Wallander v. Barnes

RODOWSKY, Judge. This case was filed in the District Court of Maryland as an action of replevin. The plaintiff, with lease financing, purchased a Mercedes automobile from a consignee who did not ⁵⁵⁵ pay the consignor. The consignor, without lien or legal process, seized the vehicle from the possession of the plaintiff.

The writ of 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 plaintiffs 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, located in Reisterstown, Maryland, for the price of $15,500. Wallander dealt with one Paul Randazzo, Jr. (Randazzo), the owner of Domino Motors.

Wallander financed the purchase through Chesapeake Industrial Leasing Company, Inc. (Chesapeake). Plaintiffs 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. Wallander paid Domino Motors by two checks, one in the amount of $15,500 drawn on Chesapeake’s account and the other in the amount of $314 for sales tax and licensing fees drawn on Wallander’s personal account. Domino Motors issued Wallander a temporary registration.

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 Wallander’s 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. Wallander’s subsequent investigation revealed that Joseph Lange, a/k/a Joseph Langehennig, (Lange), acting as ⁵⁵⁶ the agent for Harold Barnes (Barnes), d/b/a Barnes Used Cars, had delivered the Mercedes to Domino Motors to “show,” ie., 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. He was acquitted. Barnes then asked Lange to “get my car.” On July 3, 1987, someone towed the Mercedes away from Wallander’s 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 dealer in North Carolina, with the right in Barnes to reacquire it. ⁵⁵⁷ 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 we’ve never been able to discover who or where, therefore we’ve never been able to bring that person into these proceedings.” Wallander outlined that he would prove that the value of the 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 it’s not going to be available in this replevin, and we’re not going to get it back.” At the conclusion of the plaintiffs 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 Judge Collier held that Chesapeake was not entitled to immediate possession.

Prior to the hearing on Chesapeake’s claim against him, Barnes had reacquired the Mercedes from the North Carolina dealer. After Barnes prevailed in Chesapeake’s 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. ⁵⁵⁸ 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 Lange’s 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.

Wallander 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 Barnes’s possession. He said that the circumstances at that time were as if the car no longer existed. The court concluded that Wallander’s 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. Thus, Wallander could not recover the full value of the Mercedes, but only damages for its detention. Inasmuch as Wallander’s 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 court’s view, could be awarded only for that period. Alternatively, Judge McHugh held that the doctrine of avoidable consequences prevented Wallander from obtaining ⁵⁵⁹ 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 and 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 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 Wallan ⁵⁶⁰ der’s damages were limited to amounts paid in the second half of the first year of the lease, or alternatively, limited by Wallander’s 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____” That question subsumes the other questions in the petition concerning the trial courts’ 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. Barnes 4 submits that the analysis by the trial courts was correct. He further submits that the issue of damages in replevin was not included in the certiorari petition 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.), § 4-401(2) of the Courts and Judicial Proceedings Article (CJ), “the District Court has exclusive original civil jurisdiction in ... [a]n action of replevin, regardless of the value of the thing in controversy.” If, however, Wallander’s action became, in effect, “[a]n action in contract or tort,” CJ § 4-401(1), then the District Court’s jurisdiction in this case would be limited to $10,000. Section 4-401(1) was amended to increase the maximum monetary jurisdiction “in contract or tort” from $10,000 to $20,000 by Chapter 557 of the Acts of ⁵⁶¹ 1991, effective January 1, 1992, well after the action involved here. Consequently, we reject Barnes’s argument that the certiorari petition does not embrace whether this action remained one in replevin.

The issue of the proper measure of damages necessarily involves classifying the cause of action, at least as to whether it is replevin, and, if so, the extent to which damages are awardable in replevin. In any event, because we shall remand for further proceedings, as explained below, we should clarify the action and the measure of damages therein for the guidance of the District Court. I In this Part I we consider whether damages measured by the value of the goods are today recoverable in replevin. The analysis set forth below concludes that, although at one time market value damages seemingly were recoverable in replevin under the circumstances presented here, that use of replevin may have been extinguished in 1962.

