Crook Motor Co., Inc. v. Goolsby, Civ. A. No. WC 84-72-D-D.

• Decision Date: 21 December 1988
• Docket Number: Civ. A. No. WC 84-72-D-D.
• Citation: 703 F. Supp. 511
• Parties: CROOK MOTOR COMPANY, INC., Plaintiff, v. J.W. GOOLSBY, Defendant/Third-Party Plaintiff, v. James H. CREGAR, Jr., et al., Defendants/Third-Party Defendants.
• Court: U.S. District Court — Northern District of Mississippi

703 F. Supp. 511

CROOK MOTOR COMPANY, INC., Plaintiff, v. J.W. GOOLSBY, Defendant/Third-Party Plaintiff, v. James H. CREGAR, Jr., et al., Defendants/Third-Party Defendants.

Civ. A. No. WC 84-72-D-D.

United States District Court, N.D. Mississippi, W.D.

December 21, 1988.

Talmadge D. Littlejohn, New Albany, Miss., for plaintiff.

J.E. Boone, New Albany, Miss., for defendant J.W. Goolsby.

Omar D. Craig, Oxford, Miss., for third-party defendants James H. Cregar, Jr., Jim Cregar Corp., Buddy Simmons and Nat. Gen. Ins. Co.

MEMORANDUM OPINION

DAVIDSON, District Judge.

I. Findings of Fact

Plaintiff, Crook Motor Company, Inc., a North Carolina corporation which has its principal place of business in Albemarle, North Carolina, filed suit against J.W. Goolsby of Myrtle, Mississippi. The defendant in turn impleaded James Cregar and Jim Cregar Corporation of Oxford, Mississippi; Charles D. "Buddy" Simmons of Water Valley, Mississippi; and National General Insurance Company. The suit concerns the sale of a truck tractor, sold by Goolsby to plaintiff and then resold by plaintiff, title to which was later discovered to be flawed. The truck, from some time prior to its sale to Crook Motors until it was confiscated by the FBI in February 1984, bore vehicle identification number (VIN) 1FUPYSYB6CP207957 (hereafter 207957). Crook Motors sues these defendants to recover the amount it has lost as a result of its purchase and resale of that truck including the purchase price of $48,000 paid to defendant Goolsby for the truck, plaintiff's lost profit on the subsequent sale of the vehicle to Battle Creek Ford, and damage to its business reputation, together with punitive damages, legal fees, costs, and interest.

Jurisdiction is based on 28 U.S.C. § 1332; it appears to this court that there exists in this court complete diversity of citizenship between the plaintiff and all defendants, and that the amount in controversy, exclusive of interest and costs, exceeds the prerequisite $10,000 amount.

On June 15, 1983, a red 1982 Freightliner "conventional" tractor, bearing true VIN 1FUPYDYB6CH206409 (hereafter 206409) was reported stolen. The truck was owned by Steven Droke of Hornersville, Missouri, and at the time of the theft was being driven in connection with the business of Droke Brothers Trucking. The truck had been stolen on June 9, 1983, from the custody of a driver for Droke Brothers in West Memphis, Arkansas.

On July 12, 1983, Mr. Buddy Simmons purportedly¹ sold to Mr. J.W. Goolsby a black² 1982 Freightliner "conventional" tractor, in need of a few additional components, for $30,000.00. Mr. Simmons is now a licensed dealer in salvage parts; at the time of the sale of the 1982 Freightliner to Mr. Goolsby, Mr. Simmons was unlicensed, and had been in the salvage business in his back yard for only eight to nine months. He occasionally drove a "lowboy" truck for Mr. Cregar, collecting wrecks and salvaged parts which Mr. Cregar had purchased, and receiving as compensation for his services his pick of the salvaged parts at Cregar's place of business. Simmons also bought salvage on his own account and occasionally these trips were for both Cregar's and his own benefit. These transactions between the two men were strictly cash and no records were kept; nor were any records kept of where individual parts came from. Mr. Simmons claims that he took salvaged parts and built the truck which he sold to Goolsby. At this time, Mr. Simmons had no building in which to work, but was working outside. He testified that he was not sure how many other trucks he had built prior to that time, either one or two, nor did he recall who purchased those trucks. Mr. Simmons claims that he cut and welded the frames from two wrecked trucks to make the frame for the truck he sold to Goolsby, in the spring of 1983. He presented the testimony of the welder he employed to the effect that he did make such a weld for Simmons at about that time. Simmons also bought a salvaged cab and sleeper from Memphis Freightliner, and allegedly used the VIN from that cab on the title and the bill of sale, 207957. Mr. Simmons claims ignorance of how that cab number happens to match the number on the frame rail, which number was later found to be a restamp over the original VIN. Simmons further claims ignorance of how a forged specifications sheet came to be attached to the cab, which described VIN 207957 as having all the components of the truck as it then existed.³ Further, on Goolsby's title application, Cregar wrote down a prior Mississippi title number, XXXXXXX-X-XX. None of the defendants could recall at trial where that number came from. On the other application, he wrote no prior number, but marked the application as referring to a used truck. Having purchased the cab and sleeper as salvage, Simmons claims he took the VIN from one or two removable decals in the cab, and submitted those to the Mississippi Department of Motor Vehicles as the true VIN for the truck, not indicating that said truck was rebuilt from salvage nor indicating that another whole truck, bearing that VIN from the factory, was or could be still in existence elsewhere.⁴

