Chesterton State Bank v. Coffey

• Decision Date: 04 October 1983
• Docket Number: No. 4-1082A323,4-1082A323
• Citation: 454 N.E.2d 1233
• Parties: CHESTERTON STATE BANK, Appellant (Defendant Below), v. George COFFEY and Rosemarie Coffey, Appellees (Plaintiff Below).
• Court: Indiana Appellate Court

Page 1233

454 N.E.2d 1233

CHESTERTON STATE BANK, Appellant (Defendant Below), v. George COFFEY and Rosemarie Coffey, Appellees (Plaintiff Below).

No. 4-1082A323.

Court of Appeals of Indiana,

Fourth District.

Oct. 4, 1983.

Harris & Welsh, Michael C. Harris, Chesterton, for appellant.

James L. Sullivan, Valparaiso, for appellees.

MILLER, Judge.

Chesterton State Bank, defendant-appellant, disputes a jury verdict, which awarded $23,000 to plaintiffs George and Rosemarie Coffey for conversion ($8,000) and for punitive damages ($15,000) when the Bank repossessed their automobile. The Bank asserts this judgment is in error because the Coffeys' tender of the amount due on their automobile loan was defective. We find the Bank's issues do not merit reversing the trial court and affirm the judgment below .

ISSUES

Minimally paraphrased, the Bank poses the following:

1. Did the Coffeys meet the requirements of a valid tender of full payment on their automobile loan by presenting a third-party check, payable to both George and the Bank, to a teller rather than an officer when the endorsement of said check would bind the Bank to certain conditions regarding the title of the automobile?

2. May the Coffeys, whose right to recover depends upon a proper tender, rely on that tender when they fail to keep it open by depositing the same into the court?

FACTS

The facts most favorable to the judgment reveal the following: In February, 1979, the Coffeys obligated themselves to the Bank on an automobile loan for a 1978 Thunderbird. Around Christmastime in 1980, the Coffeys' house burned down and with it went the coupon book for the installment payments of the loan. George wrote a letter to the Bank explaining the problem and enclosed his check for the January, 1981 payment. However, the Bank did not accept the check and mailed it back to him, uncashed, because there was no payment coupon or loan number. Surprisingly, the February payment, doubled to pay January's installment, was accepted. On or about March 10, a teller at one of the Bank's branches refused George's March payment in the absence of a payment coupon despite the availability of a relatively simple computerized routine for ascertaining loan numbers and issuing substitute documents.

On Tuesday, March 24, Robert G. Dunbar, president of the Bank, telephoned to inform a startled George he was three payments in arrears on the loan. George protested, but Dunbar remained steadfast and demanded payment. The next day, Wednesday, Edward Ross, a Loan Review Officer of the Bank, called Mrs. Coffey at work to tell her the Coffeys had delinquent accounts--the automobile loan and a ready-reserve account. Ross refused to inform her of the arrearage on either account. Later that day, George called Dunbar demanding to know how much they owed, and again, no balances were forthcoming. At no time did Ross or Dunbar indicate they were contemplating repossession. On Friday, an apparently frustrated George went to his credit union for enough money to pay off the In October, the Bank finally returned the car to the Coffeys upon payment of the original March pay-off balance of the loan. This was apparently accomplished after negotiations between the Coffeys' lawyer and the Bank. The Bank continued to refuse, however, to turn over the title until additional sums for repossession costs, attorney fees, etc. were paid. Between March and October, the Coffeys accumulated over $6,500 in car rental expenses. (The Coffeys tried to purchase another vehicle to take the place of the repossessed Thunderbird. Two dealers refused to extend credit on the basis of the repossession, and George's credit union would not release his funds until he could return the missing check.) The $8,000 judgment for compensatory damages was apparently based in part upon the rental costs.

automobile loan. An employee at the credit union called the Bank and was able to obtain the total balance due. That afternoon, George went to the Bank, paid the total balance on the ready-reserve account, and tendered his loan pay-off check from the credit union. Both the teller to whom he presented the check and a second employee, who also saw the check, told him, "You'll have to speak to Mr. Dunbar," but that Dunbar was busy at that time. (It is significant to note the loan agreement merely requests payment at "its main or any Branch office" and does not designate payment to any specific bank officer .) George discovered Dunbar was not in his office so he left a message for Dunbar to call him at home. Dunbar failed to call George on Friday. As soon as the Bank opened Saturday, March 28, George again tried to reach Dunbar, was again informed he was busy, and left a message explaining he had business concerning the pay-off of his automobile loan. Dunbar did not return the call, and at noon, while Mrs. Coffey was shopping, the Thunderbird was repossessed from the grocery store parking lot with the pay-off check lying on the back seat. The following week, on April 3, the Coffeys brought a suit for conversion against the Bank, requesting compensatory and punitive damages.

At trial, the bank officers involved, Ross and Dunbar, disputed much of the Coffeys' testimony, especially regarding prior warning, or the lack thereof, that the car would be repossessed if they failed to pay the arrearages. They testified they based the decision to repossess not only upon the alleged default in the auto loan payments but also on insecurity of the Coffeys' credit. The loan was allegedly in arrears for March (when the installment check was refused) and for a partial installment not paid by George's insurer when he was disabled for two months in the summer of 1980. George had requested that the Bank notify him of any problems with the coverage, but it had failed to do so. The insecurity was allegedly based upon the arrearage on the ready-reserve account and upon speculation and innuendoes gleaned from other credit information, documentation of such information never being admitted at trial. However, Ross testified he knew, before the repossession, that the ready-reserve account had been paid in full.

The jury awarded the Coffeys $8,000 compensatory and $15,000 punitive damages.

DECISION

We think it pertinent to first point out to the Bank that our standard of review does not allow us to consider the evidence most favorable to the Bank. Rather, we are constrained to consider that evidence which is most favorable to the judgment and can neither weigh evidence nor judge the credibility of witnesses. Indiana Department of State Revenue v. Brown Boveri Corp., (1982) Ind., 439 N.E.2d 561. Therefore, under the circumstances, we cannot consider some of the evidence as presented in the Bank's appellate brief, which although favorable to the Bank, conflicts with the Coffeys' evidence.

Validity of Tender

The Bank asserts the Coffeys did not present valid tender to cure their default and argues only an officer could endorse the check because there were conditions on the back of the credit union pay-off check binding the Bank to the warranty that it had full right to convey title to the Coffeys and to certain conditions requiring preservation of the credit union's lien on the bill of sale and title. However, nowhere in the testimony did anyone assert that this was the original reason the Coffeys' check was not accepted. The sole reason the two bank employees had given for not taking the check was that George had to see Dunbar about it. This is clearly the prevention of full tender, especially here, where the loan's terms do not specify a tenderee other than the Bank and Dunbar was never available. See Platter v . Board of Commissioners, (1885) 103 Ind. 360, 2 N.E. 544 (referral to another person as preventing full tender of deed.) Thus, under the circumstances revealed by the...