COURT OF APPEALS

DECISION

DATED AND FILED

September 25, 2013

Diane M. Fremgen

Clerk of Court of Appeals

NOTICE

This opinion is subject to further editing.� If published, the official version will appear in the bound volume of the Official Reports.�

A party may file with the Supreme Court a petition to review an adverse decision by the Court of Appeals.� See Wis. Stat. � 808.10 and Rule 809.62.�

Appeal No.�	2013AP60	Cir. Ct. No.� 2009CV1541
STATE OF WISCONSIN�			IN COURT OF APPEALS



Midwestern Helicopter, LLC, �� Plaintiff-Respondent, �� v. William Coolbaugh, �� Defendant-Appellant, Jon P. Orlos and Pathfinder Indemnity Company LTD, �� Defendants.

�� APPEAL from a judgment of the circuit court for Kenosha County:� s. michael wilk, Judge.� Affirmed.�

�� Before Brown, C.J., Neubauer, P.J., and Gundrum, J.

�1�� NEUBAUER, P.J.�� This case is about the conversion of a helicopter when it was allowed to be used beyond the scope authorized by its owner.� A managerial employee of Midwestern Helicopters, LLC (Midwestern), allowed a pilot to take a helicopter on a skydiving job after the owner of Midwestern had established a policy that commercial events required his written permission.� The pilot ended up hitting a power line and crashing the helicopter.� Midwestern sued both the employee and the pilot for conversion and negligence.� The theory of the case was that the employee and the pilot took the helicopter without permission from Midwestern and property damage resulted.� The case was tried to the court, and the trial court ruled that the employee�s unauthorized permission to the pilot to take the helicopter out for the skydiving event, along with the resulting damage, constituted conversion.� We agree and affirm.

FACTS

�2�� Midwestern is a small company that bought, sold and repaired helicopters, provided helicopter flight instruction, provided charter helicopter transportation, and arranged with contract pilots to sell helicopter rides at community events.� John Parrish is the sole member of Midwestern.� At some time during 2008, he decided he wanted to get out of the helicopter business.� Among other preparations for sale, Parrish decided to stop doing �commercial event work,� because this aspect of the business was losing money.� Commercial event work was when an event entity, for example an airshow or a snowmobile festival, would arrange with Midwestern to have a helicopter at its event.� The public would be able to purchase helicopter rides at the event.� Midwestern would get paid per ticket, depending on how many people it flew.

�3�� To communicate his decision regarding commercial events to all those involved with scheduling and/or flying the helicopters, Parrish put a notice on Midwestern�s online scheduling program, where pilots would schedule use of helicopters, that said, �No commercial events without written permission from Midwestern Helicopter.�� Parrish also communicated this new policy to the defendant William Coolbaugh at a June 5, 2008 meeting.� Coolbaugh managed the maintenance, flight instruction, and commercial work at Midwestern.�

�4�� The accident happened on July 4, 2008, when Jon Orlos, a contract pilot for Midwestern, crashed after hitting power lines.� Coolbaugh had given Orlos permission to take a Midwestern helicopter to Skydive Chicago, an event at which Orlos would take up skydivers for jumps.� Orlos apparently took some passengers on a side sightseeing trip when he flew low enough to hit power lines and crash, severely damaging the helicopter.

�5�� Midwestern sued Coolbaugh and Orlos for the loss of the helicopter, alleging conversion and negligence.[1]� Orlos did not answer the complaint, and a default judgment was entered against him.� The case between Midwestern and Coolbaugh was tried to the court.� The court found that Coolbaugh controlled the helicopter, that he gave Orlos permission to take the helicopter without the owner�s consent, and that there resulted serious interference with the rights of the owner to possess the helicopter due to the resulting crash and $384,819 in damages.� The trial court concluded that Midwestern had proven its case for conversion but that it had not met its burden of proof regarding negligence.� Judgment was entered in favor of Midwestern, and Coolbaugh appeals.

DISCUSSION

Coolbaugh�s Appeal and Standard of Review

�6�� Coolbaugh raises several issues on appeal.� First, Coolbaugh argues that �the trial court erred when it found Coolbaugh guilty of conspiracy to convert the helicopter� and that Midwestern failed to meet its burden of proof for conspiracy.� Second, Coolbaugh argues that the trial court �erred when it found that the conversion caused the crash.�� Finally, Coolbaugh argues that he is not liable because of the superseding cause defense and because public policy precludes liability.

