First Security Bank of Utah, N.A. v. J.B.J. Feedyards, Inc.

653 P.2d 591
CourtUtah Supreme Court
DecidedJuly 20, 1982
Docket17269, 17270
StatusPublished
Cited by57 cases

This text of 653 P.2d 591 (First Security Bank of Utah, N.A. v. J.B.J. Feedyards, Inc.) is published on Counsel Stack Legal Research, covering Utah Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
First Security Bank of Utah, N.A. v. J.B.J. Feedyards, Inc., 653 P.2d 591 (Utah 1982).

Opinions

HALL, Chief Justice:

Plaintiff First Security Bank of Utah and intervenor Allen separately appeal a decision awarding damages to intervenor for plaintiff’s wrongful attachment of 266 head of cattle owned by intervenor.

On February 7, 1973, plaintiff filed suit against defendant J.B.J. Feedyards to recover money owed to it by J.B.J. On the same day, pursuant to a writ of attachment, plaintiff attached 342 cattle kept in the J.B.J. Feedyard, some of which belonged to J.B.J. itself and some of which were later found to belong to Allen. On February 9, 1973, Allen intervened in the action, filing a motion to quash plaintiff’s writ of attachment, which motion was granted on April 6, 1973. Meanwhile, the parties had stipulated that the attached cattle would be sold at the highest possible price and the proceeds held by plaintiff in a special account pending determination of ownership.

On March 9, 1973, Zions First National Bank, holder of a security interest in inter-venor’s cattle, filed a separate action against plaintiff, asserting intervenor’s ownership of and Zion’s own first lien on the attached cattle. In that action, the trial court determined that 266 of the attached cattle had belonged to intervenor and that [593]*593he should receive $114,459.07 of the sales proceeds. Although the trial court entered judgment on June 4, 1974, intervenor received only $40,467.08 at that time; plaintiff continued to hold most of the sales proceeds while it appealed that judgment. On April 15, 1975, this Court affirmed the trial court’s decision.1 Plaintiff paid to in-tervenor the remainder of the $114,459.07 in sales proceeds (less $12,873.79 feed costs), along with court costs and interest from the date of judgment.

In the suit originally filed by plaintiff against defendants, plaintiff and defendants eventually resolved by stipulation all issues between them and the decision of the trial court concerned only a claim for damages raised by intervenor against plaintiff. In that decision, the court found that at the time of the attachment, plaintiff had actual and constructive notice of intervenor’s ownership of the 266 cattle, that it attached the cattle without probable cause and that its actions showed malice. The court awarded to intervenor damages for loss of use of the $114,459.07 and attorney fees incurred in quashing plaintiff’s writ of attachment. That award resulted in the present appeal.

Plaintiff appeals on the grounds that it did have probable cause to attach interve-nor’s cattle and that intervenor has failed to show any specific items of damage. In turn, intervenor claims that the damages awarded are insufficient and that the trial court erred in refusing to grant three additional items of damage claimed by him at trial. We consider first the alleged wrongfulness of plaintiff’s attachment and second whether sufficient evidence supports the specific damages awards made by the trial court.

I

Plaintiff claims that intervenor has failed to establish malice or lack of probable cause in its actions and that in the absence of such a showing, no damages can be awarded. However, substantial evidence supports the trial court’s findings that plaintiff had notice of intervenor’s ownership of the cattle and that it lacked probable cause to attach them. At the time of attachment, intervenor’s cattle were branded with the symbol “V-5,” a brand registered with the Utah Department of Agriculture by intervenor’s business, Mount Nebo Cattle Company. A financing statement filed by Zions First National Bank with the Utah Secretary of State also showed the brand “V-5” as belonging to Mount Nebo Cattle Company. Plaintiff admits that it did not check either of these public records to determine ownership of the “V-5” brand.

Plaintiff claims that knowledge of Mount Nebo’s ownership of the brand would not have affected its decision to attach the “V— 5” branded cattle because it did not know that the Mount Nebo Cattle Company was associated with intervenor. Testimony by William Barth Boswell, an agent of J.B.J., contradicts this assertion. Boswell testified that shortly before the attachment, he told plaintiff’s officer Roy Broadbent that the cattle belonged to intervenor and that plaintiff had no claim on them. According to Boswell, he also “continually” informed other representatives of plaintiff of the independent ownership of the Mount Nebo Cattle Company cattle.

Broadbent testified that he did not recall the conversation reported by Boswell and that at the. time of attachment, he believed J.B.J. to be the owner of the “V-5” branded cattle. However, the trial court found that the “V-5” branded animals were “never directly associated with the cattle in which the First Security Bank held a secured interest.” Even if plaintiff did believe that the cattle belonged to J.B.J., it had a duty to verify this assumption by checking public records and making inquiries before taking the cattle into its possession. Plaintiff has introduced no evidence of any such efforts on its part to verify ownership. In the absence of such evidence, the trial court correctly found that plaintiff acted without probable cause.

[594]*594In addition to lack of probable cause, the trial court found legal and actual malice in plaintiff’s actions, providing the basis for awards of punitive damages and mental anguish damages to intervenor. The court found that the total value of the assets attached by plaintiff was approximately five times the amount of J.B.J.’s debt. It found that even after intervenor asserted his ownership and demanded return of the cattle, plaintiff unlawfully retained the cattle and handled them in such a way as to fail to mitigate damages. Regarding plaintiff’s purpose in carrying out the attachment, the court found as follows:

[A]t the time of the attachment First Security Bank knew that there was a substantial probability that the owner of the [cattle] was not J.B.J. Feedyards, Inc., its [debtor], and intentionally chose to disregard that possibility in order to enhance the position of FIRST SECURITY BANK....

These findings, together with those concerning probable cause, led to the court’s determination that plaintiff “with actual malice . . . unlawfully converted and used intervenors’ assets.” The record, when viewed in the light most favorable to inter-venor, contains substantial evidence to support the court’s findings and we will not disturb them.2

II

Having determined that plaintiff acted with actual malice and without probable cause, the trial court awarded the following damages to intervenor: 1) excessive interest paid to Zions First National Bank as a result of intervenor's inability to repay a loan, 2) lost profits in intervenor’s Montana livestock trade, 3) attorney fees, 4) damages for mental anguish, 5) punitive damages, and 6) prejudgment interest. The court refused to award three additional items of damages sought by intervenor: 1) loss on the sale of the attached cattle, 2) loss on the forced sale of intervenor’s Central Montana Livestock Company, and 3) lost profits in the cattle futures market.

As to each of the latter three items of claimed damages, the evidence presented by intervenor clearly fell short of establishing either the fact of damages or the causal connection between alleged damages and the actions of plaintiff. We affirm the trial court’s finding that intervenor failed to carry his burden of proof on these three items.

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Bluebook (online)
653 P.2d 591, Counsel Stack Legal Research, https://law.counselstack.com/opinion/first-security-bank-of-utah-na-v-jbj-feedyards-inc-utah-1982.