Boaeuf v. Memphis Station, L.L.C.
107 N.E.3d 817
Ohio Ct. App.2018Background
- Boaeuf purchased a bar and liquor permit from Memphis Station under an asset purchase agreement and gave a cognovit note as partial payment.
- Boaeuf operated the tavern but made only one full payment and one partial payment on the note; Memphis Station obtained a cognovit judgment for the contract price.
- While Boaeuf managed the business awaiting transfer of the liquor permit, the permit transfer was canceled and clientele issues caused the bar to close; Boaeuf testified he “walked away” from operating the bar but intended to sell the assets to satisfy the note.
- Memphis Station sold the liquor permit and bar assets to a third party despite Boaeuf’s pending replevin action and the earlier cognovit judgment in favor of Memphis Station.
- Boaeuf sued for conversion (among other claims); after trial a magistrate awarded damages for conversion ($30,000 for bar assets; $25,000 for liquor permit), punitive damages ($20,000), and attorney fees ($24,000); the trial court adopted the magistrate’s decision and Memphis Station appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Boaeuf abandoned the bar assets, defeating conversion | Boaeuf retained title and intended to sell assets to pay the note; non-use did not equal abandonment | Memphis Station said Boaeuf “walked away,” evidencing abandonment | Court: No abandonment; mere non-use and post hoc trial testimony insufficient; competent evidence shows Boaeuf did not relinquish rights |
| Proper valuation of the bar assets | Appraiser testimony and market evidence supported $30,000 valuation | Sale to third party for $39,000 total (less $25,000 liquor permit) shows assets worth $13,545 | Court: Sale price was below market; appraiser testimony was credible; $30,000 not against manifest weight |
| Whether punitive damages were warranted | Memphis Station acted with conscious disregard of Boaeuf’s rights by selling assets despite judgment and pending replevin | Memphis Station argued mitigating facts (Boaeuf walked away) negated malice | Court: Punitive damages upheld — evidence showed conscious disregard with high probability of substantial harm |
| Whether attorney fees were recoverable | Attorney fees proper when punitive damages awarded | Memphis Station argued fees unwarranted if punitive damages unjustified | Court: Attorney fees affirmed because punitive damages were justified |
Key Cases Cited
- Joyce v. General Motors Corp., 49 Ohio St.3d 93 (definition of conversion)
- Mitchell v. Hawley, 83 U.S. 544 (nemo dat quod non habet principle)
- C.E. Morris Co. v. Foley Constr. Co., 54 Ohio St.2d 279 (standard for reviewing manifest weight and credibility)
- Preston v. Murty, 32 Ohio St.3d 334 (standard for punitive damages actual malice)
- Malone v. Courtyard by Marriott Ltd. Partnership, 74 Ohio St.3d 440 (punitive damages require conscious wrongdoing)
- Terraza 8, L.L.C. v. Franklin Cty. Bd. of Revision, 150 Ohio St.3d 527 (sale price as evidence of value, but not absolute)
- Pyle v. Pyle, 11 Ohio App.3d 31 (attorney fees permissible when punitive damages awarded)