Aughenbaugh v. Williams

• Decision Date: 18 December 2018
• Docket Number: No. ED 106307,ED 106307
• Parties: Lowell D. AUGHENBAUGH and Kathy Bade, Respondents/Cross-Appellants, v. Timothy K. WILLIAMS, Appellant, and Mary E. Williams, Budget Motors LLC and John M. Taylor, Cross-Respondents.
• Court: Missouri Court of Appeals

569 S.W.3d 514

Lowell D. AUGHENBAUGH and Kathy Bade, Respondents/Cross-Appellants,

v.Timothy K. WILLIAMS, Appellant,andMary E. Williams, Budget Motors LLC and John M. Taylor, Cross-Respondents.

No. ED 106307

Missouri Court of Appeals, Eastern District, DIVISION TWO.

Filed: December 18, 2018

Motion for Rehearing and/or Transfer to Supreme Court Denied January 23, 2019

Application for Transfer Denied April 2, 2019

ATTORNEYS FOR APPELLANT: Susan K. Roach, 8000 Maryland Avenue, Suite 760, Clayton, MO 63105.

ATTORNEYS FOR RESPONDENT: Donald D. McBride II, 2000 Equitable Building, 10 S. Broadway, St. Louis, MO 63102.

ROBERT G. DOWD, JR., Judge

This appeal arises from a lawsuit involving the parties' failed business relationship in which the plaintiffs asserted claims of a breached partnership, conversion, breach of contract and unjust enrichment. The results at trial were mixed, as is our disposition on appeal. We affirm in part and reverse in part.

The parties' relationship had an inauspicious beginning. Lowell Aughenbaugh and Tim Williams met in jail, where they discussed cars and the used car dealership Tim¹ and his wife, Mary Williams, operated from a lot in Pagedale, Missouri. The dealership was known as "Budget Motors."² Tim Williams had purchased the car lot property from John Taylor and was still paying him in monthly installments at the time of trial. Taylor authorized the Williamses to use his Missouri dealership license associated with that property to buy cars from dealer auctions and to operate the used car dealership on that lot. In the spring of 2012, when Aughenbaugh was released from jail, he went to work with the Williamses. Using the Taylor license, Aughenbaugh bought cars to sell from the Budget Motors lot. Aughenbaugh paid for those cars using checks drawn from a bank account opened by Mary Williams "doing business as Budget Motors." That account was funded by wire transfers from an account owned by Aughenbaugh. With the dealer license and the Budget Motors account, Aughenbaugh could purchase cars at dealer-only auctions.

Aughenbaugh believed that he and Tim Williams had an agreement under which Aughenbaugh owned the cars he bought, he set the terms for the resale of those cars from the lot and he was entitled to keep 100% of the proceeds from those sales. At some point, Aughenbaugh’s friend, Kathy Bade, began going to auctions and buying cars with Aughenbaugh. Bade purchased the lot next door to the Budget Motors lot in Pagedale and a separate lot in Fredericktown, Missouri. She and Aughenbaugh began putting cars they purchased on her lots. Bade was also under the impression that she and Aughenbaugh owned those cars and that the profits from sales of those cars were entirely theirs to keep. These cars were titled to "Budget Motors," and as the self-described owners of Budget Motors, the Williamses believed that they owned the cars. They believed their agreement with Aughenbaugh entitled him to only a portion of the sale proceeds on any cars he brought to the lot.

By the fall of 2013, the relationship between Aughenbaugh and Tim Williams had devolved. After Aughenbaugh and Bade were prevented from making purchases using the Budget Motors account at an auction, they met with Mary Williams. Ultimately the dispute over true ownership of the cars became apparent, and cars purchased by Aughenbaugh and Bade were impounded from the Fredericktown lot by the police on reports that they had been stolen. Tim Williams retrieved those cars from police, but never returned any of them to Aughenbaugh or Bade. Aughenbaugh and Bade claimed that other cars they had purchased and put on the other lots also "went missing." Tim Williams sold some of the cars and did not give any of the proceeds to Aughenbaugh or Bade. This lawsuit followed.

Aughenbaugh and Bade (hereafter collectively "Plaintiffs") asserted various counts in their petition against the Williamses and Taylor (hereafter collectively "Defendants"). Plaintiffs alleged they had a partnership with Defendants, and based thereon, claimed they needed a judicial accounting and dissolution of the partnership and claimed Defendants had breached their fiduciary duties and the terms of partnership agreement. Plaintiffs also asserted claims of conversion, unjust enrichment and breach of contract against Defendants, seeking to hold all of them liable for damages resulting from Tim Williams’s taking of their cars and failing to repay them. The case proceeded to trial.

