Bacon & Associates, Inc. v. Rolly Tasker Sails (Thailand) Co.Bacon & Associates, Inc. v. Rolly Tasker Sails (Thailand) Co.
Appellants present the following issues concerning the jury verdict:
“I. Whether the jury verdict should be reversed because of confusion created by verdict sheets with inconsistencies, contradictions and clerical errors.
“II. Whether the jury verdict should be reversed because the jury improperly awarded $54,000.00 in administrative damages thаt were not permitted by law or supported by any evidence.
“HI. Whether the jury verdict should bereversed based on the lower court’s erroneous jury instructions regarding the statute of limitations in breach of contract actions.
“IV. Whether the jury verdict should be reversed based upon the lower court’s error in permitting appellee to present evidence regarding claims of [companies related to the plaintiff by common ownership that] were not parties to the case.”
Preliminarily, however, the appellee asserts that the appeal was noted too late.
For the reasons explained below, we shall address the merits and affirm the judgment.
Facts and Legal Proceedings
Rolland Tasker (Mr. Tasker),
1
an Australian national, formed Rоily Tasker Sails Pty. Ltd. (RTS Australia) in 1956 to produce sails. Initially working out of a rented shed, he used the money earned from selling sails
The business relationship with appellants commenced in 1971, when RTS Hong Kong began shipping sails on consignment to Bacon in Annapolis. The terms of this consignment agreement, which was oral, will be discussed, infra. Bacon received three shipments of sails from the Hong Kong facility before Mr. Tasker moved his operation back tо Australia in 1973. 2 According to Mr. Tasker, “[t]he [Bacon] account was transferred to Australia ... [a]nd all the ledger cards at that time.”
From 1973 to 1990, Mr. Tasker did business through RTS Australia. During this
In 1990, Mr. Tasker formed the appellee, RTS Thailand, and moved his operation to Phuket, Thailand. At the time of trial, Mr. Tasker owned a sixty percent share of the Thai entity, his wife owned thirty-nine percent, and the remaining shares were split among Mr. Tasker’s son, Michael, and several Thai employees. Between 1990 and 1998, seven sail shipments, and several non-sail shipments, were forwarded to Bacon from the Thailand facility. 3 From 1995 to 1998, all payments made by Bacon for Tasker entity sails were to be deposited into an account in Annapolis (the Alex Brown Account). 4
According to Mr. Tasker, all the accounts of Tasker entities, including their accounts with Bacon, had traveled with him to his present entity, RTS Thailand. Regarding the Hong Kong shipments, Mr. Tasker stated that “[t]he shipment [account] was transferred to [RTS] Australia. And in 1994, the authority was transferred to [RTS] Thailand.” He admitted, however, that RTS Hong Kong received no monetary consideration for its transfer of the account documents and paperwork to RTS Australia, and RTS Australia received no compensation for its transfer of account documents to RTS Thailand. 5
Under the consignment arrangement between the parties, Tasker entities would ship sails to Bacon, with a bill of lading and an invoice stating the net price for each sail. Once it received a shipment, Bacon would inspect and measure the sails, assign a catalog number, and fix a “retail fair market value price” for each sail. A “sail card” then was prepared for each catalog number. Sails were stored in Bacon’s Annapolis warehouse until sold. 6
Bacon would acknоwledge receipt of each sail consigned to it, stating its catalog number and its retail price. Bacon advertised Tasker entity sails in its catalog and on its website. If a customer purchased a consigned sail from Bacon, Bacon would mark “sold” on the sail card. Once the
After a March 1998 shipment from RTS Thailand, the relationship began to unravel, as evidenced by correspondence between the parties. RTS Thailand, as sole plaintiff, filed the complaint in this action on June 29, 2001. 7 The complaint sounded in breach of contract (Count I), quantum meruit (Count II), unjust enrichment (Count III), breach of bailment agreement (Count IV), trover and conversion (Count V), and constructive fraud (Count VI). RTS Thailand alleged that, since July 1998, Bacon had not made any payments аrising from sales of consigned merchandise. In their answer, appellants denied that they had failed to pay any amounts due. Additionally, they asserted a number of specific defenses, including limitations.
