Jasper v. Bryant ( 1998 )

IN THE COURT OF APPEALS
AT KNOXVILLE FILED
July 30, 1998
BRUCE and CRYSTAL JASPER, ) C/A NO. 03A01-9711-CV-00521
) Cecil Crowson, Jr.
Plaintiffs and Appellants, ) Appellate C ourt Clerk
)
v. )
)
)
DON STRECK, )
)
Defendant, )
)
and )
) APPEAL AS OF RIGHT FROM THE
) KNOX COUNTY CIRCUIT COURT
PETERBILT OF KNOXVILLE, INC., )
)
Defendant, )
Third-Party Plaintiff, and )
Appellee, )
)
v. )
)
)
)
JESS BRYANT, )
) HONORABLE HAROLD WIMBERLY,
Third-Party Defendant. ) JUDGE
For Appellants For Appellees
GARY BLACKBURN KEITH McCORD
JAY C. BALLARD McCord, Troutman & Irwin
Blackburn, Slobey, Freeman & Knoxville, Tennessee
Happell, P.C.
Nashville, Tennessee
O P I N IO N
AFFIRMED IN PART
REVERSED IN PART
REMANDED Susano, J.
1
This case arises out of a transaction involving the
original plaintiffs, Bruce Jasper and his wife, Crystal Jasper
(collectively “the Jaspers”), and the defendant Peterbilt of
Knoxville, Inc. (“Peterbilt”), regarding a 1994 Peterbilt tractor
titled in the name of Mrs. Jasper’s father, the third-party
defendant Jess Bryant (“Bryant”). The Jaspers claimed an
interest in the subject vehicle. They sued Peterbilt and its
former employee, Don Streck (“Streck”),1 claiming that the
defendants were guilty of breach of contract, conversion, fraud,
and negligent misrepresentation, in securing the transfer of the
truck to Peterbilt. At the close of the Jaspers’ proof before a
jury, the trial court held that the Jaspers had “no claim”
against Peterbilt, because the vehicle in question had not been
titled to either of the Jaspers. Accordingly, the trial court
directed a verdict in Peterbilt’s favor,2 and the Jaspers
appealed, presenting the following two issues:
1. Do the Jaspers, who had an ownership
interest in the 1994 truck according to
Tennessee, Georgia and Ohio laws, have
capacity and standing to maintain an action
for conversion and fraud?
2. Do the Jaspers, regardless of any
interest in the 1994 truck, have capacity and
standing to maintain an action for fraud?3
1
The record does not reflect the disposition of the claim against
Streck; but it is clear that the trial court’s judgment from which this appeal
is being pursued brought this litigation to a close.
2
Peterbilt filed a third-party complaint against Bryant, the title owner
of the subject vehicle. With the dismissal of the original complaint, the
third-party action was rendered moot.
3
We note that the Jaspers do not address the breach of contract claim in
either of the two issues presented for our review; by the same token, they
have not advanced any argument in support of that claim in their brief. The
statement of issues, as well as the rest of the brief, speak only in terms of
the Jaspers’ other claims, i.e., conversion, fraud and misrepresentation.
Issues not raised and argued in the brief are deemed waived. See Rule 13(b),
T.R.A.P.; Blair v. Badenhope, 940 S.W.2d 575, 576-77 (Tenn.App. 1996).
2
I. Standard of Review
We review a trial court’s grant of a directed verdict
under well-established rules:
In ruling on the motion, the court must take
the strongest legitimate view of the evidence
in favor of the non-moving party. In other
words, the court must remove any conflict in
the evidence by construing it in the light
most favorable to the non-movant and
discarding all countervailing evidence. The
court may grant the motion only if, after
assessing the evidence according to the
foregoing standards, it determines that
reasonable minds could not differ as to the
conclusions to be drawn from the evidence.
Sauls v. Evans, 635 S.W.2d 377 (Tenn. 1982);
Holmes v. Wilson, 551 S.W.2d 682 (Tenn.
1977). If there is any doubt as to the
proper conclusions to be drawn from the
evidence, the motion must be denied.
Crosslin v. Alsup, 594 S.W.2d 379 (Tenn.
1980).
Eaton v. McLain, 891 S.W.2d 587, 590 (Tenn. 1994); see also
Williams v. Brown, 860 S.W.2d 854, 857 (Tenn. 1993).
