FOR PUBLICATION
ATTORNEY FOR APPELLANT: ATTORNEY FOR APPELLEES:
JEANNE B. BLUMENTHAL SCOTT E. YAHNE
Chesterton, Indiana Efron, Efron & Yahne, P.C.
Hammond, Indiana
UNITED FARM FAMILY MUTUAL )
INSURANCE COMPANY, )
)
Appellant-Defendant, )
)
vs. ) No. 45A03-0310-CV-00393
)
HAROLD MICHALSKI, and )
RIVERSIDE LOUNGE & MARINA, INC., )
)
Appellees-Plaintiffs. )
OPINION - FOR PUBLICATION
Following a bench trial, Appellant, United Farm Family Mutual Insurance Company (United), appeals
from the trial courts adverse judgment in an action for replevin of a
boat known as Velocity brought by Riverside Lounge & Marina, Inc. (Riverside) and
Riversides owner, Harold Michalski. Upon appeal, United presents four issues for our
review, one of which we find dispositive: whether the trial court erred
in finding for and awarding damages to Michalski and Riverside in their action
for replevin.
We reverse and remand.
This litigation centers around who, between the parties, has proper legal title and
a right to possession of a 1988, thirty foot, Regal cigarette boat, HIN
RGMT1035K788, known as Velocity. The facts most favorable to the trial courts
judgment reveal that Harold Urbanski, Sr. (Urbanski) purchased Velocity on May 13, 1994
and was issued a watercraft certificate of title in Illinois. Urbanski had
insurance coverage on Velocity through United under policy number 1455551. On June
11, 1998, Urbanski filed a claim with United asserting that Velocity and its
trailer had been stolen on or about June 5, 1998,
See footnote from Doynes Marina
in Portage, Indiana, the marina which he regularly used for summer storage.See footnote
United conducted its own investigation into the alleged theft and concluded that Urbanskis
theft claim was legitimate. On July 25, 1998, United and Urbanski executed
a final settlement under which United paid Urbanskis theft claim loss in the
amount of $40,372.50,See footnote and in exchange Urbanski transferred his ownership interest in Velocity
and its trailer by signing the title to both over to United.See footnote
According to records submitted by Michalski and Riverside, Robert Krzesinski dropped Velocity off
for storage at Riversides marina in October 1997.See footnote Krzesinski claimed that a
friend of a friend, an individual whom he did not know, had contacted
him about purchasing a boat motor and installing that boat motor, as well
as one to be supplied by the individual, on a boat. The
boat, identified as Velocity, was dropped off at the home of Krzesinskis parents
by an individual Krzesinski knew only as Bob. When Velocity
was dropped off, Krzesinski observed that it had no motors, no seats, no
cover, and no outdrives. The individual Krzesinski knew as Bob left his
cell phone number and agreed to return with the second boat motor so
that Krzesinski could install it on Velocity. Over the next several months,
Krzesinski spoke with Bob on one other occasion, but he never saw him
again. Krzesinski never completed the work on Velocity because Bob never delivered
the second boat motor and did not pay for the services Krzesinski was
willing to provide. In attempting to contact Bob, Krzesinski learned from a
friend that the individual he knew as Bob perhaps lived at a certain
location in Calumet City. Krzesinski went to that location, but no one
was ever there.
