Orr, Inc. v. David Hood

ARKANSAS COURT OF APPEALS

NOT DESIGNATED FOR PUBLICATION

ANDREE LAYTON ROAF, JUDGE

DIVISION IV

ORR, INC.

APPELLANT

v.

DAVID HOOD

APPELLEE

CA99-868

SEPTEMBER 20, 2000

APPEAL FROM THE MILLER COUNTY CIRCUIT COURT,

CIV-98-148

HON. JOE EDWARD GRIFFIN, JUDGE

REVERSED AND REMANDED

Orr, Inc., a Texarkana automobile dealership, appeals from a Miller County Circuit Court judgment awarding compensatory and punitive damages to Appellee David Hood for conversion of an automobile that he had taken possession of pursuant to a purchase agreement that he made with Orr. On appeal, Orr argues that the trial court erred in: 1) rendering a directed verdict in favor of Hood at the close of Hood's case; 2) not granting a directed verdict in favor of Orr on the tort of conversion; 3) not granting Orr's motion for JNOV and a new trial; 4) calculating the amount of compensatory damages for conversion; 5) allowing the issue of punitive damages to go to the jury; and 6) instructing the jury of the finding ofconversion as a matter of law without also instructing the jury on not finding the tort of outrage as a matter of law. We agree that the trial court erred and reverse and remand.

Hood filed suit against Orr for the torts of conversion and outrage, and he prayed for compensatory and punitive damages. Orr answered and asserted as one of its affirmative defenses that the sales agreement was void for mutual mistake of the parties. Prior to trial, the trial court granted Hood's motions in limine that precluded Orr from making any reference to mutual mistake; the status of the title to the automobile that Hood traded in, a 1995 Nissan Maxima; any reference to the contract between the parties being void; and any mention of the registration of the Nissan in Texas after Hood purchased the vehicle.

Robbie Works, sales manager for Orr, testified that on June 30, 1998, Hood agreed in writing to buy a 1998 Chevy Blazer from Orr. The writing documented the $20,988 purchase price and the $11,300 trade-in allowance for Hood's 1995 Nissan Maxima, and specified that Hood would pay the balance in a single $10,504.14 payment due on August 14, 1998. Days later, Orr searched the title of Hood's Nissan and found that it had a salvage title. Works testified that in his experience that meant that the car was worth as little as half of a non-salvage car. Works stated that he called and told Hood about the title and that the deal was off. Hood later called Works and told him that his banker informed him that the title he was holding was not a salvage title. Works disagreed, and Hood told him he would not return the Blazer and intended to contact his lawyer.

On or about July 21, 1998, Orr repossessed the Blazer from Hood's property. When Hood discovered that the Blazer was missing, he believed that it was stolen. However, a few hours after the vehicle was taken back by Orr, Hood arrived at the Orr lot to retrieve personalbelongings from the Blazer. He declined to take his Nissan at that time; however, he did retrieve the Nissan a few days later.

Hood, who testified that he was a prison chaplain, stated that he was unaware that the Nissan had a salvage title in its history. He admitted that he was aware that it had been in an accident, but he had never had any problem with the vehicle. Because the Blazer was taken by Orr, Hood claimed that he had to rent a van to take his son to college in California, which caused him to incur $501.72 in rental charges. Hood admitted that he did not actually pay any money towards the purchase of the Blazer, that he never signed the title of the Nissan over to Orr, and that Orr did not have the Blazer titled in his name. According to Hood, Works had offered to let him keep the Blazer if he paid $5,000 more than they had agreed to.

Hood completed his case with brief testimony by co-workers Doug Price and Thelma Estes that the events surrounding Orr's taking of the Blazer caused Hood some apparent emotional distress. Estes also testified that the repossession caused some gossip in Hood's congregation.

