Montgomery Ward & Co., Inc. v. Andrews, s. 83CA0985

• Decision Date: 19 February 1987
• Docket Number: 83CA1108,Nos. 83CA0985,s. 83CA0985
• Citation: 736 P.2d 40
• Parties: MONTGOMERY WARD & CO., INC., an Illinois corporation, Plaintiff-Appellant and Cross-Appellee, v. Robert W. ANDREWS, Defendant-Appellee and Cross-Appellant. . II
• Court: Colorado Court of Appeals

Page 40

736 P.2d 40

MONTGOMERY WARD & CO., INC., an Illinois corporation Plaintiff-Appellant and Cross-Appellee, v. Robert W. ANDREWS, Defendant-Appellee and Cross-Appellant.

Nos. 83CA0985, 83CA1108.

Colorado Court of Appeals Div. II.

Feb. 19, 1987.

Rehearings Denied March 19, 1987.

Jacobson & Morrell, Don D. Jacobson, Denver, for plaintiff-appellant and cross-appellee.

Hamil Professional Corp., J. Lawrence Hamil, Bruce L. Waterhouse, Jr., Denver, for defendant-appellee and cross-appellant.

VAN CISE, Judge.

In this action based on a contract and repossession dispute, plaintiff, Montgomery Ward and Company, Inc. (Wards), obtained a judgment against defendant, Robert W. Andrews, on its complaint for breach of contract. Andrews obtained judgments, including both compensatory and exemplary damages, against Wards on his counterclaims for trespass, conversion of unsecured goods, outrageous conduct, and tortious interference with a prospective contract. Wards appeals the judgments against it and the trial court's refusal to add attorney fees to its breach of contract judgment. Andrews cross-appeals, challenging the adequacy of the exemplary damages awarded for interference (one dollar) and the compensatory damages awarded for conversion ($15,000). We affirm in part and reverse in part.

The admissions in the pleadings and the evidence at trial showed that in October 1976 Andrews contracted with Wards to operate a catalog sales agency in a building owned by him in Aspen. Andrews also entered into a financing agreement with Wards providing for it to have a security interest in some of his equipment and merchandise. Problems and disputes developed between Andrews and Wards, and, in March 1979, Andrews decided to sell the agency. His contract with Wards provided that a sale would be subject to Wards' approval.

Andrews discussed with his store manager's parents, the Weilands, the possibility of their buying the agency for $68,000. As part of the required approval process, the Weilands then met with Wards' district sales manager in May 1979. At this meeting, the sales manager told the Weilands that they could not afford to buy the agency, and, although the sales manager did not have actual knowledge of the agency's financial status, he told them that it was losing money.

In June, the Weilands had a second meeting in connection with obtaining Wards' approval, this time with Wards' agency sales manager. He told the Weilands that they could not afford the agency and that he thought the price was too high. He then told the Weilands to think about it a few days and call him back. Mrs. Weiland later called him, but found he had been replaced by another, who told her that she would have to begin the application and interview process anew. Discouraged, the Weilands decided not to purchase the agency.

Andrews had refused to pay his remittances to Wards, as a result of which Wards decided to close the store. Andrews was given one day's notice, after which a Wards controller went to the business premises on August 21, loaded everything, including Andrews' personal goods, into a truck, and took it all to Wards' dock in Denver. All locks at the place of business were changed, and the key was delivered to Wards' attorney. Andrews was not able to obtain the key until 10 days later at a meeting with Wards' agents in Denver.

In September, Wards commenced this action, alleging that Andrews had breached the sales agency contract and that there was a balance due and owing under that contract. Andrews counterclaimed, seeking damages for alleged breach of contract, trespass, conversion, outrageous conduct, interference with a prospective sale of his business, fraud, and negligent misrepresentations. Andrews also sought exemplary damages on all but the breach of contract counterclaim.

At trial, the court dismissed the fraud and negligent misrepresentation counterclaims at the close of Andrews' presentation. It directed a verdict in favor of Andrews on his claims for trespass and for conversion of unsecured goods, leaving the issue of damages to be determined by the jury. The jury found for Wards on its breach of contract claim and awarded it $24,000. It also returned a verdict in favor of Wards on Andrews' counterclaims for breach of contract and for conversion of secured goods.

