Arnold v. Minger
2011 WL 647480, 334 S.W.3d 650, 2011 Mo. App. LEXIS 178 (2011)
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Rule of Law:
For the conversion of unique personal property where evidence of fair market value is unobtainable, the cost of replacement is an appropriate measure of damages to fully compensate the owner for their loss.
Facts:
- Oric Arnold and Lawrence Minger were friends who formed business entities related to custom vehicles.
- Arnold personally hand-built a unique 1929 Model A wheel-standing racecar (the 'wheelstander').
- Arnold stored the wheelstander in a shop located on property the two parties had agreed to purchase together.
- In December 2005, after a falling-out between the two, Arnold was ordered off the property by law enforcement, leaving the wheelstander behind.
- In August 2006, Minger sold Arnold's wheelstander for $40,000 without Arnold's knowledge or consent.
- An expert in building such vehicles testified that they must be fabricated by hand and that fewer than 50 people in the country build them.
Procedural Posture:
- Oric Arnold sued Lawrence Minger for conversion in the Circuit Court of Morgan County, Missouri (trial court).
- The case was subsequently transferred by agreement to the Circuit Court of Laclede County, Missouri.
- Following a bench trial (trial by judge), the court found in favor of Arnold.
- The trial court entered a judgment ordering Minger to pay Arnold $115,800 in damages, calculating the amount based on replacement cost.
- Minger (appellant) appealed the judgment to the Missouri Court of Appeals, Southern District, arguing the trial court used the wrong method to calculate damages. Arnold is the appellee.
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Issue:
Is replacement cost the correct measure of damages for the conversion of unique personal property, such as a custom-built vehicle, when fair market value is not readily obtainable?
Opinions:
Majority - Don E. Burrell
Yes. Replacement cost is an appropriate measure of damages for the conversion of unique goods. While the general rule for damages in a conversion case is the fair market value at the time and place of the conversion, an exception exists for unique personal property. Such property cannot be valued in the same manner as common property because a market may not exist, and the items often have more value to the owner. The goal of awarding damages is to fully compensate the injured party for their loss, and in cases of unique property like the hand-built wheelstander, awarding the replacement cost is the only way to restore the owner to the position they occupied before the wrongful sale. The court also noted that Minger waived any argument against this measure of damages by failing to object to the replacement cost evidence presented at trial.
Analysis:
This decision reinforces the important exception to the standard 'fair market value' rule for damages in conversion actions. It clarifies that for truly unique or bespoke personal property, courts are permitted to use replacement cost to ensure the injured party is made whole. This precedent is significant for cases involving artwork, custom-made items, or any property without a readily available market, as it prevents a wrongdoer from profiting by disposing of a unique item for a low price and limiting their liability to that amount. The ruling also serves as a strong reminder of the 'use it or lose it' nature of trial objections, as the failure to object to evidence can waive a key legal argument on appeal.
