MERCHANTS NATIONAL BANK , v. BRANDON TODD OVERSTAKE, et al.,
Case No. 11CA18
IN THE COURT OF APPEALS OF OHIO FOURTH APPELLATE DISTRICT HIGHLAND COUNTY
12-31-12
2012-Ohio-6309
CIVIL APPEAL FROM COMMON PLEAS COURT
APPEARANCES:
COUNSEL FOR APPELLANT: Luther L. Liggett, Jr., Heather Logan Melick and Jeffrey J. Hanneken, Luper, Neidenthal & Logan, 50 West Broad Street, Ste. 1200, Columbus, Ohio 43215-3374
COUNSEL FOR APPELLEE, FORREST LITTLE: Thomas B. Bruns, and Kevin R. Whitmer, Freund, Freeze & Arnold, Fourth and Walnut Center, 105 East Fourth Street, Ste. 1400, Cincinnati, Ohio 45202-4006
PER CURIAM.
{¶ 1} This is an appeal from a Highland County Common Pleas Court judgment that directed a verdict in favor of Forrest Little, defendant below and appellee herein, on the claim brought against him by Merchant‘s National Bank (Merchant‘s Bank), plaintiff below and appellant herein.
{¶ 2} Appellant assigns the following errors for review:
“THE TRIAL COURT ERRED BY MAKING A FACT DETERMINATION AND BY REMOVING THE CASE FROM THE JURY.”
SECOND ASSIGNMENT OF ERROR:
“THE TRIAL COURT ERRED BY FAILING TO ALLOW THE AMENDMENT OF THE COMPLAINT OR PLEADINGS TO CONFORM TO THE EVIDENCE.”
THIRD ASSIGNMENT OF ERROR:
“THE TRIAL COURT ERRED BY NOT APPLYING UCC NOTICE REQUIREMENTS TO ITS FACT DETERMINATION.”
{¶ 3} James Earl Overstake and his business, Overstake Farm Drainage, Inc. (OFD), were customers of Merchant‘s Bank. That relationship continued after his death, although the bank then dealt with the Overstake children - Scott, Brandon and Kay.1
{¶ 4} On April 17, 2009, Scott, Brandon and Kay all executed a $311,143.27 promissory note to Merchant‘s Bank, with eight and a half (8½) percent interest, due and owing later that same year. Scott and Brandon also executed a “Commercial Security Agreement” and pledged the collateral of OFD as security for that loan.2 Later a “UCC Financing Statement” was filed with the Secretary of State thereby perfecting the bank‘s security interest in the equipment that OFD had pledged as loan collateral.
{¶ 5} Merchant‘s Bank understood that OFD intended to auction some equipment to pay
{¶ 6} Merchant‘s Bank commenced the instant action on November 5, 2009 and alleged that Little and Overstake engaged in these transactions with purpose to defraud. The bank requested, inter alia, $17,500 in compensatory damages, in addition to punitive damages and attorney fees.
{¶ 7} Little denied liability and raised a number of defenses.
{¶ 8} Brandon Overstake did not enter an appearance in the case and, on June 8, 2011, the trial court granted a default judgment against him that awarded Merchant‘s Bank $17,500 for compensatory damages, $20,000 in punitive damages and $22,552 in attorney fees.4
{¶ 9} The matter proceeded to a jury trial and, at the conclusion of Merchant‘s Bank‘s case, appellee requested a directed verdict. The trial court granted the motion. This appeal followed.
I
{¶ 11} After our review of the evidence adduced at trial, we agree with the trial court that a directed verdict was appropriate. Appellant‘s complaint alleged that Overstake and Little fraudulently transferred the backhoe in violation of its security interest. It is important to note, however, that the claims against each defendant are slightly different. Although not expressly cited in the complaint, the claim against Overstake is based on
{¶ 12} Little testified that although he was aware of the UCC requirements under Ohio law, he took Brandon Overstake at his word that no liens existed against the equipment when he purchased the backhoe. Although this admission may show many things, not the least of which is arguable negligence on Little‘s part, we agree with the trial court that neither Little‘s
{¶ 13} The tort of “civil conspiracy” can be defined as a malicious combination of two or more persons to injure another in person or property, in a way not competent for one alone, resulting in actual damages. See Williams v. Aetna Finance Co., 83 Ohio St.3d 464, 475, 700 N.E.2d 859 (1998); Kenty v. Transamerica Premium Ins. Co., 72 Ohio St.3d 415, 419, 650 N.E.2d 863 (1995). The malice that must be involved is that state of mind under which a person commits a wrongful act purposely, without reasonable or lawful excuse, to the injury of another. Porter v. Saez, 10th Dist. No. 03AP-1026, 2004-Ohio-2498, at ¶75.