During the early stages of the litigation, Bacon returned two shipments to RTS Thailand for credit. The returned sails had been consigned by RTS Hong Kong, by RTS Australia, and by RTS Thailand. The first shipment was valued at $72,269.75, while the second shipment was valued at $1,000.
As a result of amendments and rulings on motions, only the following theories of the case were submitted to the jury: as to Bacon, breach of contract, breach of bailment agreement, trover/conversion, and fraud; and, as to Mrs. Bacon, tro-ver/eonversion and fraud. Thе jury found against Bacon and Mrs. Bacon and awarded $345,327 in damages and $78,660 in interest to RTS Thailand. Aggrieved, Bacon and Mrs. Bacon noted this appeal.
Timeliness of Appeal
We first must address appellee’s motion to dismiss the appeal as untimely. Underlying appellee’s motion are the following facts. The jury returned its verdict on December 19, 2002, and on December 24 the clerk prepared, signed, and entered judgments on the docket in accordance with Maryland Rule 2-601. The judgments were entered against each appellant in favor of RTS Thailand, RTS Hong Kong, RTS Australia, and Mr. Tasker.
More than ten days thereafter, on January 6, 2003, appellants filed a motion for judgment notwithstanding the verdict, or to revise. At a Fеbruary 10, 2003 hearing, the court ordered the clerk to revise the judgment to reflect that it was entered in favor of RTS Thailand only. The court denied all other relief requested. In making the docket entries that day to comply with the court’s order, the clerk deleted RTS Australia, RTS Hong Kong, and Mr. Tasker as judgment holders only as to Mrs. Bacon, but no correction was made as to the judgment against Bacon. It was not until March 6,
2003, that the clerk docketed the change in the judgment against
Appellee’s motion argues that, because appellаnts’ post judgment motion to revise was not filed within ten days of the original December 24, 2002 judgment, the motion operated only as one under Maryland Rule 2-535(a) so that the time for appeal continued to run. 8 See Md. Rule 8-202(c).
We agree with appellants that under
Gluckstern v. Sutton,
“ ‘Rule 2-535(a) ... authorizes the circuit court to exercise revisory power over a judgment on a motion filed within thirty days from the judgment. Nevertheless, it is settled that neither the timely filing of a motion to revise a final judgment nor the court’s denial of such motion, absent an order staying the operation of the judgment, affects the finality of the judgment or the running of the time for appeal. But when a motion under Rule 2-535(a) to revise a final judgment is filed within thirty days and the circuit court in fact revises the judgment, and there has been no intervening order of appeal, the prior judgment loses its finality and the revised judgment becomes the effective final judgment in the case.’ ”
Gluckstern,
Because the notice of appeal was filed within thirty days of the revised judgment, which, under the rule in Gluckstern, effectively superseded the original judgment in this case and became a new final judgment, the appeal is properly before this Court.
I. Verdict Sheets
Appellants first assert that the judgment should be reversed because of the “cоnfusion created by verdict sheets with inconsistencies, contradictions and clerical errors.” Appellants’ argument appears to be a mix of a challenge to the jury verdict itself, and a challenge to the form of the verdict sheet.
We first address the legitimacy of the jury’s verdict. “Ordinarily, this court will not interfere with a jury verdict, even one that is inconsistent.”
Travel Comm., Inc. v. Pan Am. World Airways, Inc.,
The original verdict sheet stated the following:
“1. In the event that there are moneys due from either defendant, do you find that [the sole named plaintiff, RTS Thailand] is entitled to collect any sums for [RTS Hong Kong] and [RTS Australia]?
/ Yes No
“2. If yes, do you find that there has been:
“a. Breach of Contract
y Yes No
“b. Conversion
y Yes No
“c. Fraud
Yes y No
“3. If you answered yes to 2(a), 2(b), or 2(c), then state the amount of damages that you award:
“Amount: $291,327
“4. If you answered no to 2(a), 2(b), or 2(c), do you find that an agreement existed between Bacon ... and [RTS Thailand]?
