United States Court of Appeals,
Eleventh Circuit.
Nos. 94-6648, 94-6723.
GENERAL AMERICAN LIFE INSURANCE COMPANY, Plaintiff-Appellant-
Cross-Appellee,
v.
AmSOUTH BANK, Defendant-Appellee-Cross-Appellant.
GENERAL AMERICAN LIFE INSURANCE COMPANY, Plaintiff-Appellee,
v.
AmSOUTH BANK, Defendant-Appellant,
Edward Clayton Land, Defendant.
Dec. 4, 1996.
Appeals from the United States District Court for the Southern
District of Alabama. (No. CA92-0900-P-5), Virgil Pittman, Judge.
Before CARNES, Circuit Judge, and FAY and GIBSON *, Senior Circuit
Judges.
JOHN R. GIBSON, Senior Circuit Judge:
General American Life Insurance Company appeals from a jury
verdict finding that it was estopped from asserting its claim that
AmSouth Bank improperly paid checks payable to General American.
General American's agent indorsed the checks without authority and
deposited them in his account at AmSouth. General American argues
that as a matter of law, AmSouth did not establish the elements of
estoppel. AmSouth cross-appeals from a summary judgment order
holding it liable for checks payable to General American that the
agent restrictively indorsed and deposited in his account. General
American also argues that the district court erred in amending the
*
The Honorable JOHN R. GIBSON, Senior U.S. Circuit Judge for
the Eighth Circuit, sitting by designation.
summary judgment order to reduce General American's damages. We
affirm the summary judgment insofar as it holds AmSouth liable to
General American, but reverse its determination of General
American's damages. We reverse the judgment on the jury's verdict
in favor of AmSouth. Finally, we remand for a new trial to
determine General American's damages.
In 1982 General American, by written contract, appointed Land
& Associates, Inc. a general agent for the purpose of procuring
applications for its life and health insurance and annuities, which
Land & Associates was licensed to sell. Edward C. Land was the
owner and proprietor of Land & Associates.
Land opened a checking account at the Springdale branch of
AmSouth in Mobile, Alabama under the corporate name of Land &
Associates. Though this account was a business account, Land
opened the account and the signature card for the account bore his
personal social security number. Land used the account to pay his
agency's expenses, but he also paid personal expenses out of it,
such as his child's tuition, his membership in a Mardi Gras
society, his power and light bills, and his Visa card bills. When
Land opened the account, he provided to AmSouth business cards and
stationery from General American showing that Land & Associates was
a general agent of General American. Land had no authority to
indorse checks and knew this, and also knew that according to the
laws of insurance, he could not commingle his money with his
clients' money.
Land sold General American insurance and pension investment
services to customers. According to General American's procedures,
customers were supposed to write checks payable to General
American. General American required Land to send these checks
directly to it, and did not authorize Land to indorse these checks
under any circumstances.
Land, however, would occasionally indorse and deposit customer
checks when they were not for the exact amount owed to General
American, and then write a Land & Associates check to General
American for the correct amount. Land would make up the
difference, although only when the customer's check and his check
were for a small amount, typically under $600. General American
cashed and processed these Land & Associates checks without
objection.
Land also sent Land & Associates checks to General American
for customer accounts when customers would inadvertently write
checks payable to Land & Associates rather than General American.
These Land & Associates checks were also always for small amounts,
and General American cashed and processed them without objection.
It was impossible for General American to know from processing the
Land & Associates checks why Land had written these checks payable
to a customer's account.
In March 1987, Land began to misappropriate money. Land
purchased a rubber stamp in Mobile which printed "GALIC Qualified
Plans Acct: 0551-0900 For Deposit Only." With his rubber stamp,
Land indorsed eleven customer checks payable to General American
totalling $101,854.39 and deposited them into his Land & Associates
account at AmSouth.
