Bacon & Associates, Inc. v. Rolly Tasker Sails (Thailand) Co.

RODOWSKY, J. The appellants, Bacon & Associates, Inc. (Bacon), an Annapolis, Maryland-based sail retailer, and Merilyn “Dixie” Bacon (Mrs. Bacon), Bacon’s sole owner and president, seek reversal of a judgment of the Circuit Court for Anne Arundel County rendered on a jury verdict in favor of the appellee, Roily Tasker Sails (Thailand) Co., Ltd. (RTS Thailand), a Thailand-based sail manufacturer and distributor. Appellants present the following issues concerning the jury verdict: “I. Whether the jury verdict should be reversed because of confusion created by verdict sheets with inconsistencies, contradictions and clerical errors. “II. Whether the jury verdict should be reversed because the jury improperly awarded $54,000.00 in administrative damages that were not permitted by law or supported by any evidence. “HI. Whether the jury verdict should be reversed based on the lower court’s erroneous jury instructions regarding the statute of limitations in breach of contract actions. “IV.

Whether the jury verdict should be reversed based upon the lower court’s error in permitting appellee to present evidence regarding claims of [companies related to the plaintiff by common ownership that] were not parties to the case.” Preliminarily, however, the appellee asserts that the appeal was noted too late. For the reasons explained below, we shall address the merits and affirm the judgment. ⁶²² Facts and Legal Proceedings Rolland Tasker (Mr. Tasker), 1 an Australian national, formed Roily Tasker Sails Pty. Ltd. (RTS Australia) in 1956 to produce sails. Initially working out of a rented shed, he used the money earned from selling sails to fund his trips to sailing competitions.

Because of the high cost of importing American sail cloth into Australia, Mr. Tasker formed Roily Tasker Hong Kong, Limited (RTS Hong Kong) in 1963, and had moved his operation to Hong Kong by 1971. Mr. Tasker was the sole owner of RTS Hong Kong and RTS Australia. The business relationship with appellants commenced in 1971, when RTS Hong Kong began shipping sails on consignment to Bacon in Annapolis. The terms of this consignment agreement, which was oral, will be discussed, infra.

Bacon received three shipments of sails from the Hong Kong facility before Mr. Tasker moved his operation back to Australia in 1973. 2 According to Mr. Tasker, “[t]he [Bacon] account was transferred to Australia ... [a]nd all the ledger cards at that time.” From 1973 to 1990, Mr. Tasker did business through RTS Australia. During this period, RTS Australia forwarded seven shipments of sails to Bacon on consignment. According to Mr. Tasker, all payments by Bacon made during this period were made to RTS Australia, even for sails that had been part of the three shipments from Hong Kong. Bacon never objected to this arrangement.

In 1990, Mr. Tasker formed the appellee, RTS Thailand, and moved his operation to Phuket, Thailand. At the time of trial, Mr. Tasker owned a sixty percent share of the Thai entity, his wife owned thirty-nine percent, and the remaining shares were ⁶²³ split among Mr. Tasker’s son, Michael, and several Thai employees. Between 1990 and 1998, seven sail shipments, and several non-sail shipments, were forwarded to Bacon from the Thailand facility. 3 From 1995 to 1998, all payments made by Bacon for Tasker entity sails were to be deposited into an account in Annapolis (the Alex Brown Account). 4 According to Mr. Tasker, all the accounts of Tasker entities, including their accounts with Bacon, had traveled with him to his present entity, RTS Thailand. Regarding the Hong Kong shipments, Mr. Tasker stated that “[t]he shipment [account] was transferred to [RTS] Australia.

And in 1994, the authority was transferred to [RTS] Thailand.” He admitted, however, that RTS Hong Kong received no monetary consideration for its transfer of the account documents and paperwork to RTS Australia, and RTS Australia received no compensation for its transfer of account documents to RTS Thailand. 5 Under the consignment arrangement between the parties, Tasker entities would ship sails to Bacon, with a bill of lading and an invoice stating the net price for each sail. Once it received a shipment, Bacon would inspect and measure the sails, assign a catalog number, and fix a “retail fair market ⁶²⁴ value price” for each sail. A “sail card” then was prepared for each catalog number. Sails were stored in Bacon’s Annapolis warehouse until sold. 6 Bacon would acknowledge receipt of each sail consigned to it, stating its catalog number and its retail price.

