CLABAUGH v. GRANT

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CLABAUGH v. GRANT

2015 OK CIV APP 33

347 P.3d 1044

Case Number: 111292

Decided: 06/20/2014

Mandate Issued: 04/15/2015

DIVISION III

THE COURT OF CIVIL APPEALS OF THE STATE OF OKLAHOMA, DIVISION III

Cite as: 2015 OK CIV APP 33 , 347 P.3d 1044

JUNE CLABAUGH, Plaintiff/Appellee,

v.

JERRY GRANT,

Defendant/Third-Party Plaintiff/Appellant,

v.

FIRST AMERICAN BANK &

TRUST, Third-Party Defendant/Appellee.

APPEAL FROM THE DISTRICT COURT OF

McCLAIN COUNTY,

OKLAHOMA

HONORABLE TOM A. LUCAS, JUDGE

AFFIRMED IN PART; REVERSED IN PART

Jack Tracy, Purcell, Oklahoma, for Plaintiff/Appellee,

Randall K. Calvert,

Rabindranath Ramana, Denielle Williams, CALVERT LAW FIRM, Oklahoma City,

Oklahoma, for Defendant/Third-Party Plaintiff/Appellant,

Chris Condren, Kari

Y. Hawkins, PIERCE COUCH HENDRICKSON BAYSINGER & GREEN, L.L.P., Oklahoma

City, Oklahoma,for Third-Party Defendant/Appellee.

ROBERT D. BELL, PRESIDING JUDGE:

¶1 Defendant/Third-Party Plaintiff/Appellant, Jerry Grant, appeals from the

trial court's judgment rendered on a jury verdict in favor of

Plaintiff/Appellee, June Clabaugh, in this action for conversion and fraud. For

the reasons set forth below, we affirm in part and reverse in part.

¶2 On January 27, 2005, Plaintiff entered into a rental agreement for a

safety deposit box with Third-Party Defendant/Appellee, First American Bank

& Trust (Bank). Plaintiff and her daughter, Alicia Nelson, placed in safety

deposit box #267 her deceased father's large coin collection, along with a

variety of jewelry and other family heirlooms. Included in the box was an old

prescription bottle filled with coins. The bottle's prescription label from

Turner's Pharmacy in Purcell bore the name "Ar. Jones." Plaintiff's deceased

mother's name was Artibus Jones. Plaintiff testified the five inch by five inch

safety deposit box was completely full and weighed between 30 and 40 pounds.

Plaintiff timely paid her rent on the box every year thereafter and did not seek

to reenter the box until 2010. Trial testimony from Plaintiff's expert witness

placed the value of the coin collection at between one and two million

dollars.

¶3 In April 2008, Bank accidentally expunged Plaintiff's safety deposit

records from its computer system (although a Bank officer later conceded there

were other records available to identify the owner of box #267). Purportedly

believing it was holding an abandoned safety deposit box, Bank employees opened

and physically examined the contents of box #267 in the fall of 2009 in an

effort to identify the owner. The only item in the box that contained any

distinguishing information was the prescription pill bottle with the name "Ar.

Jones."

¶4 When Bank discovered records indicating an "Arley Jones" was a former

account holder, it sought to determine whether that Arley Jones was the same

person as the "Ar. Jones" listed on the pill bottle. Bank records revealed Arley

Jones' account had been closed years earlier by Defendant, his nephew. Bank

contacted Defendant, who confirmed he was the personal representative of Arley

Jones' estate. Testimony conflicted as to whether Defendant informed Bank he had

been discharged as the personal representative of his uncle's estate in late

2006. At Bank's request, Defendant produced the Letters of Administration

appointing him as the estate's personal representative in May 2006. On October

29, 2009, Bank drafted and had Defendant execute a hold harmless agreement.

Defendant signed the document as "Personal Representative" of the estate of

Arley Austin Jones. Bank thereafter delivered the contents of Plaintiff's safety

deposit box to Defendant, who claims he sold most of the contents to a coin

dealer a few days later for $488.00. Defendant admitted he was not the heir of

his uncle's estate, he did not have approval from the sole heir to sell the

property, and he did not contact the sole heir to disclose the transaction or

remit to her the $488.00.