The court finds it incredible that an inexperienced salvage dealer with limited resources and with no shop, shed, or enclosure built a completed truck from scratch out of wrecked parts in just 30 to 45 days; it is especially unbelievable that such a truck could then cause a salesman, who had over 20 years experience with a large used truck dealer, to remark that it was the most beautiful truck that he had ever seen. The likelihood of odd parts being put together to make a truck which could fool subsequent buyers and investigators into believing it to be a "whole" truck is very low. And finally, that such a truck built out of used parts from a myriad of other wrecked trucks could run well with few problems⁵ is particularly incredible.⁶ Thus, due to the inconsistencies in testimony, the demeanor of the witnesses, and the incredible nature of defendant's theory of the case, this court finds that Buddy Simmons did not build such a truck from salvaged parts.⁷ Prior to the sale to Goolsby, Simmons had already been refused a title on the truck, so he attempted to bond his title. He was informed by the bonding company, National General, that he was not financially "strong enough", and that he needed to get someone else to bond it for him. He called the insurer's agent in Oxford, Mississippi, and arranged through him to have Jim Cregar use his bond for the title to this truck. Thus, National General Insurance Company issued a title bond in the amount of $36,000 on the strength of which Simmons was granted title by the State of Mississippi. This application for title was filled out by Buddy Simmons on July 12 at the time he, Goolsby and Cregar were filling out a title application in the name of J.W. Goolsby for the same truck. The same truck which was sold to Goolsby by Simmons, with some cosmetic work such as painting and additional accessories, was sold to Crook Motors on September 15, 1983. On September 12, 1983 while on his first delivery trip with the truck, Goolsby stopped across the street from Crook Motors in Albemarle, North Carolina. He was experiencing alternator problems and purchased an alternator from the part shop operated by Crook Motors. He replaced the alternator and then asked a salesman for help in jump-starting the truck. Robert Barringer, a salesman with over 20 years experience with Crook Motors, went to help, and remarked that the truck was the most beautiful he had seen. He asked Goolsby if he would consider selling the truck, was told that he might, and so Barringer proceeded to inspect the truck. Barringer testified that the truck was black, with black paint on the frame rails, but that there was red paint "under the rubbers." Barringer was of the opinion that the truck was a "whole truck" (i.e. factory-built), as the major components had the Freightliner logo. Goolsby told him that the truck was not a "glider kit" (a truck rebuilt onto a factory-issued frame)⁸ and also gave no indication that the truck was rebuilt. Barringer testified that he was worried that the truck might be a "kit", because that would seriously diminish the truck's value. Goolsby and Barringer struck a bargain for $48,000, and Goolsby promised to return with the truck within the week to finalize the transaction when he received his title from the State of Mississippi. In the course of his inspection, Barringer checked the VIN on the decal in the cab against that on the left front frame rail⁹, and saw that the numbers matched.

After Goolsby left, Barringer called Freightliner to see if the truck with VIN 207957 was a "kit" and was informed that it was a whole truck, but was also told in passing that it had a Caterpillar 3046 model engine. When Goolsby returned on September 15, 1983, Barringer asked him about the engine. Goolsby responded that he had swapped engines with his brother because he preferred a Cummins' engine. Barringer had a photograph taken of the truck that day, in the same location that Goolsby had parked it. Barringer testified, and this court so finds, that the same truck which Crook Motors purchased from J.W. Goolsby on September 15, 1983, cleaned up and with the right windshield replaced, was sold to Battle Creek Ford, of Battle Creek, Michigan, for $54,000.00.¹⁰ Battle Creek Ford had sent a salesman to Crook Motors with a prospective buyer, Mr. Dorsey Ferguson of Dyer, Indiana, who purchased the truck two to three days later on September 26, 1983, from Battle Creek Ford for $69,793.00. The truck was in the possession of Mr. Dorsey Ferguson from September 26, 1983 to February 24, 1984 when he brought the truck to Crook Motors for inspection by Sgt. William Sunday of the Criminal Investigation Section, Auto Theft Unit of the Michigan State Police, Special Agent Pamela Reyburn of the Federal Bureau of Investigation, and ...