Motion to Dismiss or Affirm — Webb's Fabulous Pharmacies, Inc. v. Beckwith

S

a

Red

ia

§9

in the

| FEB @ 1999

3 up renie Court... RODAK, JR. CLERN

of the

United States

NO. 79-1033

WEBB’S FABULOUS PHARMACIES, INC.,

and ECKERD’S OF COLLEGE PARK, INC., et al

Appellants,

vs.

ARTHUR H. BECKWITH, JR.,

CLERK OF THE CIRCUIT COURT,

and SEMINOLE COUNTY, FLORIDA,

Appellees.

ON APPEAL FROM THE SUPREME COURT

OF THE STATE OF FLORIDA

MOTION TO DISMISS OR AFFIRM

HARRY A. STEWART

| 201 Southeast Sixth Street

Fort Lauderdale, Florida 33301

Telephone: (305) 765-5304

GERALD L. KNIGHT

Post Office Box 406

Fort Lauderdale, Florida 33301

Telephone: (305) 765-5105

NIKKI CLAYTON

County Attorney

Room 302

Seminole County Courthouse

North Park Avenue

Sanford, Florida 32771

Telephone: (305) 323-4330

Attorneys for Appellees

INDEX

Page

OTRO TION go onsineesediccansseeue 1

THE STATE STATUTE INVOLVED AND

THE NATURE OF THE CASE..............0000: 2

RUE ois fae viesi sin Ce 5

ORIOL ANION 5 vc dcvis that iekageceue eee 13

CERTIFICATE OF SERVICE ...............00005 14

TABLE OF CITATIONS

Cases Page

Adams, George, Lee, Schulte & Ward uv.

Westinghouse,

507 F.2d 570 (Sth Cir. 1979) .........c.cccecees 12

Beckwith v. Webb’s Fabulous Pharmacies, Inc.,

NE COTO oil Ck éescvccccccvecesrevs 4

Board of Law Library Trustees v. Lowery,

67 Cal.App.2d 480, 154 P.2d 719 (1945)........ 6

Bordy v. Smith,

150 Neb. 272, 34 N.W.2d 331 (1948) ........... ;

Cardinale v. Louisiana,

EE 10

Drainage Dist. No. 2 v. Ada County,

ae tae. 776, 226 P. 200 (1924)... 2... cece cccves 7

F. G. Oxley Stave Co. v. Butler County,

Sek ack sb be cee ky 10

Gonzalez v.’Danaher,

30 Ill. App.3d 992, 332 N.E.2d 603 (1975) ...... 9

Herndon v. Georgia,

ED cain cv ckscyeedshoepoctscives 10

Hortonviile J.S.D. No. 1 v. Hortonville Ed.,

a ws aae 5

il

TABLE OF CITATIONS (Continued)

Cases Page

In re Deposit Of Public Moneys,

52 D. & C. 646, 93 P.L.J. 147 (Pa.Com.P1. 1945) 9

Kiernan v. Cleland,

47 Ida. 200, 273 P. 988 (1929) .......ccscccccees 7

Kingsley Pictures Corp. v. Regents,

Re PCED 6 Sisk Shdwi gc ixcenievewneres 5

Lawson v. Baker,

220 S.W. 260 (Tex.Ct.App. 1920) ............. 6

Locasio v. Rosewell,

50 Ill. App.3d 794, 365 N.E. 2d 949 (1977)...... 8, 9

Metropolitan Water Dist. v. Adams,

32 Cal.2d 620, 197 P.2d 543 (1948) ............ 6, 8

Money v. State ex rel. Florida First National Bank,

206 So.2d 486 (Fla. 1968) ......ccccccccccccees 5

Monarch Tile Sales v. Frost National Bank

of San Antonio,

496 S.W.2d 254 (Tex.Ct.App., 1973) .......... 6

New York Central & H. R. Co. v. New York,

I I a eciae 10

Ostly v. Saper,

147 Cal.App.2d 671, 305 P.2d 946 (1957) ...... 6

ii

TABLE OF CITATIONS (Continued)