Land lost his first rubber stamp after indorsing eleven
checks. Land purchased another rubber stamp which printed "General
American Life Insurance Co. Qualified Plans Acct 0551-0900." Land
used this stamp to indorse twenty-six more customer checks payable
to General American totalling $554,462.69 and deposited these
checks into his Land & Associates account at AmSouth.
To conceal his misappropriations from General American and his
customers, Land changed the addresses for his General American
customers to a post office box that he controlled. Land would
intercept the statements General American sent to the customers,
which showed that less than all of their money was reaching General
American. He would then falsify new statements and send those to
the customers.
Land paid back some of the money to his customers before he
was caught. Without raising suspicion Land purchased from AmSouth
teller's checks drawn on AmSouth's account at Chemical Bank of New
York City. In the space marked for the remitter or purchaser of
the checks Land put the initials of a customer from whom he had
stolen money. Land made the checks payable to General American and
sent them to General American as if they had come from a customer.
Finally, Land's business practices raised suspicions, and in
October 1990, just as his agency was about to be investigated, Land
confessed to General American that he was taking money.
The employees of AmSouth's Springdale branch never inquired
about Land's authority to indorse checks payable to General
American and deposit them into his Land & Associates account.
AmSouth's employees never asked Land for corporate resolutions from
General American authorizing him to indorse and deposit General
American checks into his Land & Associates account. Nor did they
ask General American if Land had the authority to indorse its
checks. They never inquired about Land's authority because they
knew Land & Associates to be General American's general agent, and
because Land had been a frequent and trusted customer at the
Springdale branch from 1983 to 1990.
General American sued AmSouth for conversion of the
thirty-seven checks Land indorsed with his rubber stamps. The
district court granted summary judgment in favor of General
American on the eleven checks that Land restrictively indorsed "For
Deposit Only" with his first rubber stamp. The district court
ruled that AmSouth was liable for the checks as a matter of law
because the checks were indorsed in the name of General American
and "For Deposit Only," and AmSouth did not deposit the checks into
a General American account. Based on these eleven checks the
district court entered judgment in favor of General American for
$114,733.79. After General American and AmSouth filed their
notices of appeal, the district court reduced the judgment for
General American to $73,825.24.
With respect to the other twenty-six checks payable to General
American and deposited into the Land & Associates account, the
district court directed a verdict for General American, but
submitted to the jury the issue of whether General American was
estopped from denying the validity of the indorsements on these
checks. The jury returned a verdict for AmSouth. General American
appeals from the jury's verdict and the district court's reduction
of the judgment in its favor on the eleven checks, while AmSouth
appeals from the district court's grant of summary judgment in
favor of General American on the eleven checks.
I.
General American argues that the jury's verdict in favor of
AmSouth on the twenty-six checks must be reversed because Land did
not have the authority to indorse checks payable to General
American and because AmSouth did not present sufficient evidence to
support its estoppel defense.
Alabama law governs this diversity case. Our review of the
district court's determination and application of Alabama law is de
novo, without deference to the district court. Salve Regina
College v. Russell, 499 U.S. 225, 111 S.Ct. 1217, 113 L.Ed.2d 190
(1991).
Under Alabama law, a depositary bank is liable to the payee
of a check for conversion when the bank allows a party who has
indorsed the check without authority to deposit the check into his
account. Al Sarena Mines, Inc. v. Southtrust Bank, 548 So.2d 1356,
1358 (Ala.1989). The depositary bank may avoid liability for the
check if it has a valid defense against the payee. Id.
Consequently, AmSouth can avoid liability to General American for
the checks Land indorsed and deposited in his account at AmSouth
if: (1) Land's indorsements were authorized; or (2) AmSouth has
a valid defense against General American.
A.
AmSouth argues that under Alabama law a general insurance
agent has full power to bind the insurer and stands in the shoes of
the insurer for all purposes, and, therefore, Land had the
authority to indorse General American checks. AmSouth cites
Washington National Insurance Co. v. Strickland, 491 So.2d 872
(Ala.1985), and cases following Washington National to support its
argument.
