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Blackwell Motors, Inc. v. Manheim Services Corporation

Court of Appeals of Missouri, Eastern District, Southern Division

September 19, 2017


         Appeal from the Circuit Court St. Francois County Honorable Shawn R. McCarver


         The plaintiffs, Blackwell Motors, Inc. and Vicky DeShields, appeal the summary judgment entered by the Circuit Court of St. Francois County in favor of the defendant, Manheim Services Corporation, in connection with their suit for title and possession of four vehicles, trespass, and slander. First, because Blackwell obtained the vehicles from a person whose title to the vehicles was void, we conclude that Blackwell, and in turn DeShields, obtained no protectible interest in the vehicles. Second, because Manheim did not give instructions to law enforcement or otherwise involve itself in the criminal investigation and seizure of the vehicles, we conclude that the Bridgeton police officers present during the vehicles' seizure did not act as Manheim's agents. Therefore, we affirm the trial court's grant of summary judgment.

         Factual and Procedural Background

         Manheim Services Corporation is a motor-vehicle auctioneer in Bridgeton, St. Louis County, Missouri. The auction is open only to licensed motor-vehicle dealers. Any dealer wanting to buy or sell through the auction must register with an entity called AuctionAccess, which maintains a database of motor-vehicle dealers and their representatives. As a convenience to dealers conducting business at the auction, Manheim has the buying dealer pay the purchase price into a Manheim account. In turn, Manheim issues its own check to the selling dealer. This procedure protects selling dealers from the risk of dishonored checks. Manheim does not become part of the chain of title for a vehicle unless a buying dealer's check is returned as non-negotiable. In that event, the selling dealer assigns its ownership rights to the vehicle to Manheim in consideration for Manheim covering the buying dealer's check.

         Springdale Auto Sales, Inc. was a motor-vehicle dealer registered with AuctionAcess and authorized to conduct business through the auction. Someone claiming to be with Springdale contacted Manheim, and requested that Robert Hector be allowed to purchase vehicles at the auction for Springdale. Manheim personnel confirmed that Springdale was an authorized dealer, and faxed paperwork to the telephone number provided by the caller to have Manheim add Hector to the AuctionAccess database as an authorized Springdale representative. Hector appeared at the auction shortly thereafter for a sale on February 10, 2009. He had paperwork in hand that listed a new telephone number for Springdale, and he portrayed himself as a representative of Springdale. When Manheim personnel sought to verify Hector's authorization with Springdale, they were misled into speaking with someone who falsely represented himself as Springdale's owner and falsely confirmed Hector's pretended authority. Purportedly on behalf of Springdale, Hector then sought to buy six vehicles at the auction. The seller of the vehicles had assigned the certificates of title pending identification of the purchaser(s) at auction. Auction staff completed the assignments of the vehicle titles to Springdale when Hector, ostensibly acting on Springdale's behalf, became the high bidder. Hector claimed to pay for the vehicles via six separate checks in Springdale's name and drawn on U.S. Bank. There was, however, no such U.S. Bank checking account number-in Springdale's name or in any other name-and the checks were returned as non-negotiable on February 12, 2009. Manheim reported the incident to Officer David Knapp of the Bridgeton Police Department, who prepared an offense/incident report dated February 14, 2009. The selling dealer at the auction assigned its ownership rights and interests in the vehicles at issue to Manheim.

         In the meantime, Hector purported to sell three of the vehicles to Blackwell for a total of $31, 000. Blackwell did not pay Springdale or Hector for the vehicles, but rather paid a person named Cordel McElwain.[1] Hector ostensibly sold a fourth vehicle to Blackwell on February 18, 2009 for $8, 000.[2] Blackwell again paid Cordel McElwain for the vehicle. Blackwell later professed to sell vehicle 3 to its retail customer DeShields, and vehicles 2 and 4 to other retail customers who are not parties to this lawsuit. Blackwell retained possession of vehicle 1.