Cases | Page

Phillips Petroleum Co. v. Adams,

513 F.2d 355 (5th Cir.), cert. denied, 423 U.S.

NUN 5b CAs Naa Se Ccaeda ech od pwns seta 6

Ponoma City School District v. Payne,

9 Cal. App.2d 510, 50 P.2d 822 (1935) .......... 6

Sellers v. Harris County,

Ue Oe. FF Rs ATED is ccncccccvncccceven 7,9

Shelley v. Kraemer,

MM ON sod sin dave eawknsnevcnceesi 10

State v. Lehtola,

55 Wis.2d 494, 198 N.W.2d 354 (1972) ......... 11

State v. McFetridge,

84 Wis. 473, 54 N.W. 1 (1893) ................. 7

Street v. New York,

aT NE a eaunC kaos lvontdeeCasanns 10, 11

University of South Carolina v. Elliott,

248 So.C. 218, 149 S.E.2d 433 (1966) .......... 7

United States v. MacMillan,

SP Ae RE cia chaubacdivinsr deawe 7, 8,9

United States v. Mason,

PE MT 6 ob Gd cv as Cakdkdawaaeaas 7

iv

TABLE OF CITATIONS (Continued)

Cases Page

Vansickle v. Shanahan,

212 Kan. 426, 511 P.2d 223 (1973) ............. 11

Constitutional Provisions and Statutes

Cae. Crees Ret. BV, BOs ccoicccevcctacccecus seees 10, 11

Ti eee SE OW on ckévivcttiduwsteteenaneeie 5, 9

Toes SE, DIE: TRE «ck. cicnscdcadacecseunetube ee

i a OS gs as occ vaewdeaiedemueuaen 11

Pia. Stat. $28.33 (197O) ... 2. cvccevevecccecss 2, 3, 5, 6,

9, 10, 11, 12

Wem CR, SEN CIFUD vidios scacvdnccudeauas 5

Fin. Diet. SS7TS. 1004) (ISTO) «5... cccvccnccvesecenes 3

CRD. Than, RAO OE FUR... os cock cewewssewciscbaves 2

Other Authorities

Pa Vb it ce Gee CAO 0 is sc kcbeditanonces 6

47 C.J.S. Interest $54 (1946) .......ccccccccccccces 6

,

Vv

in the

Supreme Court

of the

United States

NO. 79-1033

WEBB’S FABULOUS PHARMACIES, INC.,

and ECKERD’S OF COLLEGE PARK, INC., et al

Appellants,

v8.

ARTHUR H. BECKWITH, JR.,

CLERK OF THE CIRCUIT COURT,

and SEMINOLE COUNTY, FLORIDA,

Appellees.

ON APPEAL FROM THE SUPREME COURT

OF THE STATE OF FLORIDA

MOTION TO DISMISS OR AFFIRM

INTRODUCTION

Appellees in the above-entitled case move to

dismiss or affirm on the grounds that the appeal does

not present a substantial federal question and the

federal question sought to be reviewed was not timely or

properly raised or expressly passed on by the Florida

Supreme Court. Rule 16 (1)(b), (c) and (d).

I.

THE STATE STATUTE INVOLVED

AND THE NATURE OF THE CASE

A. The Statute

This appeal raises the question of the validity of

Section 28.33, Florida Statutes (enacted by Chapter 73-

282, Laws of Florida), which provides in pertinent part

as follows:

' “The clerk of the circuit court in each county

shall make an estimate of his projected finan-

cial needs for the county and shall invest any

funds in designated depository banks in

interest-bearing certificates or in direct obliga-

tions of the United States in compliance with

federal laws relating to receipt of and

withdrawal of deposits . .. Moneys deposited in

the registry of the court shall be deposited in

interest-bearing certificates at the discretion of

the clerk, subject to the above guidelines....

