Court Opinion

ID: 9764324
Source: CourtListenerOpinion
Date Created: 2023-08-29 03:19:02.216683+00
Date Added: 2024-06-11T07:29:55.836437
License: Public Domain

Robert H. Dudley, Justice, dissenting. The single issue is whether the trial judge correctly set aside the award of punitive damages. The appellant, Teresa Williams, wanted to purchase a new Ford LTD automobile. She testified that, on March 14, 1979, her father towed her 1973 Dodge Charger to O’Neal Ford, Inc., appellee, a Ford dealer in Jonesboro. She chose the car which she wished to purchase and said she wanted to trade her car toward the purchase price. The parties agreed upon a “trade-in allowance” of $1,200 for appellant’s automobile and appellant signed an agreement to that effect. The trade was contingent upon appellant securing a loan to pay the balance of the purchase price. Appellant did not deliver the certificate of title on the 1973 Dodge to appellee. Appellant testified that appellee’s salesman told her that, since her 1973 Dodge was in such bad condition, she could leave it at appellee’s place of business and they would look after it for her while she was obtaining a loan. She left her car with appellee under those conditions. A legal analysis of the facts to this stage of events shows that a trade of automobiles had occurred, conditional upon appellant’s obtaining a loan for the balance, and a bailment was in effect. There was a delivery of the car by the bailor, appellant. The bailment was upon an implied contract that the bailee, appellee, would safely keep the car and then, if the bailor obtained a loan for the balance of the purchase price, take title to the car and allow a $1,200 trade-in allowance in accordance with the sales agreement. On the other hand, if the bailor could not obtain a loan, the bailee would redeliver the car to the bailor. There is no evidence whatsoever that there was an unconditional sale of appellant’s car to appellee for a cash price of $1,200. After appellant’s car had remained in front of appellee’s place of business for a few days, it was moved to a lot behind the building where other used cars were located. Subsequently, one of appellee’s salesmen mistakenly conditionally sold appellee’s car, along with several others, to a wholesale used car dealer. The $350 sale was conditioned upon delivery of the certificate of title. Appellee never delivered title. An analysis to this stage reveals that there was substantial evidence that a conversion had occurred. A conversion by a bailee is committed by an action in derogation of a bailor’s possessory right. When appellee conditionally sold appellant’s car and delivered it to a used car wholesaler the implied contract of bailment was breached. Meanwhile, appellant was going to various financial institutions trying to borrow the balance necessary to complete the trade. On April 8, 1979, upon a final rejection by a lender, appellant returned to appellee’s place of business to get her Dodge. Appellee’s salesman could not find her car and then found that it mistakenly had been sold. He so informed appellant. Appellant immediately demanded $1,200 for her car. Appellee refused to pay this amount. The next day appellant sought legal counsel who placed appellee on notice that, unless $1,200 was paid, a suit for punitive damages would be filed. The basis of appellant’s $1,200 demand is ambiguous but it is noteworthy that appellant does not argue that there had been an unconditional sale of the Dodge for $1,200. Appellee took prompt steps to recover the car. A few days later appellee notified appellant that her car had been recovered and was available for her. The conversion ended at this point. The action in derogation of the bailor’s possessory right had ceased. The bailee sought to redeliver the car to the bailor, but she refused to accept it. The jury awarded $1,200 compensatory damages for the breach to this point and these compensatory damages are not at issue. A bailee may be liable for punitive damages if he converts goods in an intentional violation of the possessory rights of the bailor. See Ford Motor Credit Co. v. Herring, 267 Ark. 201, 589 S.W.2d 584 (1979). But here there was no intentional act. To this point, when the conversion ended, there had been no intentional act, no fraud, no malice, nor had there been oppression. The situation remained a standoff, with appellant refusing to accept the car and appellee refusing to pay $ 1,200 cash. Appellant then filed suit and the jury awarded $22,500 in punitive damages. The majority upholds the punitive award because appellee would not pay appellant $ 1,200 cash for her car. The majority position is untenable. If there had been an unconditional sale of appellant’s car to appellee for $1,200, the appellee would have been entitled to possession at all times and there could have been no conversion and hence no damages, compensatory or punitive, for conversion. Thus, even the majority must agree there was not an unconditional sale. They must agree there was a bailment and a conversion. When the bailee attempted to redeliver the car according to the implied terms of the bailment, the appellant-bailor refused to accept it. She demanded $1,200 cash, with no trade, as though there had been an unconditional sale for $1,200. She and her attorney threatened a suit for punitive damages if appellee did not pay the $1,200. The majority opinion states that liability for punitive damages accrued during this latter dispute. Yet, the conversion had ended and therefore the punitive damages cannot be for the conversion. The majority can only be punishing the appellee for refusing to pay the $1,200 without a trade of cars as agreed, yet appellee had no contractual obligation, expressed or implied, to pay this amount. The appellee had not unconditionally purchased the car for $1,200. There was only a conditional trade. The appellant still held the certificate of title. A valid dispute existed between the parties over the manner of terminating the bailment. Appellee’s contention that it did not owe $1,200 cash had a valid basis but the majority punishes appellee for refusing to modify the contract and purchase appellant’s car. The majority has created a very dangerous precedent in allowing punishment damages for refusing to modify a contract. I dissent. George Rose Smith and Hickman, JJ., join in this dissent.