Green Tree Acceptance, Inc. v. Doan

• Decision Date: 10 June 1988
• Parties: GREEN TREE ACCEPTANCE, INC. v. Martha C. DOAN. 86-187.
• Court: Alabama Supreme Court

Page 201

529 So.2d 201

GREEN TREE ACCEPTANCE, INC. v. Martha C. DOAN.

86-187.

Supreme Court of Alabama.

June 10, 1988.

Michael L. Hall and Hollinger F. Barnard of Johnston, Barton, Proctor, Swedlaw & Naff, Birmingham, for appellant.

Hoyt W. Hill of Walker, Hill, Adams & Umbach, Opelika, and Joseph L. Dean, Jr., of Herndon & Dean, Opelika, for appellee.

PER CURIAM.

This is an appeal from a judgment based on a jury verdict against Green Tree Acceptance, Inc. (hereinafter "Green Tree"), a general financing company, for fraud arising out of the sale of a mobile home. Green Tree sued Martha C. Doan to recover the mobile home it had sold to her, and Doan filed a counterclaim alleging fraud in the procurement of the sales contract. The jury awarded Green Tree possession of the mobile home and awarded the counter-plaintiff Doan $2,298.00 in compensatory damages and $58,500.00 in punitive damages on the fraud counterclaim. The trial court denied Green Tree's motion for a judgment notwithstanding the verdict on the counterclaim, and this appeal followed. We affirm.

Jack Crawford, d/b/a Mobile Home World in Opelika, Alabama, had a previously repossessed mobile home for sale. Martha Doan heard about the mobile home and went to Mobile Home World to talk to Crawford about the possibility of buying it. Crawford told Doan that if her credit application was approved by the finance company she could assume the mortgage on the mobile home with monthly payments of approximately $176.00 by paying the back lot rent at the mobile home park and making the past due payments on the mortgage. The amount needed to assume the mortgage totaled $1,131.72.

Doan informed Crawford that she did not have enough cash to make the total down payment. Crawford agreed to pay the difference between what Doan was able to pay--two past due payments and the back lot rent--and the total amount needed to assume the mortgage. Doan agreed and filed a credit application.

After her credit application was approved, Doan went to Crawford's office at Mobile Home World and paid the cashier. She received a receipt for her portion of the down payment in the amount of $353.74. Crawford and Doan then went to the mobile home. Crawford checked the pipes, replaced the steps, gave Doan the key, and told her that she could go ahead and move in because the contract would go through in just a few days. Doan never heard from Crawford again after that point.

Meanwhile, Green Tree had received and approved Doan's credit application on the condition that the past due payments would be made. Green Tree sent the retail sales contract to Mobile Home World for the necessary signatures via courier mail, but the package was returned undelivered. Green Tree then sent Larry Dillard, a collection manager, to Mobile Home World to inspect the mobile home.

When Dillard arrived at the dealership he found the doors locked, the lot empty, and no one on the premises. He then went to Priester's Mobile Home Park, where he found Doan living in the mobile home. At that point, Dillard and Doan discussed the contract and the down payment. Dillard asked Doan for the down payment on the mobile home, but Doan explained that she had already paid Crawford $353.74, and that he had told her that he would pay the difference. Both Doan and Dillard stated in their depositions that Doan specifically told Dillard that she did not have the rest of the down payment and could not obtain any more money. As a result of the conversation, Doan claimed that Dillard stated that Green Tree would get the money from Crawford and that he owed them the money. Furthermore, Doan claimed that Dillard told her she did not have to worry about the fact that the contract stated that she was to make that down payment.

With the knowledge that Doan could not make any more of the down payment than she had already made, and with the knowledge that Mobile Home World and Jack Crawford apparently had disappeared, Dillard nonetheless had Doan sign the contract for the sale of the mobile home.

Doan had been renting a house with her three teenaged daughters. After signing the contract, she gave up the lease on her rental home and also sold some of her furniture and her refrigerator at a loss because furniture and a refrigerator were included with the mobile home.

Later, Dillard told his office manager, Sam Bradley, about the problem of locating Crawford to collect the down payment. Green Tree continued to try to locate Crawford, but discovered that Crawford had gone out of business and had filed for bankruptcy. At that point, Dillard went back to Doan and demanded the remainder of the down payment. Once again, Doan told Dillard that she could not get enough cash to pay the remainder of the down payment, so Dillard and Doan worked out a payment plan in which the remainder of the down payment was tacked onto the end of the contract term. However, Dillard later learned that the assumable mortgage on the mobile home was through the FHA, whose regulations required that the down payment be made prior to assumption; therefore, Green Tree could not allow the down payment to be tacked onto the contract. Finally, Dillard informed Doan that unless she made the down payment, she would have to move out of the mobile home.