�7�� We uphold the trial court�s findings of fact unless they are clearly erroneous.� Wis. Stat. � 805.17(2) (2011-12).[2]� The trial court�s findings will be affirmed unless the great weight and clear preponderance of the evidence supports a contrary finding.� Noll v. Dimiceli�s, Inc., 115 Wis. 2d 641, 643, 340 N.W.2d 575 (Ct. App. 1983).� The trial court�s decision that the facts amounted
to conversion is a question of law which we review de novo.� Kersten v.
H.C. Prange Co., 186 Wis. 2d 49, 56, 520 N.W.2d 99 (Ct. App. 1994) (whether facts fulfill legal standard is question of law).�

Conspiracy

�8�� Regarding Coolbaugh�s arguments on conspiracy, Midwestern did not plead conspiracy, and the trial court did not address conspiracy, much less find that there was a conspiracy to convert the helicopter.� We need not address this argument further.� See Rock Lake Estates Unit Owners Ass�n v. Township of Lake Mills, 195 Wis. 2d 348, 419-20 & n.5, 536 N.W.2d 415 (Ct. App. 1995) (we need not address arguments unsupported by references to the record).

Conversion

�9�� Conversion is the intentional, unauthorized control of another�s chattel so as to interfere with the owner�s possessory rights.� A person is liable for conversion when he or she (1) intentionally controls or takes property belonging to another, (2) without the owner�s consent, (3) resulting in serious interference with the owner�s rights to possess the property.� H.A. Friend & Co. v. Professional Stationery, Inc., 2006 WI App 141, �11, 294 Wis. 2d 754, 720 N.W.2d 96; see also Wis JI�Civil 2200.� The general rule regarding damages for conversion is that �the plaintiff may recover the value of the property at the time of the conversion plus interest to the date of the trial.�� Metropolitan Sav. & Loan Ass�n v. Zuelke�s, Inc., 46 Wis. 2d 568, 577, 175 N.W.2d 634 (1970) (citation omitted).

�10�� The evidence supports the trial court�s findings that all three elements of conversion were present.� First, the trial court found that Coolbaugh controlled the helicopter.� Coolbaugh managed the flight school and maintenance work and oversaw the commercial work.� Coolbaugh decided when a pilot could fly a helicopter on his or her own.� Coolbaugh had authority to give pilots access to the hangar and the key locker.� Coolbaugh himself testified that he gave Orlos permission to take the helicopter to the July 4th event.� It is reasonable to infer that Coolbaugh had control of the helicopter if he gave someone else permission to use it.

�11�� Second, the trial court found that Coolbaugh did not have authority to give permission to take the helicopter to the skydiving event without the owner�s consent.� There was conflicting testimony about whether Parrish�s ban on commercial events prohibited all events at which a pilot would take up individuals or only those that were �on speculation,� in other words, where individuals would pay per ride and no income was guaranteed.� There was also conflicting testimony about whether Skydive Chicago was a guaranteed-money event or per participant pay.� The trial court found that �Mr. Parrish had made it clear to Mr. Coolbaugh that no helicopter should be used for an event � [where] the amount of money being paid was dependent on the unknown number of people that � would determine how much money might be paid for the helicopter.�� The trial court noted that the director of Skydive Chicago testified that he never made any agreement with Midwestern to pay an hourly rate and that there was no guarantee.� The trial court found that Coolbaugh �had the helicopter under control and � in his actions in granting Mr. Orlos the right to take it on the Skydive Chicago, he did it without the owner�s consent.�� [W]hen the trial judge acts as the finder of fact, and where there is conflicting testimony, the trial judge is the ultimate arbiter of the credibility of the witnesses.�� Noll, 115 Wis. 2d at 644 (citation omitted).� The trial court found that Coolbaugh allowed Orlos to take the helicopter without the owner�s consent.� Implicit in this finding is the conclusion that Coolbaugh understood the scope of the �no commercial events� policy and deliberately violated it.� Given the conflicting testimony, we cannot say that this conclusion is clearly erroneous.

�12�� Finally, the trial court found that there was serious interference with the rights of the owner based on the $384,819 in damage to the helicopter.� It is reasonable to infer that this magnitude of damage seriously interfered with the owner�s rights to possession.� The amount was not disputed at trial.� Because the trial court findings of fact were not clearly erroneous, we uphold them on appeal.� Wis. Stat. � 805.17(2).

