Columbus Finance, Inc. v. Howard

• Decision Date: 30 April 1975
• Docket Number: No. 74-152,74-152
• Citation: 42 Ohio St.2d 178,327 N.E.2d 654,71 O.O.2d 174
• Parties: , 83 A.L.R.3d 587, 71 O.O.2d 174 COLUMBUS FINANCE, INC., Appellee and Cross-Appellant, v. HOWARD et al., Appellants and Cross-Appellees.
• Court: Ohio Supreme Court

Page 178

42 Ohio St.2d 178

327 N.E.2d 654, 83 A.L.R.3d 587, 71 O.O.2d 174

COLUMBUS FINANCE, INC., Appellee and Cross-Appellant, v. HOWARD et al., Appellants and Cross-Appellees.

No. 74-152.

Supreme Court of Ohio.

April 30, 1975.

The following recitation of the events which preceded and engendered the present litigation is contained in the December 11, 1973, decision rendered by the Court of Appeals. (38 Ohio App.2d 7, 311 N.E.2d 32.) Since the recitation is fully supported by the record and contains a complete description of the factual background of the litigation, this court adopts it:

'Plaintiff (Columbus Finance, Inc.) was the holder of two cognovit notes executed by defendants (Ronald and Shirley Howard), one in the amount of $1,058.88 executed in December 1967, and the other in the amount of $116 executed in Feburary 1968, both of which were in connection with the purchase of furniture. Plaintiff retained a security interest in the furniture. By April 1968, defendants were delinquent in making payments on the notes. On April 18, 1968, an employee of plaintiff, Roger Kidd, discovered that the defendants were in the process of moving. Kidd asked Mr. Howard where they were moving and was told they were moving to the north end of Columbus. Kidd observed the defendants load the secured furniture into a truck. Upon instructions of plaintiff's collection manager, Kidd remained in the area and observed that defendants were proceeding in the truck containing the secured furniture towards southern Ohio. When defendants made a stop in Chillicothe, Kidd approached their truck to make further inquiry concerning the move and the future location of the secured furniture. During this encounter, Kidd reminded Mr. Howard that he had lied to Kidd about where he was moving. Mr. Howard became angry and struck Kidd. (Howard admitted giving a fictitious address to Kidd because he felt it was none of his business.) A telephone call was then made to plaintiff's collection manager, and both Kidd and Mr. Howard talked to him. Arrangements were made for the repossession of the secured furniture the following day in Lucasville.

'The furniture was repossessed the following day, April 19, 1968, by Kidd accompanied by a Scioto County deputy sheriff (at the request of defendants) and a truck driver. At this time, Kidd signed a receipt for the furniture which was witnessed by the dequty sheriff and the truck driver. The truck driver signed his name and address along the left side of the receipt, rather than at the bottom. This receipt also contains the words 'paid in full' above the signature of Roger Kidd. The word 'paid' in part occupies the same space on the receipt as the address of the truck driver. Kidd testified that the words 'paid in full' were not on the receipt when he signed it. The Howards testified that it was. Each party presented an expert witness, and the expert presented by plaintiff testified that the words 'paid in full' were added after the address of the truck driver, and the expert presented by defendants testified that the words 'paid in full' were written before the address of the truck driver. Neither the truck driver, nor the deputy sheriff testified.

'It is impossible from an observation of the receipt (defendants' exhibit B) to ascertain whether the words 'paid in full' or the address of the truck driver were first placed upon the receipt. While they occupy the same space, casual observation does not indicate which is over the other. The trial court in weighing the evidence chose to believe the evidence offered by defendants that the words 'paid in full' were placed on the receipt prior to its being signed by Roger Kidd. In view of the sharp conflict in testimony, including the conflict between the experts' testimony, this court must accept the trial court's finding in this regard.

'On August 14, 1968, plaintiffs sent, by certified mail, the required notice of sale of the secured furniture, addressed to Box 108, Lucasville, Ohio. The return receipt was received back by plaintiff postmarked August 16, 1968, in Lucasville, Ohio, signed on behalf of Ronald Howard by Nancy Howard whom the evidence indicates was Mr. Howard's sister. Although the return receipt indicates that it was requested that the address where delivered be indicated, it was not indicated.

'Defendants deny ever having received this certified letter and deny any knowledge of the address. However, the Lucasville postmaster testified that the address is the address of Mr. Howard's parents and, also, was the address of defendants although at sometime, he did not know when, the defendants' address was changed to Box 33, Lucasville. Defendant's sister testified that the return receipt contained her signature, but could not remember having signed the receipt, having received the letter, or what she did with it. Mr. Howard testified that he sometimes received mail at his parents' home. In any event, the furniture was sold, the proceeds were credited by plaintiff to defendants' account, and this action was commenced only for the unpaid balance.'

