Schmidt v. Stearman

• Decision Date: 14 March 2007
• Docket Number: No. CA 06-726.,CA 06-726.
• Citation: 98 Ark.App. 167,253 S.W.3d 35
• Parties: Paul SCHMIDT, Appellant, v. Gary STEARMAN, Appellee.
• Court: Arkansas Court of Appeals

253 S.W.3d 35

98 Ark.App. 167

Paul SCHMIDT, Appellant, v. Gary STEARMAN, Appellee.

No. CA 06-726.

Court of Appeals of Arkansas.

March 14, 2007.

Harry McDermott, Fayetteville, AR, for appellant.

Everett, Wales & Mitchell, by Randall Wakefield, Fayetteville, AR, for appellee.

SARAH J. HEFFLEY, Judge.

Appellant Paul Schmidt sued appellee Gary Stearman for conversion, trespass, and the tort of outrage. The trespass and outrage counts were dismissed by directed verdict, and the conversion count went to a jury, which found in favor of Stearman. Schmidt appeals, seeking a new trial on his conversion claim; reversal of the directed verdicts on trespass and outrage; and a ruling that the trial court erred in excluding certain evidence and refusing two proffered jury instructions. We reverse and remand for a new trial on Schmidt's cause of action for conversion; all other rulings are affirmed.

The pertinent acts occurred on a 458-acre farm in Washington County, which had been in Schmidt's family for many years. In 1996, the family corporation deeded the property to the Farm Services Agency (FSA) to extinguish a debt. In 1997 and 1998, the FSA leased the land back to Schmidt for five years, and Schmidt lived there, paying rent to the government agency. At the conclusion of the lease terms, Schmidt tried to enforce what he believed was an agreement by the FSA to allow him to re-purchase the farm. The FSA did not offer to sell the farm to Schmidt, but, for a time, Schmidt remained on the property anyway without paying rent.

In June or July 2004, the FSA quitclaimed the farm to Travis Stearman, the son of appellee Gary Stearman, a nearby property owner. Schmidt considered the sale unauthorized and stayed on the land. A few months later, Travis requested $200 per month rent from Schmidt. According to Schmidt, he refused to pay it; according to the Stearmans, he agreed to pay it. In any event, the $200 monthly rent was never paid.

In early 2005, Gary Stearman, at his son's request, hired an attorney and a process server to begin eviction proceedings against Schmidt. The process server said that she was unable to locate Schmidt to serve him personally, so she posted an eviction notice on Schmidt's house on February 23, 2005 (and possibly on March 3, 2005). The notices informed Schmidt that he must vacate within twenty days or litigation would be commenced seeking his forcible removal.

According to Schmidt, he was initially unaware of the notices, and in late March 2005, he and his girlfriend, who also lived on the property, went on vacation. Before doing so, they left food for Schmidt's dogs (water was available from a nearby spring). When Schmidt returned in early or mid April, the house's electric meter had been disabled, and he called the electric company to have service restored. It was at this time, he claimed, that he discovered the eviction notice "out in the bushes next to the back door." Schmidt contacted attorney Harry McDermott, who wrote a letter to Stearman's attorney on April 15, 2005, advising that Schmidt had not agreed to pay rent and considered the sale of the property to Travis Stearman illegal.

Thereafter, Schmidt said, he and his girlfriend re-provisioned the dogs and left on another short trip. They returned on or about April 17, and Schmidt noticed that a pry bar had been used to gain entry to the house. The inside of the house, he said, had been "trashed" and "ransacked" and looked "like a tornado had gone through." According to him, nearly 100 items were missing from the house, including such things as china, furniture, antiques, jewelry, and firearms. He also discovered that all five of his dogs, whom he considered his "children," had been shot to death. Schmidt called the sheriff and apparently expressed his suspicion that Gary Stearman had committed these acts. However, according to Schmidt, the sheriff would not arrest Stearman and considered the situation to be a "civil matter." Schmidt and his girlfriend decided to leave the house because they feared for their lives. They stayed in a motel for a while, then lodged with a friend.

