Rogers v. Allis-Chalmers Credit Corp.
| Decision Date | 01 June 1982 |
| Docket Number | ALLIS-CHALMERS,No. 81-1309,81-1309 |
| Citation | 679 F.2d 138 |
| Parties | 33 UCC Rep.Serv. 1574 H. Ray ROGERS, d/b/a Ray Rogers Company, Appellee, v.CREDIT CORP., Appellant. Chiles Tractor and Machinery Co. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Wm. David Duke, House, Holmes & Jewell, P. A., Little Rock, Ark., Thomas A. Burke, Burke & Eldridge, Fayetteville, Ark., for appellant.
James W. Gallman, Putman, Gallman & Dickson, Fayetteville, Ark., for appellee.
Before HEANEY, BRIGHT and HENLEY, Circuit Judges.
Appellant Allis-Chalmers Credit Corp. (Allis-Chalmers) seeks reversal of a judgment awarding appellee H. Ray Rogers compensatory damages of $35,000.00 in this diversity action for wrongful repossession of a crawler tractor so equipped as to be called a bulldozer. In brief, Allis-Chalmers contends (1) because insufficient evidence exists to support a finding of wrongful repossession, the district court 1 erred in refusing to direct a verdict against Rogers; and (2) insufficient evidence exists to support the award of damages. We affirm the judgment of the district court.
This dispute centers around the repossession of a bulldozer purchased by Rogers under an installment contract. The vehicle was originally delivered by Chiles Tractor and Machinery Co. (Chiles), an Allis-Chalmers dealer, to Thomas B. Lee, pursuant to a six-month lease-purchase agreement. On July 3, 1978, after the lease term had expired, the agreement was converted into an installment contract; this document was signed both by Lee and Rogers as "buyers." Under the terms of the contract, payments were to be made on or before the fifth day of each month, beginning in August, 1978. The installment contract was subsequently assigned by Chiles to Allis-Chalmers. By the end of October, 1978, the contract was two payments in arrears. On October 31, 1978 the bulldozer was repossessed.
Rogers and Allis-Chalmers have advanced conflicting versions of the circumstances leading to the repossession of the bulldozer. Briefly, Rogers asserted the repossession was wrongful because Allis-Chalmers, through the actions and representations of its employee and agent, had waived any default under the contract, and had committed a breach of the peace by entering private property to secure the bulldozer. In contrast, Allis-Chalmers contends that under the terms of the contract its actions in repossessing the vehicle were entirely legal. The company argues that no actions which would constitute a waiver were taken by its employees, and that because Lee was present at the time of and consented to the repossession, no breach of the peace took place. The record contains testimony supporting each party's version of the events leading to the repossession.
At trial, Allis-Chalmers made two motions for directed verdict under Fed.R.Civ.P. 50, both at the close of plaintiff's case and the close of all the evidence. As stated, the district court denied each of these motions, deciding instead that sufficient evidence had been introduced to submit the case to the jury. The court instructed that a finding of wrongful repossession could be predicated upon proof that Rogers was not in default at the time of the repossession; that although a default had occurred, Allis-Chalmers and Chiles, through the actions of their agents and employees, had waived the right to repossess the vehicle; or, that the manner in which the repossession was accomplished constituted a breach of the peace. Following deliberations, the jury concluded Allis-Chalmers had wrongfully repossessed the bulldozer, and awarded compensatory damages to Rogers. This appeal followed.
In passing upon a motion for directed verdict under Fed.R.Civ.P. 50(a), the trial court and this court must (1) consider the evidence in the light most favorable to the plaintiff as the party prevailing with the jury; (2) assume that all conflicts in the evidence were resolved by the jury in the plaintiff's favor; (3) assume as proved all facts the plaintiff's evidence tends to prove; and (4) give to the plaintiff the benefit of all favorable inferences which may reasonably be drawn from the facts proved. E.g., McGowen v. Challenge-Cook Brothers, Inc., 672 F.2d 652 at 655 (8th Cir. 1982); Polk v. Ford Motor Co., 529 F.2d 259, 267 (8th Cir.), cert. denied, 426 U.S. 907, 96 S.Ct. 2229, 48 L.Ed.2d 832 (1976). The motion must be denied if, viewing the evidence in this light, reasonable minds might differ as to the conclusions to be drawn. Id.
Reviewing the record with these principles in mind, we note initially that it is clear a default had technically occurred under the terms of the installment contract. While the term "default" is not defined in either the agreement or the Arkansas Commercial Code, the contract, as indicated, did require that payments be made on the fifth day of each month, beginning in August, 1978. There is no real dispute that the August fifth payment was not made until mid-September, and that at the time of the repossession neither the September nor the October installment had been received. Thus, under the terms of the contract, Rogers' payments were delinquent, and the jury could not properly base its finding of wrongful repossession on the absence of any default. The parties agree, however, that to sustain the verdict in favor of Rogers, substantial evidence need exist with respect to only one of the three bases of liability on which the jury was instructed. We believe sufficient evidence was presented to submit this matter to the jury on the alternative grounds of liability.
Rogers based this wrongful repossession action in part on the contention that Allis-Chalmers waived its right to enforce strictly the time terms of the installment contract. He testified that Rodney Huffaker, the Allis-Chalmers finance representative who dealt with his account, told him in essence that the company would take no action on his account if a payment were mailed by the end of the last week in October. Relying on this alleged representation, Rogers placed an installment in the mail on October 28. This payment was returned by mail; the bulldozer was repossessed on October 31. Rogers asserts Huffaker's statements constitute a waiver by Allis-Chalmers of the contract's default provisions with respect to the September and October installments, and that the company was therefore estopped from repossessing the bulldozer in connection with those delinquent payments. Huffaker's representations were allegedly made during a telephone conversation that took place near the end of October. The testimony of Rogers and Huffaker as to the substance of this call differs sharply. Huffaker testified he told Rogers the company had to receive a payment by October 28, the end of Allis-Chalmers' fiscal month. In contrast, Rogers, as noted, stated Huffaker told him that if a payment were mailed by the end or the last week in October, he would be in "no trouble." We believe this testimony was susceptible of differing interpretations, so as to create a jury question on the issue of waiver, and that the district court correctly denied Allis-Chalmers' motion for directed verdict.
While what has been said is sufficient to dispose of the issue of liability, we also incline toward the view that a jury question was generated with respect to Rogers' claim that the repossession constituted a breach of the peace. The evidence shows that the repossession was accomplished at the mine site where Rogers was using the bulldozer to recover coal. The real property, owned by a third party, had been leased to Rogers for business purposes. Huffaker, Thomas Lee and a Chiles employee entered the property in the early morning hours of October 31, going through at least one gate to reach the bulldozer. Upon reaching the bulldozer, Lee started the vehicle and drove it onto a trailer, after which it was removed. Some two weeks later Lee brought the bulldozer account into current condition and retook possession of the machine in his own name.
Article 9 of the Uniform Commercial Code, which Arkansas has adopted, provides in pertinent part:
Unless otherwise agreed, a secured party has on default the right to take possession of the collateral. In taking possession, a secured party may...
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