At the close of Plaintiffs' case, the court directed verdicts in Defendants' favor on the partnership-based counts because there was no evidence of a partnership. Taylor was also granted a directed-verdict on all of the other claims against him at that time. Thus, the only claims submitted to the jury were for breach of contract and conversion against the Williamses. The jury instructions premised Mary Williams’s liability on the theory that Tim Williams was her agent and she could be liable for his acts occurring with the scope and course of that agency.³ The jury found in favor of the Williamses on the breach of contract claims and in favor of Plaintiffs on the conversion claims. The court then determined Plaintiffs' equitable claim of unjust enrichment in favor of the Williamses. Judgment was entered accordingly. The Williamses filed a motion for new trial, which the court granted with respect only to the conversion claims against Mary Williams. This appeal and cross-appeal followed.

Tim Williams appeals from the judgment entered on the conversion verdicts against him. Plaintiffs cross-appeal from the order granting a new trial on the conversion claims against Mary Williams. Plaintiffs also appeal from the judgment entered on the directed-verdicts in favor of all Defendants on the partnership claims and on the other claims against Taylor, along with the court’s judgment on the unjust enrichment claim in the Williamses' favor. We begin with Plaintiffs' appeal of the order granting Mary Williams a new trial.

Plaintiffs' Appeal – Order Granting New Trial

In the first point of their appeal, Plaintiffs contend the trial court did not have authority to grant a new trial on the ground cited in its order. We agree. The court’s order for new trial was entered more than thirty days after the judgment, and therefore the trial court was only authorized to order a new trial on the grounds set forth in the motion for new trial:

The jurisdiction of the trial court to order a new trial on its own initiative is restricted to a period not later than 30 days after the entry of judgment. Rule 75.01. The filing of a motion for new trial extends the jurisdiction of the court to grant a new trial for a period of 90 days after the filing of the motion. Rules 78.04 and 78.06. However, this extension of time applies only to matters and issues properly preserved and set forth in the motion for new trial. After the thirty-day period the court’s jurisdiction is limited to granting relief sought by one of the parties in its after trial motions for reasons stated in that motion.

Stretch v. State Farm Mutual Automobile Insurance Co., 645 S.W.2d 729, 731 (Mo. App. E.D. 1983) (emphasis added) (internal quotation marks and case citations omitted); see also Steele v. Evenflo Company, Inc. , 147 S.W.3d 781, 786 (Mo. App. E.D. 2004). Here, the trial court’s order granting a new trial was based exclusively on the lack of evidence to support the theory of apparent authority Plaintiffs submitted in Instruction 6. But that error was not alleged in the motion for new trial, which only alleged error in Instructions 10 and 24, the verdict-directors on Aughenbaugh’s and Bade’s conversion claims against Mary Williams respectively.

Because Plaintiffs' conversion claims against Mary Williams were premised on an agency relationship with her husband, Tim Williams, the conversion verdict-directors were modified in accordance with Missouri Approved Instruction 18.01. Thus, those instructions directed the jury to find for the plaintiff if it believed (1) the plaintiff purchased the cars with his or her money, (2) Mary Williams, or Tim Williams "acting in the course and scope of his agency" for Mary, took possession of those cars and (3) Mary thereby deprived the plaintiff of his or her right to possess them. See MAI 23.12 (Conversion); see also MAI 18.01. The MAIs require that when agency is submitted with the "scope and course of" language in a verdict-director, the court must also give an instruction defining that phrase. See MAI 18.01, Notes on Use 2. "A universally applicable definition of ‘scope of agency’ is not practicable," but Chapter 13 of the approved instruction provides definitions designed "to fit the most common cases" and "should serve as a guide in those areas not specifically covered." MAI 13.01, General Comment; see MAI 13.02 through MAI 13.07.

In this case, Plaintiffs chose to submit the definition of "scope and course" found in MAI 13.07(1) for cases in which agency is premised on "apparent authority." That was Instruction 6 and it was given to the jury without any objection. It provided that the acts of Tim Williams were "were within the ‘scope and course of agency’ " if (1) the conduct of Mary Williams "was such that an ordinarily careful person would believe" that Tim "had authority to perform such acts on behalf of" Mary and (2) Plaintiffs "reasonably relied on" Mary’s conduct. It was this instruction alone that the trial court found was given in error because there was no evidence demonstrating that Aughenbaugh or Bade relied on the appearance of authority or any conduct by Mary Williams. For this reason, the trial court granted Mary Williams a new trial on the conversion claims.

As noted, the motion for new trial contained no allegation of error with respect to Instruction 6, the apparent authority theory or the evidence relating to that theory. Mary Williams’s insistence on appeal—without any citation to the record—that not only were...