% on the tax receipts it had included in the escrow fund. The County argues that postjudgment interest cannot accrue until the trial court issues a final judgment for a fixed amount of money damages. No final judgment was entered in this case, the County says, until the trial court entered the December 23 order, at which time the County satisfied the judgment. The taxpayers argue that the occupational-tax receipts deposited into the escrow fund from January 12, 2009, until August 13, 2009, should bear interest at the rate of 12%, and, therefore, that the trial court properly required the County to pay interest on the amount in the escrow fund. Section 8-8-10, Ala.Code 1975, provides: Judgments for the payment of money, other than costs, based upon a contract action, bear interest from the day of the cause of action, at the same rate of interest as stated in said contract; all other judgments shall bear interest at the rate of 12% per annum, the provisions of § 8-8-1 notwithstanding, provided that fees allowed a trustee, executor, administrator, or attorney, and taxed as part of the cost of the proceeding, shall bear interest at a like rate from the day of entry. The trial court held in its December 23 order that the amount owed by the County to the taxpayers became fixed in an amount no less than the amount reported each month. Then, in its order of January 15, 2010, the trial court stated: This Court has determined that the amount of the taxes on which postjudgment interest has accrued, and the dates from which such interest has accrued thereon, should be calculated according to the amounts and dates of the County's certifications filed with the Court or provided to the [taxpayers'] attorneys pursuant to the Order of March 20, 2009. It is the County's certifications which `fix' the amount(s) on which postjudgment interest has accrued. .... In the Order of December 23, 2009, this Court found that the County underreported by $10,016,325.89 the amount received between January 12, 2009, and August 14, 2009. Accordingly, the Order of December 23, 2009, fixed the corpus of the Settlement Fund at $47,812,627.95. Postjudgment interest is, therefore, deemed to hereafter accrue on the corpus of the said Fund at the rate of $15,719.22 per day. Section 8-8-10 applies only when the judgment is one for the payment of money, i.e., a `money judgment.' Alabama Dep't of Conservation & Natural Res. v. Exxon Mobil Corp., 11 So.3d 194, 203 (Ala.2008). This Court has defined a final judgment as follows: `A final judgment is a terminative decision by a court of competent jurisdiction which demonstrates there has been complete adjudication of all matters in controversy between the litigants within the cognizance of that court. That is, it must be conclusive and certain in itself, (citations omitted) All matters should be decided; damages should be assessed with specificity leaving the parties with nothing to determine on their own. A judgment for damages to be final must, therefore, be for a sum certain determinable without resort to extraneous facts, (citations omitted)' Moody v. State ex rel. Payne, 351 So.2d 547, 551 (Ala.1977) (quoting Jewell v. Jackson & Whitsitt Cotton Co., 331 So.2d 623, 625 (Ala.1976)). The order of January 12, 2009, clearly was not a final judgment. That order was not a money judgment; instead, it held that Act No. 99-669 had repealed the 1967 Act, and it entered an injunction requiring the County to place the occupational taxes collected in an escrow fund. The taxpayers described the order as an injunction in their response to the County's second motion for an emergency stay in Jefferson County I: Upon [the taxpayers'] Motion for Summary Judgment, the trial court ruled, on January 12, that the Alabama Legislature validly repealed the [County's] authority to impose and collect the subject occupational and business license taxes. Even though the trial court had clearly ruled that the [County's] taxing authority had been lawfully repealed by the Legislature, the trial court entered an interlocutory injunction to maintain the status quo during appeal allowing [the County] to impose and collect occupational and business licenses taxes in Jefferson County, so long as the collected funds are deposited into a secure escrow account. Taxpayers' response, p. 2 (emphasis added). The taxpayers continued to describe the January 12, 2009, order as an injunction in their appellees' brief in this appeal: Here, the trial court was faced with a declaratory judgment action, filed pursuant to A.R. Civ. P. Rule 57. In response, the trial court declared that the County's authority to exact an occupational tax had been validly repealed by Act 99-669. In an abundance of caution, the trial court issued an injunction, in accord with A.R. Civ. P. Rule 65, allowing the County to collect the subject taxes during the pendency of the anticipated appeal and, thus, protect the Taxpayers' common law count for money had and received.... The trial court declared that the monies collected pursuant to its Rule 65 injunction were the property of the Taxpayers. Taxpayers' brief at 34-35 (emphasis added). The fact that the amount owed by the County to the escrow fund became fixed each month does not transform the injunction into a final judgment. This Court rejected that reasoning in Exxon, in which the trial court had issued a declaratory judgment ordering Exxon to pay the State royalties beginning in December 2003 `according to the plain, unambiguous language of the leases' between the State and Exxon. 11 So.3d at 198. After Exxon paid the royalties in 2008, the State requested postjudgment interest on the amount of the royalties. In explaining why the 2003 declaratory judgment did not constitute a money judgment for purposes of § 8-8-10, this Court stated that the judgment did not adjudicate or fix an amount of future royalties owed the State by Exxon. Rather, the judgment simply informed Exxon that it was to compute future royalties according to the leases as interpreted by the jury. 11 So.3d at 203. The Court rejected the State's argument that the declaratory judgment had incorporat[ed] into that judgment each monthly royalty payment as it came due, thus fixing the State's right to those payments. 11 So.3d at 202. The trial court erred in awarding postjudgment interest on the monthly deposits the County made to the escrow fund. The trial court also erred in requiring the County to pay postjudgment interest during the pendency of this appeal after it satisfied the judgment of December 23. We agree with the reasoning of the Court of Civil Appeals that the dispositive issue for determining whether a defendant has satisfied a judgment is not whether [the defendant] ... continued to prosecute its appeal beyond the date of the purported satisfaction ...; rather, it is whether moneys owed by [the defendant] to [the plaintiff] under the judgment were made available to [the plaintiff] without any restriction or condition not found in the judgment itself. Birmingham Pain Ctr., Inc. v. Cosgrove, 896 So.2d 538, 545 (Ala.Civ.App.2004). The County paid into the escrow fund established by the January 12 injunction the amount the trial court ordered it to pay. The payment of money into the court is a proper means of satisfying a judgment. Elmore County Comm'n v. Ragona, 561 So.2d 1092, 1098 (Ala.1990).