The jury found in favor of Andrews and against Wards on the other counterclaims submitted to it, and awarded him $1,428 plus $1,000 exemplary damages for the trespass, $15,002 plus $10,000 exemplary damages for the conversion of unsecured goods, $3 actual plus $1 exemplary damages for the outrageous conduct, and $68,000 plus $1 exemplary damages for interference with a prospective sale. On Wards' motion, the trial court reduced the interference award by $928. Judgments were then entered on the verdicts as modified. Wards' post-judgment motion to amend the judgment on its breach of contract claim to include its attorney fees was denied.

Neither party appeals the judgments relative to breach of contract. Andrews does not appeal the dismissal of his fraud or negligent misrepresentation counterclaims.

I. Jurisdiction

Andrews contends here, as he did in a previous motion, that this court has no jurisdiction to hear this appeal because neither party filed a timely notice of appeal. This division denied the earlier motion, and we continue to reject this contention.

Judgments were entered in this case on February 1, 1983. Timely post-trial motions were argued on July 11, 1983, and, at the conclusion of that hearing, with both parties present, the trial court announced its rulings. On that date a minute order was prepared and was entered on the register of actions. Each party's notice of appeal was filed August 11. Under ordinary circumstances, the time for filing these notices would have commenced to run and would have been computed from July 11, with the result that, pursuant to C.A.R. 4(a) as then in effect, the time would have expired 30 days thereafter, August 10.

However, here, at the conclusion of the July 11 hearing, the trial court directed Andrews' attorney to prepare a written order. The attorney did so, setting forth the court's rulings on the various motions. The proposed order included the modification in the amount of one judgment and the reason therefor and the reasons for denial of the requested attorney fees, none of which was contained in the July 11 minute order or in the entry in the register of actions. This was approved as to form by Wards' attorney, was signed by the court August 5, and was entered on the register of actions as of that date.

Under these unique circumstances, we regard the August 5 order as the final order triggering the time requirements for appeal. Therefore, the time for filing the notices of appeal commenced running no earlier than August 5 (the actual date of entry on the register of actions may have been as late as August 31), and the August 11 filings were timely. See Converse v. Zinke, 635 P.2d 882 (Colo.1981).

II. Wards' Appeal

A. Evidentiary Matters

Wards contends that the trial court committed reversible error in three rulings on evidence offered by Andrews in support of his counterclaims. We do not agree.

The first claimed error concerns testimony by Andrews about why he thought it necessary to have assurances in writing that he could sell the agency without interference by Wards. The court admitted the challenged testimony for the limited purpose of establishing Andrews' state of mind. Although the relevance and, to the extent it was hearsay, the admissibility of the proffered evidence is doubtful, the actual testimony was so vague that any error in its admission was harmless.

Second, Wards challenges the court's admission into evidence of a page from the 1981 annual report of Mobil Corporation from which had been excluded everything except one column which showed the earnings (a loss of $160,000,000) and the assets ($4,154,000,000) of Wards, an admitted wholly owned Mobil subsidiary. The name "Mobil Corporation" was on the top of the page. At the time of its admission, the court cautioned the jury that the exhibit could be considered only as related to the issue of exemplary damages, and then only if it found beyond a reasonable doubt that Andrews was entitled to such damages. Wards' counsel made it clear that Mobil was not on trial. Although it would have been better had the name "Mobil Corporation" been blocked out, under the circumstances here there was no reversible error in admitting the exhibit.

Lastly, Wards claims the trial court erred in allowing Andrews' attorney, on recross-examination of Wards' controller, to argue (in support of his outrageous conduct and exemplary damages claims) that Wards showed bad faith by bringing this lawsuit. That is a tortured interpretation of the interrogation. Moreover, there was no objection raised to this line of questioning and, consequently, no ruling was made. Hence, we perceive no error.

B. Trespass

Wards argues that the trial court's directed verdict on Andrews' trespass counterclaim rejected or ignored Wards' contractual and statutory right to enter the business premises and repossess the secured property pursuant to the financing agreement. We disagree.

The trial court properly found, as a matter of law, that, even if it were assumed that Wards had a right to enter the premises, it had no right (a) to remain on the premises longer than necessary to repossess its goods, or (b) to exercise exclusive possession over the premises thereafter, preventing Andrews and his employees from entering. Restatement (Second) of Torts § 158(b) (1965). Here, Wards deliberately exceeded its rights by changing the locks and keeping the keys from Andrews and his employee for a period of at least ten days after it had repossessed the goods to which it claims it was contractually entitled. Hence, the entry of a directed verdict on the trespass claim was correct.

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