Monteleone v. First State Bank & Trust Co.

477 So. 2d 130, 1985 La. App. LEXIS 10040
CourtLouisiana Court of Appeal
DecidedSeptember 26, 1985
DocketNo. CA 84 0644
StatusPublished

This text of 477 So. 2d 130 (Monteleone v. First State Bank & Trust Co.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Monteleone v. First State Bank & Trust Co., 477 So. 2d 130, 1985 La. App. LEXIS 10040 (La. Ct. App. 1985).

Opinion

COLE, Judge.

This appeal involves an award of damages for the wrongful seizure of a bulldozer owned by plaintiffs. The primary issues presented are whether plaintiffs’ recovery should be limited because of their alleged failure to mitigate damages and whether the damages awarded to plaintiffs were excessive.

This matter arose from the following facts. On October 3,1979 defendant, First State Bank & Trust Company (Bank), loaned a certain sum of money to Russell Varnado. On that same date Varnado delivered to the Bank a promissory note secured by a chattel mortgage on an Allis Chalmer bulldozer owned by him. For reasons not pertinent in this appeal, the Bank successively had Varnado execute new promissory notes on July 9, 1980 and August 15, 1980. Each of these notes was secured by a chattel mortgage on the same bulldozer. (The description of the bulldozer contained in both the July 9th and August 15th mortgages included an incorrect serial number.)

On September 18, 1980 Varnado sold the bulldozer to Hammond Equipment Company, misrepresenting it as being free of any encumbrances. The bulldozer was thereafter purchased from Hammond Equipment Company by plaintiffs, Anthony Mon-teleone and Harold Starkey, on September 30, 1980.1 Plaintiffs had no actual knowledge of the existence of a chattel mortgage on the bulldozer.

At the Bank’s request, Varnado again executed a new promissory note and chattel mortgage on the bulldozer on December 1, 1980. The Bank was unaware Varnado no longer owned the bulldozer at this time. After this note became delinquent, the [132]*132Bank filed suit on May 13, 1982 requesting recognition of the chattel mortgage executed on December 1, 1980. On July 2, 1982 the Bank obtained a default judgment against Varnado recognizing this mortgage. A writ of fieri facias was issued shortly thereafter, but was not executed at that time because the location of the bulldozer could not be ascertained.

The Bank first learned Varnado had sold the bulldozer at a judgment debtor rule held on October 29, 1982. After the bulldozer was eventually located in Montel-eone’s possession, the Bank directed the sheriffs office to seize it. This seizure was accomplished on January 7, 1983. The officer executing the writ appointed Mon-teleone as custodian of the bulldozer and left it in his care. The bulldozer was never physically removed from Monteleone’s custody.

On January 25,1983, a letter was written by plaintiffs’ attorney to the attorney representing the Bank. This letter set forth plaintiffs’ claim of ownership and contended the Bank’s chattel mortgage was unenforceable against the bulldozer in Montel-eone’s possession. It was requested the Bank indicate within one week whether it would voluntarily release the bulldozer in order to avoid additional damages. No evidence was introduced to show the Bank took any action until March 11, 1983, when it voluntarily released the bulldozer from seizure.

Plaintiffs subsequently filed this suit for wrongful seizure. The trial court rendered judgment in favor of plaintiffs, awarding them damages for both economic losses and loss of reputation. Monteleone was awarded $9,519 for economic losses and Starkey $5,069. Each plaintiff was also awarded $5,000 for loss of reputation. The Bank has appealed.

The only issues raised by the Bank on appeal relate to quantum. No error was assigned to the finding that the seizure was wrongful and, accordingly, this issue is not now before the Court. The primary argument made by the Bank is that plaintiffs should not be allowed to recover because they failed to meet their duty to mitigate damages. First, the Bank maintains plaintiffs could have in fact used the bulldozer during the period of the seizure, since it was not physically removed from their custody and they were not specifically prohibited from using it. The Bank contends plaintiffs thus could have avoided the largest part of their economic losses. Additionally, the Bank argues plaintiffs could have also mitigated their damages by posting bond to obtain the release of the bulldozer from seizure.2

We disagree with the Bank’s contention plaintiffs were entitled to make use of the bulldozer during the period it was under seizure, either for their own personal use and to do work for hire. Under La. Code Civ.P. art. 327 the seizure of movable property also effects the seizure of the fruits and issues which it produces while under seizure; and the sheriff is required to collect all rents and revenue produced by the property during the period of seizure. Thus, it is clear plaintiffs could not have used the bulldozer to do work for hire while it was under seizure, since any revenues so produced would have been also subject to seizure.

