Medlin v. Morganstern

• Decision Date: 28 May 2004
• Docket Number: No. A04A0246.,A04A0246.
• Citation: 601 S.E.2d 359,268 Ga. App. 116
• Parties: MEDLIN v. MORGANSTERN et al.
• Court: Georgia Court of Appeals

601 S.E.2d 359

268 Ga. App. 116

MEDLIN v. MORGANSTERN et al.

No. A04A0246.

Court of Appeals of Georgia.

May 28, 2004.

Edwin Varner, 1719 Russell Parkway, Robins, for Appellant.

Michael Weinstock, Jennifer Butler, Weinstock & Scavo, P.C., Atlanta, for Appellee.

MIKELL, Judge.

At issue in this appeal is the ownership and possession of a colt born to a Paso Fino mare named La Titicaca EZG. Plaintiff/appellant Sandye Medlin claims that the colt belongs to her and that defendants/appellees Steven and Barbra Morganstern, who currently possess the colt, tortiously interfered with a contract providing that she would receive the animal. The trial court granted summary judgment to the Morgansterns. We agree with the trial court that no genuine issue of material fact remains on the tortious interference claim. However, a fact issue remains on whether the colt belongs to Medlin. We therefore affirm in part and reverse in part.

Summary judgment is appropriate when the court, viewing all the facts and reasonable inferences from those facts in a light most favorable to the non-moving party, concludes that the evidence does not create a triable issue as to each essential element of the case. A movant for summary judgment who is a defendant may discharge his burden by pointing out by reference to the affidavits, depositions, and other documents in the record that there is an absence of evidence to support the non-moving party's case. If the moving party discharges this burden, the non-moving party cannot rest on its pleadings, but rather must point to specific evidence giving rise to a triable issue.¹

On appeal from the grant of a motion for summary judgment, this Court conducts a de novo review of the law and the evidence.²

Viewed most favorably to Medlin, the evidence shows that beginning in late February or early March 2001, she trained the Paso Fino mare in preparation for a horse show at the request of defendant Lois March, who owned the mare at that time. Medlin stated that she continued to board and train the mare for several months after the April show. March and Medlin entered into a written agreement on May 1, 2001, providing that March would allow Medlin to breed the mare with Medlin's stallion, and Medlin would keep the foal which was likely to result from the union. In return for the foal, Medlin agreed to continue to board, train, and show the mare at no charge. In addition, Medlin agreed to use her best efforts to sell the mare for March.

The mare was successfully bred to the stallion in June 2001. March then agreed to trade the pregnant mare to Marsha Sielbeck as a down payment on a Marchadora mare imported from Brazil. Medlin was aware of the transaction but believed that March would remain the registered owner of the Paso Fino mare in order to preserve Medlin's right to the foal. Medlin transported the mare to March's farm in September 2001 knowing that March was taking the mare to north Georgia to be picked up by Sielbeck.

March delivered the Paso Fino mare to Sielbeck on September 22, 2001, at the Morningstar Horse Farm in Summerville, which is owned and operated by Steven and Barbra Morganstern. Steven Morganstern averred that he was aware that March was trading the mare to Sielbeck, but neither he nor his wife knew that the mare was pregnant. Morganstern witnessed March give Sielbeck the mare's ownership documents. Sielbeck, who was indebted to the Morgansterns for certain equestrian equipment, asked them to care for the mare until mid-October, when she could arrange for its transfer to her home in Ohio. Meanwhile, Sielbeck failed to pay the Morgansterns for the equipment and did not pick up the mare. On December 13, 2001, the Morgansterns sent Sielbeck a letter demanding payment for boarding the mare and stating their intention to place a lien on the mare. Sielbeck failed to respond, and Steven Morganstern averred that he foreclosed on the mare. The mare gave birth to a colt in May 2002. March claims that she was the owner of record of the mare at that time.

