Court Opinion

ID: 3191044
Source: CourtListenerOpinion
Date Created: 2016-04-04 07:05:31.646974+00
Date Added: 2024-06-11T09:36:34.206986
License: Public Domain

THIRD DIVISION
                             ELLINGTON, P. J.,
                        DILLARD and MCFADDEN, JJ.

                   NOTICE: Motions for reconsideration must be
                   physically received in our clerk’s office within ten
                   days of the date of decision to be deemed timely filed.
                               http://www.gaappeals.us/rules

                                                                    March 23, 2016

In the Court of Appeals of Georgia
 A15A2003. BO PHILLIPS COMPANY, INC. et al. v. R. L. KING
     PROPERTIES, LLC et al.

      ELLINGTON, Presiding Judge.

      Appellants Bo Phillips Company, Inc. (“BPC”) and Ro Benn, d/b/a Big Benn

Entertainment (“Benn”) sued R. L. King Properties, LLC and Robert L. King

(collectively, the “appellees”) for conversion, among other claims. BPC and Benn

contend that they rented and delivered equipment to a DeKalb County nightclub, the

premises of which was owned by King Properties, and the appellees later denied BPC

and Benn access to the premises and refused to return their equipment.1 The trial

      1
        BPC and Benn also asserted claims for implied contract, unjust enrichment,
constructive trust, punitive damages, and attorney fees. Appellees moved for
summary judgment on all claims. BPC and Benn filed a cross-motion for summary
judgment on the issue of liability as to their conversion claim. BPC and Benn also
filed a motion to compel appellees to produce for inspection the pedestrian
barricades, allegedly owned by BPC, and the sound and lighting equipment, allegedly
court granted summary judgment in favor of the appellees on all claims and denied

BPC’s and Benn’s motion to compel discovery as moot. The trial court also impliedly

denied BPC’s and Benn’s cross-motion for summary judgment.2 BPC and Benn

appeal from the trial court’s grant of summary judgment on their claims for

conversion, punitive damages, attorney fees, and the remedy of a constructive trust.

They also appeal from the trial court’s denial of their motion to compel and the trial

court’s denial of their cross-motion for summary judgment. For the reasons set forth

below, we affirm in part and reverse in part.

      Under OCGA § 9-11-56 (c),

      [s]ummary judgment is warranted if the pleadings, depositions,
      answers to interrogatories, and admissions on file, together with the
      affidavits, if any, show that there is no genuine issue as to any
      material fact and that the moving party is entitled to a judgment as a
      matter of law. We review the grant or denial of a motion for summary
      judgment de novo, and we view the evidence, and the reasonable
      inferences drawn therefrom, in a light most favorable to the
      nonmovant.

owned by Benn, which, they contended, remained on the premises.
      2
        The trial court did not expressly deny BPC’s and Benn’s cross-motion, but
that motion’s denial was implicit in the trial court’s grant of summary judgment to
appellees on all claims. See Georgian Art Lighting Designs, Inc. v. Gwinnett County
Bd. of Tax Assessors, 211 Ga. App. 510 n.1 (439 SE2d 687) (1993),

                                          2
(Punctuation and footnotes omitted.) Assaf v. Cincinnati Ins. Co., 327 Ga. App. 475,

475-476 (759 SE2d 557) (2014).

      The evidence shows that BPC is in the business of renting, selling, and

servicing traffic and pedestrian control devices, among other safety-related gear. BPC

purchased 150 eight-foot crowd control barricades on February 2, 2012, from an

identified vendor. John Craig, Jr., BPC’s vice president, testified by affidavit that on

or about March 8, 2012, BPC rented and delivered 20 of those barricades to a

nightclub known as Club Libra, which was operating on property located at 2549

Gresham Road in DeKalb County (the “premises”). BPC rented and delivered another

10 barricades to Club Libra on March 30, 2012. Attached to the affidavit, among

other documentation, were delivery tickets showing a rental of barricades at a daily

rate. BPC later attempted to regain possession of the barricades in October 2012, but

the premises were closed and padlocked.