All interest accruing from moneys deposited

shall be deemed income of the office of the

clerk of the circuit court investing such moneys

and shall be deposited in the same accounts as

are other fees and commissions of the clerk’s-of-

fice... .” (Emphasis supplied.)

B. The Proceedings Below

Eckerd’s of College Park, Inc., (Eckerd’s) entered

into an agreement to purchase the assets of Webb’s

Fabulous Pharmacies, Inc. (Webb’s). Pursuant to Sec-

tion 676.106(4), Florida Statutes, Eckerd’s then filed a

complaint in interpleader in the Circuit Court (trial

court) below, interpleading Webb’s and Webb’s

creditors, and tendered the purchase price into the Cir-

cuit Court registry. Subsequently, on its own motion,

the Circuit Court appointed a Receiver to determine the

number and amount of claims filed against the monies

in interpleader and to investigate the establishment of

an account or accounts in which to deposit the monies.

The Circuit Court, on Eckerd’s motion, then or-

dered that the purchase price be paid to the Clerk of the

Circuit Court to be deposited in an interest-bearing ac-

count and reserved ruling on whether the interest earnea

would accrue to the benefit of the Clerk’s office. The

purchase price was accordingly delivered to the Clerk,

who in turn deposited the monies in interest-bearing

accounts. K

Thereafter, on the Receiver’s motion, the Circuit

Court ordered that the monies in interpleader be

delivered by the Clerk of the Circuit Court from the

registry to the Receiver and directed the Clerk to con-

tinue to hold the accrued interest from the monies in the

registry until a determination of the rightful party to

receive the interest could be made. The Clerk paid the

monies to the Receiver.

The Receiver then filed a noting direct the Clerk

of the Circuit Court to pay to the Réceiver the interest

accrued on the monies in interpleader while deposited in

the Circuit Court registry. In response to this motion,

the Circuit Court ultimately ordered the Clerk to pay

the interest to the Receiver and held Section 28.33,

Florida Statutes, to be unconstitutional ‘‘to the extent

that the provisions thereof pertain to private monies

held in the registry of the court... .”

The Clerk of the Circuit Court and Seminole

County, Florida, appealed the Circuit Court’s order to

the Florida Supreme Court, which reversed and held

Section 28.33, Florida Statutes, to be constitutional.

Beckwith v. Webb’s Fabulous Pharmacies, Inc.,. 374

So.2d 951 (1979). It is from the decision of the Florida

Supreme Court that the Appellants have taken this

appeal.

II.

ARGUMENT

A. The Question Presented Is So Unsubstantial As

Not To Warrant Further Argument

Appellants in their Jurisdictional Statement argue

in part that the application of Section 28.33, Florida

Statutes, to the facts of this case results in a taking of

property without just compensation in violation of the

Fifth and Fourteenth (Due Process Clause)

Amendments of the United States Constitution. In

support of this argument, Appellants cite judicial

decisions from other jurisdictions in which particular

statutes were construed and applied to various fact

situations.

=

In response, it is fundamental that, where the

validity of a state statute has been sustained in the face

of federal objections, this Court on appeal must accept

the state court’s construction of the statute and proceed

to test its validity on that basis. Hortonville J.S.D. No. 1

v. Hortonville Ed., 426 U.S. 482 (1976); Kingsley

Pictures Corp. v. Regents, 360 U.S. 684 (1959). In this

case, the Florida Supreme Court construed Section

28.33, Florida Statutes, to be applicable to interpleader

monies deposited in the registry of the Circuit Court,

such monies being considered “‘public money” while so

deposited. See Money v. State ex rel. Florida First

National Bank, 206 So.2d 4386 (Fla. 1968); Section

219.01(2), Florida Statutes.

