Borg-Warner Acceptance Corp. v. Boat Trading, Inc.

• Decision Date: 05 December 1989
• Docket Number: No. A89A1018,BORG-WARNER,A89A1018
• Citation: 389 S.E.2d 555,194 Ga.App. 63
• Parties: ACCEPTANCE CORPORATION v. BOAT TRADING, INC.
• Court: Georgia Court of Appeals

Page 555

389 S.E.2d 555

194 Ga.App. 63

BORG-WARNER ACCEPTANCE CORPORATION v. BOAT TRADING, INC.

No. A89A1018.

Court of Appeals of Georgia.

Dec. 5, 1989.

Rehearing Denied Dec. 20, 1989.

Certiorari Denied Jan. 19, 1990.

Gurley & Fowler, James B. Gurley, Atlanta, Terry R. Drugan, Savannah, for appellant.

Donald W. Gettle, Atlanta, Patricia L. Gordon, Stone Mountain, Linda W. Gettle, Atlanta, for appellee.

CARLEY, Chief Judge.

Appellee-plaintiff Boat Trading, Inc. (Boat Trading) brought suit for conversion against appellant-defendant Borg-Warner Acceptance Corporation (Borg-Warner). The case was tried before a jury and a verdict for compensatory damages, punitive damages and attorney's fees was returned for Boat Trading. Borg-Warner appeals from the judgment entered by the trial court on the jury's verdict. The facts are set forth in the prior appeals of this case and will be repeated here only insofar as is necessary. See Dixon v. Borg-Warner Acceptance Corp., 186 Ga.App. 843, 368 S.E.2d 800 (1988); Credithrift of America v. Borg-Warner Acceptance Corp., 187 Ga.App. 534, 370 S.E.2d 801 (1988).

1. Borg-Warner enumerates as error the denial of its motion for a directed verdict on the issue of Boat Trading's status as a "buyer in the ordinary course of business" under OCGA §§ 11-9-307(1) and 11-1-201(9).

Suffice it to say that here, as in Credithrift of America v. Borg-Warner Acceptance Corp., supra, the evidence as to Boat Trading's status as a "buyer in the ordinary course of business" was conflicting and a directed verdict was not authorized. The jury's verdict finding that Boat Trading was a "buyer in the ordinary course of business" is supported by sufficient evidence and the trial court did not err in denying Borg-Warner's motion for a directed verdict.

2. Borg-Warner enumerates as error the trial court's giving of jury instructions on the recoverability of attorney's fees over objection that the evidence would not authorize such a recovery.

The only evidence cited by Boat Trading as authorizing its recovery of attorney's fees is evidence that Borg-Warner was repeatedly told that Boat Trading had paid full value for the boats and that, despite this knowledge, Borg-Warner chose to proceed without making further inquiry and without responding to every communication relating thereto. However, the mere fact that Borg-Warner was apprised that Boat Trading had paid full value for the boats would show only that Borg-Warner was on notice that Boat Trading was the purchaser of the boats. As discussed in Division 1, Boat Trading's status as a purchaser of the boats is not the material factor in this case. It is Boat Trading's status as a purchaser in the ordinary course of business that is crucial. There is nothing in the record to authorize a finding that Borg-Warner knew or should have known that Boat Trading, although a purchaser of the boats, had unquestionably bought them in good faith and without knowledge that the sale was in violation of Borg-Warner's security interest and that Boat Trading was, as a matter of law, a purchaser in the ordinary course of business. To the contrary, the record shows that Borg-Warner had viable evidence that, under the existing circumstances, Boat Trading was not a purchaser in the ordinary course of business because of its intimate connection with Norcross Marine, Inc.

As we held in a prior appeal of this case: "[T]here was evidence to authorize a finding that Boat Trading was not a buyer in [the] ordinary course [of business]. [Cits.]" Credithrift of America v. Borg-Warner Acceptance Corp., supra, at 536, 370 S.E.2d 801. Boat Trading does not suggest what further efforts Borg-Warner could possibly have undertaken, short of litigation before a trior of fact, to determine the legal sufficiency of its evidence that, despite Boat Trading's status as a purchaser, Boat Trading was nevertheless not a purchaser in the ordinary course of business because of its intimate connection with Norcross Marine, Inc. As noted in Division 1, the question of whether Boat Trading was a purchaser in the ordinary course of business was vigorously disputed. Borg-Warner was entitled to litigate that vigorously disputed question without being subjected to the imposition of attorney's fees simply because its efforts were ultimately unsuccessful. There being a bona fide controversy as to Boat Trading's status as a purchaser in the ordinary course of business, an award of attorney's fees is not authorized. "Although this court has held that an award of attorney fees may be made under OCGA § 13-6-11 despite a bona fide controversy between the parties where attorney fees are sought on the ground that the party has acted in bad faith, [cit.], the 'bad faith' alleged here was the same conduct showing stubborn litigiousness.... In these circumstances, '(s)uch bad faith damages are not recoverable where there exists a bona fide controversy. (Cit.)' [Cit.]" General Hosps. of Humana v. Jenkins, 188 Ga.App. 825, 828-829(2), 374 S.E.2d 739 (1988).

There was no evidence authorizing Boat Trading to recover attorney's fees. It follows that the trial court erred in instructing the jury on this element of damages.

3. Borg-Warner enumerates as error the denial of its motion for a directed verdict on the issue of its liability for punitive damages.

Since this action arose prior to July 1, 1987, OCGA § 51-12-5 is applicable. The only evidence cited by Boat Trading as authorizing its recovery of punitive damages under OCGA § 51-12-5 is the evidence that Borg-Warner, having been put on notice of Boat Trading's status as a purchaser, made no further inquiry. As discussed in Division 1, however, this evidence is essentially irrelevant. What is material is that the record shows that Borg-Warner did have viable evidence of Boat Trading's lack of status as a purchaser in the ordinary course of business. There was, therefore, no evidence of any wilful misconduct in Borg-Warner's refusal to accede to Boat Trading's demands for the return of the boats. See generally Allmond v. Walker, 172 Ga.App. 870, 871(2), 324 S.E.2d 812 (1984). The trial court erred in denying Borg-Warner's motion for a directed verdict on the issue of its liability for punitive damages.

4. Borg-Warner enumerates as error the trial court's refusal to give several written requests to charge. We have considered each of the requests and find that none of them was erroneously refused over the objections which were raised by Borg-Warner in the trial court.

5. Borg-Warner enumerates the general grounds as to its third-party claim. Our review of the record shows, however, that the evidence did not demand a verdict in favor of Borg-Warner on its third-party claim and the trial court did not err in entering judgment on the jury's verdict on that claim.

Judgment affirmed with direction that punitive damages and attorney's fees be stricken.

DEEN and BANKE, P.JJ., and BIRDSONG, SOGNIER and BENHAM, JJ., concur.

McMURRAY, P.J., and POPE and BEASLEY, JJ., concur in part and dissent in part.

BEASLEY, Judge, concurring in part and dissenting in part.

1. I concur in the holding that Borg-Warner was not entitled to a directed verdict.

2. The submission to the jury of the issue of punitive damages was appropriate. Borg-Warner lost its motion for directed verdict on this issue, and it excepted to charges on punitive damages having been given over objection. The charges...