We reject AmSouth's interpretation of the law of Alabama.
General American's appointment of Land & Associates as its general
agent did not automatically give Land the apparent authority to
indorse checks payable to General American and deposit them in the
Land & Associates account. While it is true that a general agent
who lacks the actual authority to bind his principal may have the
apparent authority to do so, see Protective Life Ins. Co. v.
Atkins, 389 So.2d 117, 118-19 (Ala.1980), a general agent's
apparent authority is limited by the usual scope and character of
the business entrusted to his care, see Washington Nat'l, 491 So.2d
at 874; Sanders v. Brown, 145 Ala. 665, 39 So. 732, 734 (1905).
What is within the usual scope and character of the business
customarily entrusted to a particular type of general agent is a
question of fact. Protective Life, 389 So.2d at 119. AmSouth bore
the burden of proof on this issue, and thus had to prove apparent
authority. See Ala.Code § 7-3-307(1)(a) (1993).1
AmSouth failed to present evidence that General American gave
Land authority or that insurers customarily allow their general
1
Section 7-3-307(1)(b) provides for a presumption that all
signatures on a check are authorized. Ala.Code § 7-3-307(1)(b)
(1993). This presumption, however, is rebutted as soon as some
evidence is introduced that could support a finding that a
signature is unauthorized. Ala.Code § 7-3-307 official comment 1
(1993). General American rebutted this presumption of authority
when it presented testimony that Land was not authorized to
indorse checks payable to General American.
agents to indorse checks payable to the insurer. The only evidence
on this issue, presented by General American, was that no insurer
allows its general agents to indorse checks made payable to the
insurer. We must reject AmSouth's argument that Land had the
apparent authority to indorse General American checks because
AmSouth did not provide any evidence at trial to support its
argument. See Sanders, 39 So. at 734 (rejecting an apparent
authority argument because of an absence of proof to support it).
Malmberg v. American Honda Motor Co., 644 So.2d 888, 891
(Ala.1994), makes clear that the doctrine of apparent authority is
based on the actions of the principal, not those of the agent.
Apparent authority is based on the principal holding the agent out
to the third party as having the authority upon which he acts, not
upon what one thinks an agent's authority might be, or what the
agent holds out his authority to be. Id. at 891. In Malmberg, the
evidence of Honda logos on a dealer's signs, literature, products,
brochures and plaques, was not sufficient in itself to create an
inference of agency. Apparent authority was found only in
substantially greater and more detailed evidence of the method in
which Honda dealers dealt with warranties, so as to support a
customer's reliance on the dealer's statements about the warranty.
Id. Malmberg recognizes the close relationship between apparent
authority and estoppel, an issue with which we will deal.
Time and again AmSouth returns to its assertion that its
employees knew that Land & Associates was the general agent for
General American, and that this supported the existence of both
apparent authority and estoppel. The stationery and the business
card, with General American's name and Land & Associates' identity
as general agent, are the high water mark of this evidence. We
think this evidence is not unlike the logos, signs, and literature
in Malmberg, and is inadequate to support AmSouth's argument.
The Alabama cases that AmSouth cites to support its argument
do not contradict our analysis. Washington National and the cases
following it simply hold that a jury may find, when presented with
sufficient evidence, that issuing insurance policies is within a
general insurance agent's apparent authority. See, e.g., American
States Ins. Co. v. C.F. Halstead Developers, Inc., 588 So.2d 870,
872-73 (Ala.1991); Morris v. Cotton States Life & Health Ins. Co.,
501 So.2d 1192, 1194 (Ala.1986). See also Protective Life, 389
So.2d at 119. None of these cases can be read to support the
proposition that a general insurance agent stands in the shoes of
an insurance company for all purposes, including the indorsement of
checks, as AmSouth argues. AmSouth simply reads these cases too
broadly.
B.
