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Wallander v. Barnes
State: Maryland
Court: Court of Appeals
Docket No: 71/95
Case Date: 02/14/1996
Preview:Thomas R. Wallander v. Harold Barnes et al., No. 71, September Term, 1995. [Replevin - Detinue - Trover. Conversion Of Leased Mercedes. Case Delayed -

District Court Action Filed In Replevin By Lessee. No Show Cause Hearing.

At Trial Plaintiff Sought Full Value Held: Full Value Damages Not

Damages - Not Return Of Car. Recoverable In Replevin. Lessee May Seek Full

Action Became Trover, Not Detinue. But Damages Limited By Monetary

Value,

Jurisdiction Of District Court.]

Circuit Court for Montgomery County Case No. DCA 3324

IN THE COURT OF APPEALS OF MARYLAND No. 71 September Term, 1995 ____________________________________

THOMAS R. WALLANDER

v.

HAROLD BARNES et al.

____________________________________ Murphy, C.J. Eldridge Rodowsky Chasanow Karwacki Bell Raker, JJ. ____________________________________ Opinion by Rodowsky, J. ____________________________________ Filed: February 14, 1996

This case was filed in the District Court of Maryland as an action of replevin. a Mercedes The plaintiff, with lease financing, purchased from a consignee who did not pay the

automobile

consignor.

The consignor, without lien or legal process, seized The writ of

the vehicle from the possession of the plaintiff.

replevin was never issued or denied, and, at trial, the requested relief was limited to damages. At issue here is the measure of

damages, but the issue is complicated by the plaintiffUs contention that the damages claimed are awardable in replevin, and thus may exceed the ordinary limitation on the monetary jurisdiction of the District Court. In December 1986, the plaintiff, Thomas R. Wallander

(Wallander), purchased a 1980 Mercedes 300SD automobile from Domino Motors, $15,500. located in Reisterstown, Maryland, for the price of

Wallander dealt with one Paul Randazzo, Jr. (Randazzo),

the owner of Domino Motors. Wallander financed the purchase through Chesapeake Industrial Leasing Company, Inc. (Chesapeake). PlaintiffUs contract of sale

with Domino Motors shows "T.R. Wallander" as the purchaser of the vehicle and that the certificate of title is to be issued by the Motor Vehicle Administration in the name of Chesapeake.

-2Wallander paid Domino Motors by two checks, one in the amount of $15,500 drawn on ChesapeakeUs account and the other in the amount of $314 for sales tax and licensing fees drawn on WallanderUs personal account. registration. Domino Motors issued Wallander a temporary

In a separate, though related, transaction on the

same day Wallander sold his 1979 Cadillac to Domino Motors for $3,500. Randazzo transferred the license plates from WallanderUs

1979 Cadillac to the Mercedes. The lease between Wallander and Chesapeake was for a term of thirty-six months. Wallander made an advance payment of $5,554.50

and agreed to make two successive annual payments of $5,290, plus sales tax. At the end of the lease, Wallander had the option to

purchase the vehicle for an additional $3,000, or he could return it in good condition. By early 1987 Chesapeake had not received the title to the vehicle. WallanderUs subsequent investigation revealed that Joseph

Lange, a/k/a Joseph Langehennig, (Lange), acting as the agent for Harold Barnes (Barnes), d/b/a Barnes Used Cars, had delivered the Mercedes to Domino Motors to "show," i.e., on consignment. Randazzo made only part payment to Barnes, by transferring to the latter the 1979 Cadillac which Wallander had sold to Randazzo. Thereafter Barnes caused Randazzo to be charged with theft. acquitted. Barnes then asked Lange to "get my car." He was

-3On July 3, 1987, someone towed the Mercedes away from

WallanderUs place of employment.

The vehicle was delivered to

Lange, whose wife returned to Wallander personal property that had been in the vehicle. Lange did not immediately deliver the

Mercedes to Barnes, apparently because Lange claimed that some money was due to him by Barnes. On or about July 14, 1987, Wallander arranged the loan from Barnes of a car for Wallander to drive while the differences between Lange and Barnes concerning the Mercedes remained

unresolved.