II. Facts
Construed in a light most favorable to the Jaspers, the
relevant facts are these. The Jaspers, who are Ohio residents,
have been in the trucking business since 1989. In 1993, a 1994
Peterbilt semi-tractor unit (“the 1994 truck”) was purchased in
Bryant’s name from Nalley Motors in Atlanta. According to the
Jaspers, they made the down payment on the 1994 truck, but the
3
purchase was made in Bryant’s name in order to obtain financing.
After Bryant and the Jaspers returned to Ohio with the truck,
Bryant obtained a certificate of title from the State of Ohio in
his name only. On August 17, 1993, Bryant and the Jaspers
executed an agreement that provides as follows:
I, Jess Bryant, hereby lease to purchase one
1994 Peterbilt semi tractor trailer unit VIN#
tractor 1XP5DB9X4RN339557 and trailer VIN#
[number omitted in document] to Bruce N.
Jasper and Crystal A. Jasper; All due and
earned monies for above described vehicle(s)
are sole responsibility of the Jasper’s [sic]
including; Monthly payments of M.E.T. dues
icluding [sic] insurance, cargo, and
liability, fuel taxes, IRP dues -- State and
Federal taxes, all operating expenses (i.e.
tolls, fuel etc.) and repair bills including
routine equipment maintenance, also inclusive
of monthly rental charge payable to Jess
Bryant of $2000 until extent of 48 payments
are made for clear title to the Jaspers. The
15% down payment to be paid back as follows;
$8000. to T&G Enterprises, Wilmington, N.C.
$5000. to Jess Bryant, 394-B Seroco ave.,
Newark, Oh.
Pursuant to the terms of this agreement, the Jaspers assumed the
specified payments and expenses and began using the 1994 truck in
their business.
In July, 1994, the Jaspers stopped at Peterbilt’s
location in Knoxville to see Bryant, who was there in connection
with repairs to another truck. They found Bryant talking with
Streck, a sales representative of Peterbilt. Streck proposed to
the Jaspers a trade of the 1994 truck for a newer model,
explaining that they could actually lower their monthly payments
from approximately $2,500 to $2,100. A representative of Paccar,
a truck financing company, who was present at the time, indicated
4
that such a deal would be “no problem,” so long as Bryant co-
signed the note. After consulting with Peterbilt’s finance
manager, Streck informed the Jaspers that “everything is go.”
Although initially skeptical, the Jaspers ultimately
agreed to the deal. They testified that they then signed a
“purchase order,” prepared by Streck, which set forth the details
of the trade of the 1994 truck for the newer model. Although
requested to do so, Peterbilt failed to produce this document at
trial. It did produce a document entitled “Offer to Purchase,”
but this document reflects that the new truck was to be purchased
in the name of Bryant’s son -- and Mrs. Jasper’s brother -- James
H. Brown.4 The Jaspers contend that the original purchase order,
which did not list Brown as a purchaser, reflected the true
agreement between the parties, and that the document produced by
Peterbilt was altered and/or contained a forgery of Bryant’s
signature. Bryant and Mr. Jasper also testified that Bryant
signed a release to enable the Jaspers to purchase the new truck.
In August, 1994, Streck called and informed Mr. Jasper
that the new truck had arrived and that he should bring the 1994
truck down from Ohio to complete the transaction. According to
Mr. Jasper, Streck stated: “[D]on’t worry about a thing. It’s
all covered. Financing’s all approved, it’s been approved. You
couldn’t back out now if you wanted.” The Jaspers drove the 1994
truck down to Knoxville on a Friday, but upon arriving at
Peterbilt, they were informed that the new truck was not ready
yet. Anticipating that they would soon be taking delivery of the
4
The difference in last name was not explained.
5
new truck, the Jaspers turned over possession of the 1994 truck
to Streck, along with a Power of Attorney and Bill of Sale that
had been faxed to Ohio by Peterbilt and there signed in blank by
Bryant. At Streck’s suggestion, Mrs. Jasper also wrote two
checks to the lender, Paccar, in the aggregate amount of about
$3,600.
Planning to return the following Monday to pick up
their new truck, the Jaspers drove back to Ohio. On Monday
morning, however, Streck called to inform them that there was a
problem with the financing and that Paccar wanted “accelerated
payments” of $3,500 per month for the first two years of the
deal, instead of the $2,100 per month originally promised by
Streck. After first insisting on the original deal, the Jaspers
then offered to pay $3000 per month. Streck indicated that he
would make that proposal to Paccar; shortly thereafter, he called
back and stated that the lender had decided not to finance the
deal at all. He also informed the Jaspers that the 1994 truck
had already been sold and was “long gone.”
