Thomas Mote Trucking v. PCL Civil Constructors, Inc.

• Decision Date: 06 October 2000
• Docket Number: No. A00A1528, No. A00A1529.
• Citation: Thomas Mote Trucking v. PCL Civil Constructors, Inc., 540 S.E.2d 261, 246 Ga. App. 306 (Ga. App. 2000)
• Parties: THOMAS MOTE TRUCKING, INC. v. PCL CIVIL CONSTRUCTORS, INC. PCL Civil Constructors, Inc. v. Thomas Mote Trucking, Inc.
• Court: Georgia Court of Appeals

540 S.E.2d 261

246 Ga. App. 306

THOMAS MOTE TRUCKING, INC. v. PCL CIVIL CONSTRUCTORS, INC.

PCL Civil Constructors, Inc. v. Thomas Mote Trucking, Inc.

Nos. A00A1528, A00A1529.

Court of Appeals of Georgia.

October 6, 2000.

Edward J. Magner, Jr., for appellant.

Moye, O'Brien, O'Rourke, Hogan & Pickett, Nathan E. Minear, Atlanta, for appellee. RUFFIN, Judge.

Barkay Construction, Inc. sold PCL Civil Constructors, Inc. a slip form machine used to build curbs and gutters. Thomas Mote Trucking, Inc. later took the machine, claiming that Barkay had previously transferred the machine to it. PCL sued Thomas Mote Trucking for trover.¹ Following a bench trial, the trial court ruled that PCL had title to the machine and ordered Thomas Mote Trucking to return it, but awarded PCL no damages for hire for the period of wrongful detention. In Case No. A00A1528, Thomas Mote Trucking appeals, asserting that the trial court erred in determining that PCL owns the machine. In Case No. A00A1529, PCL appeals the court's failure to award damages. Because both cases involve the same operative facts, we have consolidated them. For reasons that follow, we affirm the trial court's ruling that PCL owns the machine, reverse the zero damages award, and remand for a redetermination of damages.

The record shows that Barbara Roberts formed Barkay Construction in 1993. In the fall of 1993, Thomas Mote, the president of Thomas Mote Trucking, offered to loan Barkay a sum of money. During 1993 and 1994, Mote loaned Barkay a total of $31,260. In exchange, Roberts executed two unsecured promissory notes in favor of Mote. One note was due in November 1994, and the other was due in March 1995. Roberts also issued Mote shares of stock in Barkay, making him a 49 percent owner of the company.

Barkay was unable to pay the promissory notes. According to Roberts, the company was nearly insolvent by the fall of 1995, and its only asset was a used slip form machine. At some point in 1995, Roberts and Mote met to discuss the business. During that meeting, Roberts prepared and signed a letter dated May 15, 1995, addressed to "Mr. Thomas Mote, Thomas Mote Trucking." The letter, which contained a reference line that stated "Re: Used Miller Formless Model M 1000 (Right Hand) S/N: 1010R," stated: "BarKay Construction Inc. transfers the above referenced slip form machine complete with trimmer, tools, and vibrators for the amount of $30,000 (Thirty thousand dollars)." The letter was signed by Roberts on behalf of Barkay.

Roberts testified that she executed the letter in an attempt to protect the slip form machine from creditors during bankruptcy, which she felt was imminent. Roberts said that she had just learned that Barkay could no longer purchase concrete, and "if we don't have concrete we can't work." Roberts testified that she prepared the letter in September 1995, but backdated it to May 1995 because Mote said that "under the bankruptcy laws the trustee can overturn any action that's taken or decisions made six months prior." Roberts denied that the letter transferred ownership of the machine, stating "[i]t was not a bill of sale. I didn't get any money for it. I didn't get anything for it. I was simply trying to protect the machine itself."

After Roberts prepared the May 15 letter, Barkay continued to use the slip form machine without paying rent to Mote. Roberts testified that Mote continued to demand payment on the outstanding promissory notes. She also stated that Mote offered to approach a bank with which he had a relationship to seek financing for Barkay, using the slip form machine as collateral. Roberts stated that, based on her discussions with Mote, she understood that either she or Mote would have been authorized to use the slip form machine—including possibly selling it—to procure financing for Barkay.

Mote testified to a very different understanding of the May 15 letter. According to Mote, Roberts drafted the letter and transferred the slip form machine to him because Barkay could not afford to pay the promissory notes. Mote said that he accepted the machine as full satisfaction for Barkay's debts. He admitted that he continued to ask Roberts for money, however, because he "still felt like she owed me some money besides the machine." Mote also testified that he allowed Barkay to continue using the machine rent-free after the transfer because he wanted Barkay (of which he owned 49 percent) to succeed.