Approximately four to six months after Velocity was dropped off by Bob, Krzesinski
hauled Velocity to Riverside for storage. Upon dropping Velocity off, Kellie Nowakowski,
an employee of Riverside, provided Krzesinski with Riversides vessel storage agreement.See footnote Krzesinski
signed the agreement which provided that the storage fee was eighteen dollars per
foot for the thirty-foot boat, or $540 per season.See footnote When Velocity was
dropped off at Riverside, it was nothing more than a hull. Velocity
sat idle at Riverside for over sixteen months, and no one ever paid
the storage fees.See footnote Over the course of two winter storage seasons and
one summer storage season, the total storage bill for Velocity accumulated to $1,944,
including interest. Riverside maintained that pursuant to Illinois law, it held a
lien against Velocity in that amount.See footnote
In February 1999, after Velocity had been stored at the Riverside marina for
sixteen months without payment, Michalski employed Marion Weglarz of Title Services of Illinois,
Inc., to assist in satisfying the lien or in obtaining a new certificate
of title for Velocity. Mr. Weglarz began by requesting a title search
on Velocity. Pursuant to his request to the Illinois Department of Natural
Resources, Mr. Weglarz learned that Urbanski was the registered owner of Velocity and
that the registration for Velocity under his name was to expire on June
30, 2000. On March 4, 1999, Mr. Weglarz sent a letter to
Urbanski via certified mail to the address on Urbanskis title to Velocity601 Burnham
Avenue, Calumet City, Illinois, 60409informing him that Velocity was going to be disposed
of at a public sale in thirty daysSee footnote under the provisions of what
was referred to as the Illinois Mechanics Lien lawSee footnote if he did not
pay the lien amount and take possession of Velocity within that time.See footnote
The letter to Urbanski was returned as undeliverable. Mr. Weglarz also had
a notice of the sale published in the March 11, 1999 issue of
Star Publications, a local newspaper.
Apparently, the sale was conducted at the time and place indicated in the
notices, but no one appeared in order to bid on Velocity, except for
Michalski who submitted a paper bid in the amount of Riversides claimed lien.
Thereafter, Ms. Nowakowski signed a Mechanics Lien Affirmation in which she affirmed
that [t]he . . . storage furnished for [Velocity] was completed at the
request of or with the consent of its owner, authorized agent of the
owner, or lawful possessor thereof in accordance with Illinois Compiled Statutes.See footnote Plaintiffs
Exhibit 5. Ms. Nowakowski also affirmed that the notice requirements of the
applicable statutes had been complied with. According to Mr. Weglarz, this document
was prepared and submitted to the Illinois Department of Natural Resources in order
to obtain a new title after the sale pursuant to the provisions of
the Labor and Storage Lien (Small Amount) Act was completed.See footnote Thereafter, on
May 21, 1999, the Illinois Department of Natural Resources issued a watercraft certificate
of title for Velocity to Riverside.
Only after a title was issued to Riverside for Velocity did Michalski begin
restoring and repairing Velocity. On May 5, 2000, Michalski obtained a loan
using Velocity as collateral. Prior to obtaining the loan, Michalski assigned the
title to Velocity from Riverside to himself. Michalski estimated that he had
installed on Velocity parts with an estimated value of $34,675 and that a
total of ninety-five hours of labor, at a rate of $65.00 per hour,
were expended in restoring Velocity to a usable condition. In total, the
estimated value of the repairs made to Velocity was $40,850. After restoring
Velocity back to working order, Michalski used the boat for personal recreation, as
a rental boat, and to tow other boats on the Calumet River and
Lake Michigan. Michalski was only able to use Velocity through the summer
season of 2000.
In February 2001, Tim Geller, a material damage specialist for United who had
been responsible for investigating Urbanskis theft claim, was contacted by the Portage Police
Department regarding Velocity. In making arrangements to get Velocity back, United contacted
conservation officers in Illinois. On February 3, 2001, the Illinois Department of
Natural Resources seized Velocity for a short time and then returned it to
the Riverside marina. Shortly thereafter, the Illinois State Police confiscated Velocity from
the Riverside marina and turned it over to United.See footnote Michalski made several
demands to United for return of Velocity, but United refused.
On July 3, 2001, Michalski and Riverside filed a complaint alleging conversion, seeking
replevin and to quiet title to Velocity, and/or seeking recovery in quantum meruit.
A bench trial was conducted on February 20 and March 18, 2003.