The trial court then took up both parties' directed-verdict motions. The judge first granted Hood's motion on the fair-market value of the Blazer, $20,988. He then granted Orr's directed-verdict motion on the tort of outrage. However, he denied Orr's directed-verdict motion on emotional distress, conversion, and punitive damages. The trial judge then granted Hood's directed verdict motion on conversion, and he awarded Hood the fair-market value of the Blazer, $20,988. The amount of compensatory damages and punitive damages was then submitted to the jury, and Hood was awarded $501.72 and $55,000 respectively. The trial court subsequently rejected Orr's motions for JNOV and a new trial.

Orr first argues that the trial court erred by rendering a directed verdict in favor of Hood at the close of Hood's case. However, the basis for Orr's argument is the contention that the trial court erred by excluding contract and non-performance issues related to mutual mistake of the parties and Orr's proffered testimony on this issue. Orr asserts that the trial court's ruling in limine that it could not present evidence of mutual mistake and the contract being "void" substantially prejudiced its ability to present its defense and "skewed the trial in a manner that loaded the gun for the jury." It asserts that it should have been allowed to present contract and affirmative defenses at the trial. Citing Cofield v. Randolph County Comm'n, 90 F.3d 468 (11th Cir. 1996), Orr contends that when the Nissan, by virtue of its salvage title, proved to be worth substantially less than the contract contemplated, it resulted in a failure of consideration that constituted a failure to pay, which in turn gave rise to its right to peacefully repossess the vehicle. This argument is persuasive.

In Grayson v. Bank of Little Rock, 334 Ark. 180, 188, 971 S.W.2d 788, 792 (1998), the supreme court set out the elements of conversion as follows:

Conversion is the exercise of dominion over property in violation of the rights of the owner or person entitled to possession. Conversion can only result from conduct intended to affect property. The intent required is not conscious wrongdoing but rather an intent to exercise dominion or control over the goods that is in fact inconsistent with the plaintiff's rights.

Here, the trial court denied Orr the right to prove that its right to the Blazer was superior to Orr's. If Orr had been able to demonstrate a superior right to the Blazer, no cause of action for conversion would lie. See, e.g., Arkansas Automotive Div. v. Arkansas Aviation Sales,Inc., 232 Ark. 354, 335 S.W.2d 813 (1960)(finding superior right to possession by virtue of an installment contract for the purchase of an airplane). Orr should have been allowed to litigate the issue of whether it had a superior right to the Blazer. Accordingly, we reverse and remand for a new trial on this point.

Because we are reversing on the first point, we need not address Orr's additional and alternative contentions that it could rescind its contract with Hood because the Nissan was rejected as nonconforming, pursuant to Ark. Code Ann. § 4-2-601 (Repl. 1991), that self-help repossession was permissible under the circumstances, and that replevin was not the exclusive remedy available in this situation.

Orr next argues that the trial court erred by not granting a directed verdict in its favor on the tort of conversion. Citing Passswater Chevrolet Co. v. Whiten, 178 Ark. 136, 9 S.W.2d 1057 (1928), Orr argues that the trial court should have granted its directed-verdict motion because Hood was required to show that he held title to the vehicle in order to prevail on his claim for conversion. Orr asserts that because Hood's Nissan had a salvage title, it was worth less than the $11,300 it allowed for it, and consequently, Hood did not "complete his performance" under the purchase order. Furthermore, Orr contends that even if Hood had completed his performance, under Ark. Code Ann. §§ 4-2-601 and 602, it had the right to reject the Nissan so long as Hood was seasonably notified. Because it exercised its right to reject the Nissan, Orr contends that the Blazer title was not vested in Hood at the time of the repossession. Accordingly, the court erred in failing to direct a verdict in its favor.

However, because the trial court effectively prevented Orr from litigating the contract issue, we cannot say that the trial court erred in failing to direct a verdict in favor of Orr. Theonly evidence it let in was the sales contract. By preventing litigation over whether the contract was voided by Hood's nonconforming vehicle, the trial judge rendered the sales contract conclusive of Hood's right to possess the Blazer. In short, Hood's right to possession derived from the sales contract. Because the trial court precluded Orr from asserting that the sales contract was no longer in force, the trial court in essence made its decision that Hood proved that he was lawfully in possession of the Blazer inevitable. We cannot conclude that under these circumstances a jury would not have reached the same result.

