Jensen v. Chicago and Western Indiana R. Co.

• Decision Date: 31 March 1981
• Docket Number: No. 79-781,79-781
• Citation: 419 N.E.2d 578,50 Ill.Dec. 470,94 Ill.App.3d 915
• Parties: , 50 Ill.Dec. 470 Richard JENSEN, Plaintiff-Appellee, Cross-Appellant, v. CHICAGO AND WESTERN INDIANA RAILROAD COMPANY, Defendant-Appellant, Cross- Appellee.
• Court: United States Appellate Court of Illinois

Page 578

419 N.E.2d 578

94 Ill.App.3d 915, 50 Ill.Dec. 470

Richard JENSEN, Plaintiff-Appellee, Cross-Appellant, v. CHICAGO AND WESTERN INDIANA RAILROAD COMPANY Defendant-Appellant, Cross- Appellee.

No. 79-781.

Appellate Court of Illinois, First District, Third Division.

March 31, 1981.

Bergstrom, Davis & Teeple, Bradley, McMurray, Black & Snyder, Chicago, for defendant-appellant, cross-appellee.

O'Malley & O'Malley, Ltd., Chicago, for plaintiff-appellee, cross-appellant.

McNAMARA, Justice:

Plaintiff, Richard Jensen, brought this action in the circuit court of Cook County against defendant, Chicago and Western Indiana Railroad Company, to recover compensatory and punitive damages for the alleged conversion of certain steam locomotive engines, railroad cars, parts, and tools stored on defendant's premises. The jury returned a verdict in favor of plaintiff and against defendant, and awarded plaintiff compensatory damages in the amount of $707,302 and punitive damages in the amount of $1,000,000. The trial court entered judgment on the jury verdict, and later denied defendant's post-trial motion for a new trial or judgment notwithstanding the verdict. Defendant appeals from the judgment and denial of its post-trial motion. Plaintiff cross-appeals from the trial court's denial of his motion seeking interest on the compensatory award from the date of conversion to the date of judgment.

Plaintiff is a transportation contractor engaged in the business of owning, operating, repairing, and restoring antique steam locomotives for display at museums and excursion trips. Defendant is a common carrier by rail. Between 1960 and 1969, plaintiff acquired two steam locomotives (No. 5632 and No. 4963), eight additional railroad cars, and various railroad parts, tools and appurtenance items. In 1969, this railroad equipment was situated on defendant's property pursuant to lease agreement and subsequent amendments executed by the parties. On September 25, 1969, defendant sold plaintiff's equipment to a scrap dealer, Luria Steel & Trading Corporation (Erman-Howell), for $5,800. In 1973, plaintiff filed suit alleging, in part, that in violation of lease agreements and certain statutory provisions, defendant wilfully and wrongfully sold and converted plaintiff's property; that as a direct and proximate result, plaintiff was deprived of goods having substantial value; and that such wrongful conversion was committed by defendant "willfully, wantonly and in reckless disregard" for plaintiff's rights. Defendant filed an answer denying the material allegations in plaintiff's complaint. Thereafter, trial commenced and the following evidence was adduced.

In 1964, plaintiff visited Robert E. McMillen, defendant's vice-president and general manager at the time, to request storage space for the No. 5629 locomotive and tender, and suggested that they use an agreement he had entered into with another railroad as their format. This was agreed to and, on July 16, 1964, the parties executed a lease agreement whereby plaintiff leased storage space in defendant's 49th-51st Street roundhouse area. Pertinent paragraphs of the agreement provided:

"6. Either party may terminate this lease at any time by giving not less than ten (10) days' notice in writing sent by registered mail to the other party, * * *.

7. Within thirty (30) days after the date of termination of this lease, Lessee shall remove all property belonging to it from the demised premises and restore the premises to their original condition to the satisfaction of Railroad, * * *. If Lessee shall fail to remove such property and restore the premises to their original condition within the specified period, Railroad, may, without notice to Lessee, perform such removal and restoration at the expense of Lessee, or take title to all property on the premises."

Subsequent amendments incorporated the provisions of the original agreement and increased storage space to accommodate additional items acquired by plaintiff.

On February 27, 1969, defendant, through its land and tax commissioner, Daniel J. Murray, wrote plaintiff a letter that defendant intended to close its 51st Street yard and demolish the buildings as soon as possible and requesting plaintiff to remove all his equipment immediately. Plaintiff began making plans to remove his equipment from defendant's property.