General American argues that the district court should have
entered judgment as a matter of law for General American because
AmSouth failed to present sufficient evidence to support its
estoppel defense. General American also argues that the district
court's instruction on estoppel was incorrect because the
instruction did not include an intent element for estoppel.
We review de novo the district court's decision on whether to
grant a party judgment as a matter of law. Oxford Furniture Cos.
v. Drexel Heritage Furnishings, Inc., 984 F.2d 1118, 1122 (11th
Cir.1993). We review all of the evidence, and all reasonable
inferences which flow from the evidence, in the light most
favorable to the party opposing the motion for judgment as a matter
of law. Id. A party is entitled to judgment as a matter of law
only if the evidence and inferences derived from the evidence are
so strong that reasonable persons in the exercise of impartial
judgment could not arrive at a contrary verdict. Id. If, however,
the evidence allows reasonable persons to reach different
conclusions, judgment as a matter of law is inappropriate. Id.
Estoppel is an equitable doctrine that does not create a
right or impose an obligation, but prevents an otherwise unjust
result. Williams v. FNBC Acceptance Corp., 419 So.2d 1363, 1367
(Ala.1982). The purpose of estoppel is to promote equity and
justice in an individual case by preventing a party from asserting
rights under a general rule of law when his own conduct renders
that assertion contrary to equity and good conscience. Id.
AmSouth, as the party invoking estoppel, has the burden of proving
this defense. Mobile Towing & Wrecking Co. v. First Nat'l Bank,
201 Ala. 419, 78 So. 797, 800 (1918).
AmSouth argues that the Alabama Supreme Court has articulated
conflicting definitions of equitable estoppel, but recognizes that
the district court properly instructed the jury as follows:
Here is the definition of estoppel: "An estoppel has
three important elements. The actor, who usually must have
knowledge of the true facts, communicates something in a
misleading way, either by words, conduct or silence." And the
person—and the other person in this case would be the
bank—"relies upon that communication. And the other"—that is
the bank—"would be harmed materially if the" plaintiff in this
case would be "permitted to assert any claim inconsistent with
his earlier conduct."
The district court also instructed the jury that with respect
to the affirmative defense of estoppel, if the proof failed to
establish any essential elements, the jury must find for General
American.
We are aware that Mazer v. Jackson Insurance Agency, 340 So.2d
770, 773 (Ala.1976), contains definitions of estoppel from two
texts, and General Electric Credit Corp. v. Strickland Division of
Rebel Lumber Co., 437 So.2d 1240, 1243 (Ala.1983), appears to state
the definition in a somewhat different fashion. Nevertheless,
General Electric, citing Mazer, sets out the elements of estoppel
articulated in United States Fidelity & Guaranty Co. v. McKinnon,
356 So.2d 600, 606 (Ala.1978), which the district court quoted and
specifically referred to in its jury instruction. AmSouth argues
that the definition of estoppel depends on the facts, and indeed
cites a number of Alabama Supreme Court cases that arguably would
support this conclusion, and also relate to the question of whether
intent is required in estoppel. Many of these issues we need not
resolve, as AmSouth specifically states that McKinnon, as well as
other decisions that were the basis for a portion of the district
court's instructions, are statements of the Alabama law on
estoppel, and with the exception of intent, General American
agrees.
One portion of the first element of estoppel, which the cases
say is usually present, see General Elec., 437 So.2d at 1243;
McKinnon, 356 So.2d at 606; Mazer, 340 So.2d at 773, is that a
party cannot be estopped unless it has knowledge of the true facts
and communicates something misleading to another who relies upon
the communication. As the party invoking estoppel, AmSouth has the
burden of proving that General American knew or should have known
that Land was indorsing checks payable to General American. See
Tarrant Am. Sav. Bank v. Smokeless Fuel Co., 233 Ala. 507, 172 So.