      Benn, through his business Big Ben Productions (“Big Ben”), owns, rents, and

services sound, stage, and lighting equipment. Benn testified that on October 17,

2011, Big Ben rented and delivered 42 pieces of equipment to Club Libra, as

described in an attached agreement with “Kareem Hawthorn ‘Club Libra’ BKE Ent.”

                                           3
According to Benn, he was unable to regain possession of the equipment in July 2012

as the premises were closed and padlocked.

      Kareem Hawthorn testified by affidavit that he is a member of Blacknights

Entertainment, LLC, which operated Club Libra on the Premises. Hawthorne’s

testimony showed the following. On or about October 17, 2011, Benn leased to

Blacknights sound, stage, and lighting equipment for use at Club Libra. In addition,

on March 8, 2012, BPC leased to Blacknights 20 eight-foot crowd control barricades

for use at Club Libra. BPC leased to Blacknights, also for use at Club Libra, an

additional 10 barricades on March 30, 2012. King permanently locked Blacknights

out of Club Libra on August 29, 2012, at which time the pedestrian barricades that

BPC had leased to Blacknights, and the equipment that Benn had leased to

Blacknights, remained on the premises.

      On August 22, 2012, King Properties sued Blacknights, as lessee, and

Hawthorne and Tarrik Mabon, as lease guarantors, to recover for rent, taxes, and

insurance allegedly owing under a lease agreement with respect to the premises. In

an answer verified by Hawthorn and Mabon, the defendants asserted that the personal

property on the premises was both leased and owned. In discovery responses filed in

2013, Blacknights, Hawthorn, and Mabon identified the items remaining on the

                                         4
Property as including “30 barricades (Leased Equipment),” six “DJ Speakers . . .

(Leased Equipment)” and “Sound and Lighting Equipment (Leased Equipment).” In

their discovery responses, Hawthorn and Mabon also identified “Bo Phillips” and

“Rogelio Benn” as two of the individuals with whom they or Blacknights “conducted

business and/or leased equipment from August 1, 2011 until August 25, 2012.”

      1. BPC and Benn contend that the trial court erred in granting summary

judgment to appellees on their claim for trover and conversion of their personal

property.3 Conversion constitutes “an unauthorized assumption and exercise of the

right of ownership over personal property belonging to another, in hostility to his

rights; an act of dominion over the personal property of another inconsistent with his

rights; or an unauthorized appropriation.” (Citations and punctuation omitted.)

Maryland Cas. Ins. Co. v. Welchel, 257 Ga. 259, 261 (1) (356 SE2d 877) (1987). To

establish a prima facie case for conversion, “the complaining party must show (1) title

to the property or the right of possession, (2) actual possession in the other party, (3)

demand for return of the property, and (4) refusal by the other party to return the

property.” (Citation and punctuation omitted.) Trey Inman & Assocs., P.C. v. Bank

      3
        “The gist of [a trover] action is conversion.” Powers v. Wren, 198 Ga. 316,
319 (1) (31 SE2d 713) (1944).

                                           5
of America, N.A., 306 Ga. App. 451, 457 (4) (702 SE2d 711) (2010). See Hooks v.

Cobb Center &c., Inc, 241 Ga. App. 305, 308 (5) (527 SE2d 566) (1999) (accord).

      The parties agree that Blacknights was in possession of personal property when

King Properties locked it out of the Premises. And “[i]t is presumed that title follows

the possession of the property.” (Citation omitted.) Hinchcliffe v. Pinson, 87 Ga. App.

526, 529 (74 SE2d 497) (1953). The presumption that one in possession of personal

property is the owner of that property is, however, a rebuttable presumption. See

Hattaway v. Keefe, 191 Ga. App. 315, 317 (1) (381 SE2d 569) (1989). As set forth

above, BPC and Benn came forward with evidence, including statements by

Blacknights and its members, from which a trier of fact could conclude that BPC

owned the pedestrian barricades and Benn owned the sound and lighting equipment

which was in the possession of Blacknights when Blacknights was locked out of the

premises. The appellees claim that the evidence was insufficient because of a lack of

serial numbers or other particular identifying information as to the claimed property.