This loaned vehicle was a used Plymouth station wagon.

In early September 1987, Barnes repossessed the station wagon. That repossession is not the basis of the claim in this action. On September 4, 1987, Wallander sued to recover the Mercedes from Barnes and Lange in an action of replevin filed in the District Court, sitting in Montgomery County. Orders were issued

for the defendants "to appear and show cause at a time stated therein why the property should not be returned to the plaintiff." Maryland District Rule (M.D.R.) BQ43. Barnes was served without

difficulty, but Wallander encountered a great deal of difficulty in serving Lange, resulting in a series of orders rescheduling the show cause hearing. After Lange was served and appeared through

counsel, further postponements delayed the first District Court hearing in this "replevin" case to February 9, 1989. Meanwhile, Barnes had obtained possession of the Mercedes in late 1987 and, in February 1988, transferred the vehicle to a

-4dealer in North Carolina, with the right in Barnes to reacquire it. The February 9, 1989 hearing was held before Judge Jerry H. Hyatt. In opening statement Wallander advised the court that he

had "learned in February of 1988, [that] Mr. Barnes had sold the car ... to somebody who weUve never been able to discover who or where, therefore weUve never been able to bring that person into these proceedings." the value of the Wallander outlined that he would prove that Mercedes at the time of the taking was

approximately $17,000, that the interest on the purchase price was $8,924, and that "[h]e spent $2,800 in car rentals before learning that the Mercedes had been sold, and that itUs not going to be available in this replevin, and weUre not going to get it back." At the conclusion of the plaintiffUs case further proceedings were postponed until a transcript could be obtained for use in a motion for judgment by the defendants. At the resumed trial on

April 11 Judge Hyatt granted that motion, ruling that, because of the lease from Chesapeake, Wallander had no standing. Wallander

noted an appeal to the Circuit Court for Montgomery County. We are advised that Chesapeake, on October 11, 1989, filed an action in replevin against Barnes and Lange in the District Court sitting in Montgomery County. Barnes alone had been served when

the matter came on for hearing on November 15, 1989 before Judge Edwin Collier. Judgment was in favor of Barnes who advises us that

-5Judge Collier held that Chesapeake was not entitled to immediate possession. Prior to the hearing on ChesapeakeUs claim against him, Barnes had reacquired the Mercedes from the North Carolina dealer. After

Barnes prevailed in ChesapeakeUs action, he sold the car to a dealer in the District of Columbia. In November 1990 the Circuit Court for Montgomery County (Cave, J.) reversed the judgment entered by Judge Hyatt in

Wallander v. Barnes and remanded this case to the District Court. There is no contention that this judgment of reversal and remand embodied any rulings on matters of law that would affect

disposition of the issues before this Court. After the Mercedes had been converted, Wallander continued, albeit irregularly, to pay Chesapeake under the lease until the total lease payments, together with late charges, had been paid to Chesapeake. Then, in September 1991, Wallander paid the $3,000

agreed residual value to Chesapeake because the lease required him either to exercise the purchase option or to return the car. Following remand to the District Court the action now before us was heard by Judge Dennis M. McHugh. He ruled that Barnes was

estopped to deny LangeUs authority to confer the power on Randazzo to transfer title and possession of the Mercedes to Wallander. That ruling is not questioned in the review before us.

