Source: https://www.in.gov/judiciary/opinions/previous/archive/01160201.smb.html
Timestamp: 2019-04-19 01:11:45+00:00

Document:
KRISTIN E. ERATO WILLIAM C. MENGES, JR.
Appellant-defendant/counterplaintiff Sammy Greco (Greco) appeals the trial courts judgment for $11,783.53 in favor of appellee-plaintiff/counterdefendant KMA Auto Exchange, Inc. (KMA) on KMAs claim against Greco and on his counterclaim for conversion. We affirm in part and reverse and remand in part.
III. whether the trial court properly found that Greco was not entitled to judgment on his counterclaim of conversion.
This page lists the amount financed, the finance charges, the annual percentage rate, the total payments, and the total purchase price, which references the down payment. The first page also contains a payment schedule, a description of the truck, and all additional fees and requirements related to financing.
. Bob Shoemaker, a KMA salesperson, signed the assignment clause, and this page also contained Grecos signature.
If you fail to make any payment when due.
If you break any promise under this or any other agreement with us.
If you gave us false or misleading information on your loan application.
REMEDIES ON DEFAULT. If you are in default the entire balance of your loan is due immediately. We will have all rights and remedies of a secured creditor, holder, or as otherwise provided by law or this [security agreement], without relief from valuation and appraisement laws.
You agree that we may sue you in the city and county where we have our main office. You agree to pay our attorneys fees and any other costs for collection or enforcement of this [security agreement].
You must deliver the collateral to us if we direct. With or without demanding delivery from you, we will have the right to take possession of the collateral. We may sell it at any location convenient to us and apply the proceeds to payment of our expenses and your loan.
8. If full payment for purchased used car is not made within (5) days after notification that same is ready for delivery, dealer may cancel this order and it is agreed that the advance deposit or proceeds of sale of used car taken in trade as the case may be, may be retained by dealer up to twenty percent of the sales price of purchase [ sic] used car ordered, or if used car has not been disposed of, dealer shall have a lien thereon for such amount. Such retention of fund or lien shall constitute liquidated damages for purchasers failure to complete full payment. Dealer may, at its option, return such funds or used car and hold purchaser liable for dealers loss or damage by reason of purchasers failure to complete such payment within five (5) days mentioned herein.
10. This order shall not constitute a contract until accepted in writing by dealer or his authorized representative and when so accepted is not transferable by purchaser.
Bob Shoemaker, a KMA salesperson, and Greco signed the order on December 16, 1995.
Greco took possession of the truck pursuant to the parties agreements and returned it the same day complaining of a blown engine. KMA lent Greco another vehicle and attempted to cash his $1000.00 personal check, which was returned for insufficient funds. Unable to settle their differences regarding the engines repair, Greco returned the loaner vehicle and refused to pay the down payment, and KMA refused to allow Greco to remove the truck from its property despite his repeated demands. Throughout the course of the proceedings, Greco made regular payments to NBD and eventually paid the financed portion of the purchase price in full.
On June 11, 1996, KMA filed suit in small claims court alleging that Greco had breached the security agreement by failing to pay the $1000.00 down payment and requested damages in the amount of $3,000.00 plus attorneys fees, interest, and costs pursuant to the terms of the security agreement. On September 12, 1996, Greco answered the complaint and filed three counterclaims, one of which was considered at trial. In that counterclaim, Greco alleged that KMAs continued possession of the truck constituted conversion and requested treble damages, attorneys fees, and costs pursuant Indiana Code Section 34-4-30-1. See footnote The small claims court transferred the case to the plenary docket because Grecos counterclaims exceeded its jurisdictional amount.
Greco filed a motion for summary judgment on December 20, 1996, which the trial court denied on June 17, 1997. The trial court certified its judgment for interlocutory appeal, and we affirmed the trial courts denial of summary judgment in an unpublished memorandum decision. See Greco v. KMA Auto Exch., Inc., No. 34A02-9710-CV-717 (Ind. Ct. App. 1998).
1. That on December 16, 1995, the parties entered into a written [security agreement] for the sale and purchase of a certain used 1987 Dodge truck. The purchase of the vehicle was As Is with no warranty.
2. That pursuant to the terms and conditions of said agreement, [Greco] agreed to pay the sum of one thousand dollars ($1,000) down, and the balance of the purchase price in installments, with interest on the unpaid balance from and after December 16, 1995, until paid, at the annual rate of eleven and twenty-five hundredths percent (11.25%).
