Perkins v. Dean Machinery Co.

• Decision Date: 30 April 2004
• Docket Number: No. WD 62576.,WD 62576.
• Citation: Perkins v. Dean Machinery Co., 132 S.W.3d 295 (Mo. App. 2004)
• Parties: Lowell PERKINS, et ux., Appellants, v. DEAN MACHINERY COMPANY, Respondent.
• Court: Missouri Court of Appeals

132 S.W.3d 295

Lowell PERKINS, et ux., Appellants, v. DEAN MACHINERY COMPANY, Respondent.

No. WD 62576.

Missouri Court of Appeals, Western District.

April 30, 2004.

Leonard B. Rose, John David Seaton, Kansas City, MO, for appellant.

Linda S. Tarpley, Overland Park, KS, for respondent.

Before VICTOR C. HOWARD, P.J., HAROLD L. LOWENSTEIN, and JAMES M. SMART, JR., JJ.

JAMES M. SMART, JR., Judge.

Lowell and Rena Perkins appeal the trial court's grant of a directed verdict in favor of Dean Machinery on the issue of punitive damages associated with the Perkins' claims for conversion and trespass on which they prevailed before a jury. We reverse and remand for a trial on the issue of punitive damages.

Statement of Facts

In reviewing a directed verdict in favor of the defendant, we view the evidence and all reasonable inferences therefrom in the light most favorable to the plaintiff's case. McNear v. Rhoades, 992 S.W.2d 877, 884 (Mo.App.1999). Lowell and Rena Perkins, residents of Daviess County, operated an earth moving business. In 1993, the Perkins purchased a used D6D Caterpillar bulldozer. The Perkins had recurring problems with the bulldozer's "final drives," and the Dean Machinery branch store in Chillicothe repaired it on five different occasions in less than two years. The first four repairs were performed in the field, but in October of 1996, the bulldozer had to be brought into the shop for repair. At the time of that repair, the Perkins still owed approximately $7,500.00 on the previous repair.

While the bulldozer was being repaired, the parties entered into an agreement, dated December 3, 1996, whereby the cost of the latest repair would be apportioned between Dean and the Perkins, and the amount of those repairs would be added to the already past-due amount and put on a note payable to Dean. The Perkins signed the agreement showing how the repairs would be apportioned. That agreement did not include any dollar amounts for the new repairs. Mrs. Perkins received a written accounting from David Sage, Dean's manager of the Chillicothe store, showing that the Perkins' share of the estimated new repairs would be $9,614.56.

It is unclear exactly when the repairs were completed, but at some point in December 1996, the Perkins picked up the bulldozer from Dean and put it back into service. Rena Perkins testified that it was only later, when she returned to Dean to pick up some parts, that Mr. Sage presented her with a financing statement, a security agreement, and a promissory note, which showed that the Perkins owed $24,867.51. The documents were dated December 19, 1996. Mrs. Perkins stated that she obtained a copy of the bill and left with the documents to go discuss the higher-than-expected charges with her husband. Those documents were, of course, designed to give Dean a security interest for the indebtedness and the right to repossess the bulldozer in the event of default. Rena Perkins testified she never brought the documents back to Dean.

In January 1997, Dean recorded documents perfecting its apparent security interest in the bulldozer. The documents purported to bear Lowell Perkins' signature. The Perkins were unaware of the recording. On March 7, 1997, the Perkins received in the mail what purported to be revised versions of the promissory note and security agreement from Dean. A cover letter requested that they sign these documents. The letter also asked for payment in the amount of $4,578.46 for past-due payments through February. Dean's credit manager, Robert Vermillion, testified that when he reviewed the original documents almost three months after they were drawn up, he noted that the promissory note did not include the combined amounts of principle and interest. He stated that the originals were accurate, and that the amounts due could be stated either way, but he felt that "corrected" copies should be executed in order to make the terms "clearer." The Perkins did not sign the revised documents.

The Perkins failed to make the monthly payments on the bulldozer repairs. Dean sent default notices to the Perkins in September, October, and November of 1997. The Perkins did not respond to those notices. In December of 1997, a year after the final repair, Dean went onto the Perkins' property and repossessed the bulldozer for alleged default under the terms of the promissory note and security agreement which Dean had earlier recorded.

The Perkins subsequently filed suit against Dean, seeking actual and punitive damages. Dean counterclaimed for amounts due for goods and services provided. The case was tried before a jury.

