Morrone Estate v. Caputo, 2012 ABQB 370

Court of Queen ’ s Bench of Alberta Citation: Morrone Estate v. Caputo, 2012 ABQB 370 Date: 20120604 Docket: 0701 09729 Registry: Calgary Between: John Borrelli, the personal representative of the estate of Francesco Morrone, on behalf of the estate of Francesco Morrone Plaintiff - and - Carmine Caputo also known as Carmen Caputo and Francesco S. Caputo Defendants Corrected judgment: A corrigendum was issued on June 7, 2012; the corrections have been made to the text and the corrigendum is appended to this judgment. _______________________________________________________ Memorandum of Decision of J.B. Hanebury, Master in Chambers _______________________________________________________

[ 1 ] This is an unfortunate tale of a friendship that resulted in an oral agreement to purchase a mobile home. One friend died before moving in and this led to a bitter lawsuit between the families of the two friends. The litigation has carried on for five years and during that period the land where the mobile home is located has gone into foreclosure. Neither party sought to claim the mobile home and by now, the long-disputed asset may be gone to a new owner by way of a Court order. Facts [ 2 ] Mr. Morrone’s health was failing and he needed to move.

Unfortunately he did not have a lot of money and was having trouble finding a suitable place to live in Calgary. He and Mr. Francesco Caputo (Mr. Caputo Sr.) decided that he should buy a mobile home, and have it placed on property known as Symons Valley Ranch, a property with which Francesco Caputo’s son, Carmen Caputo (Mr. Caputo Jr.), was involved either as owner or manager. [ 3 ] Mr. Caputo Sr. asked his son to purchase the home and Mr. Morrone gave the father two bank drafts in the sums of $10,000.00, $20,000.00, and a bank draft to the son in the amount of $84,813.06. Mr.

Caputo Jr. arranged for the mobile home to be purchased and transported to Symons Valley, but before Mr. Morrone could move in, he died. [ 4 ] Mr. Morrone’s family contacted Mr. Caputo Sr. by telephone in relation to the bank drafts. They were told that it was none of their business. They had their lawyer send two letters asking about the bank drafts. No response was received. [ 5 ] This lawsuit resulted and was filed in 2007. Mr. Morrone’s estate sued for the money paid to both Caputos and also in conversion for the alleged conversion by them of the funds to their own use.

The claim alleged that the bank draft for $84,813.06 was to pay for a mobile home and the use of a pad on which it was to be sited for a period of five years. [ 6 ] Mr. Caputo Sr. filed a defence saying that the $30,000.00 in bank drafts was a gift and that there was no agreement that those funds were to be used to provide services or a lease of the pad for the mobile home. [ 7 ] An application was brought for

summary judgment against Mr. Caputo Sr. and granted by Master Prowse, with written reasons, on June 17, 2009. He noted that there is a reverse onus of proof imposed on a donee who asserts a gift. That judgment remains unpaid. [ 8 ] Mr. Caputo Jr. filed a statement of defence and counterclaim on November 27, 2007. In it he alleged that he paid $130,000.00 for the mobile home and related costs, owes nothing to the estate and seeks the balance of the funds.

In the counterclaim he alleged that rent was to be paid of $1500.00 per month for the pad for the mobile home and sought $90,000.00 for outstanding and future rent on the basis that the estate did not take possession of the mobile home. [ 9 ] In the meantime, Mr. Caputo Jr. started to use the mobile home himself. First he used it for storage and then he began occupying it. At the time of the application it was still apparently in use by him. [ 10 ] Mr. Caputo Jr. was examined for discovery. He stated that it was a term of the verbal agreement with Mr. Morrone that if something happened to Mr. Morrone, Mr.

Caputo Jr. would “take over the trailer” and he would not reimburse Mr. Morrone for the money he had paid. [ 11 ] This application, for

summary judgment against Mr. Caputo Jr. was originally filed in 2008 and did not proceed. It was refiled to be heard in January, 2012, but was adjourned. An application was brought in January, 2012, by Mr. Caputo Jr. seeking security for costs from the estate. It was dismissed by Master Mason.

[12] An amended Statement of Claim was filed on February 6, 2012. It added a claim that Mr. Caputo Jr. had converted the mobilehome to his own use. [13] Mr. Caputo Jr. then filed an Amended Statement of Defence on February 16, 2012. He says that the claim for conversion isbarred by the Limitations of Actions Act R.S.A. 2000, c. L-12. He now alleges that he paid $92,900.00 for the purchase of the mobilehome and related expenses. The defence states that between Mr.

Morrone’s death on November 2, 2006, and February 28, 2007, Mr.Borrelli knew or should have known that the mobile home was available for delivery to the estate. He further states that if he convertedthe mobile home to his own use, Mr. Borrelli knew or ought to have known of this and the mobile home was and is available to him. [14] A brief was filed by Mr. Caputo Jr. in response to this application. It alleges that the agreement was that the pad was to be rentfree for the balance of Mr. Morrone’s life. It states that Mr. Carmen Caputo offered to surrender the mobile home and Mr.

