No. 94-026 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

ROBERT KING, 

Plaintiff and Respondent, 

ROBERT ZIMMERMAN and CONNIE ZIMMERMAN 

and BIG Z, INC., a Montana corporation, 

Defendants and Appellants. 

APPEAL FROM: District Court of the Thirteenth Judicial 

District, In and for the County of Yellowstone, 

The Honorable Maurice R. Colberg, Jr., 

Judge presiding. 

COUNSEL OF RECORD: 

For Appellants: 

Michael G. Majerus, Attorney at Law, 

Billings, Montana 

For Respondent: 

Brad L. Arndorfer, Attorney at Law, 

Billings, Montana 

Submitted on Briefs: June 9, 1994 

F~ 

Decided: August 1, 1994 

Filed: 
Justice Terry N. Trieweiler delivered the opinion of the Court. 

Robert King filed an action in the District Court for the 

Thirteenth Judicial District in Yellowstone County in which he 

alleged breach of contract, breach of the implied covenant of good 

faith and fair dealing, and conversion of property by defendants 

Robert and Connie Zimmerman and Big Z, Inc. Following a five-day 

jury trial, a verdict was returned for King and judgment was 

entered against Big Z and Connie Zimmerman. King was awarded 

compensatory damages for breach of contract and conversion in the 

amount of $9,654 -24. He was awarded punitive damages in the amount 

of $1.00 against Big Z, and $35,000 against Connie Zimmerman, on 

the basis that they had acted with actual malice when they 

wrongfully converted King's property. Big Z and Connie Zimmerman 

appeal. 

We affirm. 

The following issues are raised on appeal: 

1. Did the District Court err when it refused to grant the 

defendants' motion for a directed verdict on the issue of 

conversion? 

2. Did the District Court err when it refused to grant the 

defendants' motion for a directed verdict on the issue of whether 

Connie Zimmerman was personally liable for conversion of property? 

3. Did the District Court err when it affirmed the jury's 

award and assessed punitive damages against Big Z and Connie 

Zimmerman? 
4. Did the District Court abuse its discretion when it 

allowed into evidence an audio taped deposition of a witness for 

the plaintiff? 

5. Did the District Court abuse its discretion when it 

allowed King to introduce evidence in support of claims which the 

defendants contend were not raised in the pretrial order? 

This litigation involves a lease agreement between Robert King 

and a trucking firm known as Big Z, Inc., owned by Robert and 

Connie Zimmerman. Robert Zimmerman, as president of Big Z, owned 

1899 of the 1900 shares of stock of the corporation. Connie 

Zimmerman, the corporation's secretary, owned the remaining one 

share of stock. 

On May 10, 1991, King and Big Z entered into an agreement 

whereby King leased to Big Z a truck that he owned, and Big Z 

agreed to dispatch commercial loads to be hauled across the country 

by King or King's drivers. King was to receive 85 percent of the 

gross revenue from each haul, minus certain adjustments, and the 

remaining 15 percent of the gross revenue was to go to Big Z. 

The agreement stated that King would provide the necessary 

permits, licenses, and insurance to haul commercial loads. King 

testified that Big Z initially purchased the required permits in 

the name of Big Z and King, and that he was reimbursing Big Z for 

these costs out of his monthly receipts. The agreement further 

provided that King, as lessor, could terminate the lease agreement 

30 days after providing written notice, and that Big Z, as lessee, 
could terminate the lease "in a 24 hour period with extreme cause, 

such as failure to perform." 

The dispute leading to this lawsuit began with a load of 

cherries which were to be transported from the west coast to the 

east coast by Greg Ramey. The load was delivered late and resulted 

in substantial losses to Big Z. Ramey remained on the east coast 

with King's truck, and King eventually flew to the east coast in 

order to retrieve his truck. In connection with his return to 

Montana, King agreed to deliver a load of gambling "pull tabs1' to 

the west coast. The specific events which occurred are in dispute, 

but King apparently returned to Montana with the load of pull tabs 

and then declined to deliver the load to Washington state. 

In response, the Zimmermans terminatedthe lease agreement and 

immediately attempted to retrieve the license plates and other 

permits from King's truck which were in Big Z Is name. Unable to do 

so, Connie Zimmerman contacted the Yellowstone County Sheriff's 

office on July 27, 1991, and reported that the semi-tractor had 

been stolen from their business. The sheriff's office refused to 

impound the truck, but did retrieve the license plates and permits, 

as requested by Connie Zimmerman. 

