Alb USA Auto, Inc. v. Modic

2013 Ohio 1561

• Court: Ohio Court of Appeals
• Decided: April 18, 2013
• Docket: 98914
• Status: Published

Opinion

[Cite as Alb USA Auto, Inc. v. Modic, 2013-Ohio-1561.]

Court of Appeals of Ohio EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA

JOURNAL ENTRY AND OPINION No. 98914

ALB USA AUTO, INC. PLAINTIFF-APPELLEE

vs.

WILLIAM A. MODIC DEFENDANT-APPELLANT

JUDGMENT: VACATED AND REMANDED

Civil Appeal from the Cleveland Municipal Court Case No. 2012 CVI 001056

BEFORE: S. Gallagher, P.J., Kilbane, J., and E.T. Gallagher, J.

RELEASED AND JOURNALIZED: April 18, 2013 ATTORNEY FOR APPELLANT

John M. Manos 739 East 140th Street Cleveland, OH 44110

FOR APPELLEE

Alb USA Auto, Inc. c/o Statutory Agent 3172 West 25th Street Cleveland, OH 44109 SEAN C. GALLAGHER, P.J.:

{¶1} This cause came to be heard upon the accelerated calendar pursuant to

App.R. 11.1 and Loc.R. 11.1. Defendant-appellant, William A. Modic d.b.a. Bill’s

Automatic Transmission Service (“Modic”), appeals a money judgment entered against

him in the Cleveland Municipal Court, Small Claims Division. Because we find the

lower court lacked jurisdiction in this matter, we vacate the judgment and remand the

matter with instructions to dismiss the action.

{¶2} In February 2010, plaintiff-appellee, Alb USA Auto, Inc. (“Alb USA”), sold

a 2004 Saturn Vue to Latoya Franklin (“Franklin”). She paid $3,500 down and financed

the balance with Alb USA. The title listed Alb USA as the first lienholder, as required

under R.C. 4505.13(B) for security interests.

{¶3} In August 2010, a third party took the Saturn to Modic to be fixed at his auto

repair shop, Bill’s Automatic Transmission Service. Repairs were performed on the

vehicle, which involved rebuilding the transmission. When Modic was unable to contact

the third party to retrieve the vehicle, he found that Alb USA held a lien on it.

{¶4} Meanwhile, Franklin stopped making payments on the vehicle in September

2010. Alb USA attempted to repossess the Saturn because Franklin had an unpaid

balance of $5,283.36. However, Alb USA was unable to locate the car.

{¶5} In January 2012, Modic sent a registered letter to Alb USA to advise that he

had the Saturn in his shop. After receiving the letter, Ajar Emini (“Emini”), owner of Alb USA, went to Bill’s Automatic Transmission Service and contacted Modic. Modic

refused to release the car unless Alb USA paid for storage fees. Modic and Emini

engaged in further negotiations. Emini inspected the vehicle, which was missing “the

transmission and other parts.” The rebuilt transmission was not installed, and Emini did

not believe he should have to pay any money owed to Modic for the repair work

performed for Franklin. The parties were unable to reach an agreement for the release of

the vehicle.

{¶6} Alb USA filed the instant action against Modic, alleging that “[d]efendant

owes $5,000 for cost of [the] vehicle * * *.” Attached to the statement of claim was the

certificate of title, reflecting the vehicle was titled to Franklin and showing Alb USA as

the first lienholder. Franklin’s purchase agreement with Alb USA was also attached.

{¶7} Following trial, a magistrate found that Modic had converted the Saturn and

awarded Alb USA $3,000, plus costs. Modic filed objections to the magistrate’s

decision, which the trial court overruled. The trial court entered judgment against Modic

on March 30, 2012. Modic timely filed this appeal.

{¶8} Among the arguments made by Modic is that Alb USA did not set forth a

claim for conversion but, rather, stated a claim for replevin. We find this issue is

dispositive of the matter.

{¶9} In the statement of claim, Alb USA indicated that “all we wanted was the

return of the vehicle * * * in the original condition with all parts intact. [Modic] can keep

the vehicle but only if he agrees to pay a partial amount of the $5,283.36 that is still owed to us [by Franklin] * * *.” Thus, Alb USA effectively brought a replevin action to obtain

possession of the vehicle.