On several occasions, by letter and in person, Green Tree attempted to collect the down payment from Doan. Doan insisted that her agreement was with Crawford and that he was responsible for the down payment. On one occasion, a Green Tree representative went to Doan's mobile home on Thanksgiving Day and threatened to take the mobile home away unless Doan voluntarily moved out. When the threats were unsuccessful, Green Tree filed a complaint, claiming its right to possession of the 1982 DeRose mobile home. Doan filed a counterclaim alleging fraud.

On June 2, 1986, Green Tree filed a request for admissions from Doan. Doan did not respond to the request until July 11, 1986, 39 days after the request was made. Green Tree moved to strike the response, but the court denied the motion. Green Tree also moved for a summary judgment on the counterclaim, which was denied.

Following the close of the evidence at the trial, the judge gave the following jury charges on the fraud counterclaim, at the plaintiff's request:

No. 9: To recover on her counterclaim for fraud, Ms. Doan must prove that Green Tree did all of the following four elements:

1. made a false representation

2. of a material existing fact

3. that Ms. Doan relied upon

4. to her detriment.

No. 12: Ms. Doan must prove Green Tree's fraudulent intent clearly by the evidence.

No. 29: If after a consideration of all the evidence, you are not clearly and satisfactorily convinced that Green Tree made a false representation to Ms. Doan, then you must return a verdict for Green Tree on Ms. Doan's counterclaim.

The jury awarded Green Tree possession of the mobile home and awarded Doan $2,298.00 in compensatory and $58,500.00 in punitive damages on her fraud counterclaim. Green Tree appealed the judgment against it on the counterclaim.

The following issues are raised on appeal:

1. Whether the trial court erred in denying Green Tree's motion to strike Doan's responses to Green Tree's request for admissions on the grounds that the responses were untimely and prejudicial.

2. Whether the trial court erred in refusing to give Green Tree's requested jury charges numbered 10, 27, and 28.

3. Whether the trial court erred in awarding compensatory and punitive damages on Doan's fraud counterclaim.

4. Whether the jury's verdict fails for inconsistency because the jury awarded possession of the mobile home to Green Tree and awarded damages to Doan for fraud.

I.

Green Tree asserts that the trial court erred in permitting Doan to file an untimely response to Green Tree's request for admissions. We disagree.

Rule 36(a), Ala. R. Civ. P., allows 30 days for a party to respond to a request for admissions, and Rule 6(e) allows an additional 3 days for responses to a request that is delivered through the mail. If a party fails to file a timely response, the statements are deemed admitted. However, Rule 36(b) gives the trial court discretion, on a motion and "[s]ubject to the provisions of Rule 16 governing amendment of a pre-trial order," to permit the "withdrawal or amendment [of admissions] when the presentation of the merits of the action will be subserved thereby and the party who obtained the admission fails to satisfy the court that withdrawal or amendment will prejudice him in maintaining his action or defense on the merits." See Evans v. Insurance Co. of North America, 349 So.2d 1099 (Ala.1977).

Doan's response to the request for admissions was not timely, coming 39 days after the request. To have the response stricken, Green Tree had the burden of proving prejudice. See Burgess Mining & Constr. Corp. v. State ex rel. Baxley, 55 Ala.App. 61, 312 So.2d 842 (Ala.Civ.App.), cert. denied, 294 Ala. 16, 310 So.2d 872 (1975). Green Tree filed a motion to strike the response to admissions, claiming that it was prejudiced because the response arrived only three days prior to the trial date and that Green Tree had relied on the belief that the statements were deemed to be admitted when it prepared to try the case. However, Green Tree failed to indicate any specific prejudice to it in maintaining its action on the merits as a result of the late responses. Furthermore, Green Tree admittedly knew before trial that the trial court had the discretion and might permit the responses; therefore, Green Tree should have been prepared in case the responses to the request for admissions were allowed.

Green Tree cites authority for the proposition that a court should not allow withdrawal of admissions at trial except upon giving the opposing party the opportunity for a continuance. Marshall v. District of Columbia, 391 A.2d 1374 (D.C.1978). In Marshall, the first notice the opposing party had...