On May 5, 1992, King filed a complaint against Big Z and 

Robert Zimmerman in which he alleged breach of contract, breach of 

the implied covenant of good faith and fair dealing, and conversion 

of property. King claimed that Robert Zimmerman and Big Z breached 

the lease by "willfully and intentionally refusing to dispatch 

plaintiff and making false reports of theft to the Yellowstone 
County Sheriff's Department" and that they had converted King's 

property when they caused the sheriff's off ice to confiscate "tags, 

insurance and permits . . . in the name of Big Z for which the 

plaintiff had paid." Finally, the complaint alleged that 

"defendants are further liable for punitive damages for their 

intentional and malicious act of making false police reports in 

order to convert them [the property seized] from the plaintiff's 

use to their own." On June 15, 1993, the complaint was amended to 

include Connie Zimmerman as a defendant. 

A jury trial was held on August 23-27, 1993. The jury found 

a breach of contract or the obligation of good faith and fair 

dealing, and assessed damages against Big Z in the amount of 

$8,288.33 as compensatory damages, plus interest and costs. The 

jury also found conversion by Big Z and Connie Zimmerman, and 

awarded compensatory damages of $1,117.23. Furthermore, the jury 

found that Big Z and Connie Zimmerman had acted maliciously with 

respect to the conversion, and returned exemplary damages against 

Big Z in the amount of $1.00 and against Connie Zimmerman in the 

amount of $35,000. No damages were assessed against Robert 

Zimmerman personally. 

The court entered findings of fact and conclusions of law 

related to the amount of punitive damages on September 8, 1993, and 

awarded punitive damages to King in the amounts assessed by the 

jury. From the judgment entered on September 16, 1993, Big Z and 

Connie Zimmerman appeal. 
ISSUE 1 

Did the District Court err when it refused to grant the 

defendants' motion for a directed verdict on the issue of 

conversion? 

Big Z and Connie Zimmerman contend that the court should have 

granted their motion for a directed verdict on the issue of 

conversion because the items that Connie Zimmerman requested the 

sheriff's department to return were license plates and permits 

which were owned by Big Z. They assert that King could not 

demonstrate that he owned the property or had a right of 

possession, and therefore, could not prove conversion or wrongful 

possession of this property by Big Z or Connie Zimmerman. 

A court may grant a directed verdict only when it appears as 

a matter of law that the nonmoving party could not recover upon any 

view of the evidence, including the legitimate inferences to be 

drawn from the evidence. Keanzey v. KXLF (Mont. 1994) , 869 P. 2d 772, 

777, 51 St. Rep. 119, 123. A directed verdict for the defendant is 

not proper if reasonable persons could differ regarding the 

conclusions which could be drawn from the evidence, and a directed 

verdict is proper only in the complete absence of any evidence to 

warrant submission to the jury . Dees v. American National Fire Insurance 

(1993), 260 Mont. 431, 442, 861 P.2d 141, 148; Moralliv. Lake County 

(1992), 255 Mont. 23, 27, 839 P.2d 1287, 1289. 

The standard we use in reviewing denials of motions for 

directed verdicts only requires substantial evidence in the record 
to support the finding of the jury. Laize v. Dunkle (1988) , 231 Mont. 

365, 369, 753 P.2d 321, 323. We review the evidence in a light 

most favorable to the prevailing party, and will reverse only where 

there is a lack of substantial evidence to support the judgment. 

Lane, 753 P.2d at 323. Substantial evidence is evidence which a 

reasonable mind might accept as adequate to support a conclusion, 

even if it is weak or conflicting. Amoldv. BoiseCascade (1993), 259 

Mont. 259, 265, 856 P.2d 217, 220. 

Conversion requires property ownership, the owner's right of 

possession, and the unauthorized control over the property by 

another resulting in damages. Lane, 753 P.2d at 323. However, in 

an action for conversion, "property ownership" does not mean that 

the plaintiff must have absolute or unqualified title to the 

property in question, but rather that he or she must have an 

interest in the property and the right to possess the property at 

the time of the alleged conversion. Kinsman v. Stanhope (1914), 50 

Mont. 41, 144 P. 1083; 18 Am. Jur. 2d Conversion 5 75 (1985). 

Ordinarily, an immediate right to possession at the time of 

conversion is all that is required to enable a plaintiff to 

maintain an action. 18 Am. Jur. 2d Coltversion 5 76 (1985). 