The Florida Supreme Court also found that, in the

absence of the investment requirement of Section 28.33,

Florida Statutes, interest would not necessarily accrue

on such interpleader monies, there being no common

law right to interest on disputed funds deposited in

court pending the outcome of litigation as to their

ownership. See Phillips Petroleum Co. v. Adams, 513

F.2d 355 (5th Cir.), cert. denied, 423 U.S. 930 (1975);

Monarch Tile Sales v. Frost National Bank of San

Antonio, 496 S.W.2d 254 (Tex.Ct.App., 1973); 47 C.J.S.

Interest §54 (1946); and Annot., 15 A.L.R.2d 473 (1951).

As stated by the Florida Supreme Court, Section 28.33

“takes only what it creates.” 374 So.2d at 953.

In contrast, the cases relied on by Appellants in

their Jurisdictional Statement primarily concern

situations in which there was either (1) a legislative

direction or impediment which required payment of

interest earned on monies held by a public officer to a

designated recipient other than the public officer or

general fund, but not necessarily to the person entitled

to the principal; or (2) an absence of statutory direction

as to the disposition of such interest, in which event the

interest naturally flowed with the principal.

An example of the first category is Metropolitan

Water Dist. v. Adams, 32 Cal.2d 620, 197 P.2d 543

(1948), in which the California Supreme Court

construed the applicable statute to require that interest

earned on funds deposited by a public agency in

condemnation proceedings be paid to that public

agency, and not to the general fund or to the condemnee

ultimately receiving the funds. See also Ostly v. Saper,

147 Cal.App.2d 671, 305 P.2d 946 (1957); Board of Law

Library Trustees v. Lowery, 67 Cal.App.2d 480, 154 P.2d

719 (1945); Ponoma City School District v. Payne, 9

Cal.App.2d 510, 50 P.2d 822 (1935); and Lawson uv.

6

Baker, 220 S.W. 260 (Tex.Ct.App. 1920). Even the

Texas Supreme Court’s decision in Sellers v. Harris

County, 483 S.W.2d 242 (Tex. 1972), upon which

Appellants greatly rely, was based on the applicable

statute’s designation of the monies involved as “‘trust

funds,” thereby precluding their treatment as ‘‘county

funds.”

An example of the second category is Bordy uv.

Smith, 150 Neb. 272, 34 N.W.2d 331 (1948), in which the

Nebraska Supreme Court found no statute directing the

disposition of interest earned on tax foreclosure bids

while deposited with the district court clerk. Thus,

consistent with the general rule that where there is no

statute to the contrary, interest becomes a part of the

fund by whose investment it was produced, the Court

held that the interest should go to the persons who

deposited the bids. See also Kiernan v. Cleland, 47 Ida.

200, 273 P. 938 (1929); Drainage Dist. No. 2 v. Ada

County, 38 Ida. 778, 226 P. 290 (1924); University of

South Carolina v. Elliott, 248 So.C. 218, 149 S.E.2d 433

(1966); and State v. McFetridge, 84 Wis. 473, 54 N.W. 1

(1893).

Also included in the second category is the decision

of this Court in United States v. MacMillan, 253 U.S.

195 (1920), referred to in the Appellants’ Jurisdictional

Statement. There, this Court cited its previous decision

in United States v. Mason, 218 U.S. 517 (1910), to the

effect that fees and emoluments received by a federal

district court clerk were not within the purview of

general federal statutes governing the handling of public

monies of the United States, but were ‘‘allowed him for

his compensation and office expenses under the statutes

defining his rights and duties.” 253 U.S. at 204.

7

Accordingly, this Court held that interest earned on the

clerk’s fees and emoluments was not subject to those

general statutes either. It was also noted that, under the

applicable rules, a litigant could apply to a federal

district court to direct the allowance of interest on

money deposited with that court and “‘to provide for its

payment by the clerk when the request is granted.” 253

U.S. at 205.

