Opinion
No. 353-81
Opinion Filed November 2, 1982
1. Appeal and Error — Findings — Tests for Overturning
Findings of fact and conclusions of law by the trial court will not be disturbed on appeal unless clearly erroneous when viewed in the light most favorable to the prevailing party. V.R.C.P. 52.
2. Landlord and Tenant — Conversion of Tenant's Property
Where plaintiffs rented a house from defendants in December of 1977, and where an agreement was reeached to terminate the tenancy on April 15, 1978, and on April 10, while the plaintiffs were out of town, the defendants entered the rented property and removed a substantial amount of personal property, the trial court properly found that the plaintiffs had not orally pledged their personal property as security for personal debts since the requirements of nonpossessory security interests under Article Nine of the Uniform Commercial Code, a writing, signed by the debtor, containing a description of the collateral, had not been met and the defendants did not, therefore, have a security interest in the plaintiffs' property. 9A V.S.A. § 9 — 203(1)(b).
3. Secured Transactions — Security Agreement — Requirements
The requirements of a writing, signed by the debtor, containing a description of the collateral as prerequisites for nonpossessory security interests under Article Nine of the Uniform Commercial Code lessen the probability of future misunderstandings, prevent collusion and misrepresentation, and provide information to third parties who may be bound by the existence of a security interest. 9A V.S.A. § 9 — 203(1)(b).
4. Landlord and Tenant — Conversion of Tenant's Property
Where plaintiffs rented a house from defendants in December of 1977, and where an agreement was reached to terminate the tenancy on April 15, 1978, and on April 10, 1978, while plaintiffs were out of town, the defendants entered the rented property and removed a substantial amount of personal property, which the trial court valued at $26,840, the trial court properly found that the defendants had no right to seize and eventually sell the plaintiffs' property without judicial oversight, where the defendants did not have a security interest in the plaintiffs' property and where the defendants did not meet their burden of proof on the affirmative defense that the plaintiffs had abandoned their property.
5. Damages — Punitive Damages — Discretion of Court
The supreme court will not overrule a trial court finding regarding punitive damages unless it appears that the trial court had no reasonable basis for the exercise of its discretion.
6. Damages — Punitive Damages — Evidence
Where defendants were found to have had no right to seize and eventually sell personal property of the plaintiffs, who rented a house from the defendants, the trial court did not misuse its discretion in finding that punitive damages were inappropriate where there was insufficient evidence of actual malice.
7. Witnesses — Competency — Owner of Property
In an action brought by the plaintiffs against defendants arising from seizure and sale of personal property, where the trial court properly found that defendants had had no right to seize and eventually sell personal property, including numerous antiques, belonging to the plaintiffs, who had rented a house from the defendants, the supreme court could not accept the defendants unsupported assertion that one of the plaintiffs was incompetent to testify as to the value of his own property. 12 V.S.A. § 1604.
Appeal by defendants in an action by plaintiffs arising from the seizure and sale of plaintiffs' property by defendants. Rutland Superior Court, Amidon, J., presiding. Affirmed.
Donald R. Powers, Brandon, for Plaintiffs-Appellees.
Paterson, Walke Pratt, P.C., Montpelier, for Defendants-Appellants.
Present: Barney, C.J., Billings, Hill and Underwood, JJ., and Daley, J. (Ret.), Specially Assigned
The plaintiffs sued defendants, Christopher Williams and Floating Bridge Holding Company (successor corporation to Green Trails, Inc.) because of a dispute grounded in a landlord-tenant relationship. In December, 1977, plaintiffs rented a house from defendants, both sides assuming certain obligations and expecting various benefits. From all that appears, aspects of the bargain were never clarified, and the relationship deteriorated until an agreement was reached to terminate the tenancy on April 15, 1978. On April 10, however, while the plaintiffs were out of town, the defendants entered the rented property and removed a substantial amount of personal property, including numerous antiques. The value of the seized property was found by the trial court to be $26,840. Defendants admit taking and holding plaintiffs' property; in their view, such action was justified to assure that the plaintiffs paid overdue utility bills and performed repair work previously agreed to.
The defendants argued unsuccessfully below that the plaintiffs had orally pledged their personal property as security for personal debts. Alternatively, defendants argued that the property was abandoned, a conclusion they feel supported by plaintiffs' voluntary absence from the rental premises and by a failure to reclaim all the property after defendants offered to unconditionally release it. As we have frequently said, findings of fact and conclusions of law by the trial court will not be disturbed on appeal unless clearly erroneous when viewed in the light most favorable to the prevailing party. See, e.g., V.R.C.P. 52.
We begin by noting that the trial court found that the defendants did not have a security interest in the plaintiffs' property. This finding is abundantly supported. Nonpossessory security interests under Article Nine of the Uniform Commercial Code require few formalities: (1) a writing (2) signed by the debtor (3) containing a description of the collateral. 9A V.S.A. § 9 — 203(1)(b). These minimal prerequisites lessen the probability of future misunderstandings, prevent collusion and misrepresentation and provide information to third parties who may be bound by the existence of a security interest. See id., Uniform Law Comments; see generally, J. White R. Summers, Handbook of the Law Under the Uniform Commercial Code § 23-3, at 902-04 (2d ed. 1980). In the instant case, these requirements were not met. Therefore, the trial court correctly ruled that no security interest existed.
The trial court also found, as a matter of law, that there was no evidence of a clear and unequivocal intent on the part of the plaintiffs to abandon their property. We agree that defendants have not met their burden of proof on this affirmative defense. In addition, we observe that the defendants maintain that some $26,000 worth of property was abandoned to satisfy a debt of less than 10% of that amount. Thus, we agree in all respects with the trial court that the defendants had no right to seize and eventually to sell the plaintiffs' property without judicial oversight. We also agree that punitive damages are inappropriate on these facts; there is simply insufficient evidence of actual malice. We will not overrule a trial court finding regarding punitive damages unless it appears that the trial court had no reasonable basis for the exercise of its discretion. Such misuse of discretion is clearly not present here. See Gray v. Janicki, 118 Vt. 49, 55, 99 A.2d 707, 711 (1953). Finally, we cannot accept the defendants unsupported assertion that the plaintiff was incompetent to testify as to the value of his own property. See 12 V.S.A. § 1604.
The judgment of the trial court is affirmed.