McMurrain v. Fason
| Decision Date | 19 December 1990 |
| Docket Number | No. 89-3369,89-3369 |
| Parties | 16 Fla. L. Weekly 447, 16 Fla. L. Weekly 61 Scott McMURRAIN, Appellant, v. Stewart FASON, d/b/a PC Systems, Appellee. |
| Court | Florida District Court of Appeals |
Claude R. Walker of Rand & Walker, Tallahassee, for appellant.
David K. Miller of Broad & Cassel, Tallahassee, for appellee.
Scott McMurrain and PC Systems of Tallahassee, Inc., appeal a non-final order denying their motion to dissolve a prejudgment writ of replevin. We have jurisdiction pursuant to Rule 9.130(a)(3)(C)(ii), Fla.R.App.P.
Stewart Fason, d/b/a PC Systems, commenced this action by filing an unverified complaint against McMurrain and PC Systems of Tallahassee, Inc., praying for a writ of replevin to recover possession of the inventory of a retail computer store that McMurrain was operating pursuant to an agreement between the parties. The complaint alleged that the terms and conditions of the agreement authorized Fason to terminate the agreement and take immediate possession of all of the store's inventory if an on-site inspection revealed an attempt by McMurrain to conceal sales or profits of the store and the profitability of the store was less than $6,000 for the quarter ending September 30, 1989. Contending that both conditions had been breached by McMurrain, the complaint alleged that Kimberly Puffenbarger, an authorized agent of Fason, conducted an on-site inspection of the store's inventory and books on October 5, 1989, and found that McMurrain had "appropriated $2,000.00 from the PC System's bank account for the purpose of making a down payment on the purchase of a personal vehicle," that she determined the existence of an approximately $10,000 discrepancy between inventory sold and inventory on hand, that the net profit for the quarter ending September 30, 1989, was $3,008, and that inventory on hand at the store had a value of approximately $200,000.
The complaint incorporated by reference a copy of the written agreement between McMurrain and Fason. The agreement required Fason to provide financing and technical support for the store and obligated McMurrain to operate the store and split any net profits with Fason. The agreement also provided that McMurrain could terminate the agreement at any time by returning to Fason all monies owed and any computer equipment that had not been fully paid for, and that Fason could terminate the agreement if total net profits during any quarter were less than $6,000, or if an onsite inspection revealed any attempt to conceal sales or profits. The agreement provided that where such inspection revealed an attempt to conceal sales or profits, Fason could take possession of all inventory.
Fason's affidavit filed with the complaint averred:
1) I am the sole proprietor of PC Systems.
2) I delegated (sic) my employee, Kimberly F. Puffenbarger, to travel to Tallahassee, Florida to perform a site inspection and audit on the operations of the PC Systems Tallahassee store.
3) Attached hereto, and incorporated by reference herein, are true and correct copies of:
c) all outstanding invoices for merchandise shipped from my warehouse to the PC Systems Tallahassee store. (Composite Exhibit E).
4) At no time did I authorize Scott McMurrain to use PC Systems funds to make a down payment on a personal vehicle.
Kimberly Puffenbarger's affidavit was also filed in support of the complaint and averred in pertinent part: 1
3. In my capacity as an employee of PC Systems, I was directed to travel to Tallahassee, Florida for the purpose of conducting an audit of the books and operations of PC System's, Tallahassee store. I conducted that audit on Wednesday, October 4, 1989.
4. During the course of conducting the financial audit of the store's operation, I learned that Scott McMurrain, the store manager, had utilized funds in the amount of $2,000.00, drawn on the PC System's account at Barnett Bank, for the purpose of making a down payment on the purchase of his personal vehicle.
5. I instructed Mr. McMurrain that such a purchase was not authorized, and advised him that an immediate repayment of the $2,000.00 should be made. To this day, no repayment has been made.
* * * * * *
8. On further examination of the store's financial records, I determined that there was a discrepancy of approximately $10,000.00 between inventory sold and inventory on hand. Mr. McMurrain was unable to provide me with documentation to explain this discrepancy.