In any event, that use of replevin no longer remained available after replevin was substantially modified from its common law form by legislation and rules changes effected in 1973 following Fuentes v. Shevin, 407 U.S. 67 , 92 S.Ct. 1983 , 32 L.Ed.2d 556 (1972). Replevin “may be said to be the appropriate remedy in all cases where the object of the suit is to recover possession of specific goods and chattels, to the possession of which the plaintiff claims to be entitled at the time of instituting the suit.” 2 J. Poe, Pleading and Practice § 425, at 417 (1925 Tiffany ed.) (2 Poe). The action could be commenced simply by filing with the court clerk a bond in double the amount of the value of the goods to be seized. Id. § 426, at 417.

If the bond were approved by the clerk, the writ issued to the sheriff who undertook to seize the goods described in the writ. Id. § 427, at 419. If the writ were successfully executed by the sheriff, all of the goods replevied were delivered to the plaintiff. Id. § 428, at 419.

No declaration was required to be filed at the time of instituting a replevin action, although a ⁵⁶² declaration might be filed at that time. Id. § 430, at 420. When a declaration was filed at the commencement of the action, it alleged that the defendant unjustly detains the goods. This was known as a declaration “in the detinet.” Id.

When the plaintiff deferred filing the declaration until after the writ was successfully executed, the pleading alleged that the defendant unjustly had detained the goods. This was known as a declaration “in the detinuit.” Id. If the sheriff succeeded in seizing only some, but not all, of the goods sought, the declaration properly was to be in the detinet as to the part not replevied and in the detinuit as to the part delivered to the plaintiff. Id.

This distinction affected the measure of damages. In Benesch v. Weil, 69 Md. 276 , 14 A. 666 (1888), a replevin action, this Court reversed and remanded because of a failure to grant the plaintiff’s requested instruction on damages. The jury should have been told that if it found that the defendant had locked up the goods and would not permit the sheriff to take the same, then the jury could award to the plaintiff the value of the goods. Id. at 281-82 , 14 A. at 667-68 .

The Court, speaking through Chief Judge Alvey, said: “[WJhere the declaration, is in the detinuit, the plaintiff, if he recovers, has adjudged to him the right of possession of the goods and chattels, and damages for their detention only. But where the goods and chattels have been eloigned, or otherwise withheld from the execution of the writ by the act of the defendant, and the declaration is in the detinet, the plaintiff, if he be entitled to recover, is entitled to have awarded him as well the value of the goods as damages for their detention. The action of replevin in this latter form, in respect to the amount of the recovery, is not materially different from an action of trover.” Id. at 279 , 14 A. at 666 (citations omitted); see also 2 Poe § 443, at 429. The Court cited primarily to secondary sources.

Also in 1888 the General Assembly recognized that the value of goods could be awarded as damages in replevin. See Chapters 269 and 417 of the Acts of 1888. These statutes, ⁵⁶³ without change, remained codified in former Article 75, “Pleadings, Practice and Process at Law,” until they were repealed by Chapter 36 of the Acts of 1962. See 1962 Md. Laws at 101.

Chapter 417, dealing exclusively with replevin, provided that, as to chattels returned eloigned, the verdict should be either for the value of the goods or for the return of the eloigned goods. 5 Chapter 269 dealt with both replevin and detinue. It provided that, where alternative judgments were entered, the judgment was enforceable by a writ in the nature of a capias in withernam, unless the court ordered otherwise or the plaintiff agreed to accept the value of the goods and damages for detention. 6 Chapter 269 further required that every judgment in detinue and in replevin separately specify the value of the goods and damages for their detention. 7 ⁵⁶⁴ Burrier v. Cunningham Piano Co., 135 Md. 135, 145 , 108 A. 492, 496 (1919), repeated the rules from Benesch v. Weil, set forth above, and quoted Chapter 417 of the Acts of 1888 in a dicta passage dealing with the verdict. Burrier was a defendant’s appeal from a judgment for a return of the goods “ ‘or their value, $250.00.’ ” Id. at 146 , 108 A. at 496 . Because the goods, a piano, had been replevied and returned to the plaintiff, “the judgment in favor of the plaintiff should have been for the property replevied, and damages for its detention and costs of suit____” Id.