“a. Breach of Contract
y Yes No
“b. Conversion
y Yes No
“c. Fraud
Yes y No
“5. If you answered yes to 4(a), 4(b), or 4(c), state the amount of damages that you award:
“Amount: $132,660 ($78,660 interest^] $54,000 damages)
“6. Do you find that Mrs. Merilyn Dixie Bacon committed fraud or conversion?
y Yes No
“7. Do you find that Roily Tasker Sails (Thailand) Co., Ltd. knew or should have known of the wrongful conduct and damages prior to June 29,1998?
_Yes y No
“If so, what amount of damages, if any, should Roily Tasker Sails (Thailand) Co., Ltd. have been aware of prior to June 29,1998?
“Amount: $ N/A”
Because of the wording of question 4, the court prepared a Supplemental Verdict Sheet, aimed at clarifying the jury’s intent. See
Nails v. S & R, Inc.,
“1. How much do you award as damages for [RTS Hong Kong] AND [RTS Australia] COMBINED
$0 amount
$0 interest (if any)
“2. How much do you award as damages for [RTS Thailand] separately
$345,327 amount
$78,660 interest (if any)
“3. What is the total award of all damages awarded in # 1 and #2 $M8,98T
(Emphasis in original.)
Contrary to appellants’ contention, we agree with appellee that the Verdict Sheet and Supplemental Verdict Sheet reflect a “clear and decisive” verdict in favor of RTS Thailand. When these verdict sheets are read together, it is clear that the jury’s intent was that RTS Thailand be permitted
Furthermore, we decline to address appellants’ challenge to the
form
of the verdict sheets because appellants failed tо object at trial to the wording of those verdict sheets. As appellee points out in its brief, by not timely objecting to the form of a special verdict sheet, a party waives the right to object on appeal. Md. Rule 2—522(c);
Edwards v. Gramling Eng’g Corp.,
II. Administrative Damages
Appellants assert that the $54,000 damages figure, given in answer to question 5 on the original verdict sheet, was for “administrative damages” and was not supported in law or by the evidence. They draw this “administrative damages” label for the $54,000 from a written question submitted by the jury to the circuit court during the jury’s initial deliberations:
“If we find there are ‘monies due’ from the defendant, and believe in addition there are interest and administrative damages, should we detail this on [Question] # 3, or list one lumр sum.”
After receiving this note, the court replied in writing: “[P]lease explain what you mean by ‘administrative damages.’ ” It also submitted an additional written response, directing the jury: “If you find that there are moneys due please indicate the amount and the interest separately.” The jury did not provide further explanation of what it meant by “administrative damages”; instead, it assured the court that it “now understood].”
We cannot speculate as to what the jury meant by “administrative damages.” Further, the circuit court’s response to the jury’s question clearly directed them to focus their deliberations on “moneys due.” We presume that the jury followed the court’s instructions.
Owens-Illinois, Inc. v. Cook,
Our focus, then, must be on whether the evidence supports an “actual damages” award, before interest, of $345,327 ($291,327 + $54,000) to RTS Thailand. Examining the evidence in the light most favorable to RTS Thailand, as the prevailing party, we conclude that the evidence described below is sufficient to support the verdict.
+ $ 41,589.00 (Value measured by net invoice price: sails consigned June 1998-0ct.2001 per testimony of Mrs. Bacon)
$768,995.64 (Total value of all consigned sales measured by net invoice price)
- $375,106.74 (Paid on 1971-May 1998 account per Plaintiffs Exhibit 38A)
+ $ 1,024.00 (Miscredit: Museum of Yachting per testimony of Mr. Tasker)
+ $ 11,273.20 (Miscredit: non-negotiated check per testimony of Mr. Tasker)
- $ 1,682.00 (Paid on June 1998-0ct.2001 account per Plaintiffs Exhibit 11 A)
$404,504.10 (Total value of unsold sails consigned, measured by net invoice price, before credits for returns)
— $ 72,269.75 (Value of first shipment of returned goods, measured by net invoice price)
— $ 1,000.00 (Value of second shipment of returned goods, measured by net invoice price)
$331,234.35 (Total value of consigned sails, measured by net invoice price, less payments and other credits)
+ $ 15,000.00 (Adjustment — Hong Kong shipment; value of sails shipped in excess of net invoice price, per testimony of Mr. Tasker) 10
$346,234.35 (Total value of sails consigned, less payments and other credits).