3. That [Greco] tendered said down payment by means of personal check, which was deposited by [KMA] in its normal course of business, and was returned for insufficient funds.
4. That the [security agreement] provides that in the event of default, the Seller may take possession of the collateral.
6. That [KMAs] Attorney expended thirty-five (35) hours in connection with this cause, at the trial level, and, in addition, represented [KMA] during the Interlocutory Appeal; and that a reasonable compensation would be one hundred fifty dollars ($150.00) per hour for trial level work, and an additional flat fee of five thousand dollars ($5,000) for the appeal, for a total amount of ten thousand two hundred fifty dollars ($10,250.00).
7. That any denominated finding herein which is a conclusion of law should be considered as a Conclusion of Law.
1. [Greco] breached his agreement with [KMA] by failing to pay the down payment as agreed.
2. That said breach placed [Greco] in default under the terms and conditions of the [security agreement].
3. That [KMA] was entitled to possession of the truck, pursuant to the terms and conditions of the [security agreement].
4. That [KMA] is entitled to judgment against [Greco] in the sum of one thousand dollars ($1,000), together with pre-judgment interest thereon, at the rate of eleven and twenty-five hundredths percent (11.25%) from December 16, 1995, until the date hereof, in the sum of five hundred thirty-three dollars and fifty-three cents ($533.53); for its attorneys fee in the sum of ten thousand two hundred fifty dollars ($10,250.00); and for its costs of this action.
5. That [Greco] is entitled to nothing by way of his counter-claim, and [KMA] is entitled to judgment thereon.
6. That any denominated conclusion herein which is a finding of fact should be considered as a Finding of Fact.
On October 13, 2000, Greco filed a motion to correct error, which the trial court denied. Greco then discovered that the trial had not been recorded, and on July 6, 2001, the trial court approved the parties joint statement of the evidence. Greco now appeals.
all as shown by the testimony or affidavit of the custodian or other qualified witness, unless the source of information or the method or circumstances of preparation indicate a lack of trustworthiness.
The admission of evidence is a determination entrusted to the discretion of the trial court. Fowler v. Napier, 663 N.E.2d 1197, 1200 (Ind. Ct. App. 1996). A trial court abuses its discretion when its action is clearly erroneous and against the logic and effect of the facts and circumstances before it or the reasonable inferences to be drawn therefrom. Id.
it was signed during the regular course of its business, as part of its regularly conducted business activity. Because Snow testified that he was involved in the sale of the truck to Greco, a sufficient foundation exists from which the trial court could have concluded that the security agreement was made at or near the time of the transaction. See, e.g., Williams v. Hittle, 629 N.E.2d 944, 948 (Ind. Ct. App. 1994) (stating that sufficient evidence existed from which the trial court could conclude that the contested expense reports were made at or near the time of the transaction where employees of a beauty parlor met weekly to report their earnings and the weekly earnings were reported monthly to an auditor), trans. denied. Therefore, we cannot conclude that the trial court abused its discretion in admitting the security agreement into evidence.
The standard of review for findings of fact and conclusions thereon issued pursuant to Indiana Trial Rule 52(A) is one of great deference. S-Mart v. Sweetwater Coffee Co., 744 N.E.2d 580, 585 (Ind. Ct. App. 2001), trans denied. We engage in a two-tiered review and must first determine whether the evidence supports the findings and second, whether the findings support the judgment. Couchman v. Restoration Contractors, Inc., 743 N.E.2d 346, 347 (Ind. Ct. App. 2001). We will not set aside the trial courts findings and conclusions unless they are clearly erroneous. See id. A judgment is clearly erroneous only if a review of the record leaves the court with a firm conviction that a mistake has been made. S-Mart, 744 N.E.2d at 585.
Greco argues that the trial court improperly relied on the security agreement in awarding attorneys fees to KMA because KMA assigned all of its rights to NBD under the security agreement. Greco argues in the alternative that even if KMA had rights under the security agreement, he was not in default because under its terms, he was only obligated to pay (and did in fact pay) the amount financed.
KMA argues that we are required to review Grecos counterclaim for conversion under a sufficiency of the evidence standard. We review claims tried to the bench, however, under a clearly erroneous standard. See Dinsmore v. Lake Elec. Co. 719 N.E.2d 1282, 1285 (Ind. Ct. App. 1999); Ind. Trial Rule 52(A). A judgment is clearly erroneous when a review of the record leaves us with a firm conviction that a mistake has been made. Id.
