CHRISTOPHER ADVERT. GROUP v. R & B HOLDING

• Decision Date: 09 September 2004
• Docket Number: No. 3D02-3166.,3D02-3166.
• Citation: 883 So.2d 867
• Parties: CHRISTOPHER ADVERTISING GROUP, INC., Appellant, v. R & B HOLDING COMPANY, INC., a Florida Corporation d/b/a Kendall Toyota, Appellee.
• Court: Florida District Court of Appeals

883 So.2d 867

CHRISTOPHER ADVERTISING GROUP, INC., Appellant, v. R & B HOLDING COMPANY, INC., a Florida Corporation d/b/a Kendall Toyota, Appellee.

No. 3D02-3166.

District Court of Appeal of Florida, Third District.

September 9, 2004.

Rehearing Denied October 20, 2004.

Norman Malinski, Aventura; Lauri Waldman Ross, Miami, for appellant.

Ruden, McClosky, Smith, Schuster Russell and John H. Pelzer, Fort Lauderdale, and Peter L. Wechsler, Miami, and Jacqueline F. Howe, Fort Lauderdale, and Peter J. Frommer and John P. Moore, Jr., Miami, for appellee.

Before COPE, GODERICH, and FLETCHER, JJ.

COPE, J.

This appeal presents the question of how to measure damages in a conversion case, where the property converted has great value to the owner, but little or no value to anyone else. We agree with the trial court that the evidence was legally insufficient to support the jury's verdict, but conclude that there must be a new trial.

I.

Christopher Advertising Group, Inc. ("Christopher Advertising" or "the agency") is an advertising agency which specializes in advertising for automobile dealerships. The agency was formed in New Jersey in the 1980s and later relocated to Florida.

In 1990, the agency was hired by Kendall Toyota, a large Toyota dealership located in Miami-Dade County.¹ The agency soon was spending half its time on Kendall Toyota's work for which it received a monthly retainer of $19,800.

In addition to more conventional forms of advertising, the agency created a late night television show, the "Kendall Toyota Show," which eventually became the "Miami Tonight Show," which was very successful. The host and star of the show was Mark Jacobson, the general manager of Kendall Toyota. Kendall Toyota built its own television studio which it used for filming the show and for production of television commercials.

In 1994, the agency and Kendall Toyota agreed that the agency would move into Kendall Toyota's offices. The agency would continue to devote half its time to Kendall Toyota's advertising and half to other clients. The agency's owner, Paul Christopher, and the agency employees became employees of Kendall Toyota. There were no written agreements, so Paul Christopher and his employees had the status of employees at will.

In 1996, there was a business dispute between the parties. Mark Jacobson abruptly terminated the business relationship. He locked Paul Christopher and the agency employees out of the Kendall Toyota premises, which had a sophisticated security system. Viewing the facts in the light favorable to the jury verdict, Kendall Toyota refused to allow the agency to retrieve its computers, business equipment, and advertising materials that it used for its business.

Christopher testified that it took months for the agency to re-create its advertising materials so that it could resume business. Kendall Toyota continued to use plaintiff's computer for a year and a half. Kendall Toyota put the business records in storage. These consist of approximately fifty boxes of materials which were returned to Christopher in February of 1997.

The agency sued Kendall Toyota for conversion and civil theft.² The case proceeded to trial during which the jury was shown the materials which had been withheld. Paul Christopher explained how the withheld advertising materials served as the database on which the agency did business. He testified that in his opinion the advertising materials were worth $1 million. No expert valuation was presented.

The jury returned a verdict of $1 million on the conversion claim and, when trebled, a verdict of $3 million on the civil theft claim. On post-trial motions, the court set the verdict aside.

During trial, the court had kept the defense motions for directed verdict under advisement. After trial, the court granted those motions in part. The court agreed with Kendall Toyota that the $1 million verdict was not sufficiently supported by the evidence. The court reduced the conversion award to $57,777.40 which represented the value of tangible personal property (the computers and office equipment) which Kendall Toyota had withheld, plus a $7,500 commission which the agency lost because of the lockout.³ The court also granted Kendall Toyota's motion for directed verdict on the civil theft claim, finding that the civil theft notice was insufficient.

The agency has appealed.

II.

A.

The main issue in the present case is how to value property which has been the subject of conversion, where the property has great value to the owner but little or no value to anyone else.

