Title: GRAHAM v CLARKS FORK NATIONAL BANK

State: montana

Issuer: Montana Supreme Court

Document:

No. 80-349 IN THE SUPREME COURT OF THE STATE OF MONTANA 1981 DEAN GRAHAM, Plaintiff and Appellant, CLARKS FORK NATIONAL BANK, a Montana Corporation, and RAYMOND L . MIRABAL, Defendant and Respondent. Appeal from: District Court of the Thirteenth Judicial District, In and for the County of Carbon. Honorable William J. Speare, Judge presiding. Counsel of Record: For Appellant: Swandal, Douglass & Swandal, Livingston, Montana Kent Douglass argued, Livingston, Montana For Respondent: Joseph E. Mudd argued, Bridger, Montana Submitted: June 18, 1981 Decided: July 22, 1981 Filed: JuL 2 2 1988 (-L a Clerk M r . J u s t i c e Frank B. Morrison, Jr., d e l i v e r e d t h e Opinion of t h e Court. This i s an appeal from an o r d e r of t h e District Court which set a s i d e a jury award a s e x c e s s i v e and granted a new t r i a l l i m i t e d t o t h e i s s u e of damages a r i s i n g from t h e wrongful conversion of cows belonging t o t h e a p p e l l a n t , Dean Graham. I n t h e s p r i n g of 1978, Graham was t h e owner of 19 r e g i s t e r e d angus cows which he planned t o breed by a r t i f i c i a l insemination. They w e r e p a s t u r e d w i t h cows belonging t o one Marvin Heyd. Graham, a f u l l - t i m e employee of a telephone company, and Heyd, an experienced rancher and breeding s p e c i a l i s t , had e a r l i e r agreed t h a t Heyd would manage t h e c a r e and a r t i f i c i a l insemination of Graham's cows i n exchange f o r p a s t u r e f e e s o r a p o r t i o n of t h e c a l v e s produced. Fourteen of Graham's cows bore h i s r e g i s t e r e d brand. The remaining f i v e w e r e w i t h c a l f and r e t a i n e d another brand of a previous owner. During t h i s p e r i o d , t h e respondent, Clarks Fork National Bank (Bank) held a s e c u r i t y i n t e r e s t i n Heyd's c a t t l e . The Bank was n o t aware t h a t Graham's cows were i n t h e same p a s t u r e . On June 15, 1978, t h e Bank s e n t n o t i c e t o Heyd of t h e i r i n t e n t i o n t o s e i z e t h e secured cows. The following morning t h e Bank's a g e n t s went t o t h e p a s t u r e and loaded t h e cows, i n c l u d i n g those belonging t o Graham. They were taken by t r u c k t o a p a s t u r e 30 m i l e s away. Several days l a t e r t h e Bank r a n a brand check and discovered they had Graham's COWS. Graham f i r s t l e a r n e d of t h e s e i z u r e s e v e r a l days l a t e r and immediately demanded t h e i r r e t u r n . The Bank r e f u s e d t o r e t u r n them without f u r t h e r evidence of ownership o r t o inform him of t h e i r location. Heyd and the Bank subsequently renegotiated t h e i r s e c u r i t y agreement and af ter a d d i t i o n a l t i t l e documents w e r e produced, a l l the cows w e r e returned on June 29, 1978, t o a second ranch leased by Heyd. Although Graham t o l d the Bank he should be consulted regarding t h e r e t u r n of h i s cows, he was n o t n o t i f i e d p r i o r t o t h e i r r e t u r n . When Graham examined h i s cows on J u l y 1, he found s i x b u l l s i n t h e same pasture. H e determined h i s planned a r t i - f i c i a l insemination program f o r 1978-1979 had been destroyed. The cows remained i n t h e pasture through t h e summer and f a l l of 1978. Several months a f t e r the cows were returned, Heyd defaulted on t h e renegotiated agreement with the Bank. The Bank's agents returned t o t h e pasture on October 5, 1978, and drove a l l the cows t o a c o r r a l approximately 300 yards away. Graham's cows w e r e separated from t h e herd and returned t o t h e pasture. Graham subsequently i n s t i t u t e d a s u i t i n conversion and sought compensation f o r damages a s follows: 1. Wrongful t r e s p a s s and conversion f o r the f i r s t removal i n the amount of $20,175. 2. Future l o s s e s r e s u l t i n g from the d e s t r u c t i o n of h i s a r t i f i c i a l insemination program i n t h e amount of $133,200. 3 . Exemplary damages of $50,000. 