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Replevin Damages: Deterioration and Loss of Use

Lesson.  In Indiana replevin cases, plaintiffs are not limited to the remedy of repossession but may also be entitled to money damages for deterioration of the property value and for loss of use.

Case cite.  Roy Bayer Trust v. Red Husky, 13 N.E.3d 415 (Ind. Ct. App. 2014).

Legal issue.  Whether the trial court abused its discretion in determining the amount of damages awarded to the plaintiff.  

Vital facts.   Roy Bayer Trust was a dispute between a lessor and a lessee of a Kenworth (semi-tractor).  The lessee defaulted under the terms of the lease.  Evidence showed that the fair market value of the Kenworth was $16,000 and that the Kenworth was sold for only $6,000 due to deterioration, which occurred while the lessee held it wrongfully post-default.  Evidence also showed that the Kenworth could have been leased to another party had the lessee not detained it, although the trial court did not consider these damages.   

Procedural history.  The Roy Bayer Trust opinion arose out of (1) the lessee’s appeal of the trial court’s summary judgment for the lessor and (2) the lessor’s cross-appeal contesting the amount of damages awarded to it by the trial court. 

Key rules. 

  • In actions to recover possession of personal property, judgment for the plaintiff may include damages for detention of such property.  Indiana Code § 32-35-2-33(2).
  • The usual measure of damages is the value of the loss of use, measured by the fair rental value.  Such damages must be reasonable in relation to the fair market value of the property, however.
  • In addition to loss of use, the court may award damages for deterioration in the value of the property while in the hands of the defendant.

Holding.  The Indiana Court of Appeals affirmed in part and remanded in part.  The Court affirmed the trial court’s summary judgment to the lessor for damages based upon the deterioration of property value.  The Court remanded the case for the trial court to determine whether the lessor was entitled to more damages for loss of use.   

Policy/rationale.  The Court believed that the damages rules above are prudent.  “The amount of damages in a replevin action must be limited to a reasonable amount-both as a general matter and in relation to the fair market value of the property.  And although the deterioration and loss of use are separate theories of recovery, we believe the total damages award is subject to a requirement of reasonableness.” 

Related posts.  What Is Replevin?