March averred that she had no contact with Sielbeck until June 2002, when March learned that the mare and colt were in the Morgansterns' possession. March contacted the Morgansterns, demanded that she be permitted to reclaim the mare, and informed them that the colt belonged to Medlin. Medlin, who had been trying without success to contact Sielbeck, finally learned the location of the colt and mare from March. In August, the Morgansterns sent March a letter demanding payment for the care and maintenance of the mare and colt. On September 11, 2002, the Paso Fino Horse Association issued a certificate of registration listing Steven Morganstern as the registered owner. Shortly thereafter, Medlin's attorney contacted the Morgansterns and demanded either possession of the colt or damages in the amount of $10,000.

The parties remained at an impasse, and on December 23, 2002, Medlin filed suit against March and the Morgansterns. The complaint alleges that Medlin is entitled to specific performance of her contract with March; that the Morgansterns tortiously interfered with that contract; that the Morgansterns have no legal or equitable interest in the colt and should be required to relinquish it to Medlin; and that the Morgansterns deprived Medlin of the use and benefit of the colt. Medlin demanded compensatory and punitive damages.

The Morgansterns filed a counterclaim against Medlin and a cross-claim against March, asserting a lien against the colt pursuant to OCGA § 44-14-490 and a quantum meruit claim. They seek to recover the reasonable value of services rendered for the care and rearing of the colt in the event that either Medlin or March is determined to be its owner. In addition, the Morgansterns asserted a claim against Medlin for attorney fees. In their counterclaim, the Morgansterns state that they had no knowledge of the agreement between March and Medlin.

The Morgansterns served Medlin with discovery, including requests for admissions, on February 10, 2003. Medlin failed to respond. On April 21, the Morgansterns moved for summary judgment, contending that Medlin had admitted all facts necessary for adjudication. Medlin filed a motion to withdraw her admissions. The trial court granted Medlin's motion. However, the court determined that, even without the benefit of those admissions, the Morgansterns were entitled to summary judgment because there was no evidence that they tortiously interfered with the March/Medlin contract. Specifically, the court found that there was no evidence that the Morgansterns had notice of Medlin's interest in the colt or of the March/Medlin contract at the time Sielbeck delivered the mare. The court also noted that, even though Medlin knew that the pregnant mare was being traded, she failed to perfect her interest in the colt or otherwise provide notice of her interest to future purchasers. This appeal followed.

Medlin argues that the grant of summary judgment was in error because (a) genuine issues of fact remain for jury resolution on her tortious interference claim, and (b) the complaint states a claim for possession of the colt.

a. To recover under a theory of tortious interference with contractual relations, a plaintiff must show that a defendant: (1) acted improperly or wrongfully and without privilege; (2) acted purposely, with malice, and with the intent to injure; (3) induced a third party to breach a contract with the plaintiff; and (4) caused plaintiff financial injury.³ Medlin argues that the Morgansterns' refusal to relinquish possession of the colt constitutes evidence of improper or wrongful conduct. She contends that their attempt to foreclose on the Paso Fino mare and to change its registration after receiving notice that the colt belonged to Medlin is evidence that they acted purposely, with malice, and with the intent to injure. As for the third element, Medlin claims that by refusing to give up the colt, the Morgansterns have prevented March from fulfilling her contractual obligation, thereby inducing a breach of the contract. Finally, Medlin asserts that the Morgansterns' actions have caused her financial injury.

We hold that the trial court correctly granted summary judgment to the Morgansterns on this claim. A party cannot intentionally and maliciously induce a breach of a contract of which he or she is unaware.⁴ The undisputed evidence shows that the Morgansterns did not know that the Paso Fino mare was pregnant. There is no evidence that they were aware of Medlin's interest in the colt until at least June 25, 2002, when they received an electronic communication from March. Nor did the Morgansterns possess constructive knowledge of Medlin's claim because she did not perfect a security interest in the foal. "[T]he unborn young of animals" is included in the term "goods" in the Uniform Commercial Code.⁵ With certain exceptions that are inapplicable to this case, a financing statement must be filed to perfect a security interest in goods,⁶ including horses.⁷ The procedure for filing a financing statement is set out in OCGA §§ 11-9-501 through 11-9-504. It is undisputed that...