Orr next argues that the trial court erred in not granting its motions for JNOV and a new trial. It contends, without making new argument, that for the reasons articulated under point II, the trial court erred in refusing to grant its motion for JNOV and for a new trial. For the reasons previously stated, we cannot say that the trial court erred in denying these motions.

We address Orr's final three points because they are likely to arise on retrial. For his fourth point, Orr argues that the trial court erred in its calculation of compensatory damages in this case. Citing McIlroy Bank & Trust v. Seven Day Builders, 1 Ark. App. 121, 613 S.W.2d 837 (1981), Orr contends that the trial court erred in awarding the full, fair-market value because it failed to take into account the amount still owed on the vehicle. We agree. Because Hood did not own the Blazer outright, the measure of damages for conversion was the value of the truck at the time and place of its conversion, less the balance of the purchase price remaining unpaid. Patton v. Alexander, 202 Ark. 883, 154 S.W.2d 1 (1941). Accordingly, because he had not made any payments, Hood was not entitled to the fairmarket value of the Blazer. On retrial, the trial court, which had granted a directed verdict on the fair-market value of the Blazer, must revisit the issue of the proper calculation of damages.

Orr next argues that the trial court erred by allowing the issue of punitive damages to go to the jury. It contends that it was not fully allowed to present its defenses because the trial court granted Hood's motions in limine that precluded its witnesses from using the word "mistake." Orr asserts that pursuant to the statement of the law in Walt Bennett Ford v. Keck, 298 Ark. 424, 768 S.W.2d 28 (1989), its inability to assert "mistake" opened it up to consideration of punitive damages.

Because we are reversing for a new trial due to the trial court's decision to preclude Orr from litigating the contract issues in this case, the punitive damage issue will be addressed anew. However, we note that punitive damages are not recoverable in a conversion action simply because the defendant intentionally exercised control or dominion over the plaintiff's property. City Nat'l Bank v. Goodwin, 301 Ark. 182, 783 S.W.2d 335 (1990). To recover punitive damages, the plaintiff must show that the defendant intentionally exercised control or dominion over the plaintiff's property for the purpose of violating his right to the property or for the purpose of causing damages. Id.

Finally, Orr argues that even if the issue of punitive damages should have been submitted to the jury, the trial court erred by instructing the jury of the finding that it was liable for conversion as a matter of law, without also instructing the jury that it was not liable for the tort of outrage as a matter of law. Orr contends that because the jury was instructed that the trial court had found as a matter of law that Orr had converted the Blazer, it was errornot to submit an additional instruction telling the jury that the trial court had also directed out the tort of outrage. Orr contends that by failing to do so, it was substantially prejudiced by the jury being influenced and encouraged to award punitive damages. This argument is without merit.

Whether to issue an instruction to the jury is within the discretion of the trial court, and is a determination that this court will not reverse on appeal absent an abuse of that discretion. See Eisner v. Fields, 67 Ark. App. 238, 998 S.W.2d 421 (1999). However, a party is entitled to a jury instruction when it is a correct statement of the law and there is some basis in evidence to support the giving of the instruction. Id.

Here, however, Orr was asking for an instruction on a cause of action that had been dismissed by the trial court. Orr has cited no authority for its entitlement to the instruction, and it has made no convincing argument. We do not address an argument in the absence of citation to authority or convincing argument. Presley v. Presley, 66 Ark. App. 316, 989 S.W.2d 938 (1999). Moreover, Orr did not proffer an instruction; failure to proffer or abstract a proposed instruction precludes us from considering its argument on appeal. United Ins. Co. v. Murphy, 331 Ark. 364, 961 S.W.2d 752 (1998).

Reversed and remanded for a new trial.

Bird and Koonce, JJ., agree.