This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2004).
IN COURT OF APPEALS
The RiverBank MN -
Filed April 25, 2006
Chisago County District Court
File No. C6-02-856
Mark N. Jennings,
D. Sherwood McKinnis, Lindberg
& McKinnis, P.A.,
Considered and decided by Willis, Presiding Judge; Stoneburner, Judge; and Collins, Judge.*
U N P U B L I S H E D O P I N I O N
On appeal from the district court’s grant of judgment notwithstanding the verdict, appellant bank argues that the jury’s verdict should be reinstated because there was reasonable evidentiary support for the jury’s determination that appellant was not negligent and that appellant did not convert respondent’s property. Because we conclude that there was reasonable evidentiary support for the verdict, we reverse and remand for reinstatement of the jury’s verdict and the entry of judgment.
1996, respondent BargainQuest, a liquidation business of which Kerry Lund was
the sole shareholder, obtained three loans from appellant RiverBank. They were: (1) loan number 42790, in the amount of
$108,000, which was secured by real estate, (2) loan number 42791, in the
amount of $25,000, which was secured by real estate and by BargainQuest’s
inventory, equipment, and accounts receivable, and (3) loan number 43252, in
the amount of $10,000, which was secured by BargainQuest’s inventory,
equipment, and accounts receivable. In 2000,
BargainQuest defaulted on the loans.
RiverBank hired attorney James Casterton to institute a foreclosure
action on loan numbers 42790 and 42791, the two loans secured by real
estate. The foreclosures occurred on
July 20, 2001, and
RiverBank president Dean Perry also hired
attorney Thurl Quigley to bring an action on behalf of the bank on the third
loan, number 43252, to recover the pledged inventory, equipment, and accounts
receivable. Quigley requested that
RiverBank send him the documentation for the loan. On
On August 28, RiverBank served BargainQuest with the replevin summons and complaint, the order to show cause, and the temporary restraining order. The next day, BargainQuest contacted Quigley and demanded that the replevin action be dismissed because the debts on the loans referred to in the complaint had already been satisfied by the foreclosure action. Quigley then spoke with Casterton, who confirmed that the replevin complaint referred to the wrong loans. On August 29 or 30, Quigley spoke with Perry, and they decided to dismiss the replevin action and subsequently did so.
In May 2002, RiverBank brought a new action against BargainQuest for its default on loan number 43252, styled as a breach-of-contract claim; the complaint referred to the correct loan. BargainQuest counterclaimed for negligence and conversion alleged to have occurred because of the prior replevin action. BargainQuest asserted that before it received service in the replevin action, it had entered into an oral contract to sell its inventory to a third party, the temporary restraining order prevented the sale from occurring, and that BargainQuest later sold its inventory for an amount less than the amount agreed to in the oral contract. Before trial, the parties stipulated that, inter alia, if the jury found for BargainQuest, the amount of damages would be $44,475.40.
Because the parties settled RiverBank’s claims before trial, BargainQuest’s counterclaims were the only issues tried. The jury returned a special verdict that found for RiverBank on both the negligence and conversion claims. BargainQuest moved for judgment notwithstanding the verdict (JNOV) or, in the alternative, a new trial. The district court granted BargainQuest’s motion for JNOV, finding that RiverBank was liable as a result of both negligence and conversion. The district court determined that the jury’s verdict was not justified by the evidence and was contrary to the law as instructed by the court. RiverBank appeals.
D E C I S I O N
RiverBank argues that the district court
erred by granting BargainQuest’s motion for JNOV. A district court should grant JNOV
only when, “viewing the evidence in the light most favorable to the nonmoving
party, the verdict is manifestly against the entire evidence” or when, “despite
the jury’s findings of fact the moving party is entitled [to] judgment as a
matter of law.” Pouliot v. Fitzsimmons, 582 N.W.2d 221, 224 (
RiverBank contends that the record contains reasonable evidentiary support for the jury’s verdict that RiverBank was not negligent. The district court instructed the jury that negligence “is the failure to use reasonable care” and “occurs when a person does something that a reasonable person would not do or fails to do something that a reasonable person would do.” Neither party challenges the sufficiency of the jury instructions.
At trial, BargainQuest
asserted that it was injured by RiverBank’s negligence because BargainQuest had
entered into an oral agreement to sell its inventory to a third party; the
temporary restraining order issued in connection with a complaint that did not
refer to the proper loan prevented BargainQuest from completing the sale; and
BargainQuest later sold the inventory at auction for a lesser amount. The jury had before it a copy of the agreement
by which BargainQuest gave RiverBank a security interest in, inter alia, BargainQuest’s
inventory in connection with loan number 43252.
The security agreement provides that BargainQuest will not dispose of
the inventory except in the ordinary course of business at its fair market
value or at a minimum price established between RiverBank and
BargainQuest. The president of
BargainQuest testified that (1) the fair market value of the inventory was
approximately $242,000, (2) BargainQuest had orally contracted to sell the
inventory to a third party for approximately $65,000, and (3) BargainQuest
had not contacted RiverBank with regard to its attempt to sell the inventory. Because the evidence shows that BargainQuest’s
proposed sale of the inventory was in violation of RiverBank’s security
interest, the jury could reasonably conclude that BargainQuest suffered no
injury from interference with the sale. Therefore,
even though the replevin complaint referred to the wrong loans, there was
reasonable evidentiary support for the jury’s finding of no negligence on the
part of RiverBank. There is also a legal
basis for the finding. To prevail on a
negligence claim, a plaintiff must prove (1) the existence of a duty of care,
(2) a breach of that duty, (3) injury proximately caused by the breach, and (4)
damages. Gilbertson v. Leininger, 599 N.W.2d 127, 130 (
argues that the district court erred by granting BargainQuest’s motion for JNOV
on the conversion claim. Conversion is a willful act, done
without lawful justification, that interferes with property so that a person
entitled to the property is deprived of its use and possession. Larson
v. Archer-Daniels-Midland Co., 226
It is not necessary to a conversion that there should be a manual taking of the thing in question by the defendant. Nor is it necessary that it should be shown that he has applied it to his own use. Does he exercise a dominion over it in exclusion or in defiance of the plaintiff’s rights? If he does, that is, in law, a conversion, be it for his own or another person’s use.
McDonald v. Bayha, 93
We determine that there also is reasonable evidentiary support for the jury’s finding that there was no conversion. Evidence showed that (1) BargainQuest was in default on loan number 43252 and (2) BargainQuest had granted RiverBank a security interest in all of BargainQuest’s inventory in connection with that loan. And although RiverBank identified the wrong loans in its first action, and ultimately dismissed that complaint, the jury heard testimony that the complaint could have been amended to refer to the correct loan. Thus, because RiverBank had a security interest in BargainQuest’s inventory, and BargainQuest was in default of the loan that the inventory secured, there was evidence supporting the jury’s verdict that RiverBank did not exercise control over BargainQuest’s inventory in a way that was contrary to BargainQuest’s right to the inventory.
Because we conclude that the district court erred by granting JNOV, we reverse and remand for reinstatement of the jury’s verdict and the entry of judgment.
Reversed and remanded.
* Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.