This statement of the law of conversion was properly reflected 

in the following instruction which was given to the jury: 

Conversion is the unauthorized assumption and exercise of 

the right of ownership over goods or personal chattels 

belonging to another, to the alteration of their 

condition or the exclusion of the owner's rights. To 

entitle the plaintiff to recover, the jury must believe, 
from the evidence, that the plaintiff was the owner of 

the prouertv in question, or that he had some special 

interest therein, which entitled him to possession of the 

propertv at the time of the alleqed conversion. 

[Emphasis added]. 

Although the defendants consistently maintained that no 

conversion had occurred, the trial transcript reveals that the 

defendants specifically consented tothis instruction regarding the 

law of conversion. However, on appeal, Zimmerman and Big Z contend 

that King cannot maintain a conversion action because he cannot 

prove that Big Z had actually transferred title or ownership of the 

items in question to King. The crux of their argument is that 

Big Z had title to the items seized, as was required by state and 

federal regulations pertaining to the trucking business, and King 

had no ownership interest in this property. 

We disagree. Under the law of conversion, as properly stated 

in Jury Instruction No. 15, the jury did not have to find that King 

had absolute ownership of or title to the property in question, but 

rather that he had an interest in the property which entitled him 

to possession at the time Connie Zimmerman requested the sheriff to 

intervene. In this regard, the jury heard extensive testimony 

concerning the terms of the lease agreement which required King to 

provide the necessary permits, licenses, and insurance to haul 

commercial loads; the fact that federal and state regulations 

required these items to be obtained in Big 2's name, even though 

the lease required King to purchase them; King's right to possess 

these items until the lease was properly terminated, at which time 

the cost of these items would be prorated and he would be paid back 
for the unexpired use of these items; the notice required prior to 

terminating the lease; and the fact that, in accordance with the 

terms of the lease agreement, King was reimbursing Big Z for these 

items out of his monthly receipts. 

After considering this evidence in the light most favorable to 

King, including the legitimate inferences which could be drawn from 

this evidence, we conclude the jury could find that King had an 

ownership interest in the property in question. Although the 

evidence was conflicting, there was substantial evidence warranting 

submission of the issue of conversion to the jury and upon which a 

jury could base its verdict. Therefore, we conclude that Big Z and 

Connie Zimmerman were not entitled to a directed verdict on the 

issue of conversion. 

ISSUE 2 

Did the District Court err when it refused to grant the 

defendants1 motion for a directed verdict on the issue of whether 

Connie Zimmerman was personally liable for conversion of property? 

The defendants contend that the court should have granted 

Connie Zinnermanls notion for a directed verdict on the issue of 

whether she can be held personally liable for conversion of King's 

property. Zimmerman and Big Z assert that under the corporate 

shield doctrine the shareholders of a corporation are immune from 

liability unless special circumstances exist which justify 

I1piercing the corporate veil" in order to reach the shareholders 

individually. They maintain that Connie Zimmerman acted on behalf 

of the corporation, in furtherance of corporate goals, and that 
there is no evidence to justify bringing Zimmerman within the 

exceptions to the corporate shield doctrine. 

King counters by noting that this case did not involve an 

attempt to pierce the corporate veil in order to get at the assets 

of the shareholders for payment of a corporate debt. What was pled 

and tried in this case was whether Connie Zimmerman wrongfully 

converted King's property and whether there was a basis to hold her 

personally liable for her actions. In fact, the jury found that 

both Big Z and Connie Zimmerman were individually liable for 

conversion of King's property. King contends that at no time was 

the issue whether Connie Zimmerman should be held liable for the 

corporation's actions as one of its shareholders. We agree. 

The jury was instructed as follows on the issue of personal 

liability on the part of Connie Zimmerman: 

Corporate officers or directors are privileged to 

interfere with or induce breach of the corporation's 

contracts or business relations with others as long as 

their actions are in good faith and for the best 

interests of the corporation. Where an officer or 

director acts asainst the best interests of the 

corporation, acts for his own pecuniarv benefit. or with 

intent to harm the plaintiff, he is personallv liable. 

[Emphasis added]. 

This jury instruction correctly states the law regarding personal 

liability of a corporate officer or director as set forth by this 

Court in Phillips v. Molztana Education Association (1980) , 187 Mont . 419, 610 

P.2d 154. Seeaho,Mannixv.ButteWaterCompany (1991), 249 Mont. 372, 

816 p.2d 441; Bottrellv.AmericanBank (1989), 237 Mont. 1, 773 p.2d 694. 
In this instance, the jury heard testimony that Connie. 