Each appellee was found liable for conversion of the sails consigned to Bacon that were neither returned nor paid for.
11
The measure of damages in an action for conversion is the fair market value of the personalty at the time of the conversion, plus interest thereon to the date of the verdict.
Keys v. Chrysler Credit Corp.,
III. Limitations Instruction
With respect to the statute of limitations defense, the circuit court gave the following jury instruction:
“There is a three-year statute of limitations which is applicable to the Plaintiffs claims. That means that suit must be filed within three years of when the alleged wrong occurred. This suit was filed on June 29th of 2001.
“If a party is not likely to know, however, that he or she has been injured ordamaged at the time the wrong occurred then the cause of action does not accrue until the party learns or as a reasonable person should have learned [of the] damage.
“If you find that the Plaintiff knew or should have known that any payment was due prior to June 29th, 1998, in other words that they had that knowledge prior to June 29th, 1998, then the Plaintiff cannot recover as to those particular payments.”
Appellants noted three exceptions to the charge, only two of which address the limitations instruction on which they base their arguments in this Court. Appellants told the trial court:
“The first [exception] is a failure to instruct the jury that on the discovery rule the burden of proof is clear and convincing.
“The second exception is the failure to instruct the jury that on a breach of contract claim the discovery rule that was part of the instructions does not apply and that it is three years from the breach of the contract.”
In support of their first exception appellants rely on
Finch v. Hughes Aircraft Co.,
The discussion in Finch to which appellants have referred us explains those holdings in terms of the discovery rule and the “statutory ‘discovery rule,’ ” id., presently found in Maryland Code (1974, 2002 Repl.Vol.), § 5-203 of the Courts and Judicial Proceedings Article (CJ). Nowhere in that discussion do we find any support for the proposition that a plaintiff who seeks to avoid a limitations defense by reliance on the discovery rule must prove, by clear and convincing evidence, when the discovery took place. 12 We are not persuaded that the standard of proof for facts that would trigger the operation of the discovery rule is other than the ordinary preponderance of the evidence standard.
In their brief to this Court appellants expand their argument beyond their first exception by arguing a failure by the circuit court specifically to instruct that the burden was on RTS Thailand to persuade the jury that it did not, or should not, have discovered the alleged wrongs more than three years prior to the institution of this action.
In Maryland, in order properly to preserve an objection to a court’s instruсtions to the jury, a party ordinarily must make a specific objection after the instructions
Appellants’ second exception, a failure to charge that the discovery rule does not apply to breach of contract claims, rests on a legally incorrect premise. Appellants rely on
Bragunier Masonry Contractors, Inc. v. Catholic Univ. of Am.,
Significant here is that the Court of Appeals concluded that the debtor’s cause of action for the unpaid contract price had accrued, for purpоses of a strict application of the three year statute of limitations under CJ § 5-101 and for purposes of the discovery rule, when the garnishee failed to pay the balance of the price to the debtor upon completion of its construction contract with the garnishee.
13
The Court of Appeals said that “when the date of the breach and the discovery of the breach are the same, the discovery rule is satisfied.”
Bragunier,
Appellants’ argument rests entirely on the literal language of the following passage from this Court’s opinion in Bragunier.
“Ordinarily, in a breach of contract action, in the absence of fraud concealing the cause of action, for which thеre is a separate limitations provision, see § CJ 5-203, the cause of action accrues and hence limitations begins to run from the date of the breach and not from the date that the plaintiff discovers the defendant’s breach. In other words, the discovery rule recognized by the Court of Appeals in Poffen-berger v. Risser, [290 Md. 631 ,431 A.2d 677 (1981)], while applicable to many causes of actions in tort, does not apply to actions for breach of contract----The discovery rule wasnot applicable to the garnishment proceeding because it would not have had any application to the breach of contract action for non-payment that [the debtor] could have brought against the [garnishee].”
