may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1996).
STATE OF MINNESOTA
IN COURT OF APPEALS
Royal Ag Service, Inc.,
defendant and third-party plaintiff,
Affirmed in part, reversed in part, and remanded
File No. C695520
Norman J. Baer, Karlyn Vegoe Boraas, Fruth & Anthony, P.A., 3750 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402 (for appellant)
Thomas P. Melloy, Hall & Byers, P.A., 1010 West Saint Germain Street, Suite 600, St. Cloud, MN 56301 (for respondent Alfred Lanners)
Michael C. Glover, Kalina, Wills, Gisvold & Clark, P.L.L.P., 941 Hillwind Road Northeast, Suite 200, Minneapolis, MN 55432 (for respondent Robert Lanners)
Considered and decided by Parker, Presiding Judge, Crippen, Judge, and Short, Judge.
This breach-of-contract and conversion case arises from a corn delivery contract between Alfred Lanners and Royal Ag Services, Inc. (Royal Ag), a local grain elevator owned in part by Lanners's son. That contract provided Royal Ag would pay Lanners $2.55 per bushel of corn delivered to the elevator in 1994, and gave Lanners the option of receiving partial payment for the deliveries in the same calendar year, with the balance due on demand in 1995. In early 1995, when Lanners demanded final payment in the amount of $22,788.04, Royal Ag refused, arguing company records indicated its total 1994 payments corresponded with the amount of corn Lanners delivered in that year.
Lanners sued Royal Ag, alleging breach of contract and requesting compensation for the storage of certain pieces of Royal Ag's equipment on his property. Royal Ag filed a third-party claim against Lanners's son for conversion, claiming he had converted Royal Ag's monies when he deposited checks payable to Royal Ag into his own account to reimburse himself for personally fronting company bills. After a bench trial, the trial court dismissed Royal Ag's conversion claim and found against Royal Ag on the breach-of-contract claim, ordering judgment in favor of Lanners in the amount of $22,788.04. However, the trial court declined to award Lanners prejudgment interest on the award and found Royal Ag was not obligated to compensate Lanners for equipment storage.
On appeal, Royal Ag argues the trial court erred in: (1) calculating Royal Ag's payments to Lanners under the contract; and (2) rejecting Royal Ag's conversion claim against Lanners's son. Lanners appeals the trial court's rulings on prejudgment interest and compensation for equipment storage, as well as the trial court's finding that he has in his possession two Motorola two-way radios owned by Royal Ag. We affirm, but reverse the trial court's denial of prejudgment interest and remand this case for a calculation of the interest under Minn. Stat. § 549.09.
Royal Ag argues the trial court clearly erred in finding it owed Lanners payment under the 1994 contract, because Royal Ag's 1994 payments totalled $55,394.72, which amount roughly aligns with the $2.55 per bushel rate of compensation for the approximately 20,000 bushels of corn delivered by Lanners in the same year. However, the record demonstrates: (1) Royal Ag's records contained notations and price quotes showing that $18,099.68 of the monies paid by the company to Lanners in 1994 were, in fact, for certain deliveries made in 1993; and (2) in August 1994, Royal Ag obtained an additional $4,045.20 worth of corn from Lanners, which was mistakenly omitted from the company's assembly sheets, remaining unpaid. Under these circumstances, the trial court's findings regarding Royal Ag's payment under the 1994 contract were not clearly erroneous.
Royal Ag also argues the trial court erred in dismissing its conversion claim against Lanners's son. However, the plaintiff in a conversion action bears the burden of establishing the alleged converter's actions were "without legal justification." See Larson v. Archer-Daniels-Midland Co., 226 Minn. 315, 317, 32 N.W.2d 649, 650 (1948) (defining tort of conversion as act of willful interference with a chattel, done without lawful justification depriving of use and possession and requiring plaintiff to prove prima facie elements of conversion claim).
The record demonstrates: (1) in 1991, Royal Ag began experiencing a shortage in cash flow; (2) because of the company's severe financial difficulties, Lanners's son, who then managed Royal Ag's business, began paying certain company expenses out of his own personal bank accounts; (3) Royal Ag's then co-owner knew of the overdraft problems, and had met with Lanners's son concerning a possible small business loan; (4) to recover the payment amounts he had fronted, Lanners's son occasionally took checks payable to Royal Ag and deposited them into his personal checking account; (5) Lanners's son informed his secretary, the co-owner, and the company's internal and outside bookkeepers regarding his practice of covering company bills; (6) two of Royal Ag's secretaries kept full records of the payments made by Lanners's son; (7) one secretary testified that she had once reconciled expense payments made by Lanners's son on behalf of Royal Ag with the deposit of Royal Ag's checks into his personal account; and (8) while the co-owner stated he did not recall Lanners's son informing him of his payment practices, he conceded it was possible. Given this record, and in light of the fact that Royal Ag suffered no financial injury from the alleged acts of conversion, we cannot say the trial court erred in dismissing Royal Ag's conversion claim.
Lanners argues the trial court erred in denying him prejudgment interest on the breach-of-contract award. See Minn. Stat. § 549.09(b) (1996) (requiring award of prejudgment interest on pecuniary damages from date of lawsuit, demand for arbitration, or time of written notice of claim, whichever occurs first). While Minn. Stat. § 549.09 allows for interest awards in unliquidated damages cases, interest is available only when damages are "readily ascertainable by computation" and not dependent on contingencies or jury discretion. Lienhard v. State, 431 N.W.2d 861, 865 (Minn. 1988). The record demonstrates: (1) the trial court's calculations of the amount allegedly due mirrored the sums claimed by Lanners in his complaint; and (2) the damages awarded were based on objective evidence. Under these circumstances, the trial court erred in denying Lanners prejudgment interest on his breach of contract award. Therefore, we reverse on this issue and remand for a calculation of prejudgment interest under the statute.
Lanners also argues the trial court erred in declining to award him compensation for storing certain pieces of Royal Ag's equipment on his property because a lien in his favor attached to the equipment in the amount of reasonable storage expenses. See Minn. Stat. §§ 514.18 (1996) (mandating lien in favor of party who, at request of owner or legal possessor of personal property, stores or cares for property in certain capacities listed in statute); 514.19 (1996) (setting forth modes of storage or care as covered in section 514.18, including that of bailee). While there is no question Royal Ag stored several pieces of equipment on Lanners's farm, the evidence does not demonstrate the existence of a bailment relationship between the parties so as to trigger the attachment of a lien on the equipment. The record shows Lanners: (1) never requested the parties enter into a written or oral agreement relating to the equipment storage; (2) made no record of his discussions with Royal Ag on the subject; and (3) did not maintain exclusive control over the equipment, such that Royal Ag could not access it prior to paying a storage fee. Under these circumstances, the trial court correctly found Royal Ag was not obligated to compensate Lanners for storing its equipment. See, e.g., Production Credit Ass'n v. Fitzpatrick, 385 N.W.2d 410, 412 (Minn. App. 1986) (finding record evidence supported trial court's finding of bailment, where parties made agreement for storage of corn and bailee-defendant maintained exclusive control of grain bin, excluding bailor from removing corn prior to paying storage fees).
Lanners finally argues the trial court erred in finding he was in possession of two Motorola two-way radios belonging to Royal Ag. However, both the current owner of Royal Ag and Lanners's son testified to the contrary. Given this evidence, we cannot say the trial court's finding is clearly erroneous. See Minn. R. Civ. P. 52.01 (affording due regard to trial court's opportunity to judge witness credibility).
Affirmed in part, reversed in part, and remanded.