Green Tree Acceptance, Inc. v. Standridge

• Decision Date: 30 March 1990
• Citation: 565 So.2d 38
• Parties: GREEN TREE ACCEPTANCE, INC. v. Larry STANDRIDGE and El-Jay's, Inc., d/b/a Bonanza Mobile Homes. 88-240.
• Court: Alabama Supreme Court

Page 38

565 So.2d 38

GREEN TREE ACCEPTANCE, INC. v. Larry STANDRIDGE and El-Jay's, Inc., d/b/a Bonanza Mobile Homes.

88-240.

Supreme Court of Alabama.

March 30, 1990.

Rehearing Denied May 18, 1990.

Alan W. Heldman, Michael L. Hall and Robert S. Vance, Jr. of Johnston, Barton, Proctor, Swedlaw & Naff, Birmingham, for appellant.

Frank H. Hawthorne, Jr. of McPhillips, DeBardelaben & Hawthorne, and Joseph P. Borg and Joe N. Poole III of Capouano, Wampold, Prestwood & Sansone, Montgomery, for appellee Larry Standridge.

J. Knox Argo of Argo, Enslen, Holloway & Sabel, Montgomery, for appellee El-Jay's, Inc.

ALMON, Justice.

This is an appeal from judgments rendered on jury verdicts in favor of Larry Standridge and against Green Tree Acceptance, Inc. ("Green Tree") for $600,000; and for El-Jay's, Inc., d/b/a Bonanza Mobile Homes ("Bonanza") and against Green Tree for $150,000. The disputes between these parties arose from the sale of a mobile home to Standridge by Bonanza, and the repossession of that mobile home by Green Tree. Standridge filed an action against Green Tree alleging violations of the Federal Truth-in-Lending Act, ¹ fraud, conversion, and outrage. Bonanza filed a cross-claim against Green Tree alleging fraud, and the jury returned verdicts in favor of Standridge and Bonanza. Green Tree appeals, asserting that the trial judge improperly denied its motions for directed verdict, j.n.o.v., and new trial, and improperly awarded attorney fees to Bonanza.

The facts in this case are extremely complicated, and some issues raised by Green Tree were not properly preserved at the trial level. ² Therefore, only those facts necessary to resolve the issues that are properly before this Court will be set out. Standridge purchased a mobile home from Bonanza on August 25, 1985. As part of that transaction, Standridge signed a sales contract that contained, inter alia, the following provisions:

"9. Insurance. I will keep the manufactured home insured against such risks and in such amounts as you may reasonably require with an insurance company satisfactory to you.... If I fail to obtain or maintain insurance ... you may (but are not required to) purchase such insurance. I will immediately repay you for any amounts you spend in purchasing the insurance, plus interest at the rate in this contract. ³

"10. Default. I will be in default if: ... (ii) I do not keep any of my promises under this contract ... [Y]ou will give me notice of the default except when I voluntarily surrender or abandon the mobile home. I will have the right to cure during the notice period. If I do not cure the default, you may do either or both of the following at the end of the notice period:

"(a) Acceleration of Payments: You may require me to immediately repay the entire remaining balance of the contract less the refund described in the Prepayment Refund paragraph.

"(b) Repossession: You can repossess the manufactured home. Once you get possession of the manufactured home, you will sell it. If the amount from the sale, after expenses, is less than what I owe you, I will pay you the difference. If there is any property left in the manufactured home when you repossess, you will hold it for 20 days. I must claim it within 20 days or you will dispose of it." (Emphasis added.)

The contract also authorized the assignment of the contract to Green Tree. Under the terms of that assignment Green Tree would acquire all of Bonanza's rights in the event of default, as well as a limited right of recourse against Bonanza. Soon after the sale to Standridge, Bonanza assigned the contract to Green Tree.

The relationship between the parties was uneventful until November 19, 1986. At that time Bob Franklin, a Green Tree employee, notified Standridge that his physical damage insurance coverage had expired and had been renewed by Green Tree. Franklin demanded that Standridge immediately reimburse Green Tree for the premium payment it had made, a total of $139.34. Standridge requested written verification of the payment, and Franklin agreed to provide that verification. Green Tree did not provide that verification, but, over the next two days, Franklin continued to call Standridge at his office demanding immediate payment.

