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Heal v. Anderson

Court of Appeals of Iowa

April 19, 2017

JAMES HEAL, Plaintiff-Appellant,
v.
BRIAN ANDERSON, Defendant-Appellee.

         Appeal from the Iowa District Court for Iowa County, Ian K. Thornhill, Judge.

         Plaintiff appeals from the trial court's ruling finding plaintiff had converted the defendant's personal property and awarding damages in the amount of $64, 990.23. AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

          John W. Pilkington of Nidey, Erdahl, Tindal & Fischer, P.L.C., Marengo, for appellant.

          Jennifer L. Zahradnik of Kollmorgen, Schlue & Zahradnik, P.C., Belle Plaine, for appellee.

          Considered by Doyle, P.J., Tabor, J., and Blane, S.J. [*]

          BLANE, Senior Judge.

         James Heal appeals from the district court's ruling, following a bench trial, in favor of the defendant, Brian Anderson. Heal maintains the district court erred by finding he had wrongfully converted Anderson's personal property while Heal had a temporary injunction against Anderson. Additionally, he maintains the district court abused its discretion in permitting a lay witness to testify to the value of salvage vehicles on the business premises.

         I. Background Facts and Proceedings.

         Heal owned a parcel of land in Homestead, which had previously been used as a vehicle salvage yard. Anderson approached Heal about buying the parcel. Anderson was unable to meet Heal's asking price, and the parties entered into an oral contract to have Anderson run the business instead.

         The parties dispute the terms of the agreement. Heal testified he had complete ownership of the business and he hired Anderson to run it; he stated he provided the building, land, and initial inventory, and was to receive 51% of the profits. Meanwhile, Anderson would run the day-to-day operations and receive the other 49% of the profits. In contrast, Anderson testified he and Heal agreed Heal would allow Anderson to use the land and buildings but Heal's inventory was supposed to be crushed and scrapped.[1] Anderson claimed he was the sole proprietor of the business, named AAA Auto Recyclers-noting the permits and bank account were in only his name and the name of the business-and he was to obtain his own inventory. At the end of the first year, Heal and Anderson were to split the profits of the business in half, and then the two parties would discuss the option of Anderson buying the land and buildings on contract. In its written ruling, the district court found Anderson's "assertions as to the details of the agreement to be highly credible and supported by other evidence."

         Anderson received keys to the property on October 31, 2010. He spent approximately two months cleaning the property and getting it ready to open the business. In doing so, he cleaned up trash, made the buildings operational (by installing heat and fixing the plumbing), and brought in or fixed the tools and equipment necessary to run the business.

         Anderson opened the business on January 1, 2011. His girlfriend assisted by keeping the books for the business. Because Anderson did not want to quit his full-time job until the business was self-sufficient, he initially worked at the salvage yard part-time, and Josh Detling was brought on to manage day-to-day operations.

         Anderson used his own resources to build the inventory for the business- some vehicles he brought with him and others he purchased. Anderson kept separate records for parts that were sold off cars he brought in and those that came off Heal's cars that were still sitting on the property. However, the profits from both were re-invested into the business; Anderson did not pay himself a salary.

         Heal and Anderson had a good working relationship until August 2011. The relationship then broke down, and AAA ceased operations shortly thereafter. Specifically, in early August, Anderson sold a 2004 Ford F-150 he purchased with his own money and for his own personal use. He sold the truck for $7000. Anderson intended to deposit this cash, along with $280 in cash from part sales and checks written to AAA, in the business's bank account. Heal happened to be on the property that day, and he offered to deposit the checks and cash so it would not have to remain on the premises throughout the business day. Heal deposited the checks, but he kept the $7280 in cash. Once Anderson realized what he had ...


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