Commercial Fitness Concepts, L.L.C. v. WGL, LLC
2017 Ark. App. 148
| Ark. Ct. App. | 2017Background
- WGL owned a building leased to a World Gym franchisee who filed bankruptcy; the trustee sold the franchisee’s assets and Commercial Fitness purchased and removed items from the premises.
- After Commercial Fitness removed equipment (late April–early May 2015), WGL discovered missing HVAC-control items: a monitor, keyboard, and a control panel/module that interfaces between the CPU and rooftop HVAC units.
- Commercial Fitness returned the desktop CPU but not the monitor, keyboard, or panel/module; WGL sued for conversion.
- At bench trial, witnesses testified about pre- and post-removal HVAC operability, communications between WGL and Commercial Fitness, and an invoice/receipt for replacement installation of the control module.
- Trial court found conversion proven and awarded $6,597.38 (replacement cost for the module) plus $3,000 for lost rent; Commercial Fitness appealed challenging liability and the damage awards.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Commercial Fitness converted WGL’s HVAC items | WGL: circumstantial and direct evidence (missing parts after removal; texts; return of CPU only) shows wrongful dominion over monitor, keyboard, module | Commercial Fitness: its crew lawfully purchased and removed items; employees denied taking the module; lack of proof tying defendant to module | Court: affirmed conversion finding — evidence not clearly erroneous; conversion established by circumstantial and testimonial evidence |
| Proper measure of damages for the module/module-panel | WGL: replacement cost (invoice) reflects value and no market exists because module is application-specific | Commercial Fitness: replacement cost is not proper evidence of fair-market value | Court: reversed module damages — fair-market value is proper measure; invoice (replacement cost) was insufficient |
| Award for lost rents (consequential damages) | WGL: a June 30, 2015 letter of intent showing a $3,000 short-term lease supports lost-rent award | Commercial Fitness: letter is hearsay/nonbinding and insufficient to prove lost rent or profits | Court: reversed lost-rent award — nonbinding letter alone does not provide substantial basis for consequential damages |
| Standard of review on bench trial | WGL: trial-court credibility findings entitled to deference | Commercial Fitness: contends findings were clearly erroneous | Court: applied clearly-erroneous standard and found no definite and firm conviction of error on liability |
Key Cases Cited
- Hartness v. Nuckles, 2015 Ark. 444, 475 S.W.3d 558 (conversion elements and tort overview)
- McQuillan v. Mercedes-Benz Credit Corp., 331 Ark. 242, 961 S.W.2d 729 (fair-market value as ordinary measure of conversion damages)
- Crane v. Taliaferro, 2009 Ark. App. 336, 308 S.W.3d 648 (bench-trial standard of review for factual findings)
- JAG Consulting, Inc. v. Eubanks, 77 Ark. App. 232, 72 S.W.3d 549 (remand practice when proof of damages is deficient)
- St. Louis R. W. Co. v. Clemons, 242 Ark. 707, 415 S.W.2d 332 (remand and when dismissal is inappropriate)
- Pennington v. Underwood, 56 Ark. 53, 19 S.W. 108 (remand favored where plaintiff may supply missing proof)