After taking the matter under advisement, the trial court entered its
findings of fact and conclusions of law on August 28, 2003. Specifically,
the court entered judgment as follows:
17. Pursuant to Indiana Code 32-35-2-33, this Court ORDERS that [Michalski and Riverside] shall
recover judgment against [United] in the sum of $65,000 that amount being the
$47,000 market value Velocity was given by Mr. Eubanks and Michalski plus the
$18,000 for fair rental value, together with Court Costs. Appendix at 67.
United now appeals.
We begin by noting that it appears as though the trial court entered
findings of fact and conclusions of law upon its own motion, as there
is nothing in the record which suggests that either party made such a
request. Upon review of an adverse judgment where the trial court sua
sponte entered findings of fact and conclusions of law, we apply a two-tiered
standard of review.
Humphries v. Ables, 789 N.E.2d 1025, 1030 (Ind. Ct.
App. 2003). We first determine whether the evidence supports the findings and
then whether the findings support the judgment. Id. We will not
reweigh the evidence or determine the credibility of witnesses but rather consider only
the evidence which supports the judgment and the reasonable inferences to be drawn
therefrom. Id.
When the trial court enters findings sua sponte, the specific findings control only
as to the issues they cover. Id. A general judgment standard
applies to any issue upon which the trial court has not made a
finding. Id. A general judgment may be affirmed upon any legal
theory supported by the evidence. Id. A judgment in favor of
the party having the burden of proof will be affirmed if the evidence
was such that from it a reasonable trier of fact could conclude that
the elements of the partys claim were established by a preponderance of the
evidence. Robinson v. Valladares, 738 N.E.2d 278, 281 (Ind. Ct. App. 2000).
Here, Michalski and Riverside brought the instant action to recover possession of Velocity.
A replevin action is a speedy statutory remedy designed to allow one
to recover possession of property wrongfully held or detained as well as any
damages incidental to the detention. State Exchange Bank of Culver v. Teague,
495 N.E.2d 262, 266 (Ind. Ct. App. 1986). See also Ind. Code
§ 32-35-2-1 (Burns Code Ed. Repl. 2002) (providing that where property is wrongfully
taken or unlawfully detained from the owner or person claiming possession of the
property, the owner or claimant may bring an action for the possession of
the property). The trial court entered its judgment in favor of Michalski
and Riverside pursuant to Indiana Code § 32-35-2-33 (Burns Code Ed. Repl. 2002)
which provides: In an action to recover the possession of personal property,
judgment for the plaintiff may be for: (1) the delivery of the
property, or the value of the property in case delivery is not possible;
and (2) damages for the detention of the property. Specifically, the trial
court awarded Michalski and Riverside an amount for the value of Velocity and
damages for lost rents resulting from Uniteds detention thereof.
The dispositive issue in the case before us is whether the trial court
erred in finding for Michalski and Riverside upon their action for replevin of
Velocity. United asserts that the trial courts judgment is erroneous because Riverside
and Michalski did not establish superior title to or a right to possession
of Velocity. Specifically, United argues that the affirmation submitted with Riversides application
for title contained false statements, irregularities, and legal defects. United directs us
to the Mechanics Lien Affirmation wherein Ms. Nowakowski affirmed, on behalf of Riverside,
that [t]he . . storage furnished for [Velocity] was completed at the request
of or with the consent of its owner, authorized agent of the owner,
or lawful possessor thereof in accordance with Illinois Compiled Statutes. Plaintiffs Exhibit
5. United asserts that Michalski and Ms. Nowakowski knew that Velocity was
not being stored with the consent of its owner.
Before we address the merits of Uniteds argument, we must first address Michalski
and Riversides claim that United has waived the argument for our review.
In their brief, Michalski and Riverside argue that because United failed to give
notice of its intent to rely upon the Illinois Labor and Storage (Small
Amount) Act in compliance with the Uniform Judicial Notice of Foreign Law Act,
Ind. Code 34-38-4 (Burns Code Ed. Repl. 1998), United cannot now challenge the
trial courts application of such law. We disagree.
