Beach Cmty. Bank v. Disposal Servs., LLC

• Decision Date: 21 September 2016
• Docket Number: No. 1D15–5330.,1D15–5330.
• Citation: 199 So.3d 1132
• Parties: BEACH COMMUNITY BANK, Appellant, v. DISPOSAL SERVICES, LLC, Appellee.
• Court: Florida District Court of Appeals

199 So.3d 1132

BEACH COMMUNITY BANK, Appellant,

v.DISPOSAL SERVICES, LLC, Appellee.

No. 1D15–5330.

District Court of Appeal of Florida, First District.

Sept. 21, 2016.

Charles F. Beall, Jr., of Moore, Hill & Westmoreland, P.A., Pensacola, for Appellant.

Bill R. Hutto of Hutto & Bodiford, Panama City, for Appellee.

B.L. THOMAS, J.

Appellant, Beach Community Bank (Beach), appeals the trial court's order granting final summary judgment in favor of Appellee, Disposal Services, LLC (Disposal), with respect to Beach's claim of conversion, and the trial court's denial of Beach's motion to amend its complaint to add a cause of action for replevin. Beach contends that the trial court erred in interpreting section 679.3151, Florida Statutes, to preclude a claim for conversion where replevin is still an available remedy. Beach argues that a claim for conversion is appropriate when the elements for conversion are satisfied, regardless of whether replevin is an available remedy. We reverse the trial court's order granting final summary judgment, because conversion remains a valid cause of action here. In light of our reversal of final summary judgment, we decline to address Beach's argument that the trial court abused its discretion in denying Beach's motion to amend.

Beach is the successor in interest of creditors that made loans to Solid Waste Haulers of Florida (Debtor), which were secured by 308 roll-off containers (Containers) worth a total of $400,800.¹ The original creditor properly filed a UCC–1 with the Florida Secretary of State perfecting its security interest in the Containers. Through a series of transactions, and without notice to Beach, Debtor sold the Containers to Disposal; however, Debtor did not apply the sale proceeds to the loans and subsequently defaulted on its loan obligations to Beach. Following Disposal's acquisition of the Containers and Debtor's default on the loans, Beach made written demand to Disposal for either repayment of the loans in full or return of the Containers. When Disposal neither paid Beach nor returned the Containers, Beach filed a complaint against Disposal alleging that Disposal converted the Containers.

In response, Disposal filed a motion for summary judgment. The trial court granted the motion, finding that Beach could not sue for conversion as a matter of law, because the option of replevin was still available as a remedy, as the Containers are non-fungible goods that could be located and subject to repossession. In response, Beach moved for rehearing and leave to amend its complaint to add a cause of action for replevin. Both motions were denied. The trial court accepted the facts as alleged in Beach's complaint, but found, as a matter of law, that Beach could not pursue a cause of action for conversion.

When reviewing a trial court's grant of final summary judgment, the standard of review is de novo. S. Nat'l Track Servs. v. Gilley, 152 So.3d 13, 16 (Fla. 1st DCA 2014). Furthermore, “[i]t is well settled that when ruling on a motion for summary judgment, courts must construe the facts in a light most favorable to the non-moving party.” Courtney v. Fla. Transformer, Inc., 549 So.2d 1061, 1065 (Fla. 1st DCA 1989). “Summary judgment is proper if there is no genuine issue of material fact and if the moving party is entitled to judgment as a matter of law.” Black Bus. Inv. Fund of Cent. Fla., Inc. v. State, Dep't of Econ. Opportunity, 178 So.3d 931, 933 (Fla. 1st DCA 2015).

“A conversion claim is based on a ‘positive, overt act or acts of dominion or authority over the money or property inconsistent with and adverse to the rights of the true owner.’ ” Columbia Bank v. Turbeville, 143 So.3d 964, 969 (Fla. 1st DCA 2014) (quoting S.S. Jacobs Co. v. Weyrick, 164 So.2d 246, 250 (Fla. 1st DCA 1964) ). In Turbeville, this court held that a bank's allegations were sufficient to allege conversion when the bank pled that “ ‘[the defendant] intentionally engaged in unauthorized conduct when she (a) withdrew funds from the accounts at issue’ depriving [the victim] of her ‘immediate right to possess the funds' and (b) failed to return the funds upon demand. ” 143 So.3d at 969 (emphasis added).

Generally, before a conversion can occur when a party was previously in rightful possession of another's property, the following three factors must be present: first, the party in possession must be informed that continued possession of the property is no longer permitted; second, the rightful owner must demand the return of the property; and third, the party holding the property must fail to comply with the demand. Black Bus. Inv. Fund, 178 So.3d at 937.² In the context of secured transactions, once default has occurred, a secured creditor has the right to possess the collateral and is authorized to take possession of the collateral. Spellman v. Indep. Bankers' Bank of Fla., 161 So.3d 505, 508 (Fla. 5th DCA 2014). See also Bel–Bel Int'l Corp. v. Cmty. Bank of Homestead, 162 F.3d 1101, 1108 (11th Cir.1998) (holding that, under Florida law, a lienholder is considered to be the “owner” of property for the purposes of conversion if he has the present right to possession). In Spellman, a trustee appealed a summary judgment on a claim for conversion. The trustee pledged stock certificates to the Bank as collateral for securing a loan. After default, the bank...