Opinion ID: 1926607
Heading Depth: 1
Heading Rank: 7

Heading: Aurora's Conversion of Negotiable Instrument (Check) and Fraud and Misrepresentation Counterclaims

Text: Aurora complains that the trial court directed verdicts in Bykofsky's favor on its counterclaims 2, conversion of a negotiable instrument (check), and counterclaim 3, fraud and misrepresentation. Bykofsky supports the trial court's rulings. We conclude that the trial court properly directed the verdict as to counterclaim 2 because payment was stopped on the check at issue, and thus, Aurora suffered no actual damages. As the trial court stated: I think as a matter of law the jury cannot find any compensatory damages... given the fact that [payment on] the check that was issued ... was stopped and [the money] was never paid to Mr. Bykofsky.... The trial court also found that Bykofsky was authorized to sign checks on the corporate account. When the trial judge asked Aurora's counsel to detail the fraud and misrepresentation counterclaim, she responded: The fraud and misrepresentation basically is [the] situation where Mr. Bykofsky made representations to both Mr. Walker and to Dr. Statman related to the promissory notes, and the purpose for the promissory notes, and then later turned around and changed the position to indicate that it was really for the purpose of giving them an actual benefit. Counsel for Aurora also tied the fraud and misrepresentation to the two payments Bykofsky received on the $80,000 promissory notes, arguing that these sums could not have been payments on the promissory note since a different amount was reflected in the payment schedule for the note. In directing a verdict on counterclaim 2, the trial judge stated: I can't find that there's sufficient evidence of fraud and misrepresentation to go to the jury. For that reason I'm going to grant [the] motion for directed verdict in favor of [Bykofsky] on that count. In essence, the trial court determined that, at best, there was a dispute as to the reason for the $5,500 and the $7,500 payment. In connection with its argument as to the fraud and misrepresentation counterclaim, Aurora also asserts that the trial court should have permitted the testimony of defense witnesses, especially Walker and Statman, to explain the minutes of the Board of Director's meeting pertaining to the $5,500 and the $7,500 payments to Bykofsky. The record shows that the issue of the Board minutes and these payments was raised just prior to the presentation of the defense case. Defense counsel acknowledged that Statman, who signed the minutes at issue, cannot testify that he did not sign the minutes. Rather, defense counsel asserted, Dr. Statman can testify as to what his understanding was for the purpose of signing the minutes. The trial court decided not to rule on the evidentiary issue at that point, saying only: I think I'm in a better position to rule on things once I hear whatever [the] testimony is going to be. Our review of the record shows that the issue was not raised again during the trial. Thus, we are constrained to agree with the trial court that there was no credible evidence of fraud and misrepresentation with respect to the $5,500 and $7,500 payments to Bykofsky. Accordingly, for the foregoing reasons, we affirm the judgment of the trial court with respect to all issues, except for the award of punitive damages to Bykofsky on count 6 of his complaint, and to Aurora on count I of its counterclaim. We remand the punitive damages issues to the trial court with instructions to vacate the award of punitive damages to Bykofsky and to Aurora. So ordered.