¶5 When Plaintiff's daughter sought access to her safety deposit box the

following year, Bank revealed it had mistakenly released the contents to an

unnamed man. Bank contacted Defendant, who disclosed he had disposed of the box

contents. Plaintiff then sued Bank and several "Doe" defendants for conversion,

gross negligence, fraud and emotional distress. She later substituted Defendant

as "Doe #1" after learning his identity. Defendant filed a counter-claim against

Plaintiff for defamation (later abandoned) and a cross-claim against Bank for

negligence and malfeasance. Plaintiff dismissed her claims against Bank after

entering into a confidential settlement agreement. The pre-trial order listed

Plaintiff's causes of action against Defendant as fraud, conversion and punitive

damages. Defendant's claim against Bank was listed as negligence. Bank's

pre-trial motion for summary judgment was overruled.

¶6 A jury trial was conducted from April 30 to May 3, 2012. At the close of

evidence, Bank moved for a directed verdict/motion to dismiss Defendant's

cross-claim. The trial court granted the motion, finding Bank owed no duty to

Defendant. Plaintiff's claims against Defendant were submitted to the jury,

which returned a verdict finding:

1. By a preponderance of the evidence, Defendant "converted some or all

of Plaintiff's property to his own use";

2. By clear and convincing evidence, Defendant "committed fraud against"

Plaintiff; and

3. By clear and convincing evidence, Defendant "acted in reckless

disregard of the rights of" Plaintiff.

The jury awarded Plaintiff $1,250,000.00 in actual damages and, after a

separate proceeding, $125,000.00 in punitive damages. The trial judge entered

judgment to that effect. Defendant's motions for judgment notwithstanding the

verdict, new trial and for an offset of the Bank settlement proceeds were

denied. From said judgment, Defendant appeals. 1

¶7 We first address Defendant's claim that the trial court erroneously

dismissed his negligence cross-claim against Bank. The elements of negligence

are "(1) the existence of a duty on part of defendant to protect plaintiff from

injury; (2) a violation of that duty; and (3) injury proximately resulting

therefrom." Brigance v. Velvet Dove Restaurant, Inc. , 1986 OK 41, ¶7 , 725 P.2d 300 . Under this standard,

we must initially decide the threshold question of whether Bank owed a duty to

protect Defendant from injury, because there can be no actionable negligence in

the absence of a duty. Iglehart v. Board of County Comm'rs of Rogers

County , 2002 OK 76, ¶10 , 60 P.3d 497 ; Nicholson v.

Tacker , 1973 OK 75, ¶11 , 512 P.2d 156 . "Just because the

defendant has created a risk which harmed the plaintiff that does not mean that,

in the absence of some duty to the plaintiff, the defendant will be held

liable." Id . "The question of whether a duty is owed by a defendant is

one of law; . . ." Iglehart at ¶11 .

¶8 Bank argued at trial it owed no duty to Defendant because he was not a

customer. However, as Defendant correctly notes, "liability in negligence is not

necessarily dependent upon a pre-existing privity in legal relationship between

the person injured and the person causing the injury." Independent-Eastern

Torpedo Co. v. Price , 1953 OK

74, ¶42 , 258 P.2d 189 . As the

Iglehart Court detailed:

We recognize the traditional common-law rule that whenever one person is

by circumstances placed in such a position with regard to another, that, if

he (she) did not use ordinary care and skill in his (her) own conduct, he

would cause danger of injury to the person or property of the other, a duty

arises to use ordinary care and skill to avoid such danger. Among a number

of factors used to determine the existence of a duty of care, the most

important consideration is foreseeability. Generally a "defendant owes a

duty of care to all persons who are foreseeably endangered by his conduct

with respect to all risks which make the conduct unreasonably dangerous."