Thereafter, on March 10, 1969, the parties executed a final amendment authorizing plaintiff to bring a locomotive owned by a third party onto defendant's property for repair and overhaul within 30 days. Murray wrote plaintiff on May 7, 1979, acknowledging that plaintiff had been granted an additional 30 days to overhaul the No. 207 locomotive. Murray noted that the overhaul had not begun and warned that plaintiff either take steps to vacate or defendant would be forced to consider sale of the equipment for scrap. Plaintiff next received a registered letter, dated May 15, 1969, which recited that it was a final notice of cancellation of plaintiff's lease, effective May 31, 1969. It stated that demolition of the roundhouse was imminent and that on June 1, 1969, any property remaining would belong to defendant.

At this point, some conflict in the testimony arises. Plaintiff related that a few days after receipt of the letter, he discussed the removal of his equipment with Robert E. Dowdy, then defendant's president. Plaintiff told Dowdy that if defendant wished to hold him to the 30-day removal provision, he would have to be furnished with boxcars in which to load his equipment. Plaintiff preferred to purchase his own cars for loading and removal. Dowdy replied that he would give plaintiff time to bring in his own railroad cars and to complete the removal. No specific date was set. Plaintiff informed Dowdy that several cars were ready for movement, but Dowdy wanted all the equipment to be shipped at one time. By the end of May, plaintiff had purchased three empty railroad cars on which to load his equipment. One car was misdirected and did not arrive at defendant's yard until August. Dowdy reassured plaintiff, however, that defendant would wait until his cars were loaded and could be shipped at one time. In the last week of August, 1969, plaintiff finished loading his inventory onto the railroad cars.

Robert H. Snyder, defendant's superintendent of the operating department, observed plaintiff loading his equipment and advised plaintiff that he was overloading the cars. Snyder explained that without defendant's assistance and cooperation, plaintiff could not move any rolling stock off defendant's property.

Contrary to plaintiff's testimony, Dowdy, testifying as a hostile witness pursuant to Supreme Court Rule 238, stated that he did not allow plaintiff any extension of time after the May 15 letter nor did he direct anyone to grant such extension. He further testified that he had no knowledge that plaintiff was making efforts to move his equipment in May and June, 1969.

Plaintiff made plans to ship his stock to a railroad museum in Union, Illinois. He made alternate arrangements in August with James E. Rice, president of the Chicago, West Pullman and Southern Railroad. Rice testified that he agreed to store plaintiff's equipment on CWP&S property provided it was delivered to the railroad's interchange point at 104th Street. To reach CWP&S, plaintiff's cars would have to move over track belonging to the Belt Railway of Chicago. Rice explained that it was common to accommodate "special moves" of railroad equipment. He indicated that special moves do not require all rolling stock to be in compliance with railroad interchange clearance requirements. Interchange involves the transfer of care and control of cars from one railroad to another.

Ronald F. Diehl, then defendant's freight or shipping agent, testified that, in early September, plaintiff stated that he wished to ship his ten pieces of rolling stock, fully loaded, to the museum, or alternatively to CWP&S. Diehl conditionally accepted the equipment for shipment, subject to obtaining clearances for movement to the proposed destinations. Diehl prepared bills of lading and undertook the responsibility to obtain the inspection and clearances. Diehl informed plaintiff that he would be assessed a storage fee while awaiting the necessary clearances. Diehl contacted the connecting railroads involved in the planned move, Chicago and Northwestern Railroad and Belt, and requested mechanical inspections of plaintiff's equipment. Dowdy stated he had no knowledge that plaintiff's equipment was tendered to Diehl for shipment.

On September 19, 1969, representatives of the connecting railroads conducted a joint inspection of plaintiff's railroad cars at defendant's 51st Street yard. Plaintiff was present, and Diehl promised to notify him when the results of the inspection were received.

Donald F. Dilgard, assistant superintendent of the car department of C&NW, testified that he had to conduct an inspection to ensure that the equipment was mechanically sound and properly maintained. He explained that old locomotives do not have to meet federal regulations and could be transported as a "special move." Such moves were uncommon. At the inspection, Dilgard gave conditional approval for movement of three cars, with special handling, at a slow speed, but refused to move the other cars. He observed that the No. 5629 tender had no coupler or air brakes. The baggage, gondola and flat cars were badly overloaded, in decayed condition, or improperly repaired. The two locomotives were partially disassembled and in various states of disrepair. When Dilgard informed plaintiff that he could not move the badly overloaded cars, plaintiff responded, "You have to move them, otherwise they are going to junk them * * *."

Plaintiff testified that he learned from Dilgard that some of the cars had been rejected, but that Dilgard informed him a final report would be forwarded. Dilgard...