498 S.W.3d 790
Ky. Ct. App.2016Background
- Baciomieulo, LLC owned construction equipment stored on Greenamyer’s Avoca Property; equipment remained on the realty when the property was foreclosed.
- Lakeland Capital (Lakeland) acquired the Avoca Property via foreclosure/commissioner’s deed and discovered the equipment on the land.
- Lakeland contracted with Nick Bohanon, LLC and Nick Bohanon (Bohanon Defendants) to remove and scrap the equipment; Bohanon Defendants paid Lakeland $10,000 and sold the scrapped material to River Metals.
- Baciomieulo sued Lakeland, River Metals, and the Bohanon Defendants for conversion (and punitive damages); Bohanon Defendants moved for summary judgment claiming they were good-faith purchasers entitled to title.
- The Jefferson Circuit Court granted summary judgment for the Bohanon Defendants, reasoning a good-faith purchaser can acquire valid title even if the seller lacked title; Baciomieulo appealed.
- The Court of Appeals reversed and remanded, holding the circuit court erred because (1) the UCC voidable-title/entrustment protections did not apply and (2) the common-law estoppel exception from United Road Machinery Co. v. Jasper did not fit the facts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a buyer’s good faith can defeat an owner’s title when the seller never had title | Good faith is irrelevant if seller never had title; Baciomieulo retains ownership and conversion claim survives | Bohanon: their good-faith purchase from Lakeland gives them title or protection as a bona fide purchaser | Held: Buyer’s good faith generally does not vest title when seller had no title; summary judgment for Bohanon Defendants was erroneous |
| Whether KRS 355.2-403 (UCC voidable title/entrustment) permits Lakeland to transfer good title to Bohanon | Baciomieulo: UCC protections inapplicable because equipment was neither delivered under a purchase transaction nor entrusted to a merchant dealing in such goods | Bohanon: asserted they acquired title as good-faith purchasers under KRS 355.2-403 (argued voidable or good title) | Held: UCC § 2-403 defenses don’t apply — no delivery under purchase transaction and Lakeland was not a merchant/entruster; no record Lakeland had voidable title |
| Whether the common-law estoppel rule from Jasper allows transfer of title when seller had no title | Baciomieulo: Jasper exception inapplicable because there was no voluntary transfer or conduct by owner that clothed Lakeland with indicia of ownership | Bohanon: relied on Jasper to argue estoppel permits protected transfer to bona fide purchaser | Held: Jasper is narrow — applies where owner voluntarily or negligently clothed transferee with indicia of ownership; facts here don’t show such conduct, so Jasper does not apply |
| Whether Lakeland obtained title via abandonment or as successor to realty (so could validly sell) | Baciomieulo: No evidence Lakeland acquired personal-property title; commissioner’s deed covered real property, not personal property or fixtures | Bohanon: posited Lakeland might have acquired title (abandoned or otherwise) — argued in brief but offered no supporting record evidence | Held: No record support that Lakeland had title by abandonment or otherwise; issue remains for trial on remand |
Key Cases Cited
- United Road Machinery Co. v. Jasper, 568 S.W.2d 242 (Ky. Ct. App. 1978) (recognized narrow common-law estoppel permitting a transferee/buyer to keep goods when owner’s voluntary conduct clothed seller with indicia of ownership)
- Elk Horn Coal Corp. v. Allen, 324 S.W.2d 829 (Ky. 1959) (abandoned property vests title in finder; original owner relinquishes rights)
- Steelvest, Inc. v. Scansteel Service Center, Inc., 807 S.W.2d 476 (Ky. 1991) (summary judgment standard in Kentucky)
- State Auto. Mut. Ins. Co. v. Chrysler Credit Corp., 792 S.W.2d 626 (Ky. Ct. App. 1990) (good faith immaterial to conversion claim against owner)
- Kentucky Ass'n of Counties All Lines Fund Trust v. McClendon, 157 S.W.3d 626 (Ky. 2005) (elements of conversion and related authority)