4. General damages f o r t h e second conversion i n t h e amount of $2,000. During t r i a l , t h e c o u r t sustained t h e Bank's o b j e c t i o n t o e x p e r t testimony offered t o prove t h e value of a hypo- t h e t i c a l purebred angus c a l f crop and granted the ~ a n k a d i r e c t e d v e r d i c t on t h e claim f o r f u t u r e damages. The c o u r t f u r t h e r granted t h e Bank's motion f o r a d i r e c t e d v e r d i c t on exemplary damages. B y s p e c i a l v e r d i c t the jury found a l l cows taken had been returned, b u t t h a t a reduction i n value between June 16 and June 29 had occurred i n the t o t a l amount of $1,425. The jury f u r t h e r found t h a t Graham suffered general damages a s the r e s u l t of the Bank's second s e i z u r e of t h e cows i n the amount of $1,000 and found t h a t Graham was e n t i t l e d t o recover $1,050 a s a reasonable amount i n regaining possession of the c a t t l e . The jury a l s o returned a general v e r d i c t f o r $50,000, although f u t u r e c a l f crop l o s s e s and exemplary damages had been removed from t h e i r consideration. This appeal p r e s e n t s t h r e e i s s u e s f o r review. F i r s t , whether t h e D i s t r i c t Court properly granted a new t r i a l on damages. Second, whether the D i s t r i c t Court e r r e d i n granting a d i r e c t e d v e r d i c t on t h e i s s u e of f u t u r e c a l f crop l o s s e s . Third, whether t h e d i r e c t e d v e r d i c t on p u n i t i v e damages was e r r o r . W e hold t h e granting of a new t r i a l was proper, however, on r e t r i a l , Graham should be allowed t o p r e s e n t h i s e x p e r t testimony on f u t u r e c a l f crop l o s s e s and t h e claim of exemplary damages should be submitted t o t h e jury. The s t a t u t o r y damages f o r conversion a r e s t a t e d i n s e c t i o n 27-1-320, MCA. " (1) The detriment caused by t h e wrongful conversion of personal property i s presumed t o be: " ( a ) t h e value of the property a t t h e time of i t s conversion with t h e i n t e r e s t from t h a t t i m e o r , when the a c t i o n has been prosecuted with reasonable d i l i g e n c e , t h e h i g h e s t market value of t h e property a t any time between t h e conversion and the v e r d i c t without i n t e r e s t , a t the option of t h e i n j u r e d p a r t y ; and " (b) a f a i r compensation f o r t h e t i m e and money properly expended i n p u r s u i t of the property. " ( 2 ) The presumption declared by subsection (1) cannot be r e p e l l e d i n favor of one whose possession was wrongful from t h e beginning by h i s subsequent a p p l i c a t i o n of t h e property t o t h e b e n e f i t of t h e owner without such owner's consent." The D i s t r i c t Court disallowed any elements of damage n o t e x p r e s s l y provided f o r under t h e s t a t u t e . I n F e r r a t v. Adamson e t a l . (1917), 53 Mont. 172, 181, 163 P. 112, t h i s Court i n t e r p r e t e d t h e s t a t u t e ' s language : ". . . The presumption announced i s a d i s p u t a b l e one, and may be overcome by evidence t h a t by reason of t h e p e c u l i a r circumstances surrounding t h e p r o p e r t y g r e a t e r o r less i n j u r y r e s u l t s from i t s wrongful conversion than t h e s t a t u t e contemplates ; b u t i n t h e absence of proof of such s p e c i a l circumstances t h e s t a t u t o r y r u l e s govern . . . " The D i s t r i c t Court s u s t a i n e d t h e Bank's o b j e c t i o n s t o e x p e r t testimony regarding t h e v a l u e of a h y p o t h e t i c a l purebred angus c a l f crop. The o s t e n s i b l e reason g i v e n was t h e testimony lacked foundation and was too s p e c u l a t i v e . This w a s e r r o r . S u f f i c i e n t foundation was l a i d f o r t h e ex- p e r t ' s testimony regarding f u t u r e c a l f c r o p l o s s e s . This kind of testimony i s n e c e s s a r i l y s p e c u l a t i v e t o some degree, b u t t h i s Court has recognized and sanctioned such testimony although s p e c u l a t i v e i n n a t u r e . See Frisnegger v . Gibson Mont. (1979) r - , 598 P.2d 574, 582, 36 St.Rep. 1335. ". . . S e c t i o n 27-1-203, MCA (formerly s e c t i o n 17- 203, R.C.M. 1947) provides t h a t damages may be awarded i n a j u d i c i a l proceeding f o r d e t r i m e n t re- s u l t i n g a f t e r t h e commencement