Zimmerman, as secretary of Big Z, had intentionally made a false 

report to the sheriff's office when she reported that the 

semi-tractor had been stolen in order to "teach him [King] a 

lesson." Furthermore, the jury considered evidence regarding the 

termination of the lease without warning, and Connie Zimmermanls 

actions prior to calling the sheriff's office. Although this 

testimony was disputed, the jury resolved the conflicting evidence 

in favor of King. When such conflicting evidence exists, we do not 

retry a case because the jury chose to believe one party over 

another. Simchuk v. Angel Island Community Association (19 9 2 ) , 2 53 Mont . 2 2 1, 

833 P.2d 158. 

Using the same standard of review set forth in the previous 

section, we conclude that there was substantial evidence to warrant 

submitting the issue of personal liability to the jury. After 

drawing reasonable inferences in favor of King from the evidence 

presented, we conclude that a jury could logically infer that 

Connie Zimmerman's motives were not in the best interests of the 

corporation or that she had acted with the intent to harm King. We 

conclude the District Court did not err when it denied Connie 

Zimmermanls motion for a directed verdict on the issue of her 

personal liability. 

ISSUE 3 

Did the District Court err when it affirmed the jury's award 

and assessed punitive damages against Big Z and Connie Zimmerman? 
Connie Zimmerman and Big Z contend that punitive damages were 

improperly assessed against Zimmerman because there was no clear 

and convincing evidence of malice on her part. Furthermore, the 

defendants claim the District Court erred when it instructed the 

jury to consider the nine factors set forth in § 27-1-221(7) (b), 

MCA, with respect to this issue. They maintain that the court 

should have given the instruction they offered on punitive damages 

which was based on the Montana Pattern Jury Instructions, 

number 25.65. 

The jury found that both Big Z and Connie Zimmerman converted 

King's property and had acted with actual malice. After the 

verdict, the court reviewed the award pursuant to 5 27-1-221(7) (c) , 

MCA. The court issued findings of fact and conclusions of law 

related to the amount of punitive damages, and adopted the amount 

of the jury's award. 

Under 27-1-221, MCA, reasonable punitive damages may be 

awarded when a defendant has been found guilty of actual malice. 

Section 27-1-221(2), MCA, provides: 

A defendant is guilty of actual malice if he has 

knowledge of facts or intentionally disregards facts that 

create a high probability of injury to the plaintiff and: 

(a) deliberately proceeds to act in conscious or 

intentional disregard of the high probability of injury 

to the plaintiff; or 

(b) deliberately proceeds to act with indifference 

to the high probability of injury to the plaintiff. 

"All elements of the claim for punitive damages must be proved by 

clear and convincing evidence . . . [which] is more than a 
preponderance of evidence but less than beyond a reasonable doubt. " 

Section 27-1-221(5), MCA. 

A jury award of punitive damages must be reviewed by the 

district court judge. Section 27-1-221(7) (c), MCA. A district 

court judge, having heard the evidence and observed the witnesses, 

is in the best position to determine whether the requirements of 

proof of punitive damages have been met. Dees, 861 P. 2d at 150. 

Here, Judge Colberg reviewed the award and concluded the jury 

correctly assessed punitive damages against Big Z and Connie 

Zimmerman, based on clear and convincing evidence that "Connie 

Zimmerman apparently intended to teach plaintiff [King] a lesson" 

and "[tlhe behavior was intentional." Furthermore, after 

considering each of the relevant factors in 5 27-1-221(7)(b), MCA, 

the court found that the jury had assessed an appropriate amount of 

damages against each defendant. In his findings, Judge Colberg 

carefully articulated how the evidence supported each of the 

statutorily required considerations for an award of punitive 

damages. Although the record is replete with conflicting 

testimony, there is substantial, credible evidence upon which a 

jury could base a determination that Connie Zimmerman and Big Z 

acted with malice toward King when a false report of a stolen truck 

was filed and King's property was converted. 

In addition to rejecting the Zimmermans' contention that there 

was not clear and convincing evidence to support the jury's 

verdict, we find no merit in the argument that the judge improperly 

instructed the jury on the issue of punitive damages. For all 

13 
practical purposes, the differences between the proposed 

instruction and the given instruction, which was based on 

§ 27-1-221, MCA, are negligible. 

When we review a district court's refusal to give an offered 

jury instruction, the following rules apply: 

It is not reversible error for a trial court to 

refuse an offered instruction unless such refusal affects 

the substantial rights of the party proposing the 

instruction, thereby prejudicing him. 