Felmer Cummins, a certified financial planner who worked for Mote, testified that he was present when Roberts drafted the May 15 letter. Cummins said that he was concerned because Mote had no collateral for the promissory notes. Cummins testified that Roberts left the room, saying, "Well, I can sew this up. I'll give him the piece of equipment." Roberts returned with the letter, which—according to Cummins—was executed on May 15 and was not backdated.

In December 1995, Barkay was working on several projects, including a highway project under a subcontract with PCL. According to Roberts, however, the company was "still living hand to mouth." Roberts entered into an agreement to sell the slip form machine to PCL for $40,000, and she signed a "Bill of Sale" to that effect dated December 21, 1995. Under the Bill of Sale, Barkay warranted that it was conveying good title, free and clear of all encumbrances. In a separate document, PCL agreed to lease the machine to Barkay and to allow Barkay to repurchase it, applying the lease payments toward the purchase price.

Roberts testified that she called Mote and told him that she had sold the machine to PCL, but would be repurchasing it as Barkay performed the work under the subcontract. Roberts said that Mote wanted to know how much she could pay him, and she told him that she had used the proceeds of the sale to pay bills and had no money for Mote.

During the evening of January 25 or early morning of January 26, 1996, Mote removed the machine from the PCL job site. As of the date of trial, the machine remained in Mote's possession, and another business formed by him was using it to perform sidewalk and curb work. Mote testified that, although he heard rumors in January 1996, he did not know that PCL had bought the machine until after he picked it up. Mote stated, however, that he told Roberts he was going to get it in a couple of weeks before he did so.

Roberts testified that because most of Barkay's work required the slip form machine, the company ceased operations immediately after Mote took the machine. Barkay filed for bankruptcy in March 1996.

Following a bench trial, the trial court issued a judgment that (1) PCL has title to the slip form machine; (2) Thomas Mote Trucking is ordered to deliver the machine to PCL; and (3) PCL is not entitled to any damages from Thomas Mote Trucking for rental value of the property. The parties did not request, and the trial court did not issue, detailed findings of fact or conclusions of law.²

Case No. A00A1528

1. In its first enumeration of error, Thomas Mote Trucking asserts that the trial court erred by denying its motion for summary judgment. As we have ruled, however,

"[d]enial of a motion for summary judgment is rendered moot by the court's entry of judgment on the verdict. Thus, an appellate court will not review the denial of a motion for summary judgment following a trial on the merits."³

2. Thomas Mote Trucking also asserts that the trial court erred by allowing Roberts to testify to the meaning of her May 15 letter to Mote. According to Thomas Mote Trucking, such testimony was inadmissible parol evidence. PCL, on the other hand, argues that the evidence was admissible to prove that the purpose of the contract was to defraud creditors and to show that the contract lacked the essential element of consideration.⁴ We agree with PCL.

"Parol evidence is inadmissible to add to, take from, or vary a written contract."⁵ Parol evidence may be introduced, however, to show that an agreement was void at the outset.⁶ As PCL's principal argument at trial was that the purported transfer was void ab initio, Roberts' testimony was admissible on that point.

3. In three enumerations of error, Thomas Mote Trucking contends that the trial court erred in ruling that PCL owned the machine. We will affirm the trial court's ruling if there is any evidence to support it,⁷ and we are "obliged to give due regard to the trial court's opportunity to judge the witnesses' credibility."⁸ Applying this standard, we uphold the trial court's ruling, although not for the reasons urged by PCL.

"An action in trover will lie on the part of the true owner of personal property against one who has converted such property to his own use."⁹ A plaintiff may prevail in an action for trover by showing that (1) it has title to the property or a right of possession;¹⁰ and (2) the defendant was in possession of the property when the action was brought and, in its answer, denied that the plaintiff had title to, or the right to possess, the property.¹¹ Thomas Mote Trucking does not deny that PCL satisfied the second element, but argues that it, rather than PCL, owns the property by virtue of the May 15 letter. PCL argues that the May 15 letter was not a valid transfer for three reasons.

First, PCL contends that the letter was merely an attempt to defraud creditors. Roberts testified that "the sole purpose" of the letter was "an attempt to avoid any potential creditors' actions against Barkay Construction that might result in the loss of the [slip form] machine," and she later described the document as "fraudulently ... made." She stated that Mote was aware of the fraudulent purpose of the transaction and even proposed backdating the letter to deceive the bankruptcy trustee. Under OCGA § 18-2-22(2), a contract "made with intention to delay or defraud creditors, where such intention is known to the taking party" is null and void. The fact that a transfer is made...