As to BPC, appellees argue that the delivery ticket for the pedestrian barricades

shows 50, not 30, were delivered; there was a lack of evidence of ongoing rental

payments for the barricades; the person who ordered the barricades, Rowan Reid, was

not shown to be associated with Club Libra or Blacknights; and Craig’s affidavit and

                                          6
Hawthorne’s discovery responses are inconsistent as to the date of the lease. With

respect to Benn, the appellees argue that equipment listed in the lease agreement for

the DJ sound and lighting equipment was inconsistent with the demand letter for the

return of equipment sent by Benn’s counsel and with the list of leased equipment

produced in discovery by Blacknights; the complaint alleged Benn delivered 42

pieces of “sound and lighting” equipment but Hawthorne’s affidavit refers to 42

pieces of “sound, stage, and lighting equipment” (emphasis supplied); and Benn

failed to come forward with any evidence showing periodic payments consistent with

a lease. However, while the appellees point to inconsistencies and conflicts in the

evidence, they were for the jury to resolve. See Gateway Bank & Trust v. Timms, 259

Ga. App. 299, 300 (1) (577 SE2d 15) (2003) (in trial for conversion of a trailer,

conflicting evidence as to true ownership of the trailer, notwithstanding the lack of

serial number or other identifying information as to the trailer upon manufacture, was

sufficient to support the jury’s verdict).

      The appellees also rely on evidence that King Properties retained a landlord’s

lien against Blacknights’ property. They do not, however, rely on a statutory

                                             7
landlord’s lien.4 Rather, King Properties shows that, under its lease agreement5 with

Blacknights, it was entitled to retain possession of Blacknights’ personal property

“until all charges of any kind” were paid.6 See Colonial Self Storage, Inc. v. Concord

Properties, Inc., 147 Ga. App. 493, 494 (1) (249 SE2d 310) (1978) (rental contract

allowed landlord to seize tenant’s personal property upon non-payment of rent).

However, the appellees do not show that King Properties was authorized under its

agreement with Blacknights, or on any other basis, to retain personal property that

Blacknights did not own pending satisfaction of Blacknights’ obligation to King

      4
       Compare OCGA § 44-14-341 (“Landlords shall . . . have a general lien on the
property of the debtor which is subject to levy and sale, which general lien shall date
from the time of the levy of a distress warrant to enforce the general lien.”).
      5
         Although the lease attached to King Properties’ motion for summary
judgment was not expressly authenticated, we agree with King Properties that the trial
court was authorized to consider the agreement to be authenticated by the
circumstantial evidence, which included the production of the lease during discovery
and the appearance and contents of the document. See Nyankojo v. North Star Capital
Acquisition, 298 Ga. App. 6, 8 (679 SE2d 57) (2009) (documents which contained
very specific information and signatures on behalf of buyer and seller was sufficient
circumstantial evidence of authentication); Salinas v. Skelton, 249 Ga. App. 217, 220-
221 (1) (547 SE2d 289) (2001) (party’s production of document during discovery is
circumstantial evidence of authentication).
      6
       The lease provided that “[u]pon termination of this lease . . . , or upon default
by Lessee . . . , Lessor may enter the leased premises and remove any and all personal
property of Lessee and may retain possession of such personal property until all
charges of any kind, including rent, storage, or damages, shall be paid in full.”