As can be seen, therefore, the Appellants’ reliance

on this Court’s decision in MacMillan and the other

decisions cited in their Jurisdictional Statement is

misplaced. Those decisions concerned primarily the

proper meaning and application of the particular

statutes there involved. The results of the cases varied

depending on the judicial construction given those

statutes. However, in most cases in which an applicable

legislative scheme for the investment of monies being

held by a public officer and the disposition of the

interest earned on them was found to exist, the court

gave effect to that scheme, even if the required

disposition of the interest was to someone other than the

recipient of the principal. See, e.g., Metropolitan Water

Dist. v. Adams, supra.

Such judicial implementation of the applicable

legislative scheme, in apparent recognition of the fact

that the interest in issue existed only because of that

scheme, has also prevailed where, as here, the required

disposition of the interest was to the office of the public

officer involved or the general fund. Thus, for example,

in Locasio v. Rosewell, 50 Ill.App.3d 794, 365 N.E.2d 949

(1977), the plaintiffs-condemnees sought the interest

earned on funds deposited by the condemning

authorities with the county treasurer during

condemnation proceedings. The plaintiffs claimed that

the interest should have been allocated in the same

manner as the principal and that a contrary result

would constitute a taking of their property in violation

of the Fifth and Fourteenth Amendments of the United

States Constitution.

In its decision, the court in Locasio first recited the

general rule that interest is a creature of statute and is

recoverable only by statute or contract. 365 N.E.2d at

951. The court also determined that there was no

fiduciary relationship between the plaintiffs and the

county treasurer. 365 N.E.2d at 952; compare Sellers v.

Harris County, supra. Finally, the court held that the

interest in issue came within the purview of the

statutory requirement that all earnings accruing on any

investments by the county treasurer of county monies

must be credited and paid into the county treasury. This

Court’s decision in MacMillan was distinguished on the

ground that it was based on a construction of ‘Federal

statutes and rules, not on the legal or equitable

principals concerning accountability for interest.” 365

N.E.2d at 953. See also Gonzalez v. Danaher, 30

Ill. App.3d 992, 332 N.E.2d 603 (1975); and In re Deposit

Of Public Moneys, 52 D. & C. 646, 93 P.L.J. 147

(Pa.Com.Pl. 1945).

Likewise, in this case, the Florida Supreme Court

construed Section 28.33, Florida Statutes, and gave

effect to the legislative scheme established by that

statute for the disposition of interest earned pursuant to

its provisions. In this respect, therefore, the Florida

Supreme Court’s decision here is not inconsistent with

the bulk of the judicial decisions cited above. They too

recognized that a legislature may rightfully provide for

9

the disposition of property legislatively created. The

fact that the disposition required by Section 28.33

differs from the disposition contemplated by the

statutes involved in certain of those decisions does not

raise this case to a federal constitutional level or warrant

this Court’s plenary consideration.

B. The Question Presented Was Not Timely Or

Properly Raised Or Expressly Passed On By

The Florida Supreme Court

It has been stated often that this Court will not

review a federal question unless the question has been

properly presented to the state court below. See, e.g.,

Street v. New York, 394 U.S. 576 (1969); Cardinale v.

Louisiana, 394 U.S. 437 (1969); and Shelley v. Kraemer,

334 U.S. 1 (1948). Mere reference to the “Constitution of

the United States” or the “Constitution and laws of the

United States” is insufficient. See Herndon v. Georgia,

295 U.S. 441, 442-443 (1935); F. G. Oxley Stave Co. v.

Butler County, 166 U.S. 648 (1897). As stated in New

York Central & H. R. Co. v. New York, 186 U.S. 269, 273

(1902), “it must be made to appear that some provision

of the Federal, as distinguished from the state,

Constitution was relied upon, and that such provision

must be set forth.”

