Jeff Pierrard v. Wright Implement 1, LLC

Sep 12 2013, 6:02 am
Pursuant to Ind. Appellate Rule 65(D), this
Memorandum Decision shall not be
regarded as precedent or cited before any
court except for the purpose of
establishing the defense of res judicata,
collateral estoppel, or the law of the case.
ATTORNEY FOR APPELLANT: ATTORNEY FOR APPELLEE:
KEVIN R. PATMORE MARK PFEIFER
Patmore Law Office Jacobs & Pfeifer, PSC
Santa Claus, Indiana Owensboro, Kentucky
IN THE
COURT OF APPEALS OF INDIANA
JEFF PIERRARD, )
)
Appellant-Defendant, )
)
vs. ) No. 62A01-1305-CT-238
)
WRIGHT IMPLEMENT 1, LLC, )
)
Appellee-Plaintiff. )
APPEAL FROM THE PERRY CIRCUIT COURT
The Honorable Lucy Goffinet, Judge
Cause No. 62C01-1107-CT-351
September 12, 2013
MEMORANDUM DECISION – NOT FOR PUBLICATION
BAKER, Judge
The appellant-defendant Jeff Pierrard appeals the trial court’s grant of summary
judgment in favor of appellee-plaintiff Wright Implement 1, LLC (Wright Implement),
regarding Wright Implement’s claim against him for conversion of a tractor and other
equipment that he bought from the original purchaser, Bobby Ward. There was a security
interest on the property and Pierrard never searched any records to determine whether
liens might have existed.
Pierrard asserts that the trial court erred in granting Wright Implement’s motion
for summary judgment because it erroneously held that “possession of property subject to
a security interest—either before or after default—constitutes conversion.” Appellant’s
Br. p. 4.
Notwithstanding Pierrard’s contention, Wright Implement lawfully possessed the
property, and in addition to Pierrard’s failure to check the status of the liens that existed
on the property, the designated evidence established that he thwarted Wright Implement’s
efforts to recover the tractor and other equipment. As a result, we conclude that the trial
court properly granted Wright Implement’s motion for summary judgment.
FACTS
On June 14, 2010, Ward purchased a John Deere 4720 tractor, a loader, and some
other equipment from Wright Implement after borrowing the funds to buy the equipment
from John Deere Financial. The retail installment contract stated that the total financed
amount for all the equipment was $32,808. As part of the retail agreement, Ward granted
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a UCC security interest in the equipment to Wright Implement. The security interest was
perfected on June 24, 2010, with the Indiana Secretary of State.
Sometime after June 18, 2010, Ward sold the tractor to Pierrard for $9,500.
Pierrard took possession of the tractor and subsequently placed it in front of his residence
in Tell City with a “for sale” sign on it. Appellant’s App. p. 38, 43.
Ward failed to make payments on the tractor after March 9, 2011, and he died on
March 18, 2011. Sometime in June 2011, Larry McGregor, the customer support
representative for Wright Implement, began efforts to locate the tractor. Specifically,
McGregor contacted Tim Baumeister, who had been Ward’s business partner in a
construction business, to determine the tractor’s whereabouts. After this meeting,
Baumeister spoke to Pierrard about the tractor. Pierrard responded, “you don’t know
where the tractor is.” Appellant’s App. p. 38. When Baumeister told Pierrard that he
would not lie for him, Pierrard stated, “you don’t have to lie. You just don’t have to tell
them anything.” Id.
McGregor talked with Pierrard on three separate occasions about the location of
the tractor and equipment. During the first meeting, Pierrard stated that the tractor might
be in Seymour. On the second occasion, Pierrard denied that it was on his property.
During the third meeting, Pierrard admitted that he had purchased the tractor from Ward.
Pierrard also told McGregor that he had sold the tractor and equipment. McGregor
indicated that the fair market value at the time Pierrard took the equipment was $25,750.
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On July 28, 2011, John Deere filed a complaint against Pierrard regarding the
tractor and other items that he had purchased from Ward. John Deere alleged that it was
entitled to possession of the tractor and equipment in light of the security interest that had
been perfected, that Pierrard improperly prevented John Deere from taking possession of
the equipment, and that he wrongfully took the property and unlawfully possessed it.
Count II of the complaint alleged that Pierrard wrongfully converted the tractor and
equipment and, in the alternative, alleged that Pierrard “willfully, maliciously,
fraudulently, and without privilege or right to do so, . . . took the equipment from
Plaintiff’s constructive possession and retains the Equipment in violation of Plaintiff’s
security interest.” Appellant’s App. p. 4.
Thereafter, on September 23, 2011, John Deere Financial charged Wright
Implement with a “dealer chargeback” because of Ward’s default. During a deposition
on October 10, 2011, Pierrard admitted that he had “come in contact with the tractor” and
stated that he never performed a lien check on the tractor and equipment. Id. at 20, 41-
42.