Foreseeability establishes a "zone of risk," which is to say that it forms a

basis for assessing whether the conduct "creates a generalized and

foreseeable risk of harming others."

Iglehart , 2002 OK 76

at ¶10 (emphasis and footnotes omitted). See also Union Bank of Tucson, Ariz.

v. Griffin , 1989 OK 47, ¶13 ,

771 P.2d 219 , which held, "The

law imposes upon a person engaged in the prosecution of any work an obligation

to use ordinary care to perform it in such a manner as not to endanger the

property of others."

¶9 In the present case, Defendant argues Bank had a duty to exercise ordinary

care in dealing with him and Bank breached that duty. Specifically, Defendant

asserts it was reasonably foreseeable Plaintiff would some day return to Bank to

claim her property after Defendant had disposed of it, Plaintiff would then sue

Defendant, and Defendant would incur damages as a result. Defendant also

contends his injury was caused predominantly by Bank's negligent acts - losing

records, extrapolating from a name on a pill bottle that Arley Jones owned the

property at issue, and misdelivering Plaintiff's property - and not by his later

disposition of the property. In any event, Defendant urges the issue of whether

his act of selling the coins constituted a foreseeable supervening event is a

fact question for a jury.

¶10 As the Iglehart Court specifically noted, duty "is not sacrosanct

in itself, but only an expression of the sum total of those considerations of

policy which lead the law to say that the particular plaintiff is entitled to

protection." Id ., 2002 OK

76 at ¶10, n.17 , quoting Prosser, Law on Torts, pp. 332-3 (3d ed.

1964) and Tarasoff v. Regents of Univ. of Cal ., 551 P.2d 334, 342 (Cal.

1976). The instant record reveals Defendant obtained the safety deposit box

contents, not in his individual capacity, but as the personal representative

of his uncle's estate . In fact, Defendant had been discharged as personal

representative on December 29, 2006, and thereafter had no lawful right to act

on behalf of his uncle's estate. The court order discharging Defendant as

personal representative also specifically stated that all after-discovered

property belonging to his uncle is exclusively vested in the uncle's sole heir.

Regardless of Defendant's claims that he later attempted to locate the sole heir

so he could give her the sale proceeds, Defendant had no authority to

obtain the subject property nor sell the same.

¶11 In White v. Shawnee Mill Co. , 1923 OK 1057 , 221 P. 1029, 1031 , the Court

held:

The rule is well settled that, if a party suffers injury while violating

a public law, the other party being also a transgressor, he cannot recover

for the injury if the unlawful act was the cause of the

injury.

White , 1923 OK 1057 at

¶3 (citations omitted). Accord Panther v. McKnight , 1926 OK 937, ¶8 , 256 P. 916 . This rule is akin to the

in pari delicto doctrine, "[t]he principle that a plaintiff who has

participated in wrongdoing may not recover damages resulting from the

wrongdoing." Black's Law Dictionary 806 (8th ed. 2004). See also Bowlan v.

Lunsford , 1936 OK 158, ¶13 ,

54 P.2d 666 (party to illegal act

may not take advantage of party in pari delicto for damages sustained

thereby).

¶12 Bank was arguably negligent vis-a-vis Defendant in transferring

Plaintiff's property to him without conducting more thorough due diligence.

However, Defendant took possession of the property and disposed of it without

any legal authority to do so. Under these circumstances and in light of the

above stated principles of law, we cannot say Defendant is entitled to

protection from Bank's acts. Thus, we hold the trial court did not err in

holding Bank owed no legally protected duty to Defendant. The dismissal of

Defendant's cross-claim is therefore affirmed.

¶13 We next find merit in Defendant's proposition that he is entitled to

judgment notwithstanding the verdict on Plaintiff's fraud claim.

The standard for determining a motion for judgment notwithstanding the

verdict (JNOV) is identical to the standard for determining a motion for

directed verdict. We review a trial court's ruling on a motion for JNOV by

the same standard used by the trial court. We consider as true all evidence

favorable to the non-moving party together with all inferences that may be

reasonably drawn therefrom, and we disregard all conflicting evidence

favorable to the moving party. A motion for JNOV should not be granted

unless there is an entire absence of proof on a material

issue.