The Jaspers subsequently pursued other means of
financing the purchase of the new truck but were ultimately
unsuccessful. Without a truck, they were unable to continue
their business. In November, 1995, the Jaspers filed this
action, alleging that Peterbilt and Streck were guilty of a
breach of the contract to purchase the new truck, conversion of
the 1994 truck, fraud, and negligent misrepresentation.
6
The case proceeded to trial before a jury. The
defendants sought to portray the facts in a much different light,
depicting the transaction as a simple sale of the 1994 truck from
Bryant, its title owner, to Peterbilt. Among other things,
Peterbilt contended that due to poor health and financial
difficulties, Bryant had authorized Peterbilt to sell his
trucking equipment, including the 1994 truck; that the buyer of
the new truck was to be Mrs. Jasper’s brother, James Brown, but
that Paccar had rejected the proposed deal; and that because the
financing had never been approved, it, Peterbilt, had never
accepted or signed the proposal. Peterbilt pointed to the fact
that it had paid a fair price for the 1994 truck, and also
introduced an October 11, 1994, letter, signed by Bryant,
ratifying the sale and stating that the Jaspers were not parties
to the transaction. Bryant and the Jaspers claimed that Bryant’s
signature on this letter had been forged, or that Bryant had not
understood what he was signing.
As stated earlier, the trial court directed a verdict
in favor of Peterbilt following the close of the Jaspers’ proof,
concluding that the Jaspers “have no claim against the
defendant.”
III. Analysis
The precise basis for the trial court’s ruling is not
clear; however, it apparently involves a question of standing, as
opposed to one of capacity, real party in interest, or joinder.
See Rules 17.01, 17.02, and 19.01, Tenn.R.Civ.P. Generally
7
speaking, a determination of whether a party has standing to sue
depends upon whether that party has a personal stake in the
outcome of the litigation sufficient to warrant the exercise of
the court’s power on its behalf. Browning-Ferris Indus. v. City
of Oak Ridge, 644 S.W.2d 400, 402 (Tenn.App. 1982).
In the instant case, the doubt regarding the Jaspers’
standing revolves around the fact that the 1994 truck in question
was titled to Bryant, and not to either of the Jaspers. Thus,
the threshold question is whether the Jaspers had a legally-
cognizable interest in the 1994 truck sufficient to provide a
foundation for this action. However, we must first resolve a
question not specifically addressed by the trial court, i.e.,
which state’s law applies to the analysis of the August 17, 1993,
contract? Tennessee follows the traditional rule of lex loci
contractus; thus, absent any enforceable choice-of-law
provisions,5 questions involving the construction of a contract
are governed by the law of the state where the contract was made.
See Ohio Cas. Ins. Co. v. Travelers Indemnity Co., 493 S.W.2d
465, 467 (Tenn. 1973); Solomon v. FloWarr Management, Inc., 777
S.W.2d 701, 704-05 (Tenn.App. 1989). In the instant case, Mrs.
Jasper testified that the contract was executed in Ohio.
Therefore, our construction of the contract is controlled by Ohio
law.
Peterbilt agrees that Ohio law applies and specifically
argues that Ohio Rev. Code Ann § 4505.04 precludes the Jaspers
5
As can be seen from a review of the contract, there are none.
8
from asserting any interest in the 1994 truck. That section
provides, in pertinent part, as follows:
(A) No person acquiring a motor vehicle from
its owner whether the owner is a
manufacturer, importer, dealer, or any other
person, shall acquire any right, title,
claim, or interest in or to the motor vehicle
until such person has had issued to him a
certificate of title to the motor vehicle, or
delivered to him a manufacturer’s or
importer’s certificate for it; and no waiver
or estoppel operates in favor of such person
against a person having possession of the
certificate of title to, or manufacturer’s or
importer’s certificate for, the motor
vehicle, for a valuable consideration.
(B) Subject to division (C) of this section
[which is not applicable to this action], no
court shall recognize the right, title,
claim, or interest of any person in or to any
motor vehicle sold or disposed of or
mortgaged or encumbered, unless evidenced:
(1) By a certificate of title,....