Borrelli wasfree to take it if he would walk away from any further claim. Attached to the brief is a Formal Offer to Settle on that basis which alsorequires the payment by Mr. Borrelli of Mr. Carmen Caputo’s legal fees. [15] Mr. Borrelli filed a further affidavit in March, 2012, wherein he states that the information provided in the answers toundertakings of Mr. Caputo Jr. shows that the amount expended by him and others on the mobile home totals $65,000.00, which is lessthan the amount paid. [16] Mr. Caputo Jr. disputed this in an affidavit filed March 23, 2012.

He states that there are invoices provided for landscapingthat was done to the site by his company at a cost of $74,000.00. [17] In the meantime, the Symons Valley Ranch property has apparently gone into foreclosure and the Court questioned the partiesas to its status. An order for sale has been granted and by the time of these reasons the property may very well have been sold.

It appearsthat neither party wants the mobile home at this time and apparently no efforts were made to exempt it from the foreclosure proceedings. [18] In short, while the years have passed and this argument has continued, the only security for the alleged debt, the mobile homeat issue, has been ignored and if it is not now gone, is likely to soon be transferred to someone else. Analysis [19] Rule 7.3 of the Alberta Rules of Court provides that a party may apply for

summary judgment in respect of all or part of aclaim, on the ground that there is no merit to a claim or part of it. The case law considering this rule is clear that the bar on a motion forsummary judgment is high: Canada (Attorney General) v. Lameman, 2008 SCC 14. [20] When the plaintiff is the applicant, as in this case, the obligation is on it to prove each fact required to make out its cause ofaction: Royal Bank of Canada v. McLean, (1997) (AB KB), 211 A.R. 297 (Q.B.), p. 303. Similarly, it has the legalonus of showing that there is no genuine issue for trial: Murphy Oil Co. v.

Predator Corp., 2006 ABCA 69. [21] The court is not to assess the quality and weight of the evidence, as this is to be done by a trial judge: De Shazo v. NationsEnergy Co., 2005 ABCA 241. [22] The court must be satisfied that it is "plain and obvious" or "beyond doubt" that the there is no genuine issue for trial:Murphy Oil Co., paragraph 24.

Summary judgment should not be granted if opposing affidavits clash on relevant facts. [23] This application is not capable of being determined summarily for the following reasons. [24] The pleadings seek repayment of the sum advanced and damages for conversion.

[25] In relation to the claim for repayment, the evidence does not establish whether the mobile home was paid for in full or not. Ifthe mobile home was fully paid for, then Mr. Caputo Jr.’s actions will likely entitle Mr. Borrelli to the amount paid by Mr. Morrone and,as well, damages for conversion. However, if the mobile home had not been fully paid for, then Mr. Caputo Jr.’s actions will be viewedin a different light and the court will need to determine whether the breach or frustration of the contract entitles Mr. Borrelli to the fullreturn of Mr.

Marrone’s money and damages. [26] In relation to the claim for conversion, no case law was provided on the tort of conversion. There was no argument on thequestion of if, and when, title was to have passed in the mobile home. [27] The related torts of conversion, detinue and trespass to a chattel were discussed by Horner J. in Sprung Instant StructuresLtd. v. Royal Bank of Canada, 2008 ABQB 30, para. 13 et seq: 13 In Clow v.

Gershman Transport International Ltd. (2000), 2000 ABQB 360 , 265 A.R. 181 (C.A.), Paperny J.A. describedthe tort of conversion at para. 13: The essential features of the tort of conversion are: (1) a wrongful act; (2) involving a chattel; (3) consisting of handling, disposing or destruction of the chattel; (4) with the intention or effect of denying or negating the title of another person to such chattel. Paperny J.A. cited The Law of Torts in Canada, 3rd.

Ed., (Toronto, Carswell, 1989), wherein at p. 95, Professor Fridman writes: Conversion consists in a wrongful taking, using or destroying of goods or the exercise of dominion over them that is inconsistent with thetitle of the owner. It is an intentional exercise of control over a chattel which seriously interferes with the right of another to control it.There must be a voluntary act in respect of another's goods amounting to a usurpation of the owners proprietary or possessory rights inthem.

Before a person can be found responsible for conversion, the court must be satisfied that he either knowingly or carelessly, withoutascertaining or attempting to ascertain who the true owner of the property was, took possession of the goods and exercised somedominion over them in the real sense, not merely in the sense of a transporter changing their physical location.