First Nat. Bank in Durant v. Honey Creek Entm't Corp. , 2002 OK 11, ¶8 , 54 P.3d 100 (citations

omitted).

¶14 The elements of actionable fraud are:

1) a false material misrepresentation, 2) made as a positive assertion

which is either known to be false or is made recklessly without knowledge of

the truth, 3) with the intention that it be acted upon, and 4) which is

relied on by the other party to his (or her) own

detriment.

Bowman v. Presley , 2009 OK

48, ¶13 , 212 P.3d 1210 . For

purposes of the instant JNOV, we must consider as true Plaintiff's allegations

that Defendant intentionally or recklessly led Bank to believe he was still the

personal representative of his uncle's estate when he obtained Plaintiff's

property and he did so with the intention that Bank act upon such belief.

However, the record is devoid of any allegation or evidence Plaintiff

relied upon Defendant's alleged deceit to her own detriment. 2 Defendant made no

representations whatsoever to Plaintiff and Plaintiff knew nothing of

Defendant's representations to Bank at the time her property was

misappropriated. Plaintiff did not and cannot prove Defendant committed any act

of fraud against her . The trial court's decision overruling Defendant's

fraud JNOV is reversed.

¶15 Defendant also contends the trial court erred in overruling his JNOV

motion regarding Plaintiff's conversion claim. Conversion is defined as "any act

of dominion wrongfully exerted over another's personal property in denial of or

inconsistent with his rights therein." Welty v. Martinaire of Okla.,

Inc. , 1994 OK 10, ¶6 , 867 P.2d 1273 . As stated above, in

reviewing a JNOV motion this Court must consider as true all evidence favorable

to Plaintiff and disregard all Defendant's conflicting evidence. Honey

Creek , 2002 OK 11 at ¶8 .

Applying these rules to the instant case, this Court must take as true the coin

collection in Plaintiff's safety deposit box had a value of between one and two

million dollars. We must also consider as true all of Plaintiff's evidence that

indicated Defendant wrongfully exerted control over Plaintiff's property.

Conversely, we are required to disregard, among other things, Defendant's claims

that he received only $488.00 for the sale of Plaintiff's property. Under these

circumstances, we hold the trial court properly denied Defendant's conversion

JNOV motion.

¶16 In reaching the above conclusion, we specifically reject Defendant's

arguments that (1) Plaintiff was required to prove which particular items

Defendant received from Bank and (2) Defendant was merely an innocent bailee or

discoverer of lost property. With respect to the items of property received by

Defendant, Bank's officer testified it delivered all of the contents of

safety deposit box #267 to Defendant. Plaintiff, her daughter and her cousin all

testified as to the extensive coin collection inherited by Plaintiff, and

Plaintiff and her daughter testified regarding the coins, jewelry and other

valuables they placed in the safety deposit box. Plaintiff's expert testified

regarding the value of the coin collection. The issues of what items Defendant

received and the value of those items were properly submitted to the jury for

their determination.

¶17 We reject Defendant's second argument outright. Defendant was not an

innocent bailee or discoverer of lost property. Plaintiff's property was never

lost. Defendant took possession of Plaintiff's property from Bank in his

purported capacity as personal representative of his uncle's estate at a time

when he had no lawful authority to do so. Viewing the evidence in the light most

favorable to Plaintiff, the jury could properly conclude Defendant then

converted such property to his own use and in denial of Plaintiff's rights

therein.

¶18 Defendant next maintains he is entitled to a new trial because the jury

was improperly instructed regarding Plaintiff's conversion claim. We disagree.

First, we note Defendant did not object to the instructions given by the trial

court. "As a general rule, a party who makes no objection to the instructions of

the court to the jury waives any error therein." In re A.A.C.P. , 2006 OK CIV APP 32, ¶22 , 132 P.3d 644 , citing Hawkins v.

