Quinto v. Millwood Forest Products, Inc.
| Decision Date | 03 April 1997 |
| Docket Number | No. 21778,21778 |
| Parties | Fred QUINTO, Plaintiff-Appellant, v. MILLWOOD FOREST PRODUCTS, INC., Defendant-Respondent. |
| Court | Idaho Court of Appeals |
Malcolm S. Dymkoski, Coeur d'Alene, for plaintiff-appellant.
Jarold P. Cartwright, Coeur d'Alene, for defendant-respondent.
This is an action for alleged misdelivery of cedar lumber. The appeal is taken from an order of the district court granting a directed verdict to the defendant. We reverse.
In September 1989, Appellant Fred Quinto acquired from Petersen Forest Products, LTD, (Petersen), two truck loads of rough cedar lumber. He arranged for Petersen to deliver the lumber to Respondent Millwood Forest Products, Inc. (Millwood), where it was to be milled into siding. After Millwood milled the cedar lumber to specifications provided by Quinto, at Quinto's instruction a portion of the wood was loaded onto trucks for delivery to Petersen and another portion was delivered to a customer of Quinto's. The remaining wood was milled a second time at Quinto's request in an attempt to enhance its quality and value. After this lumber had been remilled and Millwood had been paid, the wood remained in Millwood's yard. In January 1990, and again in March 1990, Millwood requested that Quinto remove the lumber. During March 1990, Quinto telephoned to inform Millwood that a Davis Transport Company truck would pick up the wood during the week of March 25. On Monday, March 25, a truck of Point to Point Trucking, Ltd. arrived at the yard, and the driver told Millwood employees that he was to pick up the Quinto lumber. This truck was sent not by Quinto but by Petersen, who was apparently engaged in a dispute with Quinto regarding the right to the lumber or its proceeds. The lumber was loaded onto the Point to Point truck by Millwood employees and was transported to Petersen. On Wednesday, March 27, when Quinto telephoned to tell Millwood that the Davis Transport truck would arrive that day, he learned that the lumber had been delivered to Petersen.
Quinto brought this suit against Millwood seeking damages for the value of the lumber released to Petersen. At the conclusion of the presentation of evidence at trial, the district court granted Millwood's motion for a directed verdict. In granting the motion, the court concluded that the storage of the lumber on Millwood's premises after milling benefitted only Quinto and, therefore, constituted a gratuitous bailment. The court reasoned that, as a gratuitous bailee, Millwood could be liable only for gross negligence, and not for simple negligence, in caring for the lumber. Because the court found that the evidence would not support a finding of gross negligence on the part of Millwood, a directed verdict was granted in Millwood's favor. Quinto now appeals, contending that Millwood was a bailee for hire and was therefore liable for simple negligence in handling property entrusted to its custody, that a claim of breach of contract between Millwood and Quinto was raised in the pleadings or tried by consent of the parties and should have been presented to the jury, and that the district court improperly admitted hearsay evidence at trial.
We consider first the trial court's order directing a verdict for Millwood on the basis that a gratuitous bailee is not liable for simple negligence. On a motion for a directed verdict pursuant to I.R.C.P. 50(a), the moving party necessarily admits the truth of the adverse evidence and every inference that may legitimately be drawn therefrom in the light most favorable to the opposing party. Stephens v. Stearns, 106 Idaho 249, 252-53, 678 P.2d 41, 44-45 (1984); Jordan v. Hunter, 124 Idaho 899, 904, 865 P.2d 990, 995 (Ct.App.1993). The moving party is entitled to a directed verdict only if the evidence yields but one conclusion as to the verdict that reasonable minds could reach. Stephens, supra. In reviewing the decision to grant a motion for a directed verdict, the appellate court applies the same standard utilized by the trial court. Quick v. Crane, 111 Idaho 759, 764, 727 P.2d 1187, 1192 (1986); Stephens, supra. Because the question whether a directed verdict is appropriate is an issue of law, we freely review the trial court's decision. Id.
The district court grappled with the issue of the standard of care applicable to Millwood in the circumstances presented here. In initially granting Millwood's motion for a directed verdict, the court noted that Millwood's processing of the lumber was completed by October or November of 1989, and it was anticipated by the parties that the lumber would be retrieved by Quinto shortly after milling. The court found that there had been no agreement between the parties for storage of the lumber until March 1990, and that Millwood had neither charged nor received any fee for this storage. The court concluded that the storage of the lumber on Millwood's premises after the milling therefore constituted a gratuitous bailment. Relying upon the general rule that a gratuitous bailee is liable for loss or damage to bailed goods only if the injury was caused by the bailee's gross negligence, see Annotation, Duty and Liability of Gratuitous Bailee or Mandatory, 4 A.L.R. 1196 (1919), the court held that the evidence was insufficient to demonstrate gross negligence by Millwood, and therefore directed a verdict in Millwood's favor.
