Ledbetter v. Brown City Sav. Bank

• Decision Date: 22 May 1985
• Docket Number: Docket No. 76013
• Citation: 368 N.W.2d 257,141 Mich.App. 692
• Parties: Robert LEDBETTER and Susan Ledbetter, Plaintiffs-Appellants, Cross-Appellees, v. BROWN CITY SAVINGS BANK, a Michigan banking corporation; Douglas K. Orton and Richard Bucklew, Defendants-Appellees, Cross-Appellants. 141 Mich.App. 692, 368 N.W.2d 257
• Court: Court of Appeal of Michigan — District of US

Page 257

368 N.W.2d 257

Robert LEDBETTER and Susan Ledbetter, Plaintiffs-Appellants Cross-Appellees, v. BROWN CITY SAVINGS BANK, a Michigan banking corporation Douglas K. Orton and Richard Bucklew Defendants-Appellees, Cross-Appellants.

Docket No. 76013.

141 Mich.App. 692, 368 N.W.2d 257

Court of Appeals of Michigan.

Submitted Feb. 8, 1985.

Decided April 1, 1985.

Released for Publication May 22, 1985.

[141 MICHAPP 695] John M. Peters, Birmingham, for plaintiffs-appellants, cross-appellees.

Morrice, Lengemann & Rickard, P.C. by John L. Lengemann and Marilyn J. Greener, Imlay City, for defendants-appellees, cross-appellants.

Before DANHOF, C.J., and T.M. BURNS and BEASLEY, JJ.

PER CURIAM.

Plaintiff Susan Ledbetter appeals as of right the trial court's judgment which reduced an initial jury verdict awarded in her favor. Defendants cross-appeal from the judgment entered against them.

In 1978, plaintiff Susan Ledbetter borrowed $7,200 to start a dress shop. This loan was renewed five times, with a new promissory note being drawn each time. Each note was secured by inventory and fixtures on hand or after-acquired, but not by any real property, mortgage instruments or bank accounts. While the notes allowed the bank, in case of default, to declare the indebtedness immediately due and payable, they did not provide for any setoffs or seizure of funds on deposit.

When plaintiff Susan Ledbetter closed the store for financial reasons in April, 1980, and defaulted upon the loans, defendant bank did not proceed against the collateral, but, rather, later seized the bank accounts on deposit. Defendant Orton, president of the bank, stated that this was done in accordance with the language on the notes which [141 MICHAPP 696] granted the bank the right to pursue any legal method approved by the state.

Initially, there were discussions concerning alternative methods of paying the notes. One suggestion was to incorporate the debts into the first mortgage held by the bank on the house and lower the interest rate on the mortgage, based on defendant Orton's belief that the mortgage contained a collateral security clause which, in any event, would permit the bank to foreclose on the mortgage in order to recover the amounts owed on the dress shop notes. Subsequently, Orton discovered that this was not the case, but failed to so inform plaintiffs. Nevertheless, defendant Bucklew, vice-president of defendant bank, inserted a collateral security clause into plaintiffs' mortgage. Upon default, defendant Bucklew, as previously noted, debited the funds on deposit with the bank in five different accounts in which Susan Ledbetter held a joint interest to offset the debts and, thereafter, in December, 1981, commenced foreclosure proceedings, refusing to accept any further late payments.

Plaintiff Susan Ledbetter testified at trial that, during the course of discussions with defendant Orton, he mentioned on approximately four occasions the existence of a collateral security clause in the mortgage. Although she had asked him for a copy of the mortgage, she stated that he never honored this request. Subsequently, she contacted defendant Bucklew who informed her that the previous offer to take out a new loan of $25,000 and incorporate this into the mortgage, along with the note obligation, exceeded an acceptable percentage of the value of their home. At this time, she asked for and received a copy of the mortgage, whereupon she noticed that the collateral security clause had been inserted into the mortgage. That [141 MICHAPP 697] this clause was so inserted was verified by the mortgage copy filed with the register of deeds.

This action ensued, with plaintiffs alleging fraud, conversion, and the intentional infliction of emotional distress. An amended complaint was filed additionally alleging gross negligence, but that count was amended by stipulation into a count alleging ordinary negligence and a count alleging wilful and wanton misconduct. At trial, the counts relating to fraud and conversion were dismissed. The jury returned a verdict in favor of plaintiff Susan Ledbetter but found no cause of action with respect to plaintiff Robert Ledbetter. Defendants then moved to reduce each of the separate verdicts, including the verdicts on the intentional infliction of emotional distress count and the wilful and wanton misconduct count by 40%, contending that juror affidavits had been obtained which indicated that two of the jurors had misunderstood the application of plaintiffs' comparative negligence. The lower court reconvened the jury, conducted voir dire and sent the jury to deliberate again. A second verdict reduced plaintiff's aggregate awards by 40%. A judgment in favor of plaintiff Susan Ledbetter (hereinafter plaintiff) was entered on December 30, 1983, in a total amount of $38,100, plus costs and interest.

