Madison Capital Co., LLC v. S & S Salvage, LLC - 765 F. Supp. 2d 923 (W.D. Ky. 2011)

Rule:

Under Ky. Rev. Stat. Ann. § 413.125, an action for the taking, detaining or injuring of personal property, including an action for specific recovery shall be commenced within two years from the time the cause of action accrued. This two-year statute of limitations applies to claims of conversion.

Facts:

Timothy P. Smith sought out a buyer for the eighty-five (85) Hemscheidt Shields (the "Shields"), which were mechanized underground roof supports made of various metals that weighed approximately fifteen (15) tons per shield. In December 2005, unable to find a buyer for the Shields, Smith agreed to sell the Shields as scrap metal to S & S Salvage, LLC who in turn sold them to River Metals Recycling, LLC. In 2006, plaintiff Madison Capital Company, LLC, purchased Community Trust Bank’s ("CTB") position as a secured creditor of the Smith Companies by way of an assignment, which included a mutual general release of all claims against one another. Madison, as the assignee of CTB's interests, then pursued Smith through litigation for his personal guarantee of the CTB bank loans, eventually obtaining a judgment against him on August 26, 2008 in the amount of $1,200,000. After securing its judgment against Smith, Madison filed suit against S & S and River Metals, jointly and severally, alleging claims of conversion, negligence, replevin, constructive trust, trespass, and wrongful withholding based on the respective Defendants' actions in relation to the Shields. Madison has moved for summary judgment on its conversion and negligence claims, while S & S and River Metals has each moved for summary judgment on all of Madison's claims.

Issue:

Under the circumstances, should the court grant plaintiff’s motion for summary judgment?

Answer:

No.

Conclusion:

The Court noted that before it may grant a motion for summary judgment, it must find that there was no genuine dispute as to any material fact and the moving party was entitled to judgment as a matter of law. In this case, the Court held that the plaintiff's motion for summary judgment (Fed. R. Civ. P. 56) as to conversion and negligence claims was improper. Even assuming that plaintiff could prove the necessary elements for conversion, the filing date was well past the two-year statute of limitations prescribed under Ky. Rev. Stat. Ann. § 413.125 for a claim of conversion. Plaintiff also failed to show that purchasing used equipment to be scrapped carried a foreseeable risk of harm of which defendants should have been aware.