When this Court, by order dated July 17, 1958 and effective January 1, 1959, adopted the first Rules of Procedure governing Special Proceedings, replevin was included as Rule 1160. When the Special Proceedings Rules were completed and adopted by this Court effective January 1, 1962, 1958 Md.Rule 1160 became subtitle BQ (“Replevin”) of Chapter 1100. The 1962 BQ Rules were, in general, a statement of the then existing practice in replevin under common and statutory law. See 9B Md.Code (1957, 1963 RepLVol.), Chapter 1100, Subtitle BQ.

Under that practice the writ of replevin was issued by the court clerk upon the posting of a bond and prior to any hearing on entitlement to possession. The 1962 BQ Rules addressed damages in two places, Rule BQ44, dealing with the declaration, and Rule BQ50, dealing with the writ of capias in withernam. Rule BQ50 (1962) uses the term, “capias in withernam,” to describe a writ which is issued after entry of a judgment in the alternative and under which a plaintiff obtains return of the property sought in the replevin action. 8 ⁵⁶⁵ The BQ Rules permitted the declaration in replevin to be filed either with the bond or after the writ of replevin had been executed. 1962 Rule BQ44. In the former instance (detinet) the declaration “shall claim the return of said property plus damages for its detention.” 1962 Rule BQ44.a.

When the declaration was filed after the return of the property to the plaintiff (detinuit), the declaration “shall claim the property plus damages for its detention.” 1962 Rule BQ44.b. After all of the Special Proceedings Rules were in effect, the General Assembly, on the recommendation of the Rules Committee, enacted Chapter 36 of the Acts of 1962, effective June 1, 1962, repealing a mass of procedural statutes. Among the statutes repealed were those relating to replevin, including Md.Code (1957), Art. 75, §§ 58 and 59. Thus, as of June 1, 1962, there was no statutory recognition for damages in replevin measured by the full value of the property sought to be replevied.

Any foundation for such damages apparently rested on common law and on the recognition in Rule BQ50 that such damages were available under some circumstances. For purposes of the instant decision, we shall assume that the 1962 repeal of the replevin statutes and the adoption of Rule BQ50 did not limit the common law rule which, as articulated in Benesch v. Weil, allowed damages measured by the value of the goods, where the goods “have been eloigned, or otherwise withheld from the execution of the writ by the act of the defendant....” 69 Md. at 279 , 14 A. at 666 . In the instant matter, Barnes’s transfer of the Mercedes to an out-of-state dealer, with the right reserved in Barnes to reacquire the vehicle, arguably satisfied the alternative prong of the rule stated in Benesch , because a writ of replevin, although never issued, would have been returned eloigned if it had been issued. ⁵⁶⁶ The wholesale repeal of procedural statutes in 1962 required some fíne tuning. That was effected by Chapter 575 of the Acts of 1966, one of the purposes of which, as stated in its title, was “to reinstate certain portions of provisions of the Code of Public General Laws of Maryland erroneously repealed in prior Acts of this nature.” One of the statutes reinstated was former Article 75, § 59.

In its reincarnated form, however, the statute is limited to detinue, whereas, prior to its 1962 repeal, the statute applied to both replevin and detinue. Compare Md.Code (1957), Art. 75, § 59 and Md. Code (1957, 1969 Repl.Vol.), Art. 75, § 60A. 9 Clearly the General Assembly had intended in 1962 to repeal the statutory basis for an alternative judgment in replevin. The 1966 enactment of § 60A prompted revision of the BQ Rules. The caption of the subtitle was enlarged to “Replevin and Detinue,” and new Rule BQ53, “Detinue,” was added, effective September 1, 1967.