Plaintiff argues that the unanimous verdict followed by individual polling and discharge ended the function of the jury and that the jurors' affidavits raise no allegations of outside influence or clerical error which would allow for impeachment of the original verdict. Plaintiff further posits that the jury violated its instructions (as well as Michigan law) by applying comparative negligence to reduce the damages awarded for wilful and wanton misconduct and intentional infliction of emotional distress.

[141 MICHAPP 698] Michigan, like most other jurisdictions, adheres to the general rule that the affidavits of jurors regarding their own misconduct are not admissible for the purpose of impeaching their verdict. Mandjiak v. Meijer's Super Markets, Inc., 364 Mich. 456, 460, 110 N.W.2d 802 (1961). However, in Routhier v. Detroit, 338 Mich. 449, 61 N.W.2d 593 (1953), the Supreme Court, though recognizing the general rule, observed that there may be instances where there was, in fact, no agreement reached by the jurors, thereby resulting in the absence of any verdict. According to the Court, juror affidavits are competent to show this latter defect. The Court noted:

" 'Only when jurors have agreed to the verdict are they estopped from impeaching it. Consequently, affidavits that they never assented to it are admissible. Thus, where some of the jurors have not in fact agreed to the verdict, but, being persuaded by the majority of their fellows that it was only necessary for a majority to agree, failed to object to it when it was returned, their affidavits are admissible to show that they had never consented to the verdict.' " 338 Mich. 452, 61 N.W.2d 593.

In Routhier, it was held not to be improper for the trial court to set aside the jury verdict on the day after rendition of the verdict where the jury was recalled and polled and it was discovered that one of the jurors had not agreed to the jury verdict.

More recently, in Hoffman v. Monroe Public Schools, 96 Mich.App. 256, 292 N.W.2d 542 (1980), lv. den. 409 Mich. 931 (1980), in clarifying the general distinctions between mistakes inherent in the verdict and those vitiating the verdict itself, this Court held that:

"[I]n all cases, whether civil or criminal, once a jury [141 MICHAPP 699] has been polled and discharged, its members may not challenge mistakes or misconduct inherent in the verdict. After that point, oral testimony or affidavits by the jurors may only be received on extraneous or outside errors (such as undue influence by outside parties), or to correct clerical errors or matters of form. See * * * Harrington v Velat, 395 Mich 359; 235 NW2d 357 (1975), Hampton v Van Nest's Estate, 196 Mich 404; 163 NW 83 (1917), Marchlewicz v Stanton, 50 Mich App 344; 213 NW2d 317 (1973). Information on extraneous errors has always been permissible under the 'Iowa rule', since it does not relate directly to the thought processes or inner workings of the jury. We carve out an exception for clerical errors since, presumably, the correct information will already exist on the record and it will merely be a matter of conforming the written judgment to the earlier in-court statements; no invasion of the juror's room or minds will be necessitated." 96 Mich.App. 261, 292 N.W.2d 542.

In Dunham v. Veterans of Foreign Wars Club of Muskegon, Post 446, 104 Mich.App. 541, 305 N.W.2d 260 (1981), lv. den. 412 Mich. 912 (1982), this Court recognized the clerical-error exception in allowing the jury to be reconvened where "the verdict as transmitted to the written word did not constitute the true verdict". 104 Mich.App. 544, 305 N.W.2d 260.

In Brillhart v. Mullins, 128 Mich.App. 140, 339 N.W.2d 722 (1983), this Court held that the trial court erred in reconvening the jury to correct an alleged mistake in the amount of the verdict. Before entry of the judgment, defendant filed a motion for new trial or remittitur, to which he appended affidavits from seven jurors indicating that they thought they were awarding plaintiff 30% of $50,000, or $15,000. The trial court ordered the jury to be reconvened to determine whether a mistake had been made. At the evidentiary hearing, each juror testified that he or she had agreed that plaintiff was entitled to $15,000. The trial [141 MICHAPP 700] court granted defendant's motion for remittitur, reducing a $35,000 verdict to $15,000. This Court reversed, stating that "the jurors' misunderstanding of the comparative negligence instruction inheres in the verdict and is not subject to attack by impeaching affidavits". 128 Mich.App. 151, 339 N.W.2d 722.

In the case sub judice, the jury was presented with a verdict card drafted by defendants. The jury returned the following unanimous verdicts in favor of plaintiff:

"Intentional Infliction of Emotional Distress

                "Against Brown City Savings
                Bank                         --0
                "Against Douglas Orton       --$  500.00
                "Against Richard Bucklew     --$2,500.00
                "Negligence
                "Against Brown City Savings
                Bank                         --$5,000.00
                "Against Douglas Orton       --$  500.00
                "Against Richard Bucklew

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