McElhanon , 1957 OK 187, ¶2 ,

315 P.2d 667 . Under such

circumstances, this Court will review only for fundamental error appearing on

the face of the instructions. Sullivan v. Forty-Second West Corp ., 1998 OK 48, ¶9 , 961 P.2d 801 .

¶19 "[A]n affirmative duty is placed upon the trial court to give

instructions which accurately reflect the law regarding the issues presented."

Id . at ¶12 (quotation omitted).

In reviewing the propriety of given instructions, the instructions are to

be viewed in whole rather than separately. And, where it appears that

instructions taken as a whole do not establish that the jury was misled or

that complaining parties' rights were prejudiced, the verdict will not be

set aside. Instructions are sufficient when, considered as a whole, they

present the law that is applicable to the issues.

CNA Ins. Co. v. Krueger, Inc., of Tulsa , 1997 OK 142, ¶15 , 949 P.2d 676, 679 (citation

omitted).

¶20 We have examined the face of the jury instructions in the present case

and find no erroneous statement of fundamental law. The jury was adequately

instructed regarding Plaintiff's conversion claim. 3 Accordingly, this proposition of error

is rejected.

¶21 Next, Defendant claims the jury's award is excessive, not supported by

the evidence and warrants a remittitur. Initially, we note it is impossible to

attribute the jury's compensatory damage award to either Plaintiff's fraud

claim, which is herein reversed, or her conversion claim. However, it is clear

both causes of action sought a singular damage award for Defendant's

misappropriation of Plaintiff's property. The jury's punitive damages award was

based upon Defendant's reckless disregard for Plaintiff's rights, see 23 O.S. 2011 §9.1; OUJI No. 5.6, via

his unauthorized taking and disposal of Plaintiff's property. Thus, under the

facts of this case, we hold the damage award is unaffected by the reversal of

Plaintiff's fraud verdict.

¶22 In Currens v. Hampton , 1997 OK 58 , 939 P.2d 1138 , the Court

reiterated:

We have traditionally held that an appellate court has no right to place

a limitation on the amount of a jury verdict unless it is convinced that the

amount bears no relation whatsoever to the evidence. The established rule is

that before a verdict of a jury may be set aside as excessive, it must

appear that the verdict is so excessive as to strike mankind, at first

blush, as being beyond all measure unreasonable and outrageous, showing the

jury to have been actuated by passion, partiality, prejudice or corruption.

. . . An appellate court may not substitute its judgment for that of the

jury in its exercise as a fact-finding body; it must consider the evidence

most favorable to the plaintiffs as establishing the facts concerning the

excessiveness of the verdict.

Currens , 1997 OK 58 at

¶10 (citations omitted).

¶23 Upon review of the instant record, we cannot say the jury's award is

excessive. Considering the evidence in the light most favorable to Plaintiff,

Defendant unlawfully absconded with between a one and two million dollar coin

collection, jewelry and other heirlooms. Plaintiff's evidence established the

coin collection contained approximately 55 vintage, solid gold Double Eagle

($20.00) gold pieces, a number of extremely rare three-legged Buffalo nickels,

hundreds of Morgan silver dollars (approximately 30 to 40 pounds of solid

silver) and various other collectible coins. She testified the family heirlooms

included two gold wedding rings and a pair of diamond earrings. Plaintiff's

expert testified $488.00 would only buy ten ounces of junk silver. Because the

evidence tends to support the jury's award, its verdict must be upheld.

¶24 Finally, we address Defendant's assertion that the jury's award should be

reduced by the amount of Plaintiff's settlement with Bank. Defendant's argument

is based upon the common law "one satisfaction" rule designed to prevent a

plaintiff from gaining double recovery. See Kirkpatrick v. Chrysler

Corp. , 1996 OK 136, ¶¶12-13 ,

920 P.2d 122 . However, 12 O.S. 2011 §832(C) states "[t]here

is no right of contribution in favor of any tort-feasor who has intentionally

caused or contributed to [the plaintiff's] injury . . . ." In the present case,

Defendant intentionally converted Plaintiff's property to his own use. He is not

entitled to any set-off based upon Bank's settlement with Plaintiff. The

judgment of the trial court is affirmed in part and reversed in part.