                                           8
Properties. They do suggest that, if BPC and Benn are the true owners of the personal

property at issue, then King Properties was entitled to retain such property pending

payment of storage fees, which the appellees’ counsel characterized as an “offset” at

summary judgment hearing. But pretermitting whether King Properties could assess

a storage fee,7 they have not offered BPC and Benn the opportunity to take the

property at issue upon payment of such a fee, and they do not show thereby an

absence of triable issues of material fact as to BPC’s and Benn’s title and right to

possession that would authorize the grant of summary judgment to the appellees on

the conversion claim.8

      In addition to evidence as to their title, BPC and Benn came forward with

evidence that King Properties was in possession of their personal property, had

received their demands for the return of their property, and had refused those

      7
         The appellees rely on Domestic Sewing Machine Co. v. Watters, 50 Ga. 573,
575 (1874), which found that the “true limit” of the lien of a livery man or inn keeper
is that it “is only good against the true owner or prior incumbrancer for the expense
of feeding or taking care of that particular article.”
      8
         The appellees also argue that BPC and Benn failed to preserve their argument
on appeal that, under the Uniform Commercial Code – Leases, OCGA § 11-2A-101
et seq., the creditor of the lessee of goods takes subject to that lease. We agree with
appellees that BPC and Benn failed to raise the argument below, and we do not
address it here.

                                          9
demands. The record shows that in 2013, counsel for BPC and Benn sent letters to

King Properties’ counsel demanding the return of BPC’s pedestrian barricades and

Benn’s sound and lighting equipment. King, the sole owner of King Properties, later

acknowledged in his deposition that he received the demand letters. King also

acknowledged that King Properties owns the premises, which it rented to

Blacknights, but that he locked Blacknights out of the premises when it failed to pay

rent. King testified that, as of the time of his deposition in 2014, there had been no

tenants in the premises after Blacknights. King acknowledged that there remained

sound and lighting equipment, as well as pedestrian barricades, on the premises.

According to King, none of the sound and lighting equipment, nor any of the

pedestrian barricades, had been taken off the premises. King intended to hold onto all

of the personal property on the premises until he received payment from Blacknights,

and, in the event Blacknights failed to pay, he intended to dispose of it in a sheriff’s

sale.

        In light of the foregoing, as to defendant King Properties, we conclude that

BPC and Benn came forward with evidence to show a triable issue of fact as to each

element of their claim for conversion. As for defendant King, the evidence shows that

King was the sole member of King Properties, a limited liability company. “A LLC

                                          10
member may be held individually liable if he or she personally participates or

cooperates in a tort committed by the LLC or directs it to be done.” (Citations

omitted.) Milk v. Total Pay & HR Solutions, Inc., 280 Ga. App. 449, 454 (634 SE2d

208) (2006). If King Properties committed the tort of conversion of BPC’s and

Benn’s property, a jury could find that King participated in and directed that

conversion and was therefore personally liable. See BTL COM v. Vachon, 278 Ga.

App. 256, 260 (1) (628 SE2d 690) (2006) (Summary judgment in favor of individual

defendants was improper as there remained issues of fact as to whether they

participated in false representations that induced plaintiff to enter into agreement with

the defendants’ company.); Jennings v. Smith, 226 Ga. App. 765, 766-767 (1) (484

SE2d 362) (1997) (If a jury found the corporation negligent in constructing or

repairing the house, it could also find appellee, a corporate officer, personally liable

for such negligence because he specifically directed or participated in the

construction and repairs.). It follows that the trial court erred in granting the

appellees’ motion for summary judgment as to BPC’s and Benn’s conversion claim.

      2. BPC and Benn further contend that the trial court erred in granting the

appellees’ motion for summary judgment as to their claim for imposition of a

constructive trust. We agree. In their complaint, BPC and Benn asked that a

                                           11
constructive trust be placed on their property as it was being held by the appellees

contrary to their lawful rights. “A constructive trust arises not from the intent of the

parties, but by equity with respect to property acquired by fraud, or although acquired

without fraud where it is against equity that the property should be retained by the

one who holds it.” Aetna Life Ins. Co. v. Weekes, 241 Ga. 169, 172 (1) (244 SE2d 46)

(1978). See OCGA §53-12-132 (a) (A constructive trust is “implied whenever the

circumstances are such that the person holding legal title to property, either from

fraud or otherwise, cannot enjoy the beneficial interest in the property without

violating some established principle of equity.”). Because material issues of fact

remained as to whether appellees, inconsistently with BPC’s and Benn’s rights and

contrary to equity, exercised dominion over their property, summary judgment was

not proper as to the claim for imposition of a constructive trust. See Gibbs v. Dodson,

229 Ga. App. 64, 69 (2) (492 SE2d 923) (1997) (trial court did not err in denying

summary judgment on appellee’s counterclaim for a constructive trust on an

insurance policy, which claim would have become viable upon appellant’s assertion

of paramount right to the policy, “thereby engaging in an act of dominion hostile to

[appellee’s] ownership rights and contrary to equity”).