A party in not prejudiced by a refusal of his 

proposed instructions where the subject matter of the 

instruction is not applicable to the pleadings and facts, 

or not supported by the evidence introduced at trial, or 

the subject matter is adequately covered by other 

instructions submitted to the jury. [Citations omitted]. 

Cotlrellv. Burlington Northenz (1993), 261 Mont. 296, 306, 863 P.2d 381, 

In this case, the instruction given to the jury was 

substantially the same as that offered by the defendants. We 

cannot conclude that the defendantsf rights were affected by the 

court's decision to instruct the jury as it did. 

We conclude the court did not err when it adopted the jury's 

verdict and assessed punitive damages against Big Z and Connie 

ISSUE 4 

Did the District Court abuse its discretion when it allowed 

into evidence an audio taped deposition of a witness for the 

plaintiff? 

At trial, over the defendantsf objection, the District Court 

allowed an audio taped deposition of plaintiff's witness, Greg 
Ramey. The basis for the objection was that the Montana rules 

regarding taped depositions had not been followed and that the 

deposition had been taken after the discovery cutoff deadline had 

passed. Rule 30(h)(4), M.R.Civ.P., sets forth the rules for video 

taped or audio taped depositions, and the defendants contend these 

rules were not complied with because the operator's name and 

business address were not stated on the taped part of the 

deposition; the tape was not indexed by a time generator or other 

adequate indexing device; and the original audio tape was not filed 

with the clerk of court. The defendants maintain these rules are 

mandatory and because they were not followed, the tape should not 

have been allowed. 

The determination of the admissibility of evidence is within 

the broad discretion of the trial court, and we will not disturb 

the court's ruling absent a manifest abuse of this discretion. 

Jacobsen v. State (1989), 236 Mont. 91, 94, 769 P.2d 694, 695. 

In this instance, the court allowed admission of the audio 

taped deposition despite the fact that certain requirements set 

forth in Rule 3O(h), M.R.Civ.P., were not fully complied with. 

After reviewing the record, however, we conclude that there was no 

prejudice to the defendants resulting from the defects alleged. On 

this basis, we find no grounds to hold that the tape was 

inadmissible. 

The procedural requirements of Rule 30(h), M.R.Civ.P., insure 

the accuracy and proper identification of a taped deposition. 

Here, however, the accuracy of the taped deposition was never 

15 
challenged. The objections raised during the trial went to 

substantive issues which were discussed by Ramey, and the 

defendants were afforded adequate opportunities during the trial to 

object and excise specific portions of Ramey's testimony. These 

portions of the tape were never heard by the jury. Furthermore, 

the objection that the tape did not technically comply with the 

rule was not raised until the day of trial, even though the 

deposition had been taken and was transcribed prior to this time. 

If the accuracy of the tape was genuinely questioned, this problem 

could have been brought to the court's attention prior to the day 

of trial. 

We conclude that the District Court did not abuse its 

discretion when it allowed into evidence the audio taped deposition 

of Ramey. 

ISSUE 5 

Did the District Court abuse its discretion when it allowed 

King to introduce evidence in support of claims which the 

defendants contend were not raised in the pretrial order? 

The defendants finally contend that the District Court erred 

when it allowed plaintiff to present evidence at trial regarding 

issues of fact and law not set forth in the pretrial order. 

Specifically, they contend that breach of contract, breach of the 

covenant of good faith, conversion, and malice were not listed as 

issues. Also, punitive damages were not listed in the legal issues 

to be addressed. The defendants rely on Zimmerman v. Robenson (1993), 

259 Mont. 105, 854 P.2d 338, for the proposition that testimony 

16 
regarding issues that are not contained in the pretrial order is 

irrelevant and inadmissible. 

The purpose of pretrial orders is to prevent surprise, 

simplify the issues, and permit counsel to prepare their case for 

trial on the basis of the pretrial order. Zimmerman, 854 P.2d at 

342. In Zimmerman, under the unique facts present in that case, we 

held that permitting the introduction of a new factual matter which 

had never been raised in any of the pleadings, but rather was first 

raised during trial, would undermine the purposes pretrial orders 

are intended to serve. Here, however, after reviewing the pretrial 

order, we find the defendants' arguments without merit. The 

pretrial order adequately sets forth all of King's contentions as 

contained in the initial pleadings. Furthermore, no theories were 

advanced at trial which had not already been well established in 

the pleadings. There is no basis for the defendants to claim that 

they were "surprised" by the issues raised and had not been able to 

prepare for trial. 

The District Court did not abuse its discretion in this 

regard. 

The judgment of the District Court is affirmed. 
We concur: