Star Bank, N.A. v. Laker

• Decision Date: 09 December 1993
• Docket Number: No. 69A01-9304-CV-141,69A01-9304-CV-141
• Citation: 626 N.E.2d 466
• Parties: STAR BANK, N.A. Southeastern Indiana and Greg King Appellants-Defendants, v. Lendo LAKER Appellee-Plaintiff.
• Court: Indiana Appellate Court

Page 466

626 N.E.2d 466

STAR BANK, N.A. Southeastern Indiana and Greg King Appellants-Defendants, v. Lendo LAKER Appellee-Plaintiff.

No. 69A01-9304-CV-141.

Court of Appeals of Indiana First District.

Dec. 9, 1993.

Douglas R. Denmure, Aurora, for appellants-defendants.

John D. Gay, Gay and McCombs, Versailles, for appellee-plaintiff.

ROBERTSON, Judge.

Star Bank, N.A. Southeastern Indiana and Greg King, defendants below, appeal a judgment in favor of the plaintiff, Lendo Laker, in the amount of $225.00 and punitive damages in the amount of $7,000.00. We affirm in part and reverse in part.

Laker brought the action for replevin, trespass and conversion after the bank, while attempting to repossess two of Laker's tractors and a corn picker, moved Laker's horses and truck, and a neighbor's disc, causing damage, and refused to permit Laker to retake possession of the farm equipment, after Laker had paid the bank in full. The bank appeals that portion of the judgment awarding damages for wrongful conversion. The bank's arguments on appeal consist primarily of these: first, that the acts of its employees in moving various items of personalty on Laker's farm and in retaining possession of Laker's farm equipment for three weeks after Laker had paid the bank in full did not amount to a conversion; second, that the evidence is insufficient to permit an award of actual damages; third, that Laker's failure to amend his complaint to ask for punitive rather than treble damages requires that the award be reduced; and finally, that the evidence is insufficient to permit an award of punitive damages.

The scope of review in appeals questioning the sufficiency of the evidence is limited to an examination of the evidence most favorable to the judgment of the trial court and the reasonable inferences to be drawn therefrom. We will neither weigh the evidence nor judge the credibility of the witnesses, but will affirm the judgment if supported by evidence of probative value. Chesterton State Bank v. Coffey (1983), Ind.App., 454 N.E.2d 1233, 1235; Census Federal Credit Union v. Wann (1980), Ind.App., 403 N.E.2d 348, 350.

At trial, the court submitted Laker's complaint for damages to the jury solely upon a theory of criminal conversion. ¹ To obtain relief upon this theory, it was not necessary for Laker to prove that any of the bank's employees or the bank had been convicted of criminal conversion. Laker need only have proven by a preponderance of evidence that a criminal conversion occurred. Roake v. Christensen (1988), Ind.App., 528 N.E.2d 789, 791.

Indiana Code 35-43-4-3 provides that a person who knowingly or intentionally exerts unauthorized control over property of another person commits criminal conversion. To "exert control over property" means, among other things, to take, drive, lead away or possess property. I.C. 35-43-4-1(a). For purposes of this case, a person's control over property of another is "unauthorized" if it is exerted without the other person's consent or if it is exerted in a manner or to an extent other than that to which the other person has consented. I.C. 35-43-4-1(b)(1), (2).

The bank does not dispute that its employees went to Laker's farm to retake possession of farm equipment pledged as security for a loan and that these employees did in fact move Laker's horse to the back of the barn; moved Laker's truck, which would not start, out of the way to gain access to other equipment; took possession of a disc belonging to one of Laker's neighbors; and refused to release the equipment belonging to Laker, which the bank did repossess, for a period of three weeks after Laker had paid the bank what he had owed it. These actions constitute the exertion of control as defined by the legislature.

The absence of any authority to exercise control is shown by the evidence most favorable to the jury's verdict. Laker did not consent to the bank's actions with respect to his horse and truck, or the disc which was in his possession. And, while he may have pledged certain farm implements as collateral for a loan, thereby authorizing the bank to retake possession of the equipment should he default on his note, he did so only to the extent permitted by I.C. 26-1-9-503.

Indiana Code 26-1-9-503 permits a secured creditor to take possession without judicial process "if this can be done without breach of the peace." The statutory provision is a proscription against a secured party's use of force, intimidation or harassment in the repossession of a chattel, Wann, 403 N.E.2d 348; its purpose is to forbid acts that tend to provoke violence or any breach of the peace. Id. Hence, the statute does not authorize a secured party to break into or enter homes, buildings, enclosed spaces, to commit any crime against the defaulting party, or to disturb the peace. Id.