On Friday, November 21, 1986, Franklin called Standridge at his office at 5:00 p.m. and demanded payment by the end of the business day. Standridge told Franklin that he was unable to leave his office, but would give Franklin a check if he could come by Standridge's office. Franklin refused that proposal and the men became involved in a heated discussion. According to Standridge, Franklin insulted him, threatened to ruin his credit and cause him to lose his job, and finally ordered Standridge to either pay the insurance premium immediately or surrender possession of the mobile home. Standridge maintained that Franklin also threatened to dispose of Standridge's possessions in the trailer if it was repossessed. Standridge asked Franklin to repeat his demand to surrender the trailer, and then told Franklin he would comply with that demand. Over the following weekend Standridge removed his belongings from the mobile home and returned the keys to the trailer and his payment book to Green Tree on the following Monday. Although Green Tree maintained that the returning of the keys and the payment book showed that Standridge voluntarily surrendered the mobile home, Standridge denied that his surrender was voluntary. Standridge contended that he left his mobile home only because he believed Franklin could order him to do so.

Although the sales contract provided for notice of default before repossession, that provision did not state a time period for the notice. Ruth Vaughn, a Bonanza employee, testified that Green Tree ordinarily mailed owners that were in default a "thirty-day letter," alerting the owner that he was in default and informing him that he had 30 days to cure the default and prevent repossession. After those 30 days had expired and the mobile home had been repossessed, Green Tree would mail out a "ten-day letter," notifying the owner that he had 10 days in which to redeem his mobile home and thereby avoid a private sale. Although Green Tree did mail a "thirty-day letter" to Standridge, it was incorrectly addressed and Standridge did not receive it until some time in December. That letter, dated November 24, 1986, informed Standridge that he had 30 days from the postmarked date of the notice to cure his default.

During the last week of November 1986, Green Tree, through Bonanza, began to take affirmative steps to sell Standridge's trailer to Melissa McQueen. Those steps were initiated well before the expiration of the notice period set out in the "thirty-day letter." Standridge testified that McQueen began moving her belongings into the trailer on December 24, 1986, before he received any written notice from Green Tree. McQueen left a deposit with Bonanza and signed a sales contract on the trailer on December 31, 1986, well before the redemption period set out in Standridge's "ten day letter" had expired. At some point between Christmas 1986, and January 1, 1987, the mobile home was removed from Standridge's property and moved onto property chosen by McQueen. Although Green Tree does not dispute that these events occurred within the stated time periods, it contends that despite McQueen's possession and occupation of the mobile home, the sale was not finalized until February 10, 1987, when McQueen's final down payment was received.

On May 5, 1987, Standridge filed a complaint against Green Tree in the Circuit Court of Montgomery County, alleging fraud, conversion, and outrage. Green Tree then filed a third-party complaint against Bonanza, alleging that any liability incurred by Green Tree due to the repossession and sale was due to the actions of Bonanza. Bonanza responded with a counterclaim against Green Tree, alleging that all of the actions it took with relation to Standridge's trailer were taken at Green Tree's instruction. Bonanza maintained that Green Tree fraudulently informed its employees that the repossession and sale of Standridge's mobile home would not violate the notice provisions in the sales contract. After the close of the evidence, Green Tree moved for directed verdicts against Standridge and Bonanza. Those motions were denied. The jury then returned the following verdicts against Green Tree:

1. In favor of Standridge on the fraud claim, assessing damages of $300,000;

2. In favor of Standridge on the outrage claim, assessing damages of $275,000;

3. In favor of Standridge on the conversion claim, assessing damages of $25,000; and

4. In favor of Bonanza on the fraud claim, assessing damages of $150,000.

Bonanza also filed a claim for attorney fees under the Alabama Litigation Accountability Act, Ala.Code 1975, § 12-19-270 et seq. The trial court determined that Green Tree's claim against Bonanza was without substantial justification and awarded attorney fees in the amount of $2,500 to Bonanza. It is from that award and the judgments on the verdicts listed above that Green Tree appeals.

Denial of Green Tree's Motion for Directed Verdict

Green Tree argues that the trial court erred in refusing to direct a verdict in its favor on all of the counts in both Standridge's complaint and Bonanza's complaint. It contends that neither Standridge nor Bonanza produced a scintilla of evidence to support its claims. ⁴ Under the "scintilla" evidence rule, a directed verdict is proper only where there is not a scintilla of evidence to support the essential elements of the plaintiff's claim, or where there is no disputed issue of fact upon which reasonable men can differ. Southern United Life Ins. Co. v. Gregory, 508 So.2d 247, 250 (Ala.1987). To determine the propriety of the denial of Green Tree's motion for directed verdict, each claim, with the exception of Standridge's outrage claim, will be examined.

The elements of...