Lowell Perkins testified at trial that he never signed the documents. The three documents presented at trial bore what appeared to be the signature of Lowell Perkins. The documents were designed for signature only by Lowell Perkins, although Rena Perkins was a co-owner with her husband of the bulldozer. Rena Perkins denied signing any of the documents.

The Perkins presented a handwriting expert, William Storer, at trial.¹ The expert determined that the signatures on the documents "definitely" were not written by Lowell Perkins and concluded that the signatures were forgeries. Defendant Dean was precluded from presenting its own expert, although it had intended to do so, because it failed to supplement discovery before trial by identifying the expert. Defendant Dean also waived all cross-examination of the plaintiffs' expert. Therefore, the testimony of plaintiffs' expert remained unimpeached, uncontradicted and unchallenged.

David Sage, the Dean store manager, acknowledged at trial that he had not witnessed Mr. Perkins sign the documents. Sage testified that Rena Perkins took the documents, returned them after signature by Lowell Perkins, and then picked up the bulldozer. Sage testified that he released the bulldozer only after he had the signed documents in his possession. Sage stated, "I would have gotten [the signed security agreement] back before I released the dozer."

Sage's testimony was impeached, however, by prior inconsistent statements. In his 1999 deposition, taken three years earlier, he testified that he watched Lowell Perkins sign the three documents in his office and that Perkins willingly signed. Sage also stated in his deposition, contrary to his trial testimony, that he released the repaired bulldozer to the Perkins before obtaining their signatures on a note or security agreement. Sage offered no explanation for the dramatic turnaround in his testimony.

At the close of all the evidence, Dean moved for directed verdict on all the claims against them. The trial court granted Dean a directed verdict on the tortious interference claim and on the claim for punitive damages.

The jury returned a verdict in favor of the Perkins on their claims for conversion and trespass for $25,000.00 and $5,000.00 respectively. The jury also found for Dean on its counterclaim for moneys due in the amount of $17,100.07.

The Perkins appeal the directed verdict on their claim for punitive damages.

Standard of Review

Whether there is sufficient evidence for an award of punitive damages is a question of law. See Rodriguez v. Suzuki Motor Corp., 936 S.W.2d 104, 109-11 (Mo. banc 1996); see also 22 AM.JUR.2D, Damages, § 550 (2003); DeLong v. Hilltop Lincoln-Mercury, Inc., 812 S.W.2d 834, 841 (Mo.App.1991). We review the evidence presented to determine whether, as a matter of law, it was sufficient to submit the claim for punitive damages. In doing so, we view the evidence and all reasonable inferences in the light most favorable to submissibility. M.C. v. Yeargin, 11 S.W.3d 604, 614 (Mo.App.1999). A submissible case is made if the evidence and the inferences drawn therefrom are "sufficient to permit a reasonable juror to conclude that the plaintiff established with convincing clarity—that is, that it was highly probable—that the defendant's conduct was outrageous because of evil motive or reckless indifference." Fabricor, Inc. v. E.I. DuPont de Nemours & Co., 24 S.W.3d 82, 96-97 (Mo.App.2000).

Submissible Claim for Punitive Damages

The Perkins contend that the trial court erred in granting a directed verdict on punitive damages because they presented sufficient evidence that Dean's act of conversion (the repossession of the bulldozer based on a document forged by someone at Dean) was outrageous due to its evil motive or reckless indifference to the Perkins' rights. Thus, a reasonable juror, the Perkins claim, could have found by clear and convincing evidence that punitive damages were warranted.

Punitive damages are appropriate when a jury finds that the defendant intentionally converted property and that the converter's conduct was outrageous because of his evil motive or reckless indifference to the rights of others. Walker v. Hanke, 992 S.W.2d 925, 937 (Mo.App. 1999); see also RESTATEMENT OF THE LAW 2D, Torts, § 908(2) (1979). Punitive damages are imposed to punish and deter. Rodriguez, 936 S.W.2d at 110. It is a remedy so extraordinary or harsh, however, that it should be applied only sparingly and requires that the evidence meet the clear and convincing standard of proof. Id. at 111. Evaluating the sufficiency of the evidence to submit punitive damages is largely dependent upon the facts of each particular case. Hoskins v. Business Men's Assurance, 116 S.W.3d 557, 570 (Mo.App.2003); 25 C.J.S., Damages, § 202 (2002).

The Perkins allege that they presented sufficient evidence to submit the punitive damages claim to the jury because they demonstrated that someone at Dean forged Lowell...