{¶10} Alternatively, Alb USA sought to obtain a money judgment on a purchase

agreement to which Modic was not a party in interest. This was nothing more than an

attempt to transfer Franklin’s debt to Modic. Franklin owed $5,283.36 on the vehicle to

Alb USA. When Modic did not immediately release the car to Alb USA without being

paid for the rebuilt transmission, Alb USA sued him for the “value” of the car as reflected

in the approximate unpaid balance of Franklin’s debt.

{¶11} Pursuant to R.C. 1925.02(A)(1) and (2)(a)(i), the jurisdiction of the small

claims division is limited to $3,000, and there is no subject matter jurisdiction over claims

for replevin. Whenever it appears that the court lacks subject matter jurisdiction, the

court shall dismiss the action. Civ.R. 12(H); see also Basinger v. York, 4th Dist. No.

11CA2, 2012-Ohio-2017, 969 N.E.2d 797, ¶ 11. (When subject matter jurisdiction is

lacking, the small claims division may not transfer the case to the regular docket.)

{¶12} Instead of dismissing the action, the small claims division wrongly

“converted” this action to a conversion claim and reduced the monetary value of the claim

to conform to the small claims division’s jurisdiction. This court has previously stated:

Where property can be returned, and the defendant has not acted in a

manner inconsistent with the plaintiff’s ownership rights, the appropriate

remedy is replevin, not conversion. [Citations omitted.] Conversion

involves an intentional exercise of dominion or control over property in a manner which seriously interferes with another person’s rights to dominion

and control. Restatement of the Law 2d, Torts, §222A.

Marthaller v. Kustala, 8th Dist. No. 90529, 2008-Ohio-4227, ¶ 11.

{¶13} Franklin is still the legal holder of the title to the vehicle and, therefore, still

has legal possession of the vehicle. Modic did not convert the ownership interest in the

vehicle. Further, Modic did not impair Alb USA’s interest in the vehicle. Despite Alb

USA’s claim that the “transmission and other parts were missing,” a point relied upon by

the magistrate, there was evidence that the transmission was actually repaired and Modic

was seeking $1,100 for the rebuilt transmission and $450 in labor. This casts doubt on

the claim that the transmission and “other parts” were missing. Also, there is nothing in

the record to indicate that Modic had stripped or damaged the vehicle. In fact, the

record only shows that he was repairing the vehicle.

{¶14} Further, although Modic should not have conditioned a release of the

vehicle on Alb USA’s paying for storage fees and the rebuilt transmission, Alb USA was

seeking a return of the vehicle “with all parts intact.” At best, the parties had a dispute

concerning the condition in which the vehicle was to be returned; there was no conversion

of the vehicle.

{¶15} This case was nothing more than a replevin action over which the small

claims court lacked jurisdiction. Alb USA should have filed this action in the general

division of the municipal court in order to obtain possession of the vehicle as the superior

lienholder and to have a replevin order issued against Modic. Accordingly, we vacate the judgment and remand the matter with instructions for the lower court to dismiss the

action. As this issue is dispositive of the matter, we need not address the remaining

arguments raised on appeal.

{¶16} Judgment vacated; case remanded for dismissal.

It is ordered that appellant recover from 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 municipal

court to carry this judgment into execution.

A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of

the Rules of Appellate Procedure.

SEAN C. GALLAGHER, PRESIDING JUDGE

MARY EILEEN KILBANE, J., CONCURS; EILEEN T. GALLAGHER, J., DISSENTS (WITH SEPARATE OPINION)

EILEEN T. GALLAGHER, J., DISSENTING:

{¶17} I respectfully dissent because I believe Alb USA’s “statement of claim” sets

forth a viable claim for conversion.

{¶18} The majority concludes that Alb USA’s statement of claim “effectively

brought a replevin action to obtain possession of the vehicle.” In its “statement of

claim,” Alb USA alleges that after Franklin defaulted on her loan, it filed a complaint in replevin to recover the vehicle from her, but was unable to locate the car. Thus, Alb

USA was familiar with the appropriate use of replevin actions.

{¶19} However, in this action, Alb USA alleges that “all we wanted was the return

of the vehicle * * * in the original condition with all parts intact.” (Emphasis added.)

