Jones v. Marquis Terminal, Inc.
2014 Ky. App. LEXIS 87
| Ky. Ct. App. | 2014Background
- Steve Jones owned three belt conveyors rented to Marquis Terminal (parent Ross Brothers) and sent notice of rental terms: $375/day for all three; no formal lease executed.
- Jones invoiced Marquis; Marquis paid $7,875 but retained and continued using the equipment through the time of trial and beyond, accruing additional unpaid rental charges.
- Jones filed suit Feb 1, 2011 for unpaid rent and sought an injunction; no injunction issued; amended complaint later added conversion claim and punitive damages.
- Bench trial ultimately held Jan 23, 2013; trial court found Marquis agreed to rent and knew it owed invoices but limited Jones’s recovery, concluding Jones failed to mitigate damages after June 30, 2011.
- Trial court awarded $59,250 (total rental less prior payment) for 179 days and ordered return of the equipment; Jones appealed mitigation ruling, denial of pre-judgment interest, and denial of conversion damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether mitigation limited contract damages | Jones: entitled to full agreed rental for entire period Marquis possessed equipment | Marquis: Jones should have sought injunctive relief or sold equipment; failure to mitigate after June 2011 | Reversed trial court — Jones not barred; entitled to rental at agreed rate for actual possession period |
| Whether pre-judgment interest is required | Jones: contract fixed rental rate and days, so interest due as a matter of course | Marquis: no equitable reason to deny interest impliedly argued | Court: Pre-judgment interest required under Restatement §354(1) because breach was failure to pay a definite sum |
| Whether conversion claim warranted tort damages or full value/punitive damages | Jones: Marquis’s retention was conversion warranting full value and punitive damages | Marquis: retention was contractual breach; no independent tort loss shown | Affirmed trial court — no separate tort damages; breach remedy adequate and no independent loss shown |
| Burden of proof on mitigation | Jones: Marquis bears burden to prove failure to mitigate | Marquis: argued Jones had obligation to act (e.g., seek court order) | Court agreed Jones need not have taken extraordinary steps; Marquis failed to prove mitigation failure |
Key Cases Cited
- Owens-Corning Fiberglas Corp. v. Golightly, 976 S.W.2d 409 (Ky. 1998) (standard of review for bench trial findings under CR 52.01)
- A & A Mechanical, Inc. v. Thermal Equipment Sales, Inc., 998 S.W.2d 505 (Ky. Ct. App. 1999) (appellate review of law applied to found facts)
- Deskins v. Estep, 314 S.W.3d 300 (Ky. Ct. App. 2010) (mitigation duty in contract damages)
- St. Auto. Mutual Ins. Co. v. Chrysler Credit Corp., 792 S.W.2d 626 (Ky. Ct. App. 1990) (definition of conversion)
- Ky. Ass'n of Counties All Lines Fund Trust v. McClendon, 157 S.W.3d 626 (Ky. 2005) (elements of conversion)
- Meade v. Richardson Fuel, Inc., 166 S.W.3d 55 (Ky. Ct. App. 2005) (conversion and damages analysis)