Bbc Restaurant LLC v. Bdc Limited LLC ( 2015 )

STATE OF MICHIGAN
COURT OF APPEALS
BBC RESTAURANT LLC and COOLIDGE UNPUBLISHED
INVESTMENTS LLC, May 14, 2015
Plaintiffs/Counter-Defendants-
Appellants,
v No. 319354
Oakland Circuit Court
BDC LIMITED LLC, LC No. 2011-122968-CK
Defendant/Counter-Plaintiff,
and
LEIGH JEFFREY ROSE,
Defendant,
and
STEPHEN M. FELDMAN,
Defendant/Counter-Plaintiff-
Appellee,
and
MARCO PIEROBON and LUCIANO
PIEROBON,
Counter-Defendants.
Before: TALBOT, C.J., and CAVANAGH and METER, JJ.
PER CURIAM.
In this action arising from the sale of a business, plaintiffs BBC Restaurant LLC (BBC)
and Coolidge Investments LLC (Coolidge) appeal as of right an order that granted summary
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disposition to defendant Stephen M. Feldman with respect to their conversion claim against
him.1 We affirm.
Feldman was the sole member of BDC Limited LLC (BDC). Pursuant to a September 3,
2010, Asset Purchase Agreement, BDC purchased a restaurant and related assets from BBC.
Coolidge owned the building where the restaurant was being operated and leased the premises to
BDC. Marco Pierobon and Luciano Pierobon are the members of both BBC and Coolidge. The
purchase price for the restaurant and its assets was $220,813, and BDC gave plaintiffs a $50,000
down payment, a Security Agreement, and a Secured Promissory Note for the remainder.2
Pursuant to the Security Agreement, BDC granted BBC a security interest in “all property now
or hereafter located on the Restaurant’s premises . . . or any part thereof and used or useable in
connection with any present or future operation of the Restaurant (referred to collectively as the
‘Collateral[’] )[.]” While the sale was pending, BDC and its agent, Leigh Jeffrey Rose, managed
the restaurant.
By September 2011, BDC had defaulted on its payment obligations. Consequently, on
November 10, 2011, plaintiffs obtained an injunction that ordered BDC not to “transfer, sell,
destroy, interfere with, or exercise any further control over the collateral . . . .” Then, on
November 30, 2011, the trial court issued an order that required BDC and Rose to return, within
seven days, certain equipment that had been removed from the restaurant. Evidently, this order
was violated.
Rose subsequently filed for bankruptcy. At the bankruptcy hearing, Rose testified that he
removed equipment from the restaurant pursuant to Feldman’s instructions. Feldman offered to
arrange the return of at least some of the assets.3 Based upon the allegedly improper removal of
Collateral, plaintiffs alleged conversion against Feldman.
Regarding Feldman’s motion for summary disposition, the trial court ruled:
Although the terms of the Security Agreement provide BBC with a
security interest in the terms listed as Collateral, Plaintiffs have not shown that
Defendants exercised “domain” over Plaintiffs’ property or converted the
Collateral to their own use. Instead, it is undisputed that the Collateral was stored
in Rose’s airplane hangar and home. Therefore, Plaintiffs’ claim for common law
and statutory conversion fails as a matter of law. See Brennan v Edward D Jones
& Co, 245 Mich App 156, 158[; 626 NW2d 917] (2001) (holding that conversion
“occurs at the point that such wrongful dominion is asserted”); see also MCL
600.2919a. [Emphasis omitted.]
1
There were numerous other claims below, but this is the sole claim on appeal.
2
The documents connected with the sale were signed by Leigh Jeffrey Rose as “Authorized
Agent” of BDC.
3
Feldman maintained that Rose had purchased some assets separately from the transactions with
BBC.