Gary Stearman later admitted that he broke into Schmidt's house, arranged for the personal property to be removed, and shot the animals. He also acknowledged that he had asked a mechanic to take a tie rod from an old Mack truck on Schmidt's property. At trial, he gave the following context to his actions. After hiring an attorney and having the eviction notices posted, he drove by Schmidt's house in April 2005. He said that he saw newspapers piled up by the mailbox, an un-mowed, debris-strewn yard, and dogs that "didn't have any food"; according to him, it looked as if nobody had lived there for a long time.¹ He assumed that Schmidt had vacated the premises as ordered. He entered the property and "beat on the door numerous times" but received no answer. He said that he pried open the door and walked through the house to make sure that Schmidt was not "laying in there dead." He observed that the utilities and the refrigerator were on and saw a lot of "junk" in the house but did not see Schmidt, so he left. Before doing so, however, he shot Schmidt's dogs and "slung them over the brush," even though he acknowledged that he was acquainted with the dogs, knew they were pets, and had never had any trouble with them. Stearman said that he thought killing the dogs was the humane thing to do because they had been "abandoned" and could turn "wild." Upon arriving home, he told his ex-wife that "it looks like Schmidt has pulled out, just like I thought he would, and left all that mess up there." He told her "if there's anything up there that you want, then help yourself to it because I'm going to doze it down." According to Mrs. Stearman, she retrieved several items from the house and stored them in a shed on hers and Stearman's property (although she said that she did not take everything that Schmidt would later claim).

The sheriff did get involved in the matter, and shortly after the property was removed, he called Stearman and asked him if he had taken anything from Schmidt. Stearman said that he had not but his ex-wife had. Mrs. Stearman, embarrassed by the matter, told the sheriff she would return the property; Stearman likewise said that he would make sure that Schmidt got his property back and that he was prepared to deliver his things to him. Mrs. Stearman said that she kept waiting for Schmidt to call regarding the property, but he did not.

Schmidt filed suit against Gary Stearman on April 20, 2005, just three days after he discovered that the incident occurred. He sought compensatory and punitive damages for trespass, outrage, and conversion. Sometime thereafter, Mrs. Stearman called Schmidt and spoke to him about returning his property, but he said that the return was not convenient at that time because, according to Schmidt, he was still living in a motel. Eventually, the goods were returned to Schmidt in November or December 2005 when he was living with his friend, although, according to Schmidt, he did not get all of the property back.

The case went to trial in January 2006. At the close of Schmidt's proof, the trial court directed a verdict for Stearman on trespass and outrage. The conversion case was fully tried, and, after deliberations, the jurors filled out the verdict form as follows:

We, the Jury, find for the plaintiff, Paul Schmidt, and award him damages in the amount of $_______

[Unsigned signature lines]

OR

We, the Jury, find for the defendant, Gary Stearman, Sr. [sic], on the complaint of the plaintiff, Paul Schmidt.

[Nine signatures] Judgment was entered, and Schmidt moved for a new trial on the ground that the jury's verdict was clearly contrary to the preponderance of the evidence. The motion was denied, and this appeal followed.

Denial of Motion for New Trial

We first address Schmidt's argument that the trial court erred in denying his motion for a new trial on conversion. When a motion for a new trial is made on the ground that the verdict is clearly contrary to the preponderance of the evidence, we affirm the denial of the motion if the jury's verdict is supported by substantial evidence. Barringer v. Hall, 89 Ark. App. 293, 202 S.W.3d 568 (2005). Substantial evidence is that which goes beyond suspicion or conjecture and is sufficient to compel a conclusion one way or the other. Id. We give the verdict the benefit of all reasonable inferences in accordance with the proof. Id. It is only where there is no reasonable probability that the incident occurred according to the version of the prevailing party or where fair-minded persons can only draw a contrary conclusion that a jury verdict should be disturbed. Id.

Conversion is a common-law, tort action for the wrongful possession or disposition of another's property. Buck v. Gillham, 80 Ark.App. 375, 96 S.W.3d 750 (2003). The tort of conversion is committed when a party wrongfully commits a distinct act of dominion over the property of another that is inconsistent with the owner's rights. Id. The intent required is not conscious wrongdoing but rather an intent to exercise dominion or control over the goods that is in fact inconsistent with the plaintiff's rights. Id. A person can be held liable to the true owner of stolen personal property for conversion notwithstanding that he or she acted in the utmost good faith and without knowledge of the true owner's title. Id.

In the present case, the basic elements of conversion were proven beyond dispute. Several of Schmidt's possessions were taken, and they were taken with the clear intent to exercise dominion and control over them in a manner inconsistent with Schmidt's ownership—Stearman told his ex-wife to "help herself" to the items in the house; the items were removed from the house and placed in a shed on the Stearman land; and Stearman ordered his mechanic to remove a part from Schmidt's Mack truck. But, despite this...