¶25 AFFIRMED IN PART; REVERSED IN PART.

MITCHELL, J., and GOREE, J., concur.

FOOTNOTES

1 During

the pendency of this appeal, Defendant filed with this Court a Motion for

Expedited Ruling seeking an appellate decision before Defendant's real property

was sold at sheriff's sale. Said motion was rendered moot by the trial court's

issuance of a stay of execution proceedings on January 17, 2014.

2 The

trial court did not submit OUJI No. 18.1 to the jury. The instructions given by

the court did not contain any requirement that Plaintiff must have detrimentally

relied on Defendant's misrepresentations.

3 Having

already decided Plaintiff's fraud verdict against Defendant must be overturned,

we need not determine whether the trial court's fraud instructions were

sufficient.

Citationizer © Summary of Documents Citing This Document

Cite

Name

Level

None Found.

Citationizer: Table of Authority

Cite

Name

Level

Oklahoma Court of Civil Appeals Cases

Cite Name Level

2006 OK CIV APP 32 , 132 P.3d 644 , In the Matter of A.A.C.P. Discussed

Oklahoma Supreme Court Cases

Cite Name Level

1986 OK 41 , 725 P.2d 300 , 57 OBJ 1698, Brigance v. Velvet Dove Restaurant, Inc. Discussed

1989 OK 47 , 771 P.2d 219 , 60 OBJ 813, Union Bank of Tucson, Arizona v. Griffin Discussed

1994 OK 10 , 867 P.2d 1273 , 65 OBJ 457, Welty v. Martinaire of Oklahoma, Inc. Discussed

1997 OK 58 , 939 P.2d 1138 , 68 OBJ 1645, Currens v. Hampton Discussed at Length

1953 OK 74 , 258 P.2d 189 , 208 Okla 633, INDEPENDENT-EASTERN TORPEDO CO. v. PRICE Discussed

1936 OK 158 , 54 P.2d 666 , 176 Okla. 115 , BOWLAN v. LUNSFORD Discussed

1957 OK 187 , 315 P.2d 667 , HAWKINS v. McELHANON Discussed

2002 OK 11 , 54 P.3d 100 , 73 OBJ 560, FIRST NATIONAL BANK IN DURANT v. HONEY CREEK ENTERTAINMENT CORP. Discussed at Length

1923 OK 1057 , 221 P. 1029 , 94 Okla. 260 , WHITE v. SHAWNEE MILLING CO. Discussed at Length

1973 OK 75 , 512 P.2d 156 , NICHOLSON v. TACKER Discussed

2002 OK 76 , 60 P.3d 497 , IGLEHART v. BOARD OF COUNTY COMMISSIONERS OF ROGERS COUNTY Discussed at Length

2009 OK 48 , 212 P.3d 1210 , BOWMAN v. PRESLEY Discussed

1996 OK 136 , 920 P.2d 122 , 67 OBJ 2065, Kirkpatrick v. Chrysler Corp. Discussed

1997 OK 142 , 949 P.2d 676 , 68 OBJ 3827, CNA INSURANCE CO. v. KRUEGER, INC. Discussed

1926 OK 937 , 256 P. 916 , 125 Okla. 134 , PANTHER v. McKNIGHT Discussed

1998 OK 48 , 961 P.2d 801 , 69 OBJ 2135, SULLIVAN v. FORTY SECOND WEST CORP. Discussed

Title 12. Civil Procedure

Cite Name Level

12 O.S. 832 , Joint Tort-Feasors - Contribution - Indemnity - Exemptions Cited

Title 23. Damages

Cite Name Level

23 O.S. 9 .1, Damages for Sake of Example and Punishment of Defendant - Punitive Damages Awards by Jury Cited