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It is apparent that the trial court granted Feldman’s motion for summary disposition
pursuant to MCR 2.116(C)(10). “This Court reviews de novo a trial court’s decision on a motion
for summary disposition.” Allen v Bloomfield Hills Sch Dist, 281 Mich App 49, 52; 760 NW2d
811 (2008). A motion for summary disposition brought pursuant to MCR 2.116(C)(10) tests the
factual sufficiency of the complaint. Joseph v Auto Club Ins Ass’n, 491 Mich 200, 206; 815
NW2d 412 (2012). A mere possibility that the claim might be supported by evidence at trial is
insufficient for a claim to survive. Maiden v Rozwood, 461 Mich 109, 121; 597 NW2d 817
(1999); Bennett v Detroit Police Chief, 274 Mich App 307, 317; 732 NW2d 164 (2006). Review
is limited to the evidence that had been presented to the trial court at the time the motion was
decided. Innovative Adult Foster Care, Inc v Ragin, 285 Mich App 466, 476; 776 NW2d 398
(2009).
Plaintiffs alleged both common law and statutory conversion of Collateral.
Common law conversion . . . consists of any “distinct act of domain
wrongfully exerted over another’s personal property in denial of or inconsistent
with the rights therein.” Conversion may occur when a party properly in
possession of property uses it in an improper way, for an improper purpose, or by
delivering it without authorization to a third party. [Dep’t of Agriculture v
Appletree Mktg, LLC, 485 Mich 1, 13-14; 779 NW2d 237 (2010), quoting
Foremost Ins Co v Allstate Ins Co, 439 Mich 378, 391; 486 NW2d 600 (1992).]
MCL 600.2919a describes statutory conversion and provides, in pertinent part:
(1) A person damaged as a result of either or both of the following may
recover 3 times the amount of actual damages sustained, plus costs and reasonable
attorney fees:
(a) Another person’s stealing or embezzling property or converting
property to the other person’s own use.
(b) Another person’s buying, receiving, possessing, concealing, or aiding
in the concealment of stolen, embezzled, or converted property when the person
buying, receiving, possessing, concealing, or aiding in the concealment of stolen,
embezzled, or converted property knew that the property was stolen, embezzled,
or converted.
We note, initially, that as the appellants, plaintiffs bear the burden in this appeal to
provide this Court with the basis for their arguments. Mitcham v Detroit, 355 Mich 182, 203; 94
NW2d 388 (1959). As support for their position that a question of fact exists regarding whether
Feldman committed conversion, plaintiffs point to the testimony provided by Rose in connection
with his bankruptcy. Rose testified as follows:
Q. Is it your position that the equipment you removed from the Berkley
Bistro and Café was owned by BBC Limited, L.L.C.?
A. That’s correct.
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Q. Okay. And under whose authority did you remove that equipment if
you didn’t have an ownership interest in that entity?
A. A member of the—of the BBC.
Q. And who is the member?
A. Feldman.
Evidently, plaintiffs believe that the above references to “BBC” provide evidence that Rose
removed BBC property at the direction of Feldman. However, it is patently apparent that these
references to “BBC” were either transcription errors or misspoken words. Indeed, Feldman was
not a member “of the BBC” but instead was the sole member of BDC. Moreover, the full name
of BDC is “BDC Limited LLC” and the full name of BBC is “BBC Restaurant LLC,” and Rose
was asked about “BBC Limited, L.L.C.” (emphasis added). The only fair reading of the
testimony indicates that what Rose actually meant was that he removed equipment owned by
BDC, not BBC, at Feldman’s direction. This is consistent with Feldman’s testimony that he did
not instruct Rose to remove Collateral as defined in the financing statement. Thus, plaintiffs
have failed to point to sufficient evidence that Rose was directed by Feldman to remove
Collateral owned by plaintiffs.4
Additionally, as noted by the trial court, the equipment at issue was stored at Rose’s
airplane hangar and home. Plaintiffs make no attempt to argue that Feldman directed Rose to
store the assets in these places. As such, plaintiffs have failed to establish any genuine issue of
material fact regarding whether Feldman exercised dominion over Collateral. Under all the
circumstances, the trial court did not err in granting Feldman summary disposition regarding
plaintiffs’ conversion claim.
Affirmed.
/s/ Michael J. Talbot
/s/ Mark J. Cavanagh
/s/ Patrick M. Meter
4
To read the testimony in a less-than-commonsense fashion would be to entertain a mere
possibility that the claim might be supported by evidence at trial. Bennett, 274 Mich App at 317.
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