thereof ' o r c e r t a i n t o r e s u l t i n t h e f u t u r e . ' While no c a s e i n Montana has construed t h i s s t a t u t e , it has always been t h e p r a c t i c e i n Montana t o i n s t r u c t j u r i e s t h a t f u t u r e damages --- need o n l y be reasonably c e r t a i n , -- and n o t a b s o l u t e l y c e r t a i n -- a s t h e s t a t u t e seems t o imply. I n holding, as w e do, t h a t f u t u r e damagesneed o n l y be reasonably c e r t a i n under t h e evidence, it must be granted t h a t i n determining an award f o r f u t u r e damages, a j u r y , or an e x p e r t t e s t i f y i n g on -- t h e s u b j e c t , must --- t o some degree engage i n c o n j e c t u r e and specula t i o n . When t h e con jec t u r e a n d s p e c u l a t i o n i s based upon reasonably c e r t a i n human experience a s t o f u t u r e e v e n t s , t h e jury o r trier of f a c t i s e n t i t l e d t o r e l y on t h a t degree of reasonable c e r t a i n t y i n f i x i n g and awarding f u t u r e damages. From t h a t viewpoint, s i n c e no man has t h e g i f t of knowledge of t h e f u t u r e , it i s p o s s i b l y less con- f u s i n g t o a j u r y , given t h e t a s k of determining f u t u r e damages, t o be i n s t r u c t e d t h a t it may n o t r e l y ' s o l e l y ' on s p e c u l a t i o n o r c o n j e c t u r e , b u t may u t i l i z e t h e reasonable c e r t a i n t y t h e evidence pre- s e n t s with r e s p e c t t o those damages. W e do n o t r e a d i n t o t h e i n s t r u c t i o n a s given t h a t t h e jury could base its award ' p a r t i a l l y ' on s p e c u l a t i o n o r c o n j e c t u r e ; r a t h e r t h e i n s t r u c t i o n f a i r l y p l a i n l y tells t h e jury t h a t it should compensate t h e p l a i n - t i f f f o r l o s s o r harm which i s ' r e a s o n a b l y c e r t a i n ' t o be s u f f e r e d by him i n t h e f u t u r e . W e do n o t see t h a t a jury could hear those words without r e a l i z i n g t h a t it was t o look t o t h e evidence f o r reasonable c e r t a i n t y on t h e s u b j e c t . W e f i n d no e r r o r i n t h e i n s t r u c t i o n a s given." (Emphasis added. 1 The f i n a l i s s u e i s whether t h e evidence supported a under jury i s s u e on p u n i t i v e damages,/section 27-1-221, MCA. W e have c a r e f u l l y reviewed t h e record and f i n d s u f f i c i e n t evidence t o j u s t i f y submission of t h e i s s u e of p u n i t i v e damages t o t h e jury. I n Klind v. Valley County Bank (1924), 69 Mont. 386, 399, 222 P. 439, 4 4 4 , w e s t a t e d t h e g e n e r a l r u l e r e s p e c t i n g p u n i t i v e awards: "'To warrant t h e recovery of such damages t h e act complained o f must n o t only be unlawful, b u t must a l s o p a r t a k e somewhat of a c r i m i n a l o r wanton n a t u r e . And it i s an almost u n i v e r s a l l y recognized r u l e t h a t such damages may be recovered i n cases, and o n l y i n such c a s e s , where t h e wrongful a c t complained of i s c h a r a c t e r i z e d by some such circumstances of aggra- v a t i o n a s w i l l f u l n e s s , wantonness, malice, oppres- s i o n , b r u t a l i t y , i n s u l t , r e c k l e s s n e s s , g r o s s n e g l i - gence, o r g r o s s f r a u d on t h e p a r t of t h e defendant. (8 R.C.L. 585, 586.) ' " W e f i n d t h e following f a c t s i n evidence j u s t i f i e d t h e submission of p u n i t i v e damages t o t h e jury under t h e "reck- l e s s n e s s " s t a n d a r d of Klind and s e c t i o n 27-1-221, MCA. The Bank s e i z e d Graham's cows which c a r r i e d brands e s t a b l i s h i n g prima f a c i e ownership i n someone o t h e r than t h e Bank's d e b t o r and moved them 30 m i l e s away. When Graham attempted t o recover h i s cows, t h e Bank adamantly r e f u s e d t o d i v u l g e t h e i r l o c a t i o n and r e t u r n e d h i s cows t o a p a s t u r e w i t h s i x u n r e g i s t e r e d b u l l s . I n our opinion t h e r e was s u f f i c i e n t evidence t o r a i s e an i s s u e f o r t h e j u r y ' s c o n s i d e r a t i o n . This cause i s hereby remanded f o r a new t r i a l i n ac- W e concur: ' . / c h i e f J u s t i c e n J u s t i c e s