{¶ 14} In the end, we agree with the trial court that in the case sub judice, insufficient evidence was adduced for the jury to consider. Again, nothing in Little‘s testimony indicates that he and Brandon Overstake entered into a “malicious combination,” or that Little acted purposely to injure appellant. Thus, we find no error in the trial court‘s directed verdict and we hereby overrule appellant‘s first assignment of error.
II
{¶ 15} In its second assignment of error, Merchant‘s Bank asserts that the trial court should have afforded it an opportunity to amend its complaint.
{¶ 16} Our review of the record reveals that on May 4, 2011, appellant filed a written motion to amend its complaint in order to add additional claims against Little that appear to set forth: (1) counts for conversion of the backhoe, (2) negligence for failing to search the UCC financing statements, and (3) unjust enrichment. The trial court did not rule on the written
{¶ 17}
{¶ 18} We readily acknowledge that when applying the abuse of discretion standard, reviewing courts may not simply substitute their judgment for the trial courts. State ex rel. Duncan v. Chippewa Twp. Trustees, 73 Ohio St.3d 728, 732, 654 N.E.2d 1254 (1995). Nevertheless, for the following reasons we conclude that in this situation the trial court should
{¶ 19} In the case sub judice, although the trial court correctly rejected the fraud claim, we note that the court also seemed to indicate that some merit may exist to the bank‘s claim:
“Uh, while this Court believes that Mr Little should have checked to see if there was a lien on the property it can be done very simply by going to the Secretary of State‘s , uh, on-line to check and see if there is a lien on the property, uh, while he probably should have done that, uh . . . * * * I don‘t understand the theory that somebody can be liable for fraud and punitive damages just because he‘s a transferee of property on which a lien is present.”
{¶ 20} Again, we generally agree with the trial court‘s sentiment if, in fact, appellant is restricted to the fraud claim set forth in its initial pleading. However, as the first portion of the comment suggests, valid claims other than fraud may indeed exist against the appellee.
{¶ 21} Although Little opposed appellant‘s request to amend the complaint and argued that appellant did not have “any evidence to support the very claims it wishes to add,” we believe that this issue is best left for the jury to decide, particularly in light of the fact that Little did not claim that the amended complaint prejudiced him. Indeed, Little should have recognized from the initial complaint that it is alleged that he purchased the backhoe, even though encumbered by a properly perfected security interest. Thus, we do not understand how the complaint‘s amendment could have prejudiced Little.
{¶ 23} Accordingly, in light of
{¶ 24} Thus, based upon the foregoing reasons, we hereby sustain appellant‘s second assignment of error.
III
{¶ 25} Having sustained Merchant Bank‘s second assignment of error, its third assignment of error has been rendered moot and will be disregarded. See
{¶ 26} Accordingly, based upon the foregoing reasons, we hereby reverse the trial court‘s judgment and remand this case for further proceedings consistent with this opinion.
JUDGMENT REVERSED AND CASE REMANDED FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION.
It is ordered the judgment be reversed and that this case be remanded for further proceedings consistent with this opinion. Appellant to recover of appellee costs herein taxed.
The Court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this Court directing the Highland County Common Pleas Court to carry this judgment into execution.
A certified copy of this entry shall constitute that mandate pursuant to
Abele, P.J. & Kline, J.: Concur in Judgment & Opinion
McFarland, J.: Concurs in Judgment Only
For the Court
BY: _________________________
Peter B. Abele
Presiding Judge
BY: _________________________
Roger L. Kline, Judge
BY: _________________________
Matthew W. McFarland, Judge
NOTICE TO COUNSEL
Pursuant to Local Rule No. 14, this document constitutes a final judgment entry and the time period for further appeal commences from the date of filing with the clerk.