Bacon advertised Tasker entity sails in its catalog and on its website. If a customer purchased a consigned sail from Bacon, Bacon would mark “sold” on the sail card. Once the purchasing customer’s ten-day window to inspect and return the sail expired, Bacon was to issue a check for the net invoice price. In the early years of the relationship, this check was sent directly to the facility at which Mr. Tasker was based.

In later years, Bacon deposited its check into the Alex Brown Account and sent an itemized check stub to notify the consign- or. The sail then would be deleted from Bacon’s inventory list. The difference between the net invoice price assigned to the sail by the consignor and the retail sale price set by Bacon constituted Bacon’s gross profit. After a March 1998 shipment from RTS Thailand, the relationship began to unravel, as evidenced by correspondence between the parties.

RTS Thailand, as sole plaintiff, filed the complaint in this action on June 29, 2001. 7 The complaint sounded in breach of contract (Count I), quantum meruit (Count II), unjust enrichment (Count III), breach of bailment agreement (Count IV), trover and conversion (Count V), and constructive fraud (Count VI). RTS Thailand alleged that, ⁶²⁵ since July 1998, Bacon had not made any payments arising from sales of consigned merchandise. In their answer, appellants denied that they had failed to pay any amounts due. Additionally, they asserted a number of specific defenses, including limitations.

During the early stages of the litigation, Bacon returned two shipments to RTS Thailand for credit. The returned sails had been consigned by RTS Hong Kong, by RTS Australia, and by RTS Thailand. The first shipment was valued at $72,269.75, while the second shipment was valued at $1,000. As a result of amendments and rulings on motions, only the following theories of the case were submitted to the jury: as to Bacon, breach of contract, breach of bailment agreement, trover/conversion, and fraud; and, as to Mrs. Bacon, tro-ver/eonversion and fraud.

The jury found against Bacon and Mrs. Bacon and awarded $345,327 in damages and $78,660 in interest to RTS Thailand. Aggrieved, Bacon and Mrs. Bacon noted this appeal. Timeliness of Appeal We first must address appellee’s motion to dismiss the appeal as untimely. Underlying appellee’s motion are the following facts.

The jury returned its verdict on December 19, 2002, and on December 24 the clerk prepared, signed, and entered judgments on the docket in accordance with Maryland Rule 2-601. The judgments were entered against each appellant in favor of RTS Thailand, RTS Hong Kong, RTS Australia, and Mr. Tasker. More than ten days thereafter, on January 6, 2003, appellants filed a motion for judgment notwithstanding the verdict, or to revise. At a February 10, 2003 hearing, the court ordered the clerk to revise the judgment to reflect that it was entered in favor of RTS Thailand only.

The court denied all other relief requested. In making the docket entries that day to comply with the court’s order, the clerk deleted RTS Australia, RTS Hong Kong, and Mr. Tasker as judgment holders only as to Mrs. Bacon, but no correction was made as to the judgment against Bacon. It was not until March 6, ⁶²⁶ 2003, that the clerk docketed the change in the judgment against Bacon to reflect that it stood only in favor of RTS Thailand. Appellants’ notice of appeal was filed March 20, 2003, within thirty days of the March 6, 2003 order.

Appellee’s motion argues that, because appellants’ post judgment motion to revise was not filed within ten days of the original December 24, 2002 judgment, the motion operated only as one under Maryland Rule 2-535(a) so that the time for appeal continued to run. 8 See Md. Rule 8-202(c). We agree with appellants that under Gluckstern v. Sutton, 319 Md. 634 , 574 A.2d 898 (1990), the appeal was timely. Gluekstem held that, when a timely motion to revise the judgment is filed, and no appeal is noted prior to the resolution of the motion, if the circuit court subsequently revises the judgment, the revised judgment becomes the final judgment. Quoting from its decision in Yarema v. Exxon Corp., 305 Md. 219 , 503 A.2d 239 (1986), the Court of Appeals explained: “ ‘Rule 2-535(a) ... authorizes the circuit court to exercise revisory power over a judgment on a motion filed within thirty days from the judgment.

Nevertheless, it is settled that neither the timely filing of a motion to revise a final judgment nor the court’s denial of such motion, absent an order staying the operation of the judgment, affects the finality of the judgment or the running of the time for appeal. But when a motion under Rule 2-535(a) to revise a final judgment is filed within thirty days and the circuit court in fact revises the judgment, and there has been no intervening order of appeal, the prior judgment loses its finality and the revised judgment becomes the effective final judgment in the case.’ ” Gluckstern, 319 Md. at 651 , 574 A.2d at 906 (citations omitted). Because the notice of appeal was filed within thirty days of the revised judgment, which, under the rule in Gluckstern , ⁶²⁷ effectively superseded the original judgment in this case and became a new final judgment, the appeal is properly before this Court. I. Verdict Sheets Appellants first assert that the judgment should be reversed because of the “confusion created by verdict sheets with inconsistencies, contradictions and clerical errors.” Appellants’ argument appears to be a mix of a challenge to the jury verdict itself, and a challenge to the form of the verdict sheet.