603, 607-08 (1937). AmSouth's estoppel defense begins to founder
because it has not demonstrated that General American had knowledge
of Land's indorsement and deposit of checks payable to General
American, because General American made no communication of any
kind to AmSouth, and because it follows that in absence of the
communication there could be no reliance by AmSouth.
AmSouth presented no direct evidence that General American
knew Land was indorsing its checks. All of General American's
employees testified that General American did not allow any general
agent to indorse checks payable to General American under any
circumstances. All of these witnesses denied knowing about Land's
indorsement of General American checks and denied knowing of anyone
at General American who was aware of Land's indorsement of General
American checks. AmSouth's employees uniformly stated that they
never told General American that Land was indorsing checks payable
to it and never asked General American if Land could do so. Thus,
the testimony of General American's employees was corroborated by
the testimony of AmSouth's employees.
To escape this shortfall in its evidence, AmSouth relies on
testimony from Land that shows, it argues, that General American
knew or should have known that Land was indorsing its checks. We
reject AmSouth's argument that a reasonable jury could conclude
that General American knew or should have known Land was indorsing
its checks because General American accepted Land & Associates
checks which paid money into customer accounts. Land's
uncontradicted testimony is that it was impossible for someone
other than himself, such as General American, to know why he had
sent a Land & Associates check payable to a customer's account.
Further, this is especially so when there was an explanation for
the Land & Associates checks which did not involve his indorsement
of General American checks, that is, that a customer gave Land a
check payable to Land & Associates. Indeed, Land's testimony was
that he was attempting to conceal, from not only General American
but also AmSouth, the nature of his transactions. We conclude no
reasonable jury could infer that General American knew or should
have known that Land was indorsing its checks because it received
and processed Land & Associates checks that paid money into
customer accounts.
AmSouth also argues that General American knew or should have
known Land was indorsing checks because General American received
Chemical Bank teller's checks from Land. The record shows that
there was nothing on these checks to indicate to General American
that Land purchased them or did anything but collect them from
customers and send them to General American. Land testified and
the checks show that Land always put a customer's initials in the
space on the checks marked for the remitter of the check. Land
also testified that he sent these checks to General American with
the paperwork which normally accompanied a customer's check. We
conclude that no reasonable jury could infer that General American
knew or should have known Land was indorsing checks payable to
General American from General American's processing of the Chemical
Bank teller's checks.
AmSouth's defense of estoppel fails because AmSouth has failed
to provide sufficient evidence to prove the essential elements of
its defense. The record is clear that General American, having no
knowledge of Land's practice, made no communication to AmSouth, and
with no communication, it follows that there was nothing for
AmSouth to rely upon. Thus, AmSouth has simply not established the
essential elements of estoppel. It also follows that whether or
not intent was necessary on the part of General American, the
failure to demonstrate knowledge and communication make it evident
that there could be no intention that such be acted upon. AmSouth
has also failed to show that Land had authority to indorse checks
payable to General American. Indeed, there is only evidence to the
contrary. Therefore, AmSouth is liable as a matter of law to
General American for converting the twenty-six checks Land indorsed
and deposited in his account at AmSouth. See Al Sarena Mines, 548
So.2d at 1358. We reverse the jury's verdict in favor of AmSouth.
Having concluded that there was no submissible issue as to
estoppel, it is unnecessary that we reach the highly contested
issue as to whether the instruction given by the district court on
estoppel was erroneous for failure to submit the issue of intent.
II.
AmSouth cross-appeals from the district court's summary
judgment order holding AmSouth liable to General American for the
eleven restrictively indorsed checks. AmSouth argues that the
district court should have allowed AmSouth to raise certain
affirmative defenses against General American's claim that AmSouth
converted the eleven checks. AmSouth asserts that its defenses
raise genuine issues of material fact, and, therefore, summary
judgment was inappropriate as to these eleven checks.