Quinto then moved for a new trial, alleging, inter alia, that the court had erred in holding that Millwood was a gratuitous bailee. Quinto asserted that a bailment for hire existed and that Millwood was therefore required to exercise ordinary care with respect to the bailed goods. Upon consideration of Quinto's motion, the district court revised its determination as to the law applicable to a gratuitous bailee and held that misdelivery of goods by a gratuitous bailee, however innocent, imposes absolute liability upon the bailee. The court relied upon numerous authorities for this proposition, including RESTATEMENT (SECOND) OF TORTS § 234 (1965); 8 AM.JUR.2d. Bailments § 181, at 911-12 (1980); 8 C.J.S. Bailments § 92, at 334 (1988); Samuel Williston, WILLISTON ON CONTRACTS (1936). Accordingly, the court ordered a new trial. Thereafter, both parties requested revision of the district court's decision, and the court ultimately reinstated the directed verdict in Millwood's favor. The court was persuaded that in Idaho, the rule of absolute liability for misdelivery of bailed goods was abrogated by Loomis v. Imperial Motors Inc., 88 Idaho 74, 396 P.2d 467 (1964). The court interpreted Loomis as holding that liability of a gratuitous bailee for misdelivery arises only upon a showing of gross negligence.
On appeal, Quinto again argues that Millwood was a bailee for hire. We, however, conclude that the characterization of the bailment as gratuitous or for hire is irrelevant to disposition of Quinto's claim and that the district court was correct in its second disposition of this case because a bailee is liable for unauthorized delivery regardless of the level of care that may have been exercised by the bailee.
A bailment is:
A delivery of goods or personal property, by one person to another, in trust for the execution of a special object upon or in relation to such goods, beneficial either to the bailor or bailee or both, and upon a contract, express or implied, to perform the trust and carry out such object, and thereupon either to redeliver the goods to the bailor or otherwise dispose of the same in conformity with the purpose of the trust.
Id. at 78, 396 P.2d at 469, quoting BLACK'S LAW DICTIONARY (4th ed.). A gratuitous bailment is a bailment for the sole benefit of the bailor. Id. A gratuitous bailee is liable for damage to or loss of the bailed item only if the bailee was grossly negligent. Id. at 79, 396 P.2d at 469-70. A bailee for hire, on the other hand is liable for simple negligence (the failure to use ordinary or reasonable care) which results in the loss of or damage to bailed property. Low v. Park Price Co., 95 Idaho 91, 94, 503 P.2d 291, 294 (1972) (); Carson v. Bye, 79 Idaho 495, 498, 321 P.2d 604, 605 (1958) ().
The nature of the bailment relationship is of little or no consequence, however, to the question of liability for misdelivery of bailed goods. The great weight of authorities hold that a delivery of bailed property by a bailee to one not authorized by the bailor to receive it is a conversion or a breach of the bailment contract for which the law imposes liability on the bailee irrespective of negligence. RESTATEMENT (SECOND) OF TORTS § 234; Walter H.E. Jaeger, WILLISTON ON CONTRACTS § 1038 (3d ed. 1967); W. Page Keeton et al., PROSSER AND KEETON ON THE LAW OF TORTS § 15, at 97 (5th ed. 1984). "This liability is the same whether the bailment is for the sole benefit of the bailor, the sole benefit of the bailee, or the mutual benefit of both." 8 Am.Jur.2d Bailments § 181, at 912.
For example, in Rensch v. Riddle's Diamonds of Rapid City, Inc., 393 N.W.2d 269 (S.D.1986), two diamond rings were left with a jeweler to be cleaned, the cleaning having been advertised as free to the public. When the owner returned to pick up his rings, he learned that the jeweler's clerk had mistakenly given the rings to another customer. The rings were never recovered. The Supreme Court of South Dakota, relying on the general rule that even innocent misdelivery of bailed goods by a gratuitous bailee imposes absolute liability on the bailee, affirmed a summary judgment against the bailee on the issue of liability.
In Fireman's Fund Ins. Co. v. Wagner Fur, Inc., 760 F.Supp. 1101 (S.D.N.Y.1991), a fur storage facility delivered, via UPS, the owner's...
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