Further, under La.Code Civ.P. art. 326 the sheriff has a duty to safeguard, protect and preserve seized property.3 The sheriff may appoint a keeper for this purpose, who has the same duty to protect and preserve the seized property as the sheriff. La.Code Civ.P. art. 326; see Baker Bank & [133]*133Trust Co. v. Chausse, 393 So.2d 261, 263-4, (La.App. 1st Cir.1980), writ denied, 397 So.2d 1364 (La.1981); Bickham Motors, Inc. v. Crain, 185 So.2d 271, 276 (La.App. 1st Cir.1966). In the present case Montel-eone was appointed keeper of the bulldozer under seizure. Use of the bulldozer could have resulted in damages to it or a depreciation in its value. Accordingly, it would have been totally inconsistent with Montel-eone’s duties as keeper of the property to have used it either for his own purposes or that of co-owner Starkey.

We also reject the Bank’s argument plaintiffs could have mitigated their losses by posting a release bond pursuant to La. R.S. 13:3874 and Code Civ.P. art. 5127. Under the doctrine of mitigation of damages an injured person has a duty to exercise reasonable diligence and ordinary care in attempting to minimize his damages after an injury has been inflicted. Unverzagt v. Young Builders, Inc., 215 So.2d 823 (La.1968); Aultman v. Rinicker, 416 So.2d 641, 645 (La.App. 2d Cir.1982); Stanley v. Guy, 442 So.2d 579 (La.App. 1st Cir.1983). However, this doctrine will not be applied to restrict a plaintiffs recovery when he would be required to make substantial expenditures of his own funds in order to avoid the consequences of the defendant’s acts. Unverzagt, supra; Aultman, supra; also see Pope v. Spiers, 347 So.2d 1191 (La.App. 1st Cir.1977).

La.R.S. 13:3874 permits certain parties claiming ownership of seized property to obtain the release of the property by posting security which exceeds one-half of the property’s value. In the present case, it would have been necessary for plaintiffs to post a bond in the range of $4,500 to $6,000 in order to obtain the release of the bulldozer.4 We conclude plaintiffs were not required under the mitigation doctrine to furnish bond in such a substantial amount.

Given the substantial sum necessary, it would be inequitable to restrict plaintiffs’ recovery due to their failure to post a release bond, particularly since the Bank was put on notice at an early point of the possibility of damages to plaintiffs. A period of approximately six weeks lapsed between the time the Bank received formal written notice of plaintiffs’ ownership claims and the time the Bank voluntarily released the bulldozer.

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Related

Mid-State Homes, Inc. v. Lartigue
383 So. 2d 99 (Louisiana Court of Appeal, 1980)
Stanley v. Guy
442 So. 2d 579 (Louisiana Court of Appeal, 1983)
Aultman v. Rinicker
416 So. 2d 641 (Louisiana Court of Appeal, 1982)
Pope v. Spiers
347 So. 2d 1191 (Louisiana Court of Appeal, 1977)
Unverzagt v. Young Builders, Inc.
215 So. 2d 823 (Supreme Court of Louisiana, 1968)
Bickham Motors, Inc. v. Crain
185 So. 2d 271 (Louisiana Court of Appeal, 1966)
Baker Bank & Trust Co. v. Chausse
393 So. 2d 261 (Louisiana Court of Appeal, 1980)

Cite This Page — Counsel Stack

Bluebook (online)
477 So. 2d 130, 1985 La. App. LEXIS 10040, Counsel Stack Legal Research, https://law.counselstack.com/opinion/monteleone-v-first-state-bank-trust-co-lactapp-1985.