Tenant Locked Out of Office Entitled to Conversion Damages

Where a landlord evicted a tenant by locking him out and bypassed the legal process outlined in the lease, the landlord was liable for conversion, and the Court of Appeals affirmed an award based on “the present day value of the personal property which Plaintiff claimed was not returned.”

In Philp v. Southeast Enterprises, LLC, No. M2016-02046-COA-R3-CV (Tenn. Ct. App. Feb. 9, 2018), plaintiff tenant had rented an office space from defendant landlord. After plaintiff failed to pay rent for two months, defendant “changed the locks on the doors and posted a notice on the building entrance stating that Plaintiff had been evicted.” Plaintiff filed suit for various causes of action related to the lease and eviction, including a claim for conversion and punitive damages. After a trial, the trial court found that defendant was liable for conversion, which the Court of Appeals affirmed. The trial court also awarded plaintiff $5,000 in punitive damages, and although the Court of Appeals affirmed the decision to award punitive damages, it vacated the amount and instructed the trial court “to make specific findings of fact and conclusions of law relative to the appropriate factors and enter judgment accordingly.”

Regarding the conversion claim, the Court of Appeals first affirmed that defendant was liable for conversion damages. The Court pointed out that “[b]y locking Plaintiff out, Defendants maintained possession of all of Plaintiff’s property inside the building.” The Court noted that “Defendants bypassed legal process and changed the locks on the door,” and that their “actions of wrongfully evicting Plaintiff from the property allowed them to exercise dominion and maintain control over Plaintiff’s personal property.” The finding that defendants were liable for conversion was thus affirmed.

Next, the Court looked at the damages actually awarded for the conversion claim. The trial court awarded plaintiff the current day value of the “total amount of the items listed[.]” Plaintiff argued, though, that “the measure of damages for conversion should have been for the full cost of Plaintiff’s investment plus moving and storage expenses, loss of use and rental value, and wear and tear.” Noting that plaintiff here did not plead any special damages, the Court ruled that he “fail[ed] to set forth a cogent argument in his brief that the court erred and has not identified any evidence which preponderates against the values assigned by the court.” The damages award was thus affirmed, although the trial court was directed to modify the award by calculating the interest to run from the date of conversion rather than the date of the filing of the complaint.

In addition to affirming the conversion holding, the Court of Appeals affirmed that punitive damages were appropriate in this case. The trial court awarded plaintiff punitive damages of $5,000. Its findings of fact and conclusions of law, however, did not “contain sufficient findings as to each of the relevant Hodges criteria in the court’s determination of the amount of the punitive damages award.” The Court pointed out:

In non-jury trials, the trial judge’s findings of fact and conclusions of law are essential and must clearly set forth the reasons for approving a punitive damage award, demonstrating a consideration of all of the Hodges factors. The findings of fact and conclusions of law should explicitly refer to each of the factors, as well as any other factors supporting the award of punitive damages.

(internal citations omitted). Because the trial court’s order did not contain the requisite findings, the punitive award was vacated and remanded for reconsideration in light of the appropriate factors.

Some may wonder why the appellate court referenced Hodges factors rather than the new statute on punitive damages that largely, if not completely, renders the holding in Hodges obsolete.  The reason is the wrongful acts alleged in this matter pre-dated the effective date of Tenn. Code Ann. Sec. 29-39-104.

While this opinion isn’t full of broad legal conclusions, it does contain some helpful information on conversion damages and punitive damages. Anyone appealing such an award, or trying to ensure that a trial court order granting these damages will be upheld on appeal, will want to aware of this decision (or the cases it cites).