In the complaint, Michalski and Riverside asserted that their claim of title was
superior to Uniteds. To establish such fact, Michalski and Riverside presented evidence
to show that they had acquired a lien pursuant to Illinois law and
that after complying with the statutory requirements for enforcing such lien, Riverside used
such lien to obtain its title to Velocity. Although neither party specifically
referred to the Illinois Labor and Storage Lien (Small Amount) Act, it is
clear from the record before us that this is the statutory scheme upon
which Michalski and Riverside relied in asserting their lien which served as the
basis for their subsequent claim of title to Velocity. Illinois law was
thus the basis of Michalski and Riversides claim for replevin. United was
thus under no obligation to provide notice to Michalski and Riverside of its
intention to rely upon such law challenging Michalski and Riversides claim. Further,
we note that although we will not usually decide the merits of an
appeal upon grounds not argued by the parties nor submitted to the trial
court, we are obligated to ascertain the correct law applicable to the facts
if to do otherwise would be to render a clearly erroneous appellate decision.
Dedelow v. Pucalik, 801 N.E.2d 178, 184 (Ind. Ct. App. 2003).
Here, we must look to the Illinois Labor and Storage Lien (Small Amount)
Act in reviewing Uniteds challenge to Michalski and Riversides claim of a lien
and claim of superior title.
Michalski and Riverside also argue that United has waived any argument it has
pursuant to the Illinois Labor and Storage Lien (Small Amount) Act because United
failed to make such arguments to the trial court. A party generally
waives appellate review of an issue or argument unless that party presented the
issue or argument before the trial court. Dedelow, 801 N.E.2d at 183.
However, we prefer to decide a case upon the merits whenever possible.
Id. We have held that [q]uestions within the issues and before
the trial court are before the appellate court, and new arguments and authorities
may with strict propriety be brought forward. Id. at 184 (quoting Bielat
v. Folta, 141 Ind.App. 452, 454, 229 N.E.2d 474, 475 (1967)). Here,
the issue of Riversides lien pursuant to Illinois law, which served as the
basis for its application of title to Velocity, was an issue before the
court as part and parcel of their claim for replevin. Indeed, the
trial court found in its judgment that Riverside acquired its lien pursuant to
applicable Illinois law. App. at 66.
Further, after reviewing the record, we note that Uniteds counsel cross-examined Ms. Nowakowski
as to whether she inquired of Krzesinski about his ownership/possession of Velocity at
the time he consented to its storage. Uniteds counsel further questioned Ms.
Nowakowski about the veracity of the affirmation she signed on behalf of Riverside
in which she indicated that the storage of Velocity was at the request
of or with the consent of its owner, authorized agent of the owner,
or lawful possessor thereof. We can discern of no other reason why
Uniteds counsel would have challenged Ms. Nowakowskis testimony in this regard if not
to cast doubt on Riverside and Michalskis claim of a lien under Illinois
law and the use of that lien to obtain their purported superior title
to Velocity. We therefore decline to hold that United waived the appellate
argument that Michalski and Riverside did not establish superior title to Velocity because
of false representations in an affirmation which was submitted with the application for
title to Velocity.
Now, we turn back to Uniteds claim that the trial courts judgment is
erroneous because Riverside and Michalski did not establish superior title to or a
right of possession to Velocity. In a replevin action the only issue
which must necessarily be decided is the right to present possession. Teague,
495 N.E.2d at 266. In order for a plaintiff to recover in
an action for replevin, he must prove his title or right to possession,
that the property is unlawfully detained, and that the defendant wrongfully holds possession
thereof. Snyder v. Intl Harvester Credit Corp., 147 Ind.App. 364, 368, 261
N.E.2d 71, 73 (1970). The plaintiff must prove his right to possession
on the strength of his own title, not merely the weakness of the
defendants title or right to possession. Tucker v. Capital City Riggers, 437
N.E.2d 1048, 1051 (Ind. Ct. App. 1982). Only where the plaintiff has
made a prima facie case of right to possession of the chattel sought,
does the burden of going forward with the evidence to show a right
of possession rest on the defendant. Warner v. Warner, 104 Ind.App. 252,
257-58, 10 N.E.2d 773, 775-76 (1937).