* * *
According to Peterbilt, this statute compels a finding that the
Jaspers lack standing to assert an interest in the 1994 truck.
A review of Ohio appellate cases applying § 4505.04
reveals that it is limited in scope. The Ohio Supreme Court has
held that § 4505.04 is “irrelevant to ownership issues except
those regarding importation of vehicles, rights between
lienholders, rights of bona fide purchasers and instruments
evidencing title and ownership.” Calderone v. Jim’s Body Shop,
599 N.E.2d 848, 851 (Ohio App. 1991)(citing Smith v. Nationwide
Mut. Ins. Co., 524 N.E.2d 507, 509 (Ohio 1988)); see also
9
Hoegler v. Hamper, 607 N.E.2d 89, 91 (Ohio App. 1992). As
explained by the Ohio Supreme Court,
[t]he purpose of [§ 4505.04] is to prevent
the importation of stolen motor vehicles, to
protect Ohio bona-fide purchasers against
thieves and wrongdoers, and to create an
instrument evidencing title to, and ownership
of, motor vehicles.
* * *
[§] 4505.04 was intended to apply to
litigation where the parties were rival
claimants to title, i.e., ownership of the
automobile; to contests between the alleged
owner and lien claimants; to litigation
between the owner holding the valid
certificate of title and one holding a
stolen, forged or otherwise invalidly issued
certificate of title; and to similar
situations.
Hughes v. Al Green, Inc., 418 N.E.2d 1355, 1358 (Ohio 1981)
(citations omitted). Thus, it is well-established that the
statute’s “proof of title requirements... apply only in cases
where there are competing claims to a motor vehicle.” Calderone,
599 N.E.2d at 851; Hoegler, 607 N.E.2d at 90. Significantly, it
also has been held that the statute “was not adopted to clarify
contractual rights and duties.” Hughes, 418 N.E.2d at 1358.
This case does not involve competing claims to
ownership of the 1994 truck -- this is not a lawsuit between
Bryant and the Jaspers; instead, it involves a claim of
conversion, fraud and misrepresentation surrounding the transfer
of the 1994 truck to Peterbilt. See Calderone, 599 N.E.2d at
851, and Hoegler, 607 N.E.2d at 90. The Jaspers simply seek to
10
recover for the deprivation of their interest in the vehicle and
other damages.
It is clear that the statute in question, and the cases
that have applied it, do not preclude one who is not the holder
of the certificate of title from asserting a claim based upon
some legally-cognizable interest in the vehicle. In fact,
several Ohio decisions have restricted application of the statute
while acknowledging the existence of other non-title interests in
a motor vehicle. See, e.g., Gibson v. Dan Phillips Repair Serv.,
1998 WL 32587 (Ohio App., January 30, 1998)(plaintiff, whose ex-
husband was still title owner of van, nevertheless had interest
in the vehicle sufficient to give her standing to sue for
unauthorized repairs thereto); Simmons v. Dimitrouleas
Wallcovering, Inc., 1995 WL 19136 (Ohio App., January 18,
1995)(upholding recovery based on theory of unjust enrichment for
improvements and payments to seller of truck who repossessed
vehicle, because there were no competing claims for ownership);
Plum v. Gelateria Umbertos, Inc., 1987 WL 27797 (Ohio App.,
December 8, 1987)(recognizing a leasehold interest in a truck as
distinct from a “title or ownership” interest, and rejecting the
argument that the trial court’s grant of summary judgment for
defendant, on plaintiff’s claim for conversion of that interest,
was predicated on § 4505.04); Graham Leasing Corp. v. Barr
Trucking, 1981 WL 3436 (Ohio App., August 27, 1981)(under lease
of truck, “it is clear that the right of possession and use of
the vehicle is transferred to the lessee or customer, thus an
incident of ownership is transferred.”). Furthermore, in a
11
decision involving an action to establish a resulting trust in a
truck, the Ohio Court of Appeals said the following:
Was it the intention of the Legislature, when
it enacted the certificate of title law, to
remove from the law of trusts that species of
personal property known as motor vehicles, so
that under no circumstances could the legal
title, as evidenced by a certificate of
title, be in one person and the beneficial
interest remain in another? We do not
believe that any such thought was in the
legislative mind when it enacted [the
predecessor to § 4505.04].