On December 20, 2011, Wright Implement was substituted for John Deere as the
plaintiff in this action. On October 5, 2012, Wright Implement filed a motion for
summary judgment, claiming that it was entitled to judgment as a matter of law because
there was no genuine issue of material fact that Pierrard had converted the tractor and
other equipment.
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The trial court granted Wright Implement’s motion for summary judgment against
Pierrard in the amount of $25,750, plus interest from the date of judgment. The trial
court subsequently denied Pierrard’s motion to correct error, and he now appeals.
DISCUSSION AND DECISION
I. Standard of Review
We review the trial court’s grant or denial of a motion for summary judgment de
novo. Shofstall v. Int’l Union of Painters & Allied Trades, 991 N.E.2d 100, 102 (Ind.
2013). Summary judgment is only appropriate when the record shows there are no
genuine issues of material fact to be decided at trial, and the moving party is entitled to
judgment as a matter of law. Ind. Dep’t of Revenue v. Miller Brewing Co., 975 N.E.2d
800, 802-03 (Ind. 2012). Like the trial court, we construe all designated evidentiary
material in the light most favorable to the non-moving party. Bradshaw v. Chandler, 916
N.E.2d 163, 166 (Ind. 2009).
II. Pierrard’s Contentions
Pierrard claims that the trial court erred in granting Wright Implement’s motion
for summary judgment because that result stands for the proposition that any person who
owns property subject to a security interest would, immediately upon default, be guilty of
conversion. In other words, Pierrard contends that to hold him liable for conversion
where he had possessed and disposed of the tractor prior to being informed of Ward’s
security interest in the property and default was erroneous. Pierrard claims that he simply
refused to provide Wright Implement with any information about the tractor’s location,
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and there should be no liability on his part for not assisting Wright Implement in its
efforts to recover the equipment.
In resolving this issue, we initially observe that the tort of conversion has been
defined as “the appropriation of the personal property of another to the party’s own use
and benefit, or in its destruction or in exercising dominion over it, in exclusion and
defiance of the rights of the owner or lawful possessor, or in withholding it from his
possession, under a claim and title inconsistent with the owner’s.” Schrenker v. State,
919 N.E.2d 1188, 1194 (Ind. Ct. App. 2010). Also, no mens rea is required and good
faith is not a defense in a civil conversion action. Id.In this case, the designated evidence established that the tractor and other
equipment were subject to a validly perfected security interest. Thus, Wright Implement
was the lawful possessor of the property. See Deere & Co. v. New Holland Rochester,
Inc., 935 N.E.2d 269 (Ind. Ct. App. 2010) (observing that it is black letter law that, upon
default, a secured creditor has the right to take possession of the collateral securing its
claim and the rights set forth in the agreement with the defaulting party).
Pursuant to Baumeister’s affidavit, Pierrard purchased the tractor and equipment
from Ward. Appellant’s App. p. 37. Baumeister’s affidavit also states that Pierrard told
Baumeister not to assist Wright Implement in recovering possession of the property,
when he told him not to talk to representatives from Wright Implement and disclosing the
location of the equipment. Id. at 38. Also, even though Pierrard previously stated that
Ward told him that there were no liens on the tractor and equipment, that statement is
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irrelevant because good faith is not a defense to the tort of conversion. Schrenker, 919
N.E.2d at 1194.
We find this Court’s opinion in Deere & Co. v. New Holland Rochester, Inc., 935
N.E.2d 267 (Ind. Ct. App. 2010), instructive here. In that case, John Deere had a
perfected security interest in some farm equipment that an individual by the name of
Hostetler had purchased. Hostetler later traded the equipment with New Holland
Rochester, Inc. (New Holland). Id. at 268.
The evidence demonstrated that New Holland relied on Hostetler’s representation
that Deere’s liens had been satisfied, but it did not conduct an independent examination
to determine whether the liens on the equipment had been released. Id. It was ultimately
determined that New Holland could not rely on Hostetler’s statements and it was under a
duty to examine the records to determine whether the liens had been released. Id. at 270.
Similarly, in these circumstances, Pierrard could not reasonably rely on any
alleged representations by Ward that there were no liens on the tractor and other
equipment. Pierrard could have searched the records available at the Secretary of State’s
Office to determine whether the tractor and equipment were subject to any liens. Hence,
Pierrard has no defense that he is a bona fide purchaser. Also, because Wright
Implement was the lawful possessor of the property, Pierrard’s actions in thwarting
Wright Implement’s efforts to rightly recover the property and retaining possession of it
constitute conversion. Also, while Pierrard maintains that there can be no conversion
because he no longer possessed the tractor and equipment, we note that such mere
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conclusory statements are not sufficient to avoid summary judgment. Lidnsey v.
DeGroot, 898 N.E.2d 1251, 1262 (Ind. Ct. App. 2009). For these reasons, we conclude
that the trial court properly granted Wright Implement’s motion for summary judgment.
The judgment of the trial court is affirmed.
FRIEDLANDER, J., and VAIDIK, J., concur.
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