In asserting a claim for replevin, Michalski and Riverside maintained that their title
to Velocity was superior to Uniteds claim and that United was improperly detaining
Velocity. In its judgment the trial court found that Riverside had acquired
a storage lien after Velocity had been stored at its marina for more
than eighteen months without payment. The court, however, did not make any
specific factual findings with regard to Michalski and Riversides compliance with Illinois law
in obtaining the lien. The court then found that Riverside acquired title
to Velocity after complying with applicable Illinois law for enforcing its storage lien
and that title to Velocity was later assigned from Riverside to Michalski.
As we have noted above, the applicable Illinois law under which Riverside and
Michalski claimed a lien, which later served as a basis for acquisition of
title and their claim of a right to possession of Velocity, is the
Illinois Labor and Storage Lien (Small Amount) Act.
Under that Act, in order for a storage lien to be obtained, Velocity
had to be stored at the request of or with the consent of
its owner, authorized agent of the owner, or lawful possessor thereof. 770
Ill. Comp. Stat. 50/1. The Act further provides the manner in which
the lien may be enforced, specifically providing for notice and a commercially reasonable
public or private sale. 770 Ill. Comp. Stat. 50/2-50/4. In establishing
title and right of possession, Michalski and Riverside presented evidence showing compliance with
the notice and sale provisions of the Act, including an affirmation signed by
an employee of Riverside in which it was also affirmed that Velocitys storage
was at the request of or with the consent of its owner, authorized
agent of the owner, or lawful possessor thereof.
In Estate of Downs v. Webster, 716 N.E.2d 1256 (Ill. App. Ct. 1999),
the Appellate Court of Illinois considered a claim of a lien pursuant to
the Self-Storage Facility Act. There, the former executor of the estate entered
into a lease with a storage facility for the storage of property belonging
to the estate. The new executor of the estate learned of the
storage of estate property and filed an action in replevin against the owner
of the storage facility asserting that the former executor had no authority to
enter into the lease. The trial court found that the storage facility
acquired a lien against the estate property pursuant to the Self-Storage Facility Act.
Upon appeal, the court, in analyzing that act, noted that no exception
was made for property wrongfully placed in a storage facility; rather, the court
found that the language of the statute was quite broad in that it
applied to all personal property placed in storage. Id. at 1259.
In further support of its position, the court compared that act with language
found in the Labor and Storage Lien Act and the Labor and Storage
Lien (Small Amount) Act and noted that those two acts contained qualifying language
as to how a lien could be acquired against stored property. Id.
at 1260. Specifically, the court noted that under the language of the
labor and storage lien acts, the person providing storage must have legal authority
over the property as a condition precedent to imposition of a lien.
Id. In so noting, the court was specifically referring to the restrictive
language which provides that the storage must be provided at the request of
or with the consent of its owner, authorized agent of the owner, or
lawful possessor thereof . . . . Id.
In Kunde v. Biddle, 353 N.E.2d 410 (Ill. App. Ct. 1976), the court
considered a towing companys claim of a lien under the Labor and Storage
Lien Act. At the request of the owner of a private parking
lot, the towing company removed cars which were wrongfully parked in the lot.
The towing company refused to relinquish the cars to their owners until
the owners paid the towing and storage fees, claiming that it had acquired
a lien against the vehicles under the Labor and Storage Lien Act.