Douglas v. Hubbard, 107 N.E.2d 884, 886 (Ohio App. 1951).
Given the foregoing, we find that Ohio Rev. Code Ann.
§ 4505.04 does not present a legal bar to the Jaspers’ claims,
even though the certificate of title to the 1994 truck remained
in Bryant’s name.
We now turn our attention to the contract between
Bryant and the Jaspers for the purpose of ascertaining the
Jaspers’ interest in the 1994 truck under Ohio law. First and
foremost, we must interpret the contract so as to effectuate the
intent of the parties. Pharmacia Hepar, Inc. v. City of
Franklin, 676 N.E.2d 587, 592 (Ohio App. 1996); Forstner v.
Forstner, 588 N.E.2d 285, 288 (Ohio App. 1990). We initially
look to the language of the contract. Pharmacia Hepar, Inc., 676
N.E.2d at 592. While the contract contains the language, “lease
to purchase” -- signifying a lease of the vehicle -- the totality
of the language of the contract, as illuminated by the testimony,
indicates otherwise. Cf. State ex rel. Celebrezze v. Tele-
12
Communications, Inc., 601 N.E.2d 234, 239-41 (Ohio Ct. Cl.
1990).6 We find and hold that the substance of the agreement
between Bryant and the Jaspers is that of a contract to transfer
title upon the satisfaction of certain conditions -- a
transaction akin to a conditional sale. See Rockwell v. Thomas,
189 N.E.2d 168, 170 (Ohio App. 1962) (“[t]he prime essential
element and distinguishing feature of a contract of conditional
sale is the reservation of title in the seller until the
performance of some condition or the happening of some
contingency, usually the full payment of the purchase price.”);
see also State ex rel. Celebrezze, 601 N.E.2d at 239-41, and
Bellish v. C.I.T. Corp., 50 N.E.2d 147, 150 (Ohio 1943).
The contract, which was obviously drafted by a lay
person, is ambiguous, and hence the trial court was correct in
permitting the introduction of parol evidence to explain its
terms. See Pharmacia Hepar, Inc., 676 N.E.2d at 592; Forstner,
588 N.E.2d at 288; Bellish, 50 N.E.2d at 150. This testimony
indicates that the parties to the contract intended that the
Jaspers would have exclusive use and possession of, and an
equitable ownership interest in, the 1994 truck. Pursuant to
this interest, the Jaspers took possession of the vehicle and
commenced payment of the expenses set forth in the contract.
When all of the conditions of the contract had been satisfied,
the Jaspers were to then receive full title to the vehicle.
Until then, the Jaspers had a legally-cognizable interest,
6
The fact that the contract does not provide for the return of the truck
to Bryant at the end of the term, but instead contemplates the transfer of
title to the Jaspers upon full payment, indicates that it is not a true lease.
Id.
13
including the right to exclusive possession. If the jury finds
that they were tortiously deprived of that interest, it will be
the duty of that body to determine the value of that interest as
shown by the proof so that compensatory damages can be awarded.
We find that the August 17, 1993, contract conferred
upon the Jaspers a legally-cognizable interest in the 1994 truck,
and that the Jaspers therefore have standing to bring this
action.
The parties had different theories and sharply
contrasting evidence as to the facts surrounding the transfer of
the 1994 truck to Peterbilt. It is the prerogative of the jury
to determine which version is true. Taking the strongest
legitimate view of the evidence in favor of the Jaspers, Eaton v.
McLain, 891 S.W.2d 587, 590 (Tenn. 1994), we find that a jury
reasonably could conclude that Peterbilt tortiously deprived the
Jaspers of their interest in the 1994 truck. Accordingly, we
hold that the trial court erred in directing a verdict in favor
of Peterbilt.7
IV. Conclusion
It results that the judgment of the trial court
dismissing the Jaspers’ conversion, fraud and misrepresentation
claims is reversed. The judgment of the trial court as to the
breach of contract theory is affirmed. This case is remanded to
7
In light of this holding, it is obvious that we do not agree with
Peterbilt’s argument that this appeal is frivolous under T.C.A. § 27-1-122.
14
the trial court for further proceedings, not inconsistent with
this opinion. Costs on appeal are assessed to the appellee.
__________________________
Charles D. Susano, Jr., J.
CONCUR:
_________________________
Herschel P. Franks, J.
_________________________
Don T. McMurray, J.
15