The above-quoted rationale is inconsistent with the rationale applied by the Court of Appeals in its Bragunier and, thereby, effectively has been disapproved. In explaining why the time of accrual of the cause of action for the alleged credits was not postponed by the discovery rule, the Court of Appeals said:
“In the case sub judice, the discovery rule, while applying to the relationship between [the garnishee] and [the debtor,] makes no difference. If there was a breach of contract between them, [the debtor-general contractor] was at all times from the point of the completion of the contract for the [project] aware of, i.e., had ‘discоvered,’ the nonpayment, and thus had notice of any possible breach of contract.”
In the instant matter, RTS Thailand was dependent upon Bacon to learn when a sale of a consigned sail had taken place. If Bacon sold one of the consigned sails but did not advise the consigner, half way around the world, that a sale had taken place, and the net invoice price had not been remitted to the consignor, or deposited to the Alex Brown Account, RTS Thailand would not know of the breach of contract. This is not a case where, as a matter of law, breach and discovery of the breach were simultaneous.
Moreover, even if the discovery rule were inapplicable to breach of contract actions, it is applicable to conversion. That is the common ground of liability of the two appellants. See n. 11, supra.
IV. Inter-Company Assignments
Appellants contend that all of the evidence relating to inter-comрany assignments of the accounts and choses in action against Bacon should have been excluded in accordance with appellants’ continuing objection. The basis for the objection was that the first amended complaint, on which the case was tried, named only RTS Thailand as plaintiff. It failed to join the other Tasker entity consignors, and it failed specifically to allege earlier consignments to Bacon by RTS Hong Kong and RTS Australia, with ultimate assignment of those consignors’ rights to RTS Thailand. Appellants do not contend that there was insufficient evidence at trial to support the jury’s finding that appellants’ obligation was owned, at that time, by RTS Thailand. Nor do appеllants take the position that they were surprised at trial that the claims asserted against them by RTS Thailand included the value of sails originally consigned by RTS Hong Kong and RTS Australia. The argument rests either on non-joinder or on a point of pleading.
With respect to non-joinder, the common law rule has been changed by the Maryland Rules of Procedure. “At common law no action could be maintained in his own name by the assignee of a chose in action, such as a ... personal obligation;
This evolution in civil procedure is explained succinctly by leading commentators on the Federal Rules of Civil Procedure when discussing
“At common law the assignee of a chose in action did not hold legal title to it and could not qualify as the real party in interest. Indeed, in large measure the real party in interest concept developed as a means of еliminating this restrictive rule. Under present law an assignment passes the title to the assignee so that he is the owner of any claim arising from the chose and should be treated as the real party in interest underRule 17(a) .”
6A C.A. Wright, A.R. Miller & M.K. Kane, Federal Practice and Procedure: Civil 2d § 1545, at 346 (1990) (footnotes omitted). In the instant matter, under the evidence accepted by the jury, RTS Thailand is the assignee of the accounts representing the consigned goods and holds the right to sue for their value.
With respect to appellants’ pleading point, Poe points out that “[t]o entitle the assignee to bring the action in his own name, he should set out in his declaration the assignment to himself[.]” Poe § 325, at 273. We shall assume, arguendo, that to comply with Maryland Rule 2-303(b)’s requirement that “[a] pleading ... contain only such statements of fact as may be necessary to show the pleader’s entitlement to relief,J” RTS Thailand should have alleged the assignments as a matter of proper pleading. Nevertheless, it is clear that appellants were not unfairly prejudiced by the admission of evidence of the inter-corporate assignments even though those assignments were not alleged specifically in the first amended complaint.
That complaint made plain that RTS Thailand was claiming monies due over the entire three decade history of the relationship with appellants. Appellants recognized as much when, in their answer filed about one month before trial, they raised the following special defense, among others:
“The claims set forth in Counts I through IV of Plaintiffs First Amended Complaint fail to set forth the appropriate legal capacity of Plaintiff to sue on behalf of any other entity, company, person, business or other corporation.”
