Sherry Trost v. Zachary Trost

525 F. App'x 335
Court of Appeals for the Sixth Circuit·Decided May 7, 2013·No. 12-1426, 12-1704·Unpublished·Cited by 7 cases

Opinion

OPINION

JANE B. STRANCH, Circuit Judge.

This appeal arises from a dispute between members of the Trost family. 1 A jury found Sherry Trost’s stepson and his wife, Zachary and Kim Trost, liable for converting Sherry’s property, and determined that Zachary alone breached a contract he and Sherry made. Ruling on Zachary and Kim’s post-verdict motion for judgment as a matter of law, the trial court let the jury’s judgment stand on the conversion claim, but reversed it on the contract theory. Both sides now appeal their losses. While the court below correctly refused to second-guess the jury on the conversion claim, we conclude that it wrongly interposed a statute-of-frauds defense to reverse the jury’s verdict on the contract claim. As a result, we AFFIRM IN PART, REVERSE IN PART, and REMAND for the court below to reinstate the jury’s verdict.

I. BACKGROUND

The following undisputed facts summarize the events leading up to the death of the Trost family patriarch, which precipitated the conflict at , the center of this matter:

Plaintiff, Sherry Trost, is the widower of Fred Trost. Fred Trost started a television show in Michigan in 1982, titled Michigan Outdoors. Michigan Outdoors was a dba of Fred Trost Enterprises, Inc. Fred Trost Enterprises, Inc. accumulated significant debts, including, but not limited to, a significant multimillion dollar civil judgment known as the “Buck Stop Judgment.” Plaintiff married Fred Trost on July 29, 1988. Later the show was operated by the corporate entity Michigan Sportsman Development Association and the name of the show was changed to “Practical Sportsman.” Michigan Sportsman Development Association became Practical Sportsman, Inc. in 1992. Practical Sportsman Inc. was later changed to a nonprofit corporation, Practical Sportsman Foundation. The “Michigan Outdoors” tape library owned by Fred Trost Enterprises, Inc. was bought by ZNT Marketing, Inc, a company owned by Zachary Trost and JoAnn Cribley at he [sic] auction held when all the assets related to the television show were seized due to the Buck Stop Judgment.
Fred Trost continued to operate his show[;] however[,] the debts from Fred Trost Enterprises, Inc. followed Fred Trost and made it impossible for him to own or operate the show in his own name or to own any assets of the show. In fact, Fred Trost was going to have to shut down the show and the business because of the debt. Fred Trost was to receive a significant inheritance from his parents upon their passing[;] however[,] these funds would not be available in time to save the show. Plaintiff and nonparty JoAnn Cribley agreed to take ownership of the show and its assets and *338 agreed to take on the show’s debts in their names so that Fred Trost could continue to operate the show. Plaintiff and JoAnn Cribley became officers and owners of Practical Sportsman, Inc.
In 2002, a non-profit corporation, Practical Sportsman Foundation, was set up in order to continue the operation of the show. Again, JoAnn Cribley and Sherry Trost were officers of Practical Sportsman Foundation. Practical Sportsman Foundation took on debts of the previous business entities and incurred additional debt. Fred Trost remained in charge of the running of the business, including finances and bookkeeping.
Plaintiff took a second mortgage on her home so Practical Sportsman Foundation could obtain an operating loan in the amount of $36,000.00. Practical Sportsman Foundation incurred at least $56,797.06 payroll tax liability to the Internal Revenue Service. Plaintiff ultimately paid that tax liability out of her personal funds after the filing of this lawsuit because the IRS had frozen her assets. She used money from her retirement account and incurred additional tax liability for using her retirement funds.
Practical Sportsman Foundation incurred additional tax debt to the state of Michigan of approximately $16,000.00. Practical Sportsman borrowed an additional operating loan of $9,000 to support the show and the business. Because Plaintiff and JoAnn Cribley were the legal owners and financiers of Practical Sportsman Foundation, they were ultimately liable for the loan and tax debts.
Fred Trost became suddenly ill in May 2007. After several months in the hospital, Fred Trost passed away in July 2007 prior to receiving his inheritance or paying any of the debts from the show.
Defendant Zachary Trost is the son of Fred Trost and [stepson] of Plaintiff Sherry Trost. Defendant Kim Trost is the wife of Zachary Trost. Zachary Trost worked on the show with his father over the years and he and/or his company owned a museum and published a magazine related to the show.
Fred Trost predeceased one of his parents and never received the inheritance. Zachary Trost and [his sister] Tara Trost received an inheritance from Fred Trost’s parents.

When Fred died in July 2007, Sherry says that she agreed to give Zachary the assets she owned related to Fred’s show— mostly videotapes of original show episodes, raw footage, and assorted show memorabilia — in exchange for Zachary paying off the debts Sherry incurred running the show, including tax debts and outstanding loans. Zachary took the assets from Sherry and tried to profit from them by, for example, selling DVDs of old episodes on the internet. But despite Sherry’s repeatedly requests over the next two years that he pay off the debts, Zachary ignored her. And when she ultimately demanded that he return the assets, Zachary refused.

In June 2009, Sherry sued Zachary and Kim. She alleged multiple counts, but only two are relevant here. First, Sherry asserted nearly $109,000 in contract damages stemming from Zachary’s alleged failure to pay the business debts. Second, she advanced a common-law conversion claim against both Zachary and Kim to recover the value of the property converted.

Zachary and Kim moved for summary judgment. On the contract claim, the court held that Sherry presented sufficient evidence to support the existence of an oral contract. But it reserved the question *339 of whether the oral contract was subject to the statute-of-frauds provision in Michigan’s version of the Uniform Commercial Code (UCC), which applies to the sale of goods. And on the conversion claim, the court concluded that Sherry’s claim presented factual issues regarding whether Zachary’s possession of the assets was inconsistent with Sherry’s rights.

A three-day jury trial was held in February 2012. In her case-in-chief, Sherry took the stand, put on three witnesses, and submitted nearly two dozen exhibits. The trial evidence detailed the property at issue, how Sherry came to own it, the circumstances surrounding the formation of Sherry’s contract with Zachary, Sherry’s partial performance of it, and Zachary’s breach. Sherry testified that the property at issue consisted of the video library from Fred’s show and miscellaneous memorabilia. The latter included video editing equipment, show props, wildlife mounts, rifles, shotguns, hunting and fishing equipment, and a shotgun reloading machine.

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Sherry Trost v. Zachary Trost, 525 F. App'x 335 (6th Cir. 2013).

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