�13�� After finding these facts, the trial court made the conclusion of law that the facts constituted conversion under the elements stated above and� Restatement (Second) of Torts, � 228 (1965), Exceeding Authorized Use (hereinafter Section 228), which states:� �One who is authorized to make a particular use of a chattel, and uses it in a manner exceeding the authorization, is subject to liability for conversion to another whose right to control the use of the chattel is thereby seriously violated.�� This section �arises most frequently in cases of bailments under contract for a particular use, but it is equally applicable to a servant, an independent contractor, a gratuitous user, or any other person permitted to use the chattel.�� Section 228 cmt. a (emphasis added).� Furthermore, it is not necessary that an individual convert the chattel for his own use; if a person takes control in defiance of the owner�s rights, it is a conversion, for his or her own sake or the sake of another.� See Mitzner v. Hyman, 333 S.E.2d 182, 183 (Ga. Ct. App. 1985); see also State ex rel. Kropf v. Gilbert, 213 Wis. 196, 211, 251 N.W. 478 (1933).�

�14�� The trial court�s conclusion that the facts of the case constituted conversion is supported by the illustrations to Section 228.

�� 4.�� A rents an automobile to B to drive to X City and return.� In violation of the agreement, B drives to Y City, ten miles beyond X City. �This is not a conversion.

��

�� 6.�� The same facts�, except that while the automobile is in Y City it is seriously damaged in a collision, with or without negligence on the part of B.� This is a conversion.

Section 228 at 446.� These examples illustrate that whether an unauthorized exercise of dominion constitutes conversion depends on the severity of interference with the owner�s right to control.� Restatement (Second) Torts � 222A cmt. d. at 433 (1965) (�The question is nearly always one of degree, and no fixed line can be drawn.�)� Here, Coolbaugh knew that Orlos was taking the helicopter to an event that was prohibited by Parrish�s policy barring commercial events.� Yet Coolbaugh gave Orlos permission to take the helicopter.� When Orlos went to the prohibited event and crashed the helicopter, it was a conversion, whether or not Coolbaugh or Orlos was negligent with regard to the accident.

Causation

�15�� Coolbaugh argues that the trial court �erred when it found that the conversion caused the crash� and that we review this as a mixed question of fact and law.� First, there is no causation element in conversion; the conversion
must result in interference with the owner�s rights to possess the property.� See H.A. Friend & Co., 294 Wis. 2d 754, �11; see also Wis JI�Civil 2200.� Second, the trial court did not find that the conversion caused the crash.� The trial court found that �there was a result of serious interference with the rights of the owner to possess the property.�

Negligence

�16�� The trial court concluded that Midwestern had not met its burden of proof on negligence.� Coolbaugh, understandably, does not challenge this conclusion.� Instead, Coolbaugh argues that two defenses applicable in negligence cases�public policy and superseding cause�should preclude liability in this conversion case.� Coolbaugh cites no authority applying either rationale in a conversion case.� Coolbaugh does not even argue why these doctrines should apply to conversion as they do to negligence, simply stating:� �The same analysis for conversion applies here to Coolbaugh.�� We decline to import these negligence defenses into this conversion case, in which the trial court rejected the negligence claim.� See Fritz v. McGrath, 146 Wis. 2d 681, 686, 431 N.W.2d 751 (Ct. App. 1988) (we need not consider arguments broadly stated but not specifically argued).

CONCLUSION

�17�� The trial court�s findings of facts are supported by the evidence, and its conclusion that the facts fulfilled the legal standard for conversion is not an error of law.� We therefore affirm the judgment.

�� By the Court.�Judgment affirmed.

[1] Midwestern also sued its insurer, Pathfinder Indemnity, alleging breach of contract for Pathfinder�s refusal to cover the loss.� Pathfinder prevailed on summary judgment, a decision that is not before the court on appeal.

[2] All references to the Wisconsin Statutes are to the 2011-12 version unless otherwise noted.

Case No.:	2013AP60
Complete Title of Case:		�Petition for Review Filed

	Midwestern Helicopter, LLC, �� Plaintiff-Respondent, �� v. William Coolbaugh, �� Defendant-Appellant,� Jon P. Orlos and Pathfinder Indemnity Company LTD, �� Defendants.

Opinion Filed:		September 25, 2013
Submitted on Briefs:�		August 19, 2013

JUDGES:		Brown, C.J., Neubauer, P.J., and Gundrum, J.
�� Concurred:
�� Dissented:

Appellant
ATTORNEYS:		On behalf of the defendant-appellant, the cause was submitted on the briefs of Scott L. Schroeder of Scott L. Schroeder, S.C., Janesville.�

Respondent
ATTORNEYS:		On behalf of the plaintiff-respondent, the cause was submitted on the brief of Robert I. DuMez of Alia, DuMez, Dunn & McTernan, S.C., Kenosha.