Missouri Supreme Court to decide$12,000 question on interest money

A post-settlement ruling in a tragic Daviess County case has been challenged before the Missouri Supreme Court. The case was heard and taken under advisement on March 6. The decision could be rendered anywhere from a few weeks to a few months from now.

The question is, who gets over $12,000 in interest which accrued from an insurance settlement paid into the Daviess County Circuit Court’s registry?

The case stems from the death of 12-year-old Trevor Best in a boating accident on Lake Viking in July, 1999. Trevor was killed, and his brother Trenton sustained severe injuries, when a boat piloted by William Logston collided with the boat on which the boys were riding. Several other people were also injured in the collision.

At the time, William Logston was insured under a recreational vehicle policy issued by Grinnell Mutual Reinsurance Company with a liability limit of $300,000.

Grinnell filed a petition in interpleader in the Circuit Court of Daviess County on Sept. 25, 2000. The petition asked the court to permit Grinnell to pay the $300,000 policy limit into the court’s registry. The petition also requested the interpleader defendants to interplea their respective claims and to discharge Grinnell from further liability with respect to the July 25, 1999, collision.

The legal definition of interpleader is the procedure used when two parties are involved in a lawsuit over the right to collect a debt from a third party who admits the money is owed but does not know which person to pay. The debtor (Grinnell) deposits the funds with the court (“interpleads”), asks the court to dismiss it from the lawsuit, and lets the claimants fight over it in court.

The court granted Grinnell’s petition in February 2001. Grinnell paid the $300,000 into the circuit court registry, and it was deposited in the clerk’s regular account as required by statute.

The Best family and others filed suit in March 2001. The money remained in the court’s care until October 2003, when the parties reached an agreement on how to divide the money. At that time, more than $12,000 in interest had accrued on the funds.

Circuit Clerk Linda Adkins consulted with the Daviess County Commission, advising them that neither the claimants nor their lawyers had asked the court to place the money in a separate interest bearing account. The commissioners and Mrs. Adkins reached a mutual agreement that a portion of the accrued interest should be used for improvement to the Circuit Clerk’s office. They further agreed that if the interest was later ordered to be paid out to the Best family, the county would reimburse them from the county’s general revenue fund.

Judge Rex Gabbert of the Seventh Judicial Circuit (Clay County) then ordered the Daviess County Circuit Clerk to distribute the total amount of $312,325 among the parties.

Circuit Clerk Linda Adkins again met with the Daviess County Commission to advise them that the judge had ordered her to pay both the interest and the principal. The commission, basing their decision on section 483.310, RSMo., refused to repay the money from general revenue at that time to await a final court decision.

The court later set aside the first order issued by Judge Gabbert and, under Judge Gary Witt of the Sixth Judicial Circuit (Platte County), directed the Circuit Clerk to distribute only the principal amount of $300,000. On Feb. 6, 2004, interpleader defendants John and Tammy Best filed a motion for contempt against the clerk for not complying with the court’s earlier orders regarding distribution.

When asked to comment on the case, Mrs. Adkins responded that the statute is very clear. It provides that if the parties, or their attorneys, to the lawsuit fail to request the court place the money held by the court in a separate interest bearing account within 60 days of depositing the funds, then the court may use the money for purposes listed in the statute. This request was never made; therefore, the interest money, by statute, and by an order issued by the appointed circuit court judge, became the property of the Circuit Court.

Mrs. Adkins has applied the statute at least two other times during her 27-year tenure as Circuit Clerk.

The Best family is contending that the statute in question violates the state and federal constitutions and that the interest accruing on interpleaded funds deposited in a court’s registry is private property. They are represented by Benjamin S. Creedy of Murphy, Taylor, Siemens & Elliott, P.C.

The Daviess County Circuit Clerk is represented by Jay Nixon, Missouri Attorney General, and David A. Johnston, Assistant Attorney General. In Johnston’s brief responding to the suit, he asserts that the Best family failed to comply with easy procedures for reinvestment of the interpleaded funds. The Bests voluntarily permitted placement of the interpleaded funds into the clerk’s account and then failed to take advantage of their opportunity under the statute to apply for reinvestment of the funds into a separate interest-bearing account. Johnston’s brief concluded that the trial court “did not err in ruling against appellants (the Bests) in the modifications to the original judgment and orders and denying their other motions for relief. The judgment (for the Daviess County Circuit Clerk) should be affirmed.”