         Law enforcement seized all four of the vehicles as part of a criminal investigation on April 2, 2009. Officer Knapp and Detective Chris Welby of the Bridgeton Police Department were present when the Missouri Highway Patrol seized vehicles 1 and 2 from Blackwell's premises. The other two vehicles were seized from DeShields and from another Blackwell customer by the Missouri Highway Patrol and the Madison County Sheriffs Department, respectively. Detective Welby supervised the criminal investigation and vehicle recovery. In addition to his employment with the Bridgeton Police Department, Officer Knapp had worked part-time for Manheim performing security services at the auction since 2007. Knapp was on duty as a Bridgeton police officer when the vehicles were recovered. Detective Welby had also performed some secondary security work for Manheim that ended several months before the February 2009 incident with Hector. David Wright was another Bridgeton police officer who participated in the criminal investigation into the vehicles, but Officer Wright was not present during the recovery of the vehicles.

         The State charged Hector with one count of stealing by deceit in excess of $25, 000, a class B felony, and six counts of forgery, a class C felony. He pled guilty to all counts. The following exchange occurred during the plea hearing in which Hector acknowledged under oath and on the record that he was not an approved agent of Springdale and that he was not authorized to act on its behalf.

[PROSECUTOR]: Yes, your Honor. Counts 1 through 7 all occurred on or about February 10th, 2009 at 12:30 p.m. at 13813 St. Charles Rock Road in the County of St. Louis, State of Missouri.
Count 1, the State would show at trial that Robert B. Hector committed the class B felony of stealing by deceit and that the defendant appropriated six motor vehicles of a value of at least $25, 000, which property was in the possession of Manheim St. Louis and defendant appropriated such property from Manheim St. Louis and with the purpose to deprive the victim thereof by deceit in that defendant represented to Manheim St. Louis that he had negotiable checks, which representations were false and known by the defendant to be false and Manheim St. Louis relied on the representations and was thereby induced to part with such property.
Your Honor, Counts 2 through 7, on those counts the State would show in each of those counts that the defendant, Robert B. Hector, committed the class C felony of forgery, in that the defendant, with the purpose to defraud, completed a writing, namely checks, so that it purported to have been made by the authority of one who did not give such authority.
The testimony at trial would be, your Honor, that on February 10th of '09, Mr. Hector went to Manheim St. Louis Auto Auction, he represented himself as an agent authorized to bid on automobiles for Springdale Auto Sales, the defendant had not been given permission by Springdale Auto Sales to bid on vehicles nor was he an approved agent of Springdale.
The defendant bid and purchased six vehicles from Manhiem (sic) St. Louis of over eighty thousand dollars, the defendant paid for these vehicles with six checks drawn on U.S. Bank. The name on the checks was Springdale Auto Sales but Springdale Auto Sales did not have an account, the same account that's listed on the checks that Mr. Hector passed to Manhiem (sic) St. Louis Auto Auction.
THE COURT: Mr. Hector, is what the prosecuting attorney said substantially true and correct?
THE DEFENDANT: Yes, it is, your Honor.

(Emphases added.)

         The plaintiffs filed suit against Manheim. In their first amended petition, they asserted claims for replevin, conversion, interference with contract, slander of title, trespass, and slander. Blackwell and DeShields claimed they were good-faith purchasers for value, and thus had good title to and ownership rights in the respective vehicles. Blackwell further claimed that Officers Wright and Knapp, acting as agents for Manheim, solicited the assistance of the Missouri Highway Patrol in seizing the vehicles from Blackwell "on the pretense that the seizure was in connection with their investigation of criminal activity, " and causing the vehicles to be delivered to Manheim. Blackwell claimed it suffered damages, including loss of business, loss of reputation, interruption of business, loss of the benefit of its contracts with retail customers, costs associated with replacing the vehicles, and costs of settling with its customers' lenders.

         Manheim filed a motion for summary judgment. In their amended response to Manheim's statement of uncontroverted material facts, the plaintiffs denied that Hector was indicted, prosecuted, and pled guilty to stealing and forgery, objecting only on the basis that such statements were "immaterial and irrelevant."