The evidence most favorable to the verdict establishes by a preponderance of the evidence that the bank's employees exceeded the bounds set by I.C. 26-1-9-503, as construed by the common law. See Universal C.I.T. Credit Corp. v. Shepler (1975), 164 Ind.App. 516, 329 N.E.2d 620, 622 (Common law and provisions of the UCC supplement one another and should be construed together). Bank employees entered Laker's barn when only his twelve-year-old son was at home; moved Laker's horse to the back of the barn where it proceeded to overgraze on alfalfa hay; forced Laker's truck down the hill in such a manner as to render the truck's brakes inoperable and to dig deep ruts into the land for a considerable distance; and, in the process of seizing a neighbor's disc, broke seven of its blades. The bank's actions were more than a technical trespass, see id.; they amounted to criminal mischief as that crime is defined by I.C. 35-43-1-2(a) (to recklessly, knowingly, or intentionally damage property of another person without the other person's consent).

In addition, the evidence shows that, while Laker, in the end, offered no resistance to the repossession, when Laker arrived and found his property being repossessed, he was angry. According to employee Carroll Grubbs, "they kind of argued around a little, he [Laker] hollered and cussed a lot, threw buckets, which is normal, you know ..." Thus, the actions of bank employees tended to provoke violence and caused a breach of the peace. See Wann, 403 N.E.2d at 35 (If repossession verbally or otherwise contested at time of attempted repossession by defaulting person in control of chattel, creditor must desist and pursue its remedy in court).

Criminal conversion requires that the unauthorized control be either knowing or intentional. Coffel v. Perry (1983), Ind.App., 452 N.E.2d 1066, 1069. A person engages in conduct knowingly if, when he engages in the conduct, he is aware of a high probability that he is doing so. I.C. 35-41-2-2(b). A person is presumed to have intended the consequences of his acts. Andrews, 505 N.E.2d at 821. Criminal intent to commit a specific criminal act may be inferred from the voluntary commission of the act. Id. Evidence of good motive for commission of a crime does not constitute a defense even when specific intent is required. Id.

Laker testified that when he found his Belgian draft horse, it had been barely tied with an eight foot rope and the horse was eating alfalfa hay. Three fourths of a bale of hay was either gone or had been trampled down. The horse's veterinarian observed the hay.

The bank's employees who were involved in moving the horse denied that the horse had been tied loosely. Each testified that he or she knew that a horse should not be permitted to overeat. One of the employees testified that there was not any hay anywhere around the horse; the other testified that he had not seen any fresh alfalfa hay and that he had moved a bale of hay.

The evidence is thus in conflict as to whether the bank's employees, knowing that a horse which is not properly restrained will overeat, nonetheless tied the horse so near to alfalfa hay and so loosely that the horse could easily reach the hay. The jury's verdict in favor of Laker indicates that the jury resolved the many questions of credibility in favor of Laker. Accordingly, from the jury's perspective, we find there to be sufficient evidence to reasonably infer that, regardless of their motives, the banks' employees more probably than not knowingly exerted unauthorized control over Laker's horse.

The evidence also supports a determination that the bank knowingly exerted unauthorized control over Laker's truck. Laker testified that his truck was not blocking the bank's access to his tractor and that the tractor could have been started and backed out without having moved the truck. It was Laker's opinion that the employees moved the truck to gain access to his friend's disc. In any event, the truck had been pushed down an incline. The movement of the truck caused deep ruts in the ground which the bank employees offered to fill with stone. The offer demonstrates that the bank's employees knew that the damage to the land had been caused by the movement of the truck for which they were responsible and thus that they had exceeded the scope of their authority.

Likewise, the evidence supports a determination by a preponderance of the evidence that the bank's employees knew they were exceeding the scope of their authority when they took possession of Laker's neighbor's disc. There is no evidence that the employees knew the disc belonged to someone other than Laker. However, the evidence does show that, believing the disc to be collateral subject to repossession, they insisted on taking it after it had become apparent it would be difficult to remove because it had sunk into the ground, at the cost of seven blades and to the damage of Laker's real estate.

Finally, there can be no real dispute that the bank knew it was exerting unauthorized control over Laker's tractors when it accepted payment in full of the debt owed by Laker yet refused to relinquish...