We review de novo the district court's grant of summary
judgment. Hairston v. Gainesville Sun Publishing Co., 9 F.3d 913,
918 (11th Cir.1993). Summary judgment is appropriate if there is
no genuine issue as to any material fact and the party asking for
summary judgment is entitled to judgment as a matter of law. Id.
Summary judgment must be granted when a party fails to present
evidence establishing an element essential to his case and on which
he has the burden of proof. Id. (quoting Celotex Corp. v. Catrett,
477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265
(1986)).
Under Alabama law, a depositary bank is liable to the payee
of a restrictively indorsed check for conversion of that check when
the bank does not pay the check according to its restrictive
indorsement. AmSouth Bank v. Reliable Janitorial Serv., Inc., 548
So.2d 1365, 1367-68 (Ala.1989). The depositary bank, however, may
avoid liability for the check if it has a valid defense against the
payee. See id. at 1368-69 (permitting a depositary bank to raise
the defense of account stated).
We conclude that the district court properly granted General
American summary judgment because none of AmSouth's defenses raise
a genuine issue of material fact or preclude granting General
American judgment as a matter of law. The defenses that AmSouth
argues raise a genuine issue of material fact and preclude summary
judgment with respect to the eleven checks are: (1) that Land had
the apparent authority to indorse checks payable to General
American because he was General American's general agent; (2)
equitable estoppel; and (3) ratification.2
As we explained above, AmSouth has failed to present any
evidence to support its apparent authority argument on which it has
the burden of proof. See Celotex Corp., 477 U.S. at 322-25, 106
S.Ct. at 2552-54. Also, there is no basis in Alabama law for
AmSouth's argument that Land had the authority to indorse checks
payable to General American simply because he was General
American's general agent. Thus, AmSouth's apparent authority
defense did not prevent the district court's grant of summary
judgment to General American on the eleven checks.
AmSouth's equitable estoppel defense fails because AmSouth
presented no evidence to support the essential elements of this
defense on which it had the burden of proof. As to whether General
American knew or should have known that Land was indorsing its
checks, the only evidence was to the contrary. There was no
communication by General American and no reliance by AmSouth. The
evidence AmSouth relies on to raise a genuine issue as to General
American's knowledge is the same evidence it presented at the trial
concerning the twenty-six checks. That evidence was not enough to
2
AmSouth in its brief to this court mentions other defenses
such as "contributory negligence," "consent," and "respondeat
superior." AmSouth completely fails to discuss or explain what
genuine issues of material fact these defenses raise, and thus we
do not consider them. Cf. Blue Cross & Blue Shield v. Weitz, 913
F.2d 1544, 1550 (11th Cir.1990) ("Presenting such arguments in
opposition to a motion for summary judgment is the responsibility
of the non-moving party, not the court....").
preclude judgment as a matter of law with respect to the twenty-six
checks, and it also fails with respect to the eleven restrictively
indorsed checks.
AmSouth's ratification defense, on which it had the burden of
proof, did not preclude summary judgment because AmSouth did not
present any evidence that General American ratified Land's
unauthorized indorsements. Id.
The payee of a check can expressly ratify an unauthorized
indorsement by approving the indorsement, see Citibanc v. Tricor
Energies, Inc., 493 So.2d 1344, 1347 (Ala.1986); Fulka v. Florida
Commercial Banks, Inc., 371 So.2d 521, 523-24
(Fla.Dist.Ct.App.1979), or by holding the unauthorized indorser
solely responsible for the check and forgoing any action against
the depositary bank which accepted the check, see Eutsler v. First
Nat'l Bank, 639 P.2d 1245, 1247-48 (Okla.1982); Federal Pac. Elec.
Co. v. First Pa. Bank, 266 Pa.Super. 471, 405 A.2d 530, 534 (1979);
Thermo Contracting Corp. v. Bank of New Jersey, 69 N.J. 352, 354
A.2d 291, 296-97 (1976). The payee of a check impliedly ratifies
an unauthorized indorsement when he discovers the unauthorized
indorsement and then unreasonably delays in notifying the
depositary bank that he intends to hold the bank liable for the
check. See Cook v. Great Western Bank & Trust, 141 Ariz. 80, 685
P.2d 145, 148-50 (Ct.App.1984).
