Court Opinion

ID: 9391876
Source: CourtListenerOpinion
Date Created: 2023-05-03 15:04:36.651628+00
Date Added: 2024-06-11T17:18:28.549637
License: Public Domain

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                              FOURTH DISTRICT

             HOLLYWOOD IMPORTS LIMITED, INC. d/b/a
                AUTONATION HONDA HOLLYWOOD,
                          Appellant,

                                     v.

             NATIONWIDE FINANCIAL SERVICES, LLC and
                   JAVIER FERNANDO MURCIA,
                           Appellees.

                               No. 4D22-567

                               [May 3, 2023]

   Appeal from the County Court for the Seventeenth Judicial Circuit,
Broward County; Corey Amanda Cawthon, Judge; L.T. Case No.
COSO13012404.

   Nancy W. Gregoire Stamper of Birnbaum, Lippman & Gregoire, PLLC,
Fort Lauderdale, and Richard A. Ivers of the Law Office of Richard A. Ivers,
Coconut Creek, for appellant.

  Ronald R. Torres of the Torres Law Offices, Weston, for appellee
Nationwide Financial Services, LLC.

KLINGENSMITH, C.J.

   Appellant Hollywood Imports Limited, Inc., doing business as
AutoNation Honda Hollywood, appeals the trial court’s final judgment for
conversion following a non-jury trial in favor of appellee Nationwide
Financial Services, LLC. We affirm the trial court’s final judgment in all
respects except for its finding that appellee was entitled to the fair market
value of the vehicle at the center of the dispute. On that issue, we reverse.

   In 2012, a buyer entered a retail installment sale contract with a seller
for the purchase of a Volkswagen that provided for nine monthly
payments. That contract was then assigned to Nationwide. The issued
certificate of title reflected the buyer was the registered owner and
Nationwide was the first lienholder. However, the buyer failed to make the
last payment due.
   The buyer then signed another contract to purchase a vehicle from
Hollywood Imports and used the Volkswagen as a trade-in. Hollywood
Imports claims the buyer represented that no outstanding liens existed
against the Volkswagen, he owned the vehicle free and clear, and he would
clear up the discrepancy in the title report showing Nationwide’s
outstanding lien. Soon after, Hollywood Imports received a signed lien
satisfaction form reflecting Nationwide’s lien had been satisfied.
Nationwide alleges the lien satisfaction document contained the forged
signature of Nationwide’s authorized representative.

   The buyer then signed an application for duplicate title for Hollywood
Imports, which was submitted along with the contested lien satisfaction
form to the Department of Motor Vehicles (“DMV”). The DMV issued a
duplicate certificate of title for the Volkswagen showing the buyer as the
registered owner and without naming Nationwide as the first lienholder.
Afterwards, Hollywood Imports sold the vehicle to another customer.
   Nationwide filed a complaint for conversion against Hollywood Imports
in county court, claiming damages of $15,000.00. After a non-jury trial,
the county court entered final judgments that were later reversed on
appeal by the circuit court sitting in its appellate capacity 1 and remanded
back to the county court.

    After the case went back to county court, Nationwide moved for entry
of final judgment in its favor, arguing it was entitled to judgment for
$15,000.00, plus prejudgment interest, because that was the maximum
which the court could award and because it was the “fair market value” of
the vehicle.     Hollywood Imports moved for summary judgment on
damages, arguing Nationwide’s recovery was limited to its interest in the
car, specifically the unpaid $2,018.45 installment which represented the
balance of its outstanding lien. The county court entered final judgment
in favor of Nationwide, and relied on the Fifth District’s opinion in Page v.
Matthews, 386 So. 2d 815, 817 (Fla. 5th DCA 1980), to find that because
Hollywood Imports was not in privity of contract with Nationwide, and thus
was a “stranger” to the sales contract, Nationwide could recover the
Volkswagen’s full value. This appeal followed.

    “The appropriate measure of damages, as compared with the amount
of damages awarded, involves a legal question reviewable on appeal.” R &
B Holding Co., Inc. v. Christopher Advert. Grp., Inc., 994 So. 2d 329, 331

1 The first appeal was prior to this court assuming jurisdiction of county court
appeals. See Fla. R. App. P. 9.030(b); In re Amends. to Fla. Rule of App. Proc.
9.030, 285 So. 3d 1246 (Fla. 2019).

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(Fla. 3d DCA 2008). As a result, our review of the trial court’s damage
award is de novo. See D’Angelo v. Fitzmaurice, 863 So. 2d 311, 314 (Fla.
2003) (“The standard of review for the pure question of law before us is de
novo.”).

    “In tort actions, the measure of damages [awarded] seeks to restore the
victim to the position he would be in had the wrong not been committed.”
Ashland Oil, Inc. v. Pickard, 269 So. 2d 714, 723 (Fla. 3d DCA 1972).
Ordinarily, the damages which an owner in a conversion action can recover
is “the fair market value of the property at the time of the conversion plus
legal interest to the date of the verdict.” Cutler v. Pelletier, 507 So. 2d 676,
679 (Fla. 4th DCA 1987).