See 9B Md.Code (1957, 1971 RephVol.), Rule BQ53. 10 A Rules Committee note accompany ⁵⁶⁷ ing the 1967 adoption of Rule BQ53 gave the following explanation: “The substantive aspects of section e are to be found in Code, article 75, § 60A (Laws of 1966, Chapter 575), and are restated in this section for the convenience of the bar in utilizing the detinue rales. At common law the defendant had the option to either return the goods or pay their value, plus damages, if any, for their detention, Poe (6th ed.), Vol. 1, § 156. Code, article 75, § 59 of the 1957 Code (originally enacted in 1888, inadvertently repealed in 1962 and reenacted in 1966, and designated section 60A) apparently was intended to give the plaintiff the right to demand the return of the property unless the court shall otherwise order for good cause shown. Attention is invited to the fact that the verdict in detinue must be in the alternative for the return of the goods or their value.

See Code, article 75, § 60A. See also 16 Am.Jur. section 12.” The precedent on which Wallander rests his argument for the award of value damages in replevin, General Motors Acceptance Corp. v. Petrillo, 253 Md. 669 , 253 A.2d 736 (1969), was decided while Maryland replevin practice was principally governed by the 1962 BQ Rules as described above. In the GMAC case the appellant had properly repossessed its debt- or’s track, to which the debtor’s camper was attached. Id. at 676-77 , 253 A.2d at 740-41 .

The debtor, Petrillo, successfully replevied the camper, only to find that it had been physically damaged while in the possession of GMAC and that two guns that had been in the camper were missing. Id. at 671-73 , 253 A.2d at 738 . The trial court awarded damages to Petrillo that included the cost of repair of the camper ($264.20) and the ⁵⁶⁸ value of the guns ($123). Id. at 672 , 253 A.2d at 738 .

This Court treated the claim for the missing guns as the same type of claim as that for physical damage to the camper, i.e., compensation for actual injury to the property that was replevied. Id. at 673 , 253 A.2d at 739 . Thus, GMAC treats the facts as presenting a successful replevin in which the plaintiffs judgment is for return of the property and damages for its detention. GMAC does not segregate the missing contents of the camper from the camper itself and does not treat the contents as eloigned.

Thus, GMAC is of very little help in the instant matter. The BQ Rules were drastically revised following the Supreme Court’s 1972 decision in Fuentes , holding that due process was violated by prehearing seizures of property as permitted under historic replevin practice. 407 U.S. at 96-97 , 92 S.Ct. at 2002-03 . Maryland’s response to Fuentes was a package of changes in court rules and in statutes that was recommended by a joint committee of legislators and members of the Rules Committee. See Chapter 880 of the Acts of 1973, effective as an emergency measure on May 24, 1973; Minutes of the Rules Committee for Saturday, January 20,1973, on file in the Rules Committee office.

The overriding purpose and unifying theme of these changes were to provide a judicial hearing early in the procedure, so that the writ of replevin could issue as expeditiously as constitutionally and practically possible. Due process was satisfied under the 1973 changes by a preseizure hearing on a show cause order. See M.D.R. BQ43 and M.D.R. BQ44. It was concluded that the District Court was probably better able to schedule an early show cause hearing and, for that reason, exclusive original jurisdiction over replevin actions was placed in the District Court, without regard to the value of the property.

See Chapter 880 of the Acts of 1973; CJ § 4-401(2). M.D.R. BQ44 concerning the show cause hearing provides: “Upon the hearing on the order to show cause, the court shall make a determination whether the plaintiff, with rea ⁵⁶⁹ sonable probability, is entitled to return of the property claimed. If the court so determines, the writ of replevin shall issue, upon the filing by the plaintiff of a replevin bond.... If issuance of the writ of replevin is denied, the action shall proceed in detinue.” It is the