Business Law 13th Edition by Frank Cross, Kenneth Clarkson, Roger LeRoy Miller

Exercise 14

BACKGROUND AND FACTS A truck owned by Johnson Construction Company needed repairs. John Robert Johnson, Jr., the company's president, took the truck with its attached fifteen-ton trailer to Bubba Shaffer, doing business as Shaffer's Auto and Diesel Repair. The truck was supposedly fixed, and Johnson paid the bill. The truck continued to leak oil and water. Johnson returned the truck to Shaffer, who again claimed to have fixed the problem. Johnson paid the second bill. The problems with the truck continued, however, so Johnson returned the truck and trailer a third time. Shaffer gave a verbal estimate of $1,000 for the repairs, but he ultimately sent an invoice for $5,863.49. Johnson offered to settle for $2,480, the amount of the initial estimate ($1,000), plus the costs of parts and shipping. Shaffer refused the offer and would not return Johnson's truck or trailer until full payment was made. Shaffer also charged Johnson a storage fee of $50 a day and 18 percent interest on the $5,863.49.
Johnson Construction filed a suit against Shaffer alleging unfair trade practices. The trial court determined that Shaffer had acted deceptively and wrongfully in maintaining possession of the trailer, on which no work had been performed. The trial court awarded Johnson $3,500 in general damages, plus $750 in attorneys' fees. Shaffer was awarded the initial estimate of $1,000 and appealed.
IN THE LANGUAGE OF THE COURT
LOLLEY, J. [Judge]
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* * * At the outset, we point out that Mr. Johnson maintained he had a verbal agreement with Bubba Shaffer, the owner of Shaffer's Auto Diesel and Repair, that the repairs to the truck would cost $1,000. Mr. Johnson also testified that he was not informed otherwise.
The existence or nonexistence of a contract is a question of fact, and the finder of fact's determination may not be set aside unless it is clearly wrong.
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* * * At the trial of the matter, the trial court was presented with testimony from Mr.
Johnson, Mr. Shaffer, and Michael Louton, a mechanic employed by Shaffer. * * * The trial court did not believe Mr. Johnson was informed of the cost for the additional work.
* * * We cannot say that the trial court was clearly wrong in its determination. * * * The trial court viewed Mr. Shaffer's testimony on the issue as "disingenuous" and we cannot see where that was an error.
As for the amount that Shaffer contends is due for storage, had it invoiced Mr. Johnson the amount of the original estimate in the first place, there would have been no need to store the truck or trailer. * * * We cannot see how Shaffer would be entitled to any payment for storage
when it failed to return the truck and trailer where an offer of payment for the agreed upon price had been conveyed.
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* * * So considering, we see no error in the trial court's characterization of Shaffer's actions with the trailer as holding "hostage in an effort to force payment for unauthorized repairs." * * * Shaffer had no legal right to retain possession of the trailer * * *. Thus, the trial court did not err in its determination that Shaffer's retention of Johnson Construction's trailer [for four years!] was a deceptive conversion of the trailer. [Emphasis added.]
DECISION AND REMEDY The state appellate court affirmed the judgment of the trial court in favor of Johnson Construction Company. It affirmed the award of $ 3,500, plus $ 750 in attorneys' fees, as well as Shaffer's original award of $ 1,000.
WHAT IF THE FACTS WERE DIFFERENT? Suppose that Shaffer had invoiced Johnson for only $ 1,500. Would the outcome have been different?
THE ETHICAL DIMENSION? Would it have been ethical for Shaffer's mechanic to lie to support his employer's case? Discuss.