   Here, Nationwide was not the Volkswagen’s owner, and only had an
interest in the car as a lienholder. It is well settled that “one who has a
special interest in personal property can only recover in a conversion
action the value of his interest in the property.” Mercury Motor Exp., Inc.
v. Crockett, 422 So. 2d 358, 359 (Fla. 1st DCA 1982) (quoting Page, 386
So. 2d at 816); see also Fletcher v. Dees, 134 So. 234, 235 (Fla. 1931)
(holding that “one who has a special interest can only recover the value of
his special interest in the property”); Stearns v. Landmark First Nat’l Bank
of Fort Lauderdale, 498 So. 2d 1001, 1002 (Fla. 4th DCA 1986) (plaintiff
in a conversion action against bank could pursue the claim only to the
extent of her one-half interest in the property).

    The “stranger” rule used by the lower court should not be applied to
improperly award Nationwide the Volkswagen’s fair market value and, in
effect, give them a windfall. The rationale of the “stranger” rule allows
special interest holders to recover the full value of the property but only in
cases where the holder of such limited or qualified interest is also liable to
a person owning a superior or remainder interest. See, e.g., First Tenn.
Bank, Nat’l Ass’n v. Graphic Arts Ctr., Inc., 859 S.W.2d 858, 867 (Mo. Ct.
App. 1993). The general owner of the Volkswagen in this case was the
buyer, while Nationwide only had a security interest by way of a lien.

   In other words, lienholders may recover the fair market value amount
from wrongdoers in a conversion action only when the special interest
owner is answerable to the general owner for whatever interest remains
after the special claim is satisfied. See id. The reason for allowing such
recovery in those limited cases is because the party having the limited or
qualified interest is liable themselves to the owner of the remaining
interest. Thus, to be adequately compensated, the special interest holder
must receive sufficient compensation not only to compensate for the

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holder’s loss but also to satisfy the demands of such other owners who
possess a superior interest.

  Nothing in the evidence presented to the lower court suggested that
Nationwide was responsible to another party holding any superior interest.
Nationwide’s only interest remaining in the subject vehicle was the one
unpaid monthly installment.         Therefore, the rationale behind the
application of the “stranger” rule does not apply here.

     While Florida has no statute covering the act of conversion, by analogy
the replevin statute, section 78.19, Florida Statutes (2013), is instructive.
That statute provides: “[W]hen plaintiff’s interest in the property is based
on a claim of lien or some special interest therein, the judgment shall be
only for the amount of the lien or the value of such special interest and costs
. . . .” § 78.19(1), Fla. Stat. (2013) (emphasis added). See Littman v. Com.
Bank & Tr. Co., 425 So. 2d 636, 641 (Fla. 3d DCA 1983) (emphasis added)
(requiring appellants to pay the remaining balance under the security
agreement as damages, after both parties had purchased and resold the
equipment subject to the bank’s lien, “indicating at least some knowledge
and acceptance of the lien as the property’s true value”).

    We decline to permit parties in conversion cases to exceed
compensatory limits to impose a penalty upon a defendant, thus allowing
a conversion action to take the place of other remedies such as civil theft,
which allows an injured party to recover an amount exceeding those limits.
“[T]he purpose of compensatory tort damages is to compensate”; it is not
the purpose of such damages “to punish defendants or bestow a windfall
upon plaintiffs.” MCI Worldcom Network Servs., Inc. v. Mastec, Inc., 995
So. 2d 221, 224 (Fla. 2008) (quoting Coop. Leasing, Inc. v. Johnson, 872
So. 2d 956, 958 (Fla. 2d DCA 2004)). As the Florida Supreme Court
explained:

      The fundamental principle of the law of damages is that the
      person injured by breach of contract or by wrongful or
      negligent act or omission shall have fair and just
      compensation commensurate with the loss sustained in
      consequence of the defendants act which give[s] rise to the
      action. In other words, the damages awarded should be equal
      to and precisely commensurate with the injury sustained.

MCI Worldcom, 995 So. 2d at 224 (quoting Hanna v. Martin, 49 So. 2d 585,
587 (Fla. 1950)). “The view that a windfall, if any is to be enjoyed, should
go to the plaintiff borders too closely on approval of unwarranted punitive

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damages, and it is a view not espoused by our cases.” Fla. Physician’s Ins.
Reciprocal v. Stanley, 452 So. 2d 514, 516 (Fla. 1984) (citation omitted).

    Accordingly, we reverse the award of the vehicle’s fair market value to
Nationwide and remand for proceedings consistent with this opinion. We
affirm on all other issues without comment.

   Affirmed in part, reversed in part, and remanded.

GERBER and ARTAU, JJ., concur.

                           *         *        *

   Not final until disposition of timely filed motion for rehearing.

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