However, it further alleges that not only was the transmission no longer installed in the

vehicle, but other parts were missing. Thus, the value of the vehicle was diminished by

virtue of its missing parts.

{¶20} The elements of a conversion claim include (1) plaintiff’s ownership or

right to possession of the property at the time of conversion; (2) defendant’s conversion

by a wrongful act or disposition of plaintiff’s property rights; and (3) damages. Dream

Makers v. Marshek, 8th Dist. No. 81249, 2002-Ohio-7069, ¶ 19. If the defendant came

into possession of the property lawfully, the plaintiff must prove two additional elements

to establish conversion: (1) that the plaintiff demanded the return of the property after the

defendant exercised dominion or control over the property; and (2) that the defendant

refused to deliver the property to the plaintiff. R&S Distrib., Inc. v. Hartge Smith

Nonwovens, L.L.C., 1st Dist. No. C-090100, 2010-Ohio-3992, ¶ 23. The measure of

damages in a conversion action is the value of the converted property at the time it was

converted. Tabar v. Charlie’s Towing Serv., 97 Ohio App.3d 423, 427-428, 646 N.E.2d

1132 (8th Dist.1994).

{¶21} Emini demanded the return of the vehicle. He even offered to pay $200 for

Modic’s labor in exchange for the car, despite the missing parts. However, Modic refused to return the vehicle. Under these circumstances, a judgment in replevin and

repossession of the vehicle would not compensate Alb USA for the diminution in value

caused by missing parts. This is precisely why I believe Emini did not seek replevin, but

requested $3,500.1

{¶22} Furthermore, there is no requirement that a plaintiff first exhaust his

remedies in a replevin action before electing to sue for conversion. Perez Bar & Grill v.

Schneider, 9th Dist. No. 11CA010076, 2012-Ohio-5820, ¶ 11. If the plaintiff can

establish all the elements of conversion, he may pursue the conversion claim without

regard to other potential remedies. Id.

{¶23} Alb USA held a security interest in the vehicle by virtue of its sale, which

included financing, to Franklin. As the first lien holder, it had first priority to possession

of the vehicle. When a secured party acquires a secured interest in a motor vehicle

before a lien creditor, the secured party will have superior rights to the vehicle. R.C.

4505.13(B); 2 Commonwealth v. Berry, 2 Ohio St.2d 169, 207 N.E.2d 545 (1965).

“[W]hen property is subject to a security interest, an exercise of dominion or control over

the property that is inconsistent with the rights of the secured party constitutes, as to that

1 The statement of claim states, in relevant part: “Defendant owes $5,000 for cost of vehicle. * * * He can keep the vehicle but only if he agrees to pay a partial amount of the $5283.36 that is still owed to us (he would pay approximately $3,500).” 2 R.C. 4505.13(B) provides, in pertinent part: “[A]ny security agreement covering a security interest in a motor vehicle, if a notation of the agreement has been made by a clerk of a court of common pleas on the face of the certificate of title or the clerk has entered a notation of the agreement into the automated title processing system and a physical certificate of title for the motor vehicle has not been issued, is valid as against the creditors of the debtor.” (Emphasis added.) secured party, a conversion of the property.” Battle Creek State Bank v. Preusker, 253

Neb. 502, 511, 571 N.W.2d 294 (Neb.1997).

{¶24} As soon as Alb USA learned that the vehicle was in Modic’s possession, it

demanded its return. Modic refused to tender the vehicle, which now had the

transmission and other parts missing. Therefore, I would find that the trial court properly

found that Modic’s possession of the vehicle constituted conversion and award money

damages.

{¶25} I would also find that the trial court properly awarded judgment against

Modic personally. The complaint identified Modic as an individual defendant, and he

failed to assert that he was not the real party in interest in the trial court. The failure to

name the real party in interest is a defense that is waived if not timely asserted. Goldney

v. Byrd, 8th Dist. No. 88285, 2007-Ohio-1985, ¶ 22.

{¶26} Finally, I would find that Modic was not entitled to a possessory artisan’s

lien. Although Modic may be entitled to compensation from the party who requested his

service, he is not entitled to compensation from Alb USA.

{¶27} Therefore, I respectfully dissent.