                                          12
      3. BPC and Benn also contend that the trial court erred in granting the

appellees’ motion for summary judgment on their claim for punitive damages. We

agree. Punitive damages may be awarded in an action for conversion, which is an

intentional tort, “provided one or more of the criteria in OCGA § 51-12-5.1 (b) are

met.” Gateway Bank & Trust v. Timms, 259 Ga. App. at 301 (3). See Taylor v.

Powertel, Inc., 250 Ga. App. 356, 357 (1) (b) (551 SE2d 765) (2001) (finding that

actions for trover or for conversion are intentional torts). Punitive damages are

available “only in such tort actions in which it is proven by clear and convincing

evidence that the defendant’s actions showed willful misconduct, malice, fraud,

wantonness, oppression, or that entire want of care which would raise the

presumption of conscious indifference to consequences.” OCGA § 51-12-5.1 (b).

Viewing the evidence in a light most favorable to BPC and Benn, a trier of fact could

find that appellees became aware in pursuit of their claims against Blacknights that

King Properties was in possession of property that did not belong to Blacknights and

which King Properties was not entitled to retain under its agreement with

Blacknights. A trier of fact could also conclude that the appellees were thereafter

unwilling to return that property to BPC and Benn, its true owners, upon their

demand, thereby showing “that entire want of care which would raise the presumption

                                         13
of conscious indifference to consequences.” Id. See Gateway Bank & Trust v. Timms,

259 Ga. App. at 301 (3) (where in trover action bank did not hold title to seized

trailer, but held a UCC financing statement against property of the true owner’s son,

and made no effort to identify the son as the owner of the trailer within a year of its

seizure, and, further, the bank’s loan officer responded to the owner’s request for the

return of her trailer by merely referring her to the bank’s counsel, there existed some

clear and convincing evidence authorizing the jury’s award of punitive damages).

      4. BPC and Benn further maintain that the trial court erred in granting summary

judgment to the appellees on BPC’s and Benn’s claim for attorney fees on account of

the appellees’ bad faith. See OCGA § 13-6-11.9 “Bad faith warranting an award of

attorney fees must arise out of the transaction on which the cause of action is

predicated, and it may be found in how the defendant acted in his dealing with the

plaintiff.” (Footnote omitted.) Foxchase v. Cliatt, 254 Ga. App. 239, 240 (2) (562

SE2d 221) (2002). As we noted in Division 3, supra, conversion is considered an

      9
       “The expenses of litigation generally shall not be allowed as a part of the
damages; but where the plaintiff has specially pleaded and has made prayer therefor
and where the defendant has acted in bad faith, has been stubbornly litigious, or has
caused the plaintiff unnecessary trouble and expense, the jury may allow them.”
OCGA § 13-6-11. The statute “applies to both contract and tort cases.” Lowery v.
Roper, 293 Ga. App. 243, 244 n. 2 (666 SE2d 710) (2008).

                                          14
intentional tort. And “[e]very intentional tort invokes a species of bad faith and

entitles a person so wronged to recover the expenses of litigation including attorney

fees.” (Citation and punctuation omitted.) Bunch v. Byington, 292 Ga. App. 497, 506

(5) (664 SE2d 842) (2008). See Ponce de Leon Condominiums v. Di Girolamo, 238

Ga. 188, 190 (2) (232 SE2d 62) (1977) (accord). The same evidence which, if viewed

in a light most favorable to BPC and Benn, would authorize an award of punitive

damages would also authorize an award of attorney fees. See id. (same testimony that

authorized jury’s award of punitive damages also provided authorization for jury to

find that appellants acted in bad faith). Therefore, the trial court also erred in granting

summary judgment to the appellees on BPC’s and Benn’s claim for attorney fees.