In this case; Appellants did not specifically raise in

the state courts below the question as to whether

Section 28.33, Florida Statutes, violates Article IV,

Section 4 of the United States Constitution. In fact, an

examination of the record should reveal that the

Appellants never expressly relied on Article IV, Section

4 or that provision’s guarantee of a “republican form of

government.”’ Moreover, a review of the Florida

10

Supreme Court’s decision below reveals no reference to

such a federal claim. See Street v. New York, supra at

582, in which it was stated that when the highest state

court has failed to pass upon a federal question, “‘it will

be assumed that the omission was due to want of proper

presentation.” Thus, this Court should not now review

the validity of Section 28.33 on the ground that it

violates Article IV, Section 4.

However, even assuming that Appellants have

properly reserved this federal question, it cannot be

seriously maintained’ that Section 28.33, Florida

Statutes, has “destroyed” the judicial branch of the

Florida government or “materially curtailed” its power

and authority in violation of Article IV, Section 4 of the

United States Constitution. See Vansickle v. Shanahan,

212 Kan. 426, 511 P.2d 223, 243 (1973); and State v.

Lehtola, 55 Wis.2d 494, 198 N.W.2d 354 (1972).

According to the Florida Supreme Court, even the

minimal limitation on judicial options that Section

28.33 may pose with respect to the method of handling

disputed funds apparently can be judicially overridden.

As stated in the opinion below in response to one of

Appellants’ contentions:

“Tt is irrelevant that had these funds been

initially held by a receiver, the interest earned

would have accrued to the party receiving the

principal. In that event, judiciai discretion

would have been exercised and the legislature,

under our separation of powers doctrine, could

not effect a change in the court’s order. Art. II,

§3, Fla. Const. The legislature has the right,

however, to decide that [interest on] funds held

11

by a public officer in a public account accrue to

the benefit of all the people.” 374 So.2d at 953.

Surely, this language demonstrates that the Florida

Supreme Court has construed and applied Section

28.33, Florida Statutes, in a manner that protects the

integrity of the state’s judicial branch of government

against any “curtailment” that Section 28.33 may

arguably represent. Also, the fact that the Circuit Court

below ultimately did grant the Appellants’ motion to

pay the interpleader monies involved to the Receiver,

with the interest accruing thereafter to flow with the

principal, proves that Section 28.33 does not constitute

a legislative instrusion into the province of the judiciary.

Had the Appellants made such motion initially, instead

of moving to pay the interpleader monies into the

Circuit Court registry, perhaps the interest in issue

would not have been created and this case would have

been unnecessary. Cf. Adams, George, Lee, Schulte &

Westinghouse, 597 F.2d 570 (5th Cir. 1979), in which the

unsuccessful claimants of a right to interest could have

likewise acted on their own to protect that alleged right,

but did not. In any event, however, the Appellants’

argument on this point is totally without merit and

warrants no further consideration by this Court.

12

Il.

CONCLUSION

WHEREFORE, Appellees respectfully submit that

the question upon which this cause depends is so

unsubstantial as not to need further argument and that

the question sought to be reviewed was not timely or

properly reserved or expressly passed on by the Florida

Supreme Court, and Appellees respectfully move this

Court to dismiss this appeal, or, in the alternative, to

affirm the judgment entered in the cause by the Florida

Supreme Court.

Respectfully submitted,

HARRY A. STEWART

201 Southeast Sixth Street

Fort Lauderdale, Florida 33301

Telephone: (305) 765-5304

GERALD L. KNIGHT

Post Office Box 406

Fort Lauderdale, Florida 33301

Teiephone: (305) 765-5105

NIKKI CLAYTON,

County Attorney

Room 302,

Seminole County Courthouse

North Park Avenue

Sanford, Florida 32771

Telephone: (305) 323-4330

Attorneys for Appellees

13

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on this day of

, 1980, copies of the

foregoing Motion to Dismiss Or Affirm were furnished

by mail to HARVEY M. ALPER, Massey, Alper, Wack

& Eaton, 165 Whooping Loop, Altamonte Springs,

Florida, 32701, Attorney for Appellants, and to all other

persons required to be served in accordance with the

Supreme Court Rules.

HARRY A. STEWART

14