Succinctly put, conversionis a "positive wrongful act or dealing with the goods in a manner, and with an intention, inconsistent with the owner's rights." 14 Detinue differs from conversion in that it is concerned with the wrongful detention of a chattel but without the intention or effect ofdenying or negating the title of the Plaintiff to the chattel. As with conversion in order for a Plaintiff to establish detinue it is necessary toprove that the Plaintiff had possession or an immediate right of possession at the time the chattel was detained.

Also, the Plaintiff mustestablish that a demand for the return of the chattel has been made and refused.

The demand must be unconditional and the refusal mustbe absolute and unqualified. 15 A trespass to a chattel will be established where the plaintiff has possession or an immediate right of possession and that right orpossession is wrongfully interfered with, physically, by the defendant, but without the intention or effect of denying or negating thePlaintiff's title. 16 It is apparent from the foregoing that to establish either conversion, detinue or trespass to chattels, it is necessary for the Plaintiff toprove that it had possession, or an immediate right of possession, at the relevant time. [emphasis added]

[ 28 ] To claim in conversion, Mr. Borrelli must prove that Mr. Morrone had a right to possession of the mobile home. He has not done so. If the funds had been paid in full, as he alleges, his right of possession would seem to follow. However Mr. Caputo Jr. states that the funds have not been paid in full and points to a significant invoice from his company. [ 29 ] It is acknowledged that Mr. Caputo’s allegations and evidence are riddled with inconsistencies. However, that does not mean that

summary judgment should follow. The initial burden is on the applicant, Mr. Borrelli, to prove the elements of his case and he has not met that burden. [ 30 ] A

summary judgment application is insufficient to determine this matter. It is for a trial judge to review the invoices, hear Mr. Caputo Jr. and determine whether he had any right to maintain possession of the mobile home and what compensation should be paid to the estate. Conclusion [ 31 ] In

summary, Mr. Marrone was to receive a mobile home. It is unclear if he paid for it in total or if further funds were owing. It is unclear when title to the mobile home was to pass. It is unclear if he was to pay further rent for the pad or not. It cannot be summarily determined whether he had either ownership or possessory rights in the home at the time of his death. [ 32 ] What is clear is that Mr. Caputo Jr.’s sudden reversal and last ditch attempt to get Mr. Borrelli to take the mobile home, some five years later when it was on the eve of being lost in a foreclosure, was too little too late.

He will ultimately have to live with the consequences of his actions which could include the repayment of the monies received plus interest, damages for the use of the mobile home and the pad for five years, and costs. His blithe failure to try and salvage the value of the mobile home in order to mitigate the claim of Mr. Borrelli could have expensive consequences. [ 33 ] While

summary judgment cannot be granted on the information before this court, I will comment on two defences relied upon by Mr. Caputo Jr. as raising triable issues. [ 34 ] Firstly, Mr. Caputo’s allegations and evidence about the mobile home take many forms. Insofar as he may be alleging that the mobile home was a gift to him, that allegation is unsustainable for the reasons found in Master Prowse’s decision in relation to the other two bank drafts at issue in this case, which decision is dated June 17, 2009, unreported. [ 35 ] Secondly, Mr.

Caputo Jr. alleges that the claim for the conversion of the mobile home is barred by the Limitations Act . The case law relied upon by Mr. Caputo Jr. relates to a claim made by the filing of an initiating pleading. That case law does not take into consideration the saving provisions found in s. 6 of the Act . That

section provides that when a claim is added to an existing proceeding, the defendant is not entitled to immunity where a new claimant is not added or substituted or the capacity in which the claimant sues or the defendant is being sued does not change, so long as the added claim is related to the conduct, transaction or events described in the original pleading. [ 36 ] The case law has held that the words “related to” are to be given a broad meaning and the court must evaluate whether the requirements of this

section are fulfilled within the circumstances of each case: Dow Chemical Canada Inc. v. Nova Chemicals Corp. , 2010 ABQB 524 , para. 68 ; Stout Estate v. Golinowski Estate , 2002 ABCA 49 , at para. 100 . [ 37 ] In this case the entire claim against Mr. Carmen Caputo relates to the aborted purchase of the mobile home and the added claim relates to Mr. Caputo’s conduct in relation to that mobile home. In light of this case law it is difficult to see how the added claim for conversion is not related to the earlier claim. [ 38 ] The application for

summary judgment is dismissed. The costs of this application will be in the cause.

Heard on the 5 th day of April, 2012. Dated at the City of Calgary, Alberta this 4 th day of June, 2012. J.B. Hanebury M.C.C.Q.B.A. Appearances: Constantine Nikitiuk Nikitiuk Blain for the Plaintiff Thomas F. Glenn Low, Glenn & Card LLP for the Defendants _______________________________________________________ Corrigendum of the Memorandum of Decision of J.B. Hanebury, Master in Chambers _______________________________________________________ The following replaces the Citation line: Citation: Morrone Estate v. Caputo, 2012 ABQB 370