On appeal from the Superior Court of New Jersey, Law Division, Bergen County.
Michels and Keefe. The opinion of the court was delivered by Michels, P.J.A.D.
Defendants Leo Holt and Holt International Motors (Holt International) appeal from a summary judgment of the Law Division that awarded plaintiff Barco Auto Leasing Corporation damages in the sum of $19,300 for the conversion of a BMW car.
The record, on the basis of which the summary judgment under review was entered in this matter, reveals that on or about October 29, 1983, Exotic Car Leasing Corporation (Exotic) of Pompano Beach, Florida, sold a 1981 733i BMW, Vehicle Identification No. "WBAFF3307B7351243" to plaintiff, a New York corporation authorized to do business in New Jersey. The document evidencing this transaction is a form issued by the State of Florida entitled "Division of Motor Vehicles Reassignment by Licensed Dealer", which, according to the affidavit of plaintiff's Vice President and General Counsel Richard Leibowitz (Leibowitz), demonstrates that the BMW was titled in Florida. Pursuant to a vehicle lease agreement executed on January 1, 1984, plaintiff subsequently leased the BMW back to Exotic. Paragraph 18 of this contract provided, in pertinent part, that "[t]his is an agreement of lease only. We retain title
to the vehicle." This lease contract was personally guaranteed by Exotic's president, John McKinnon (McKinnon).
According to the affidavit of Leibowitz, Exotic subsequently fell into arrears on the monthly lease payments in or around May 1984, the last payment having been received by plaintiff in December 1984. When plaintiff attempted to repossess the BMW, however, Liebowitz learned that McKinnon and his company had "disappeared" and were being sought by the police on charges of fraud and passing bad checks. Leibowitz then discovered that McKinnon had sold the BMW to Holt International, a New Jersey corporation, and that the BMW had been involved in an accident while being driven by the son of Leo Holt, the principal of Holt International.
By letter dated October 1, 1985, Leibowitz advised Leo Holt that plaintiff owned the BMW which had purportedly been delivered to defendant's place of business in Pennsauken, New Jersey. Shortly thereafter, Leo Holt called Leibowitz and advised him that he had obtained the BMW from McKinnon in November 1984 as payment for a debt owed by McKinnon. However, Leo Holt further informed Leibowitz that the BMW had been sold approximately 8 months earlier to a party whom Leo Holt declined to identify. Plaintiff did not learn the identity of the buyer until he received a letter from defendants' counsel in May 1987. According to the invoice enclosed therein, the BMW had been sold by Holt International to Global Motors, Inc. of Knoxville, Tennessee on September 27, 1985.
Plaintiff initiated this action against defendants for the alleged wrongful conversion of the 1981 BMW on January 22, 1986. Plaintiff alleged that it was and still is the record owner of the vehicle and charged that "defendant had full knowledge of the fact that the subject automobile was not owned by Mr. McKinnon or his company but was rather [sic] leased to them by the plaintiff and that title was in the name of the plaintiff corporation." (Emphasis added). Defendants denied these allegations in their answer and later contended, in opposing
plaintiff's summary judgment motion, that plaintiff had never filed a certificate of title in either Florida, New Jersey or New York. According to the affidavit of Leo Holt, McKinnon, from whom he had purchased several automobiles in the past with no problems, advised him on November 1, 1984, that Exotic owned the subject BMW. Leo Holt then purchased the automobile on behalf of Holt Sport Car Classics, Inc. (Holt SCC) for the sum of $18,000. This transaction is evidenced by an Exotic invoice dated November 1, 1984. Although McKinnon did not have physical possession of the certificate of title to the BMW at that time, he advised Leo Holt that the document was at his bank and promised that it would be delivered promptly.
After McKinnon failed to deliver title as promised, Leo Holt threatened to return the vehicle. According to Leo Holt, however, McKinnon advised him at this point that he had "lost" the title certificate after removing it from the bank, but that he would contact Emanuel Andrews (Andrews), the person who had sold the BMW to Exotic, and ask him to obtain a duplicate certificate. Subsequently a meeting occurred between Leo Holt, McKinnon and Andrews, at which time Andrews endorsed a duplicate copy of title directly over to Holt SCC pursuant to McKinnon's instructions.
Timothy Holt, Leo Holt's son and president of Holt SCC, which is in the business of buying and selling used automobiles, applied for and received a certificate of ownership for the BMW on behalf of Holt SCC. The BMW was eventually titled in New Jersey in or around May 1985. The document evidencing this is the certificate of title issued by the Commonwealth of Pennsylvania to Andrews indicating "NJ title issued" to Holt SCC as first assignee. According to the affidavit of Beth Everett Frederick (Frederick), a legal assistant with defendant's counsel, the Pennsylvania Department of Transportation advised her on March 27, 1987, that Andrews had in fact been issued a duplicate ...