       5. BPC and Benn also maintain that the trial court erred in denying their motion

to compel discovery as moot. The record shows that BPC and Benn moved to compel

the appellees to allow them access to the premises for purposes of inspecting their

personal property. The trial court found the motion to compel to be moot because the

appellees were entitled to summary judgment on all of BPC’s and Benn’s claims. As

we found supra, however, the trial court erred in granting summary judgment on

BPC’s and Benn’s claim for conversion, among other claims.

                                            15
      Although the motion to compel was filed after the conclusion of the six-month

discovery period, it was not necessarily too late to be considered, as appellees

contend. See Fisher v. Bd. of Commrs. of Douglas County, 200 Ga. App. 353, 354 (1)

(408 SE2d 120) (1991) (“So long as discovery is promptly and diligently pursued by

the moving party within the discovery period . . . , a motion to compel or for sanctions

may be brought after the expiration of the discovery period.”). Nor do we find, as the

appellees argue, that BPC and Benn waived this claim of error by failing to ask the

trial court continue or set aside its ruling on the summary judgment motion pending

resolution of the motion to compel. See Mallard v. Forest Heights Water Works, 260

Ga. App. 750, 752 (2) (580 SE2d 602) (2003) (holding that appellant waived

argument that the trial court erred by considering appellee’s summary judgment

motion without first ruling on appellant’s motion to compel discovery because

appellant never moved to continue the summary judgment ruling or otherwise object

at the trial level). The authority relied upon by appellees is distinguishable because

BPC and Benn do not contend that the trial court erred in ruling on their motion for

summary judgment before ruling on the motion to compel. Rather, because genuine

issues of fact remain for the jury on BPC’s and Benn’s claim for conversion, the

motion to compel was not moot and “may again be presented to the trial court for

                                          16
ruling.” Daniel v. Earle, 174 Ga. App. 649, 650 (2) (331 SE2d 19) (1985) (as the trial

court determined the motion to compel to be moot in view of its grant of summary

judgment to the appellee, but this court found that genuine issues of material fact

remained for the jury, appellant was entitled to pursue a ruling on his motion to

compel).

      6. Lastly, we consider BPC’s and Benn’s argument that the trial court erred in

denying their cross-motion for summary judgment on the issue of the appellees’

liability on their conversion claim. Viewing the evidence in a light most favorable to

the appellees for purposes of this claim of error, the appellees have pointed to

evidence, including the lack of ongoing lease or rental payments, from which a trier

of fact might find that neither BPC nor Benn overcame the presumption that property

in possession of Blacknights was owned by Blacknights, and that the property was

therefore lawfully in the possession of King Properties under its agreement with

Blacknights. It follows that the trial court did not err in denying BPC’s and Benn’s

cross-motion for summary judgment.

      In summary, the trial court erred in granting summary judgment to the

appellees on BPC’s and Benn’s claims for conversion, imposition of a constructive

trust, punitive damages, and attorney fees. BPC’s and Benn’s motion to compel was

                                         17
not moot and may again be presented to the trial court for consideration. The trial

court’s denial of BPC’s and Benn’s cross-motion for summary judgment is affirmed.

      Judgment affirmed in part and reversed in part. McFadden, J., concurs.

Dillard, J., concurs in judgment only.

                                         18
 A15A2003. BO PHILLIPS COMPANY, INC. et al. v. R. L. KING

       PROPERTIES, LLC et al.

      DILLARD, Judge, concurring in judgment only.

      I concur in judgment only because I do not agree with all that is said in the

majority opinion. As a result, the majority’s opinion decides only the issues presented

in the case sub judice and may not be cited as binding precedent. See Court of

Appeals Rule 33 (a).