One Step Up, Ltd. v. Sam Logistic, Inc.
17 A.3d 826
| N.J. Super. Ct. App. Div. | 2011Background
- Plaintiff One Step Up, Ltd. imports and distributes off-price apparel; Sam Logistic, Inc. stores goods and is owned by Pang; ETI sold goods to plaintiff and stored them at Sam's warehouse; December 20, 2007 letter stated ETI transferred the named goods to plaintiff and that Sam would release to OSU; Sam released portions of the goods in December 2007 under a verbal understanding, according to Sultan, or only upon Zhang’s signature, per Pang; January 16, 2008 plaintiff requested further releases but Sam refused; Pang admitted knowledge that the goods were sold to others and believed ETI cancelled the transfer; after trial, the court held Sam and Pang liable for conversion and awarded $244,584; a partial settlement in April 2008 reduced plaintiff’s claims against ETI and Zhang and released part of the goods; on appeal, defendants challenge hearsay rulings, cross-claim dismissals, the conversion theory given ownership status, reliance on a bill of lading, release by settlement, and damages calculation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Admissibility of statements about cancellation | Plaintiff argues ETI/Zhang statements are party-admissions. | Defendants contend statements are hearsay and not admissible under party-opponent or statement-against-interest exceptions. | Exclusion affirmed; statements not within N.J.R.E. 803(b)(1) or 803(c)(25) because Zhang not a party-opponent and not shown against interests. |
| Cross-claim against ETI and Zhang | Plaintiff seeks to pursue conversion claims independent of ETI/Zhang. | Absence of cross-claim against ETI and Zhang precludes review of cross-claim issues. | By absence of cross-claim, cross-claim merits are not reviewed. |
| Conversion despite cancellation of contract | Plaintiff remained owner under a document of title and had rights to the stored goods. | If ownership cancelled, plaintiff cannot recover; delivery to others in good faith could bar liability. | Conversion established; December 20, 2007 letter constituted a document of title; bailee liable for misdelivery absent good-faith compliance with title or interpleader when adverse claims exist. |
| Liability despite delivery under bill of lading | Defendants delivered per plaintiff’s documented title; still liable for conversion. | Delivery under bill of lading may excuse liability under good-faith rule. | Not dispositive; the bailee knew of adverse claims and failed to follow Capezzaro interpleader framework; liability stands. |
| Settlement and damages calculation | Settlement did not extinguish all claims; damages properly calculated as value of goods converted. | Settlement with ETI/Zhang and partial deliveries warrant offset or windfall arguments. | Damages properly calculated at $244,584; windfall claim rejected. |
Key Cases Cited
- Capezzaro v. Winfrey, 153 N.J.Super. 267 (App.Div.1977) (bailee must follow interpleader/remedies when adverse claims exist; ignorance of lack of title not a defense)
- LaPlace v. Briere, 404 N.J.Super. 585 (App.Div.2010) (conversion can occur without intent to harm; negligent misdelivery can support liability)
- Lembaga Enters., Inc. v. Cace Trucking & Warehouse, Inc., 320 N.J.Super. 501 (App.Div.1999) (definition of conversion and bailee liability standards)
- Chicago Title Ins. Co. v. Ellis, 409 N.J.Super. 444 (App.Div.2009) (approach to damages in conversion actions; equitable considerations)
- Friedman v. Guffanti, 137 N.J.L. 195 (E. & A.1948) (damages for conversion limited to value of the chattel converted)
- Tessmar v. Grosner, 23 N.J. 193 (1957) (damages measure in tort for conversion)
- State v. Norman, 151 N.J. 5 (1997) (principles on admissibility of statements against interest)
- State v. Kennedy, 135 N.J.Super. 513 (App.Div.1975) (explanation of party-admission concept in hearsay)