What is replevin?
Replevin is an action to return goods that are wrongfully held by another person or party.
Who can use replevin?
Replevin can be used by anybody. It is typically used by secured creditors looking to repossess collateral the debtor refuses to surrender after a default on the loan. Often times, Replevin is used to return goods to the seller when the buyer fails to pay the seller. It is also used in instances where a dispute arises over ownership of the property. The party seeking Replevin must have a genuine claim to the property.
What is the replevin process in Minnesota?
In Minnesota, a person seeking Replevin must bring the action in the county where the property is located.
There are two types of Replevin:
- a) Immediate Replevin; and
- b) Adjudicated Replevin
Immediate Replevin seeks to get possession of the property before the underlying dispute (why the property is disputed in the first place) is settled.
Adjudicated Replievin allows the underlying dispute to be resolved (or it already is resolved) and the property is seized and returned after the judgment is delivered.
What else would be helpful to know for someone seeking to understand the procedural replevin requirements in Minnesota?
Many times, a party seeking an immediate action of Replevin may be asked to post a bond before Replevin is granted (Minn. Stat. Ann. § 565.25). Remember, immediate Replevin gives possession of the property to someone else before the underlying dispute of ownership is settled, So, in immediate Replevin, the question of “who actually owns this property?” is not yet solved. What happens if the party losing the property is actually the party entitled to have it? What damages would that party suffer by not having it? This is why there is a requirement to post a bond – to offset any costs incurred by erroneous deprivation. The law has always presumed that a person who has possession is the true owner of the property. Because of this, there is generally no requirement for a bond to be posted by the party with possession of the property.
What legal standards apply to a creditor obtaining a replevin in Minnesota?
The legal standards applying to Replevin vary based on which type of Replevin is sought. If a party is seeking Adjudicated Replevin, the underlying claim has been settled on the merits. No bond is required to get the property returned. If, however, there is an action for Immediate Replevin, a different standard applies. As mentioned before, the underlying dispute has not been settled on the merits, and typically a bond has to be posted. In Immediate Replevin, the court weighs a number of factors before granting. The party seeking Replevin must: (1) show a legitimate claim to the property; (2) show that they don’t have possession of the property; (3) show a substantial likelihood of succeeding on the underlying claim; (4) show that the harm of not having possession of the claimed property outweighs the harm to the party currently in possession should the property change hands; and (5) post a bond.
What else would be helpful to know for a creditor seeking to understand the substantive replevin issues in Minnesota?
In Minnesota, under Minn. Stat. Ann § 548.04, Replevin is a hybrid action. It allows the party bringing the action to either (1) get the property back; or (2) if the property cannot be recovered in part or in full, the reasonable value of the unrecoverable property may be obtained.
Do you have any tips for creditors seeking replevin in Minnesota?
Replevin actions may be more costly than they’re worth in certain circumstances. Mainly this is because (1) the property is still subject to the rights of other secured creditors who may have priority; and (2) property may not have a high market value, but it’s economic value can be high. For example, lets say that a creditor wants to replevvy a construction company‘s only pay loader. The loader might only have a market value of $10,000, but it generates $300,000 of revenue annually for the construction company. Renting a replacement loader would cost $20,000 a year. The bond posted will usually be an amount that offsets any damages to the company by not having the seized property. In this example, assuming a rental replacement loader is readily available, the bond posted would be for $20,000. This exceeds the value of the collateral. Now, a year later after the underlying claim has been resolved and the court determines that the creditor is not entitled to the loader, the creditor will forfeit the bond and be forced to give the loader back to the construction company. Creditors should: (1) have absolute confidence that the debt is actually owed and not subject to any legitimate defenses; and (2) weigh out a cost/benefit analysis of money that is recoverable vs. the money it would cost if the creditor loses the underlying claim.
Do you have any tips for debtors opposing replevin in Minnesota?
Ask for the bond. This is an alleged debtor’s biggest tool against “eager beaver” creditors. Many times, a creditor will see the amount that he must post in the form of a bond, and think twice about pursuing the claim before a full adjudication.
Remember, it is the debtor who must ask for the bond. If, at the initial hearing, the debtor fails to ask for the bond, he is deemed to have waived his desire for one and cannot later request that the property be bonded.