Southern Missouri Bank v. Fogle, No. 14998

• Court: Missouri Court of Appeals
• Writing for the Court: HOLSTEIN; CROW
• Citation: 738 S.W.2d 153
• Parties: SOUTHERN MISSOURI BANK, Plaintiff-Respondent, v. Neil FOGLE, Defendant-Appellant.
• Decision Date: 14 October 1987
• Docket Number: No. 14998

Page 153

738 S.W.2d 153 SOUTHERN MISSOURI BANK, Plaintiff-Respondent,
v.
Neil FOGLE, Defendant-Appellant. No. 14998. Missouri Court of Appeals,
Southern District,
Division One. Oct. 14, 1987.

Page 154

Ronald D. White, Robinson, Turley, Turley & White, Rolla, Joseph W. Rigler, Springfield, for defendant-appellant.

Thomas Strong, Steve Garner, Strong & Wooddell, P.C., Springfield, for plaintiff-respondent.

HOLSTEIN, Judge.

Southern Missouri Bank (the Bank) filed a three-count petition in replevin seeking possession of personal property and money damages resulting from Neil Fogle's default on three separate notes, each of which was secured. Fogle filed a counterclaim seeking both actual and punitive damages for "wrongful replevin" of defendant's property. The jury returned a verdict against the bank on each of its three claims and in favor of Fogle on his counterclaim, assessing actual damages in the sum of $80,000 and punitive damages in the sum of $65,000.

The trial court sustained the bank's motion for new trial on all issues on the basis that it had erroneously instructed the jury regarding compensatory damages on Fogle's counterclaim. From the order granting a new trial, Fogle appeals.

Fogle raises two points on appeal: (1) the trial court violated Rule 78.03 ¹ by failing to set forth the reasons the instruction was in error, and (2) the granting of a motion for new trial on all issues was an abuse of the trial court's discretion, because error in

Page 155

the compensatory damages instruction under the counterclaim did not justify a granting of a new trial on all issues.

The pleadings and evidence indicate Fogle executed three separate notes payable to the bank. The first, dated January 6, 1982, was in the principal sum of $15,000 and secured by a security agreement of the same date granting a security interest in a 1964 Piper Twin Comanche airplane. Fogle had executed a second note dated April 5, 1982, in the principal sum of $6,000 which was secured by a security agreement of the same date covering all inventory, furniture and fixtures of the "Pit Stop" liquor store. The third note was in the principal sum of $5,025 dated May 16, 1983, and was secured by a security agreement on a 1970 Chevrolet pickup truck. Each of the three notes had been in default for more than ninety days by August 14, 1984, when the petition in replevin was filed.

On August 23, 1984, plaintiff filed its affidavit in replevin which contained the allegations essential to obtain immediate possession of the secured property. An ex parte order of delivery and replevin was issued. Pursuant to that order, the sheriff seized the secured property, delivering it to plaintiff. As provided in Rule 99.09, Fogle requested and received a hearing to determine the bank's right to possession pending trial on the merits.

At the hearing held September 12, 1984, Fogle did not deny the validity of the notes or the security agreements, nor did he claim the notes were not in default according to their terms. Fogle denied any demand was made for payment of the notes. He contended the bank was not entitled to possession of the property on the basis of a conversation he had with bank president Robert Phillips on Monday or Tuesday of the week of August 20, 1984. In that conversation, Fogle informed Phillips he intended to take the airplane to Memphis to sell. The evidence regarding the conversation with Phillips was as follows:

Q. Did Mr. Phillips tell you that you had no problem, nothing to worry about, if you would come in the following Monday?

A. The conversation, as I remember it, was I told him that I was going to be out of town. I would be back in there Friday evening and that I would come over Saturday morning. And he said that he would not be in his office on Saturday morning.

I said, "Will you be in your office on Monday morning?" He said, "I'll be in my office on Monday morning." I said, "Well, we should be able to clear this thing up, and I should, you know, be able to substantially pay off my indebtedness to the bank."

And I believe his exact words were, "That's what we're looking for."

No further evidence was offered at that hearing to indicate Phillips had made any commitment not to take action to enforce the notes. On this evidence, the trial court determined the bank was entitled to possession of the secured property and entered its order in conformity with that finding.

In his answer, Fogle admitted execution and delivery of the notes and security agreements. By way of affirmative defense, he alleged he had promised to pay off the notes on Monday, August 27, 1984, and that Phillips had told him that would be acceptable and no action would be taken prior to that day. He further alleged that he had detrimentally relied on Phillips' statements. In addition to the affirmative defense, Fogle filed a counterclaim containing essentially the same allegations, seeking actual and punitive damages.

At trial, Fogle again admitted all three notes were delinquent. He modified his prior testimony by admitting he had received a letter on about May 16, 1984, making a demand for payment of the notes. Fogle also modified the account of his telephone conversation with Phillips. In response to questions by his attorney, Fogle testified as follows:

Q. Did you tell Mr. Phillips you were in a position, then, to come in and satisfy these notes?

A. I did, yes.

Q. Or very nearly in position?

A. Yes, I did.

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Q. Did you talk about what day you would be in to pay the notes?

A. I told him that I had--was getting ready to fly a three-day trip and that I would be back late Friday. And he--or Friday afternoon. And he indicated that he would not be in the bank. And I said, "Well, how about Saturday morning?"

He said, "Well, I won't be in the bank Saturday morning, either." And I said, "Well, how about Monday?"

Q. What did he say?

A. He said, "Yes, I'll be back Monday." I think he told me he was going to Kansas City.

Q. Did you--Did you ask him whether or not he would refrain or keep from doing anything on the notes to allow you to come in Monday?

A. Well, the conversation was such that I wanted some assurance from him that nothing would take place until I had a chance to come in and pay off the money.

Q. What did you ask him?

A. I asked him if he would--Once it was determined that I was not going to be in town and he was not going to be in town, that the first time that both of us would be in town was Monday, I asked him if--if they would hold off until Monday.

Q. What did he say?

A. He replied in the affirmative.

At the close of plaintiff's case and at the close of all the evidence, plaintiff moved for a directed verdict. These motions were overruled.

The jury returned a verdict against the bank on each of the three counts in replevin and a verdict in favor of defendant on his counterclaim awarding him actual damages in the sum of $80,000 and punitive damages in the sum of $65,000.

The bank filed a motion for judgment in accordance with the prior motion for a directed verdict on all issues or alternatively, a new trial on all issues. That motion was filed September 10, 1986. The trial court, in response to the bank's motion, entered the following order:

Plaintiff's motions filed herein on 9-10-86 are ruled upon as follows: Plaintiff's motion for judgment in accordance with prior motion for directed verdict made at close of all evidence is overruled; plaintiff's motion for new trial is sustained and as ground for granting new trial on all issues, the court find [sic] it erred in giving damage instruction No. 21.

Instruction No. 21 is the compensatory damages instruction on Fogle's counterclaim.

Fogle appeals from the order granting a new trial. The bank attempted to cross-appeal from the order overruling it's motion for judgment. We dismissed the cross-appeal because the bank...