AmSouth argues it established a genuine issue of material fact
as to its ratification defense by proof: (1) that General American
waited several years after discovery of the unauthorized
indorsements to file suit against AmSouth; and (2) that General
American has held Land responsible for its loss resulting from
Land's unauthorized indorsements. The record shows that General
American notified AmSouth shortly after it confirmed Land's
misappropriations. Additionally, General American's delay in
filing suit against AmSouth is irrelevant for ratification, because
notification does not equal or require filing suit. As General
American did notify AmSouth promptly and its delay in filing suit
is irrelevant, this evidence raises no genuine issue of material
fact.
General American can hold Land responsible for his
unauthorized indorsements without expressly ratifying his
indorsements. It is only when the payee looks to the indorser for
payment on the check and forgoes any action against the depositary
bank that the payee expressly ratifies the indorsement. See
Eutsler, 639 P.2d at 1247-48; Federal Pac. Elec., 405 A.2d at 534.
AmSouth has not presented any evidence showing that General
American agreed to pursue only Land and, thereby, excused AmSouth
from any liability on the checks. That General American has forced
Land to pay back some of his illegal gains, by itself, does not
raise a genuine issue of material fact as to AmSouth's ratification
defense. Thus, AmSouth's ratification defense did not prevent the
district court's entry of summary judgment as AmSouth had the
burden of proof on this defense and failed to present any relevant
evidence to support this defense. See Celotex Corp., 477 U.S. at
322-25, 106 S.Ct. at 2552-54.
The district court properly entered summary judgment against
AmSouth on the eleven restrictively indorsed checks as AmSouth was
liable in conversion for those checks as a matter of law.
III.
General American argues that the district court improperly
amended its June 13, 1994 judgment in favor of General American,
because it did not have jurisdiction to amend the judgment after
General American and AmSouth had filed their notices of appeal.
General American also argues that the June 13, 1994 judgment should
be reinstated because the information the district court used to
amend its judgment was inaccurate.
Under Federal Rule of Civil Procedure 60(a), the district
court may freely amend its judgment to correct errors arising from
an oversight or omission before an appeal from that judgment is
docketed in the appellate court. The district court amended its
judgment on July 14, 1994 to correct an oversight in that judgment.
This court docketed the appeal from that judgment on July 21, 1994.
Thus, under Rule 60(a) the district court had the power to amend
its judgment on July 14, 1994.
General American also argues that the district court relied
on inaccurate information in amending its judgment. In its July
14, 1994 amended judgment the district court reduced the damages it
awarded to General American for AmSouth's conversion of the eleven
restrictively indorsed checks because it failed to take into
account two of AmSouth's offsets which should have been credited
against General American's recovery. While we express no opinion
on the accuracy of the information concerning the offsets, we note
that the district court or a jury will have to fully revisit the
issue of the amount of AmSouth's offsets in calculating General
American's damages from AmSouth's conversion of the twenty-six
checks indorsed without restriction. In order to obtain consistent
results, we believe the best course is to reverse the district
court's determination of General American's damages from the eleven
checks so that General American's damages and AmSouth's offsets for
all thirty-seven checks can be determined in one proceeding.
IV.
In conclusion, we hold that AmSouth is liable as a matter of
law to General American for converting all thirty-seven of the
checks in this case. We, therefore, REVERSE the jury's verdict in
favor of AmSouth and AFFIRM the summary judgment in favor of
General American. We also REVERSE the district court's
determination of General American's damages resulting from
AmSouth's conversion of the eleven restrictively indorsed checks.
Finally, we REMAND for a new trial to determine General American's
damages resulting from AmSouth's conversion of the thirty-seven
checks.