Battista v. Savings Bank of Baltimore

• Decision Date: 01 September 1985
• Docket Number: No. 1057,1057
• Parties: , 1 UCC Rep.Serv.2d 1040 Jacqueline BATTISTA v. SAVINGS BANK OF BALTIMORE. ,
• Court: Court of Special Appeals of Maryland

Page 257

67 Md.App. 257

507 A.2d 203, 1 UCC Rep.Serv.2d 1040

Jacqueline BATTISTA v. SAVINGS BANK OF BALTIMORE.

No. 1057, Sept. Term, 1985.

Court of Special Appeals of Maryland.

April 9, 1986.

Bradford G.Y. Carney (Matthew B. Ruble and Callahan, Calwell and Laudeman, on brief), Baltimore, for appellant.

Donna Hill Staton (Deborah E. Jennings and Piper & Marbury, on brief), Baltimore, for appellee.

Argued before ADKINS, BLOOM, AND ROBERT M. BELL, JJ.

ADKINS, Judge.

The basic issue presented in this appeal is: was there a jury question on the issue of whether appellee, Savings Bank of Baltimore, had waived its right to repossess the Honda automobile of appellant, Jacqueline Battista? Battista says the Bank's frequent acceptance of late payments without repossession provided sufficient evidence to take the waiver issue to the jury. The Bank argues to the contrary, emphasizing the presence of an anti-waiver provision in the installment sales agreement. There are subsidiary issues relating to the sufficiency of the evidence as to both compensatory and punitive damages if we agree with Battista that it was for the jury to decide whether the Bank wrongfully repossessed her car.

We shall outline the pertinent facts as we discuss the specific issues. First, we sketch the procedural posture of the case.

In January 1978, Battista purchased a 1978 Honda Civic from O'Donnell Pontiac, which assigned its retail installment sales agreement to the Bank. Battista made several monthly payments late. The Bank accepted these until October 1980. In that month, when Battista had not made her August or September payments, the Bank repossessed the automobile. Although the account was later brought current--in fact, advance payments were made--the Bank initially refused to return the vehicle upon Battista's request. Eventually the car was returned.

Battista then sued the Bank for conversion, negligence, and breach of contract, claiming both compensatory and punitive damages. ¹ At the close of her case, the Circuit Court for Baltimore City granted the Bank's motion for judgment on the punitive damages claim. The remainder of the case went to the jury, which brought in a verdict of $9,000 in favor of Battista and against the Bank. The Bank filed a timely motion for judgment n.o.v., the court granted it, and judgment was entered for the Bank. As to the conversion claim--the only ground for the Bank's liability asserted on appeal--the judge reasoned

it boils down to whether or not there was evidence of conduct which insofar as the bank is concerned, whether there was evidence of conduct which presented a factual issue as to waiver or as to modification.

Now, the terms of the contract are quite clear.... [T]he contract is quite clear that, as to when or whether a waiver or modification of the contract occurs....

The conduct alleged during the trial of the case as to the bank, I find to be inadequate to produce a factual issue. At best the jury would, I think, was put in a position to speculate both as to damages and as to the issue of whether or not there was a waiver, and, of course, as to whether or not there was a conversion, inasmuch as the original taking was a legal one; then a conversion would not exist.

This appeal followed.

Waiver and the Conversion Claim

Battista's conversion claim was based on the theory that the Bank was not authorized to repossess her car in October 1980. ² If that theory is correct, there is no doubt that there was a conversion. " 'A conversion' is any distinct act of ownership or dominion exerted by one person over the personal property of another in denial of his right or inconsistent with it." Interstate Insurance Co. v. Logan, 205 Md. 583, 588-589, 109 A.2d 904 (1954). The Bank, on the other hand, points to the undisputed fact that when the car was repossessed, two monthly payments were past due. The agreement provided:

In the event of a default ... the entire unpaid balance of the purchase price shall, at the option of the Holder [Bank], become immediately due and payable, and ... the Holder may, with or without legal process and with or without previous notice or demand for performance enter into the premises where the vehicle may be ... and take possession of the same ... [emphasis supplied].

Thus, says the Bank, there was no conversion; it merely exercised its rights under the agreement.