As a general proposition, the owner of property which has been converted is entitled to fair value at the time and place of the conversion, with interest. See Restatement (Second) of Torts § 927 (1979). How to calculate fair value depends on the circumstances of the case. See id. §§ 911, 927.

"`[V]alue' includes market value and value to the owner. A person tortiously deprived of property is entitled to damages based upon its special value to him if that is greater than its market value." Id. § 927 cmt. c.

In many cases, the value of property will be what the Restatement refers to as the "exchange value" which "is the amount of money for which the subject matter could be exchanged or procured if there is a market continually resorted to by traders, or if no market exists, the amount that could be obtained in the usual course of finding a purchaser or hirer of similar property or services." Id. § 911(2).

For ordinary used goods, the measure of damages is the used value at the time of conversion, not the original cost or the replacement cost. See Lilly v. Bronson, 129 Fla. 675, 177 So. 218, 219 (1937) (measure of damages for used fishing boat and net was reasonable value at time of seizure).

The damage rules must be flexibly applied so as to provide fair compensation under the circumstances of the specific case. Writing in the context of valuing household articles, antiques, and heirlooms destroyed in a fire, the Florida Supreme Court said:

It is often impossible to place what is a current market value on such articles but the law does not contemplate that this be done with mathematical exactness. The law guarantees every person a remedy when he has been wronged. If the damage is to personal property as in this case, it may be impossible to show that all of it had a market value. In fact it may be very valuable so far as the owner is concerned but have no value so far as the public is concerned. It would be manifestly unfair to apply the test of market value in such cases.

When the wrong is shown it becomes the duty of court and jury to apply a test that will reasonably compensate the person wronged rather than one that makes it impossible to do so. The principle of res ipsa loquitur may be used to aid the result even though not technically applicable.

Florida Public Utilities Co. v. Wester, 150 Fla. 378, 7 So.2d 788, 790 (1942) (emphasis added).

B.

Special rules apply where the property converted has great value to the owner but little or no value to anyone else. The Restatement has addressed the issue as follows:

e. Peculiar value to the owner. The phrase "value to the owner" denotes the existence of factors apart from those entering into exchange value that cause the article to be more desirable to the owner than to others.

Some things may have no exchange value but may be valuable to the owner; other things may have a comparatively small exchange value but have a special and greater value to the owner. The absence or inadequacy of the exchange value may result from the fact that others could not or would not use the thing for any purpose, or would employ it only in a less useful manner. Thus a personal record or manuscript, an artificial eye or a dog trained to obey only one master, will have substantially no value to others than the owner....

....

Even when the subject matter has its chief value in its value for use by the injured person, if the thing is replaceable, the damages for its loss are limited to replacement value, less an amount for depreciation.

Restatement (Second) of Torts § 911 cmt. e (emphasis added); see also W.E. Shipley, Annotation, Measure of Damages for Conversion or Loss of, or Damage to, Personal Property Having No Market Value, § 5, 12 A.L.R.2d 902 (1950); Emerson v. Empire Fire & Marine Ins. Co., 393 So.2d 691 (La.1981); Veeco Instruments, Inc. v. Candido, 70 Misc.2d 333, 334 N.Y.S.2d 321 (Sup.Ct.1972).

Although our reasoning differs from that of the trial court we agree with the court's decision to set aside the $1 million verdict. In this case the correct measure of damages would be the cost of re-creating the database. The $1 million figure testified to by Mr. Christopher did not represent the cost of re-creating the database, but instead represented his attempt to place a value on the database as an income-producing asset.⁴

Kendall Toyota acknowledges that the cost of re-creating the database is a correct measure of damages. Kendall Toyota argues, however, that the agency failed to bring out such evidence at trial, and therefore should not have a new trial. We reject that argument. At trial the agency attempted to ask witnesses about the cost of re-creating the database. This was excluded by the court because of an order in limine, obtained by Kendall Toyota, precluding evidence of consequential damages. The court interpreted the order to exclude evidence of the cost of re-creating the database, and precluded any such testimony. The point is sufficiently preserved and the agency is entitled to a new trial.

Kendall Toyota argues alternatively that since it eventually returned the database and equipment to the agency, it follows that the agency cannot recover anything for the cost of re-creating database. Kendall says that to do so would amount to a double recovery. According to Kendall Toyota, the agency is entitled at most to damages for loss of use of the database...