We first address the legitimacy of the jury’s verdict. “Ordinarily, this court will not interfere with a jury verdict, even one that is inconsistent.” Travel Comm., Inc. v. Pan Am. World Airways, Inc., 91 Md.App. 123, 149 , 603 A.2d 1301, 1314 , cert. denied, 327 Md. 525 , 610 A.2d 797 (1992). When the verdict is irreconcilably inconsistent or defective, however, such interference has been held necessary. “Where the answer to one of the questions in a special verdict form would require a verdict in favor of the plaintiff and an answer to another would require a verdict in favor of the defendant, the verdict is irreconcilably defective.” S & R, Inc. v. Nails, 85 Md.App. 570, 590 , 584 A.2d 722, 731 (1991), rev’d on other grounds, 334 Md. 398 , 639 A.2d 660 (1994); see, e.g., Southern Mgt. Corp. v. Taha, 378 Md. 461, 479 , 836 A.2d 627, 637 (2003) (holding jury verdict that “exonerated] named individual employee-agent defendants while purporting to inculpate the corporate defendant” irreconcilably inconsistent).

It is through the lens of these legal standards that we examine the jury verdicts in this case. The original verdict sheet stated the following: “1. In the event that there are moneys due from either defendant, do you find that [the sole named plaintiff, RTS Thailand] is entitled to collect any sums for [RTS Hong Kong] and [RTS Australia]? / Yes No “2. If yes, do you find that there has been: ⁶²⁸ “a.

Breach of Contract y Yes No “b. Conversion y Yes No “c. Fraud Yes y No “3. If you answered yes to 2(a), 2(b), or 2(c), then state the amount of damages that you award: “Amount: $291,327 “4.

If you answered no to 2(a), 2(b), or 2(c), do you find that an agreement existed between Bacon ... and [RTS Thailand]? “a. Breach of Contract y Yes No “b. Conversion y Yes No “c. Fraud Yes y No “5.

If you answered yes to 4(a), 4(b), or 4(c), state the amount of damages that you award: “Amount: $132,660 ($78,660 interest^] $54,000 damages) “6. Do you find that Mrs. Merilyn Dixie Bacon committed fraud or conversion? y Yes No “7. Do you find that Roily Tasker Sails (Thailand) Co., Ltd. knew or should have known of the wrongful conduct and damages prior to June 29,1998? _Yes y No “If so, what amount of damages, if any, should Roily Tasker Sails (Thailand) Co., Ltd. have been aware of prior to June 29,1998? “Amount: $ N/A” ⁶²⁹ Because of the wording of question 4, the court prepared a Supplemental Verdict Sheet, aimed at clarifying the jury’s intent. See Nails v. S & R, Inc., 334 Md. 398, 412 , 639 A.2d 660, 667 (1994) (“[I]n a civil case, after a jury has rendered an initial verdict, the trial judge ordinarily may ask the jury to amend, clarify or supplement the verdict in order to resolve an ambiguity, inconsistency, incompleteness, or similar problem ■with the initial verdict, up until the jury has been discharged and has left the court room”).

After ten minutes of deliberation, the jury returned the Supplemental Verdict Sheet with the following findings: “1. How much do you award as damages for [RTS Hong Kong] AND [RTS Australia] COMBINED $0 amount $0 interest (if any) “2. How much do you award as damages for [RTS Thailand] separately $345,327 amount $78,660 interest (if any) “3. What is the total award of all damages awarded in # 1 and #2 $M8,98T (Emphasis in original.) Contrary to appellants’ contention, we agree with appellee that the Verdict Sheet and Supplemental Verdict Sheet reflect a “clear and decisive” verdict in favor of RTS Thailand.