9. Hector was indicted by the Grand Jury of St. Louis County for the offenses of stealing motor vehicles valued in excess of $25, 000 (a Class B Felony as described in Section 570.030 RSMO) and forgery (a Class C Felony as described in Section 570.090). See Affidavit of David Knapp at ¶ 10; Exhibit EE. (Footnote to statutory references omitted).
RESPONSE: Deny. The alleged statement of material fact contained in Paragraph 9 is immaterial and irrelevant to any issue and is, therefore, not a statement of genuine material fact.
10.The criminal charges were prosecuted in the St. Louis County Circuit Court in the case entitled State of Missouri v. Robert Hector in Division 3 of that court bearing cause number 09SL-CR03296-01. See Exhibit FF.
RESPONSE: Deny. The alleged statement of material fact contained in Paragraph 10 is immaterial and irrelevant to any issue and is, therefore, not a statement of genuine material fact.
11.Hector pleaded guilty to all charges on June 17, 2010. See Exhibit FF, at page 5, lines 9-11; page 7, lines 13-25; page 8, lines 1-25; and page 9, lines 1-13.
RESPONSE: Deny. The alleged statement of material fact contained in Paragraph 11 is immaterial and irrelevant to any issue and is, therefore, not a statement of genuine material fact.

         Importantly, the plaintiffs then admitted that Hector did not have authority to act for Springdale.

16. Robert Hector was not authorized to act on behalf of Springdale Auto Sales, Inc. See Exhibit FF [the above excerpt from the plea hearing transcript] at page 8, lines 20-25 to page 9, lines 1-13.
RESPONSE: Admit. However, Hector was not authorized by Springdale to purchase the vehicles from Manheim, but Manheim transferred the vehicles to him believing that he was the agent of Springdale. Reference: Pages 4-11, Deposition of James Holt, Exhibit 6.

         In their first amended petition and throughout their responses to discovery, the plaintiffs stated numerous times that Blackwell purchased the vehicles from Hector,

         A few weeks later, the plaintiffs filed a statement of additional material facts, seeking to establish that Hector was an authorized buyer for Springdale according to the records of AuctionAccess.[3]

         With regard to the trespass and slander counts, Manheim asserted that it did not direct or instruct Officer Knapp or Detective Welby in connection with the criminal investigation and seizure of two of the vehicles from Blackwell. Blackwell sought to demonstrate the existence of a genuine dispute of this material fact through yet another statement of additional material facts.

         The trial court entered summary judgment in favor of Manheim, finding no genuine dispute existed that Hector misrepresented himself as a representative of Springdale and did not have authority to act on Springdale's behalf, that Hector gave Manheim six fictitious checks as payment for six vehicles, that Blackwell purchased four of the vehicles from Hector, and that Hector pled guilty to larceny and forgery. The trial court found that the case of Moore Equipment Company v. Ha[ferty governed the bona fide purchaser issues in the case.[4]Accordingly, the trial court determined that Hector was not a "purchaser" at the auction, that no title to or ownership interest in the vehicles passed to Hector, that Hector was not acting on behalf of Springdale, and that Hector was unable to transfer title to the vehicles to Blackwell.

         The trial court found that the issue of the dual-employment status of Officer Knapp and Detective Welby was governed by Carinelo v. Miller.[5] The trial court found that Blackwell had failed to comply with Rule 74.04(c)(2) with a number of its responses, and found inter alia that no genuine dispute existed that Knapp was on duty with the Bridgeton Police Department and was present when vehicles 1 and 2 were seized, that Welby was a detective with the Bridgeton Police Department who supervised the investigation and recovery of the vehicles, that neither Knapp nor Welby received direction or instruction from Manheim in connection with the criminal investigation or seizure, and that the criminal investigation and vehicle seizure were validated when Hector admitted the crime.

         Blackwell and DeShields appeal.

         Standard of Review

         Summary judgment allows a trial court to enter judgment for the moving party where the party demonstrates a right to judgment as a matter of law based on facts about which there is no genuine dispute. ITT Commercial Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). Our review is essentially de novo. Id. When considering an appeal from summary judgment, we review the record in the light most favorable to the party against whom the court entered judgment. Id. We can affirm a summary judgment by any appropriate theory supported by the record. Missouri Bankers Ass 'n, Inc. v. St. Louis County, 448 S.W.3d 267, 270-71 (Mo. banc 2014).

         For purposes of summary judgment, a "genuine issue" exists where the record contains competent materials that evidence two plausible, but contradictory, accounts of the essential facts. ITT, 854 S.W.2d at 382. "A 'genuine issue' is a dispute that is real, not merely argumentative, imaginary or frivolous." Id. Summary judgment is proper where the "genuine ...

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