The 'action' referred to by the Court of Appeals was instituted when Columbus Finance filed a petition in the Franklin County Municipal Court, seeking judgment by confession on the cognovit notes. Such a judgment was obtained on April 14, 1971. Due to an erroneous listing of the Howards' address on the petition, they did not receive Notice of the judgment, as required by R.C. 2323.13.

Shortly after obtaining the judgment, Columbus Finance levied execution on an automobile owned by the Howards. At approximately 11:00 a. m. on April 25, 1971, the finance company's collection manager and a bailiff from the Municipal Court appeared at the Howards' residence with a tow truck and commenced action to remove the automobile. Mrs. Howard, who was at home at the time, vigorously protested when informed of the reason for the execution, producing the 'paid in full' receipt. Nevertheless, the automobile was towed away.

On May 26, 1971, the Howards filed a motion to vacate the judgment by confession. On the same day, they also filed an answer to Columbus Finance's petition and a cross-complaint. The answer alleged that the notes had been paid in full; the cross-complaint sought compensatory and punitive damages from the finance company on the basis of its allegedly unlawful acquisition of the automobile.

The motion to vacate was sustained and a nonjury trial held. Subsequently, the trial court ruled that the Howards had discharged their obligations to Columbus Finance prior to 1971, and that they were entitled to damages for the 'wrongful attachment' of their automobile. The aggregate damage award of $3,000 consisted of $240 compensatory damages for the loss of use of the automobile during the period of dispossession, $760 compensatory damages for Mrs. Howard's 'mental suffering, anguish and humiliation by reason of plaintiff's wrongful attachment,' and $2,000 in punitive damages and attorneys fees.

The Court of Appeals affirmed the award of $1,000 in compensatory damages, but reversed the award of punitive damages and attorney fees. Both parties filed notices of Appeal to this court, and the motion to certify the record was allowed.

Vorys, Sater, Seymour & Pease, Thomas M. Taggart and James H. Hedden, Columbus, for appellee and cross-appellant.

James B. Albers, Columbus, for appellants and cross-appellees.

C. WILLIAM O'NEILL, Chief Justice.

Columbus Finance has not contested those portions of the trial court's judgment denying recovery on the two cognovit notes and awarding the Howards compensatory damages for loss of use of their automobile. These matters are, therefore, not at issue in this appeal; that Columbus Finance wrongfully executed on the Howards' automobile is established. ^* What is at issue is the availability, in an action for wrongful execution, of two categories of money damages: punitive damages and compensatory damages for mental suffering and humiliation. Since wrongful execution is a tort action, the resolution of these issues is dependent upon principles generally applicable to tort actions.

I.

The Howards contend that the Court of Appeals erred in reversing the trial court's award of punitive damages and attorney fees. The reversal was based on the appellate court's conclusions that actual malice is an essential element to justify the award of punitive damages, and that the record revealed no evidence of such malice on the part of Columbus Finance. This court agrees with both conclusions.

It is an established principle of law in this state that punitive damages may be awarded in tort cases involving fraud, insult or malice. Roberts v. Mason (1859), 10 Ohio St. 277; Saberton v. Greenwald (1946), 146 Ohio St. 414, 66 N.E.2d 224. If punitive damages are proper, the aggrieved party may also recover reasonable attorney fees. Roberts v. Mason, supra; Peckham Iron Co. v. Harper (1884), 41 Ohio St. 100; Davis v. Tunison (1959), 168 Ohio St. 471, 155 N.E.2d 904. Appellants premise their claim for punitive damages on the finance company's alleged malice in executing on the automobile.

The parties disagree as to a general description of the conduct which constitutes malice sufficient to sustain an award of punitive damages. Appellee contends that an award of punitive damages is proper only if 'actual malice' on the part of the wrongdoer is shown. There is case law which directly supports that position. Davis v. Tunsion, supra; Pickle v. Swinehart (1960), 170 Ohio St. 441, 166 N.E.2d 227. See, also Smithhisler v. Dutter (1952), 157 Ohio St. 454, 105 N.E.2d 868, in which this court recognized that actual malice is ordinarily required in order to sustain an award of punitive damages, but that an exception is made for cases involving alienation of affection of a spouse.

Actual malice was defined in one punitive damages case as "that state of mind under which a person's conduct is...