In asserting his right to the liens, the owner of the towing company
claimed that he expended labor and storage at the request of the lawful
possessor of the vehicles, i.e. the owners of the private parking lot on
which the cars were wrongfully parked. The court concluded that to say
that the parking lot owners were lawful possessors was a strained interpretation and
application of statutory lien provisions. Id. at 413. The court held
that the parking lot owners could not be considered agents of the owners
of the cars. Id. The court noted that a mere possessor
has no authority to create a lien against an automobile without the owners
consent. Id. Thus, the court concluded that the towing company did
not acquire a lien under the storage lien statute because the storage was
not provided at the request of or with the consent of the owner,
authorized agent of the owner, or lawful possessor thereof. Id.
Under the authority of Webster and Kunde, it is clear that Illinois courts
have given effect to the restrictive language in the Illinois Labor and Storage
Lien (Small Amount) Act, which requires that in order for a lien to
be obtained, the storage of property must be provided at the request of
or with the consent of its owner, authorized agent of the owner, or
lawful possessor thereof. Here, it is undisputed that Velocity was dropped off
for storage at the Riverside marina by Krzesinski and that Krzesinski was not
the owner of Velocity. The question before us then becomes whether there
was any evidence from which the trial court could have concluded by a
preponderance of the evidence that Krzesinski was the authorized agent of the owner,
i.e. Urbanski, or the lawful possessor of Velocity when he consented to Velocitys
storage at the Riverside marina.
At the bench trial, Riverside and Michalski presented evidence from which they sought
the inference that the Bob who delivered Velocity into Krzesinskis possession was Robert
Urbanski, Jr., Urbanskis son. Indeed, the trial court made such inference, for
in its judgment, the court found that Robert Urbanski, Jr., was the Bob
who contacted Krzesinski and later dropped Velocity off at Krzesinskis parents home, never
to return and claim the boat. In their brief, Michalski and Riverside
argue that there was no evidence that Robert Urbanski, Jr., was not an
authorized agent of Urbanski. However, there also was no evidence presented from
which the trial court could conclude that Urbanski, Jr., was the authorized agent
of Urbanski. The simple fact that Urbanski, Jr., was Urbanskis son is
not enough from which a reasonable inference can be drawn to establish that
Urbanski, Jr., was acting as Urbanskis authorized agent. Because there was no
evidence that Urbanski, Jr., was acting as an authorized agent of Urbanski, there
is nothing from which it could be concluded that Krzesinski, through Urbanski, Jr.,
was acting as an authorized agent of Urbanski. The burden was upon
Michalski and Riverside to prove that Krzesinski, through Urbanski, Jr., was acting as
an authorized agent of Urbanski, the registered owner of Velocity, when Krzesinski dropped
the boat off for storage at the Riverside marina, as such establishes their
claim to a valid lien and subsequent title to Velocity.
There was also no evidence from which the trial court could have concluded
that Krzesinski was the lawful possessor of Velocity when he dropped it off
at the Riverside marina. Again, the undisputed evidence is that Bob, or
as the trial court specifically found, Urbanski, Jr., delivered Velocity to Krzesinski.
There was no evidence presented which showed that Urbanski, Jr., was the lawful
possessor vis-à-vis Urbanski. Thus, Krzesinski cannot be said to be the lawful
possessor through Urbanski, Jr.
See footnote
In short, Michalski and Riverside did not establish that Velocity was stored at
the request of or with the consent of its owner, the authorized agent
of the owner, or the lawful possessor thereof. Thus, Riverside did not
establish that it had acquired a valid lien against Velocity. In applying
for a title to Velocity, inaccurate representations were made, i.e. that a valid
lien had been acquired, to induce the State of Illinois to issue a
new title to the boat to Riverside. Riverside and Michalski thus failed
as a matter of law to establish a valid title to Velocity which
is superior to Uniteds. Further, Michalski and Riverside did not show that
they have a right of possession to Velocity other than through the purported
title, which we have concluded was not properly obtained. Therefore, we hold
that the trial court erred in finding for Michalski and Riverside on their
claim of replevin.See footnote
The judgment of the trial court is reversed and remanded for further proceedings.
MAY, J., and VAIDIK, J., concur.