When these verdict sheets are read together, it is clear that the jury’s intent was that RTS Thailand be permitted to recover on the appellants’ obligations resulting from the Tasker entities’ entire thirty-year relationship with Bacon and Mrs. Bacon. The verdicts are not inconsistent, much less irreconcilably so. Under the original verdict sheet, the jury found that RTS Thailand was entitled to collect $291,327 due to RTS Hong Kong and RTS Australia, and that Bacon owed RTS Thailand, directly, an additional $54,000. Thus, on the original verdict sheet, the jury awarded RTS Thailand $345,327 and awarded no damages to the other Tasker entities, just as it did ⁶³⁰ on the Supplemental Verdict Sheet. 9 The verdict sheets exhibited a clear and consistent intent on the part of the jury, which we shall not disturb.

Furthermore, we decline to address appellants’ challenge to the form of the verdict sheets because appellants failed to object at trial to the wording of those verdict sheets. As appellee points out in its brief, by not timely objecting to the form of a special verdict sheet, a party waives the right to object on appeal. Md. Rule 2—522(c); Edwards v. Gramling Eng’g Corp., 322 Md. 535, 549 , 588 A.2d 793, 800 , cert. denied, 502 U.S. 915 , 112 S.Ct. 317 , 116 L.Ed.2d 259 (1991); Baltimore Luggage Co. v. Ligon, 208 Md. 406, 414 , 118 A.2d 665, 669 (1955).

II

Administrative Damages Appellants assert that the $54,000 damages figure, given in answer to question 5 on the original verdict sheet, was for “administrative damages” and was not supported in law or by the evidence. They draw this “administrative damages” label for the $54,000 from a written question submitted by the jury to the circuit court during the jury’s initial deliberations: “If we find there are ‘monies due’ from the defendant, and believe in addition there are interest and administrative damages, should we detail this on [Question] # 3, or list one lump sum.” After receiving this note, the court replied in writing: “[P]lease explain what you mean by ‘administrative damages.’ ” It also submitted an additional written response, directing the jury: “If you find that there are moneys due please indicate the amount and the interest separately.” The jury did not provide further explanation of what it meant by ⁶³¹ “administrative damages”; instead, it assured the court that it “now understood].” We cannot speculate as to what the jury meant by “administrative damages.” Further, the circuit court’s response to the jury’s question clearly directed them to focus their deliberations on “moneys due.” We presume that the jury followed the court’s instructions. Owens-Illinois, Inc. v. Cook, 148 Md.App. 457, 476 , 813 A.2d 280, 290 (2002), cert. granted on other issues, 374 Md. 82 , 821 A.2d 370 (2003). Our focus, then, must be on whether the evidence supports an “actual damages” award, before interest, of $345,327 ($291,327 + $54,000) to RTS Thailand.

Examining the evidence in the light most favorable to RTS Thailand, as the prevailing party, we conclude that the evidence described below is sufficient to support the verdict. $727,406.64 (Value measured by net invoice price: sails consigned 1971-May 1998 per Plaintiffs Exhibit 35A) + $ 41,589.00 (Value measured by net invoice price: sails consigned June 1998-0ct.2001 per testimony of Mrs. Bacon) $768,995.64 (Total value of all consigned sales measured by net invoice price) - $375,106.74 (Paid on 1971-May 1998 account per Plaintiffs Exhibit 38A) + $ 1,024.00 (Miscredit: Museum of Yachting per testimony of Mr. Tasker) + $ 11,273.20 (Miscredit: non-negotiated check per testimony of Mr. Tasker) - $ 1,682.00 (Paid on June 1998-0ct.2001 account per Plaintiffs Exhibit 11 A) $404,504.10 (Total value of unsold sails consigned, measured by net invoice price, before credits for returns) — $ 72,269.75 (Value of first shipment of returned goods, measured by net invoice price) — $ 1,000.00 (Value of second shipment of returned goods, measured by net invoice price) $331,234.35 (Total value of consigned sails, measured by net invoice price, less payments and other credits) + $ 15,000.00 (Adjustment — Hong Kong shipment; value of sails shipped in excess of net invoice price, per ⁶³² testimony of Mr. Tasker) 10 $346,234.35 (Total value of sails consigned, less payments and other credits). Each appellee was found liable for conversion of the sails consigned to Bacon that were neither returned nor paid for. 11 The measure of damages in an action for conversion is the fair market value of the personalty at the time of the conversion, plus interest thereon to the date of the verdict. Keys v. Chrysler Credit Corp., 303 Md. 397, 415 , 494 A.2d 200, 209 (1985). Here the evidence supported a value of the converted sales in excess of the jury’s verdict, before interest, of $345,327.

There was no reversible error in the total verdict.

III

Limitations Instruction With respect to the statute of limitations defense, the circuit court gave the following jury instruction: “There is a three-year statute of limitations which is applicable to the