The documentary exhibits that obviously were assembled during the period of discovery also relate to the three decade
For all the foregoing reasons, we shall affirm.
JUDGMENT OF THE CIRCUIT COURT FOR ANNE ARUNDEL COUNTY AFFIRMED.
COSTS TO BE PAID BY THE APPELLANTS.
Notes
. Mr. Tasker has sixty years of experience in the sport of sailing and in the arts of boat-building and sail-making. He raced a sailboat, hand-built by him, in the 1956 Olympic games in Melbourne, Australia, won a World Yachting Championship title, and is a member of the Australian Sports Hall of Fame.
. RTS Australia apparently was still in existence during the time Mr. Tasker wаs operating out of Hong Kong.
. Allhough the Tasker entity products consigned to Bacon could include goods other than sails, the patties have not made any distinction that is material to the issues on this appeal between sails and other product lines. Consequently, for the sake of simplicity, we shall refer simply to "sails.”
. An Alex Brown Cash Reserve Fund account was opened on October 30, 1989, in the names of Mr. Tasker, his wife, and Mrs. Bacon. Mr. Tasker explained that Mrs. Bacon's name was placed on the account because neither Mrs. nor Mr. Tasker was a United States citizen. Bacon was expected to make a monthly deposit into this account equal to the net invoice price of all Tasker entity sails sold in the preceding month. Mr. Tasker testified that he and his wife occasionally drew funds from this account for personal expenses.
. Copies of the checks written by Bacon based on sales of Tasker entity consignments are included in the record. From August 1971 to April 1973, these checks were written to RTS Hong Kong. From May 1973 to June 1981, the checks were written to "Roily Tasker” or "Mr. Roily Tasker.” From July 1981 onward, the checks were written to "Roily Tasker[,] Roily Tasker Pty., Ltd.”
. The parties also had a “trading account,” under which Bacon purchased sails for its own account, for resale. Mr. Tasker explained the difference as follows: "A trading account is where we sell sails and they are paid for in 30 days. But a consignment account is where we sell sails and they are paid for after sale.” The claims underlying this appeal relate only to the consignment account.
. A first amended complaint continued to name RTS Thailand as the sole plaintiff. A second amended complaint, however, named multiple plaintiffs, by including RTS Thailand, RTS Hong Kong, RTS Australia, and Mr. Tasker, individually, and as trustee for the Tasker entities. On December 10, 2002, at appellants' request, the circuit court rejected the second amended complaint, so that RTS Thailand proceeded to trial as the sole plaintiff. We discuss this issue further in Part IV.
. Under Rule 2-535(a), "[o]n motion of any party filed within 30 days after entry of judgment, the court may exercise revisory power and control over the judgment!.]”
. Contrary to appellants' contention, the jury specified the amount of the verdict on both verdict sheets.
Contrast Gaither v. Wilmer,
. Mr. Tasker testified that the actual value of sails sent to Bacon for this 1973 shipment was $315,000, rather than $300,000 as invoiced.
. Although question 6 on the original verdict sheet, dealing with Mrs. Bacon's liability, was phrased in the alternative (“fraud or conversion”), we interpret the "yes” answer to relate only to conversion. That interpretation reconciles the answer to question 6 with the answer to question 2 when the jury found thаt Mrs. Bacon’s corporation, through which she acted, had not committed fraud.
. Nor is there any such statement with respect to an avoidance of limitations based upon CJ § 5-203. That section addresses a case in which “knowledge of a cause of action is kept from a party by the fraud of an adverse party[.]” Because the circuit court in the case now before us did not instruct on CJ § 5-203, we have no occasion to speak to the standard of proof under that statute.
. As the Court of Appeals has explained, the discovery rule “is not so much an exception to the statute of limitations, as it is a recognition that the Legislature, in employing the word 'accrues' in [CJ] § 5-101 never intended to close our courts to plaintiffs inculpably unaware of their injuries.”
Murphy v. Merzbacher,