The central issue, as we have seen, is whether there was sufficient evidence for a fact-finder to decide that the Bank had, by its conduct, waived its contractual right to repossess upon default. The legal principle is well-established:

The creditor may have waived the right to object to the default of the debtor, in which case repossession is wrongful. Waiver of default is commonly found in the cr

editor's accepting late payments without protest and in failing to notify the debtor that strict adherence to the agreement terms will be required.

9 R. Anderson, Anderson on the Uniform Commercial Code § 9-503:14 (3d ed.1985). To explore this central issue fully, we must now review in more detail certain facts adduced at trial. In doing so, we keep in mind that we are dealing with the granting of a motion for judgment n.o.v. Such a motion should be denied if there is any evidence from which a reasonable mind could infer the facts supporting the jury's verdict. In ruling on the motion the court must assume the truth of all credible evidence on the issue and must take that evidence and all inferences fairly deducible therefrom in the light most favorable to the party against whom the motion was made. If that evidence and those inferences are sufficient to lead to conclusions from which reasonable minds could differ, the motion must be denied; the weight and value of the evidence is for the jury. Impala Platinum, Ltd. v. Impala Sales (U.S.A.), Inc., 283 Md. 296, 327, 389 A.2d 887 (1978); McSlarrow v. Walker, 56 Md.App. 151, 158, 467 A.2d 196 (1983), cert. denied, 299 Md. 137, 472 A.2d 1000 (1984). From this perspective we review the record.

As we have said, Battista purchased her Honda in January 1978 from O'Donnell Pontiac. The transaction was memorialized in an agreement, on a form supplied by the Bank, and assigned by O'Donnell to the Bank. The agreement required Battista to make 42 consecutive monthly payments of $136.79 each, beginning on February 20, 1978. The amount of each payment included a sum for the purchase of credit life and credit disability insurance. The agreement included the "repossession upon default" provision we have already quoted, as well as the following:

Failure of Holder to exercise any of the Holder's rights hereunder provided shall not be deemed a waiver thereof, and no waiver of any such rights shall be deemed to apply to any other of such rights, nor shall it be effective unless in writing and signed by the Holder.

At first all went well. Battista made payments regularly, and often on time, although some were a few days late. But in May 1979, Battista was injured in an accident, and as a consequence, disabled. She discovered that Geneva Life Insurance Company was carrying her disability credit insurance (we do not know who selected Geneva; it was not Battista) and she invoked the provisions of that insurance, by the terms of which Geneva was to make the monthly payments to the Bank.

The June 1979 payment was not paid on time and on July 10, the Bank sent Battista a notice saying it intended to repossess the car unless she made payment within ten days. Battista called the Bank, explaining that she was out of work and that Geneva would be making the payments. The Bank official to whom she spoke (Mr. Prescimone) said "we will wait awhile and see what happened." On July 18 Geneva sent the Bank a check for $136.79. The car was not repossessed.

During the summer Geneva at various times sent the Bank various checks for various amounts. These irregularities, it seems, occurred because Geneva required medical verification every 30 days that Battista's disability was continuing. Her doctor, however, did not wish to see her every 30 days, and did not wish to issue a certificate of disability when he had not seen her. As a consequence, Geneva received irregularly-timed disability certificates. Whenever it received a certificate, it sent the Bank a check, sometimes for more than a single payment. There was evidence that the Bank was aware of this circumstance. It accepted all of Geneva's checks.

On September 18, 1979, the Bank sent Battista another letter asserting that the August payment had not been made and threatening repossession unless she paid $136.79 plus late charges within ten days. Battista again phoned Prescimone and explained the situation. Geneva eventually made the payment. The car was not repossessed. This scenario was repeated following another repossession letter dated July 9, 1980. Both before and after that Geneva made its occasional payments, all of which were accepted by the Bank. The car was not repossessed.

Things came to a head in September 1980. By letter dated September 10, but apparently not mailed until September 23, the Bank demanded the August payment and again threatened repossession if payment was not received within ten days of September 10 (that critical date had passed before the letter was mailed). Battista again called the Bank "many times" and attempted to contact Prescimone, but he was never available and never responded to her messages to return her calls. On October 5 the car was repossessed. By October 16 the Bank had received enough payments to bring the account current through December 20. The Bank finally returned the car to Battista on November 25.

What legal conclusions can we draw from these facts? We turn first to the nature of waiver.

A waiver is the intentional relinquishment of a known right, or such conduct as warrants an inference of the relinquishment of such right, and may result from an express agreement or be...