Along with the complaint and attached exhibits, Fason filed a motion for issuance of a prejudgment writ of replevin. The motion alleged that the replevin action was based upon the agreement between Fason and McMurrain, that the affidavit filed with the complaint [presumably the Puffenbarger affidavit] established that McMurrain breached the agreement by making unauthorized deductions from the business bank account and concealed sales or profits, and,
Therefore, pursuant to Section 78.068(2) "the Defendant is engaging in, or is about to engage in, conduct that may place the claimed property in danger of distruction [sic], concealment, waste, removal from the State, removal from the jurisdiction of the Court, or transfer to an innicent [sic] purchaser during the penancy [sic] of the action" and "the Defendant has failed to make payment as agreed."
Finally, the motion stated that Fason had posted a $450,000 bond and requested the court to issue a prejudgment writ of replevin.
On October 12, 1989, the same day Fason filed the complaint and motion, the trial court heard Fason's motion at a non-evidentiary, ex parte hearing. Upon reviewing the complaint, affidavits, and exhibits, the court found that Fason had established a right to immediate possession of the inventory and entered an order directing the clerk to issue and the sheriff to serve the requested prejudgment writ of replevin upon McMurrain.
The writ was executed the following day. McMurrain immediately filed a motion to dissolve the prejudgment writ of replevin and served it by hand delivery upon Fason. The motion alleged that Fason had failed to allege or show that McMurrain was engaging in, or about to engage in, conduct that might place the claimed property in danger of destruction, concealment, waste, removal from the state, removal from the court's jurisdiction, or transfer to an innocent purchaser during the pendency of the action. McMurrain's motion further alleged that he was not moving from the state, he was not engaging in conduct that placed the property in danger of destruction, concealment, or waste, he was operating the store in accordance with the agreement, and that no goods were being concealed. On October 20, 1989, McMurrain obtained an emergency hearing on this motion, apparently after providing Fason only "ten minutes" notice. Neither Fason nor his attorney attended the hearing and no testimony or evidence was presented by or on behalf of either party. Upon reviewing the court file, which was unchanged from the initial hearing, the court denied McMurrain's motion to dissolve the prejudgment writ of replevin.
As a preliminary issue, McMurrain argues that the trial court erred in issuing the writ because Fason did not comply with section 78.068(1), Florida Statutes (1987), by filing a verified petition or separate affidavit that demonstrated the nature of the claim and the grounds relied on for issuance of the writ. Section 78.068(2) provides that a prejudgment writ of replevin may issue only if the court finds, pursuant to subsection (1):
that the defendant is engaging in, or is about to engage in, conduct that may place the claimed property in danger of destruction, concealment, waste, removal from the state, removal from the jurisdiction of the court, or transfer to an innocent purchaser during the pendency of the action or that the defendant has failed to make payment as agreed.
We agree with McMurrain that the record before the trial court was insufficient to support issuance of the prejudgment writ at the time that the court issued such writ. The complaint itself was not verified, and under section 78.068(1) the allegations contained therein could not serve as a basis for issuance of the writ. Furthermore, even if the complaint had been verified, the two key allegations contained in the complaint that might have supported issuance of the writ were called into doubt by the language of the agreement annexed thereto. The complaint alleges that under the terms and conditions of the agreement Fason was entitled to immediate possession of the store's inventory because the profitability of the store was less than $6,000 for the quarter ending September 30, 1989. The agreement, while it contains a termination option allowing Fason to terminate the agreement if the total net profits during any quarter are less than $6,000, does not contain any provision authorizing Fason to take possession, immediately or otherwise, of the inventory upon disclosure of such occurrence. The other "key" allegation of the complaint is that under the terms and conditions of the agreement Fason was entitled to take immediate possession of the inventory if an on-site inspection revealed any attempt to conceal sales or profits. The agreement, however, while providing that Fason may take possession of the inventory upon such an occurrence, does not make provision for taking immediate possession and effectively shutting the business down. Since the conflicting language of the agreement incorporated in the complaint controls over conflicting allegations of the complaint, see Carter v. Fleming, 567 So.2d 535 (Fla. 1st DCA 1990); Striton Properties v. Jacksonville Beach, 533 So.2d 1174 (Fla. 1st DCA 1988), rev. denied, 544 So.2d 201 (Fla.1989); ...
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