Greco argues that the trial court improperly granted judgment on his counterclaim in KMAs favor because the trial court erroneously concluded [t]hat [KMA] was entitled to possession of the truck, pursuant to the terms and conditions of the [security agreement] since KMA had assigned all its rights to NBD. Greco further argues that since he was not in default, the remedies on default provision, which might have given a creditor rights in the truck, is inapplicable. In response, KMA contends that it was entitled to possession of the truck pursuant to the security agreement because Greco was in default.
As we concluded above, KMA does not have rights under the security agreement because it governs only the financing arrangements between Greco and NBD; therefore, we are firmly convinced that a mistake was made See footnote when the trial court found [t]hat the [security agreement] provides that in the event of default the Seller may take possession of the collateral. Thus, the trial courts conclusions that KMA was entitled to possession of the truck pursuant to the terms of the security agreement and that Greco is entitled to nothing by way of his counter-claim, and [KMA] is entitled to judgment thereon are clearly erroneous. While we conclude that the trial court improperly granted judgment in KMAs favor, we must also determine whether Greco is entitled to judgment on his counterclaim for conversion.
Under Indiana Code Section 34-24-3-1, a person who proves the elements of criminal conversion by a preponderance of the evidence can recover up to three times the actual damages, the costs of the action, and reasonable attorneys fees. See Gilliana v. Paniaguas, 708 N.E.2d 895, 899 (Ind. Ct. App. 1999) (citing Ind. Code § 34-24-3-1), trans. denied. This section allows a person who has suffered a pecuniary loss as a result of a violation of criminal conversion to bring a civil action to recover the loss. Id.
We have maintained that the mens rea requirement differentiates criminal conversion from the more innocent breach of contract or failure to pay a debt situation that the criminal conversion statute was not intended to cover. See Gilliana, 708 N.E.2d at 899. The legislature did not intend to criminalize bona fide contract disputes. Nations Credit Commercial Corp. v. Grauel Enter., Inc., 703 N.E.2d 1072, 1078 (Ind. Ct. App. 1998), trans. denied.
Based on this evidence, we are convinced that KMA exerted unauthorized control over Grecos property. We further conclude that KMA did so knowingly because neither the security agreement nor the order gave KMA a right to possession of the vehicle. Additionally, Grecos attorney testified that he informed KMA that they had no right to the truck and that it must be returned[,] and KMA presented no evidence indicating that it had acted upon a reasonable interpretation of an ambiguous contract or that this was a transaction between sophisticated business entities. See Gilliana, 708 N.E.2d at 900 (considering these factors in determining whether the requisite mens rea was present in a claim of civil conversion). In fact, the security agreement governed the financing arrangements and unambiguously assigned any rights that KMA might have had to NBD. Further, nothing in the record even intimates that Greco was a sophisticated business entity.
Thus, Greco established the elements of criminal conversion by a preponderance of the evidence. We therefore reverse the trial courts judgment on the counterclaim and remand to the trial court to amend its findings and conclusions in accordance with this opinion and to calculate Grecos damages under Indiana Code Section 34-24-3-1.
Footnote: This section has been recodified without substantial change as Indiana Code Section 34-24-3-1, and we hereinafter refer to it as such.
Footnote: In fact, it appears that the order, rather than the security agreement, created rights in KMA to the down payment in describing the remedies available to KMA if full payment is not timely made. We also note that while the order contains a liquidated damages clause, it does not provide for the award of attorneys fees.
Notice of Acceptance[.] The Seller has assigned this Agreement to the Bank identified in the Sellers Acceptance above.
If we transfer this [security agreement] to another creditor, that creditor will have all of our rights.
We further note that since the security agreement only governs the financed amount and Greco timely paid that amount in full, he is not in default under the security agreement.
Footnote: In the conclusion section of his appellate brief, Greco asks us to vacate the trial courts award of prejudgment interest. Greco, however, does not dispute the trial courts award of the down payment to KMA; thus, we cannot reverse the trial courts award of prejudgment interest thereon.
Footnote: We note that this language tracks the language of the standard of review.
Footnote: In its brief, KMA states that Snow testified that Greco had not been denied permission to remove the truck from KMAs property. We note, however, that the agreed statement of the evidence indicates that this statement was ordered stricken from the record because KMA had failed to respond to discovery requests, and thus Grecos earlier requests for admissions had been deemed admitted.

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