-6Wallander argued to Judge McHugh that the action continued to be in replevin, but Judge McHugh ruled that the proceedings were in detinue. Judge McHugh noted that a writ of replevin had never

issued and that, by the time of the first hearing before Judge Hyatt, it would have been pointless to issue the writ of replevin because the Mercedes was no longer in BarnesUs possession. He said

that the circumstances at that time were as if the car no longer existed. The court concluded that WallanderUs action had been converted to detinue by operation of M.D.R. BQ44. That rule in part provides

that "[i]f issuance of the writ of replevin is denied, the action shall proceed in detinue." The court further reasoned that, at the time of the taking in July 1987, Wallander did not own the Mercedes; rather he had the right to possess it only for the period for which Wallander had paid rent. Mercedes, Thus, Wallander could not recover the full value of the but only damages for its detention. Inasmuch as

WallanderUs unused portion of the prepaid lease period, at the time of conversion, was approximately the second half of the first year of the lease term, damages for deprivation of possession, in the courtUs view, could be awarded only for that period. Alternatively, Judge McHugh held that the doctrine of

avoidable consequences prevented Wallander from obtaining loss of use damages for any period after the first year of the lease. He

ruled that payments by Wallander made to Chesapeake after Barnes

-7and Lange had retaken possession of the Mercedes were "voluntary payments." The court said:

"The supervening repossession by Barnes and Lange could not reasonably have been foreseen and it completely frustrated the purpose of the contract between Wallander and the leasing company, Chesapeake. Briefly stated, had Wallander withheld payments on the lease so long as the car remained out of his possession, the principle of commercial frustration should have been a complete defense to an action by the leasing company for lease payments." The District Court entered judgment in favor of Wallander for $3,752.25. The judgment aggregated three components: $2,777.25,

representing the second half of the first lease year for which rent had been prepaid, the $500 down payment on the purchase from Randazzo,1 and $475 for auto insurance for the first year of the lease.2

Wallander had paid a $500 deposit from his funds. It is not clear whether that deposit was refunded to Wallander when the check for $15,500 from Chesapeake was delivered to Domino Motors. If not refunded, then it would seem that Domino Motors owed Wallander $500. The District Court seems to have treated the deposit as part of WallanderUs lost use of the vehicle. On remand to the District Court Wallander also sought punitive damages. Judge McHugh found as a fact that Barnes and Lange acted in the belief that they had a right to seize the Mercedes and that there was no evidence to show the state of mind required for an award of punitive damages. See Owens-Illinois, Inc. v. Zenobia, 325 Md. 420, 601 A.2d 633, rehUg denied, 325 Md. 665, 602 A.2d 1182 (1992). Our grant of WallanderUs certiorari petition embraced the punitive damage issue. We hold that Judge McHughUs fact-finding was not clearly erroneous. Indeed, Wallander seemingly conceded at argument in this Court that the test for punitive damages was not satisfied when the significance was pointed out to Wallander of his statement that Barnes acted under the mistaken advice of counsel.
2

1

-8Wallander again appealed to the Circuit Court for Montgomery County where the matter was reviewed on the record by Judge James McKenna. He agreed with Judge McHugh that the action had been

converted to detinue and that WallanderUs damages were limited to amounts paid in the second half of the first year of the lease, or alternatively, limited by WallanderUs failure to mitigate because the lease was commercially frustrated.3 Wallander petitioned this Court for the writ of certiorari which we granted. The petition includes the question of "[w]hether

the Circuit Court erred in failing to award Petitioner the full measure of compensatory damages ...." other questions in the petition That question subsumes the the trial courtsU

concerning

holdings on mitigation of damages.

In this Court Wallander, by

brief and oral argument, submits that his replevin action was not converted to detinue, and that he is entitled to damages in replevin measured by the full value of the Mercedes at the time of taking, together with additional damages. analysis by the trial courts was correct. Barnes4 submits that the He further submits that

the issue of damages in replevin was not included in the certiorari

Barnes also argued before Judge McKenna that the judgment entered by Judge Collier in favor of Barnes and against Chesapeake was res judicata as to WallanderUs claim. Judge McKenna rejected that argument. Barnes did not raise the res judicata issue by a conditional cross-petition for certiorari so that the issue is not before this Court.
4

3

Lange neither briefed nor argued as a respondent in this

Court.

-9petition and should not be considered. Underlying these arguments

is the issue of whether the monetary jurisdiction of the District Court is limited or unlimited in this case. Under Md. Code (1974, 1995 Repl. Vol., 1995 Cum. Supp.),
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