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, venue for a Replevin action lies in the county where the taking occurred or where the property is situated, if the property was wrongfully taken (Minn. Stat. § 542.06). Where the property was not wrongfully taken but is wrongfully withheld, such as a secured creditor pursuing collateral a debtor lawfully received and now refuses to surrender, general venue applies instead: a county where a defendant resides or where the cause of action arose (Minn. Stat. § 542.09).

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?

A party seeking an immediate action of Replevin must post a bond before Replevin is granted (Minn. Stat. § 565.25); the court cannot order seizure of the property without it. 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.

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 show a legitimate claim to the property, show that they don’t have possession of it, and show the probability of success on the merits entitling them to possession, then post the bond required under Minn. Stat. § 565.25, subd. 1. Seizure then follows unless the court finds all of the following: the party in possession has shown a defense that is a fair basis for litigation and would entitle it to keep the property, its interests cannot be adequately protected by the claimant’s bond, and the harm it would suffer would be substantially greater than the harm to the party seeking Replevin if the property is not turned over before the underlying claim is decided (Minn. Stat. § 565.23, subd. 3).

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. The bond a creditor must post is fixed by statute at 1-1/2 times the property’s fair market value, Minn. Stat. § 565.25, subd. 1, so on a $10,000 loader the bond would be $15,000, regardless of the company’s lost revenue or replacement-rental cost. 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 must return the loader and pay the construction company any sum the court adjudges against the creditor under the bond, up to the bonded amount. 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?

The bond is an alleged debtor’s biggest tool against “eager beaver” creditors. The court cannot order seizure of the property without the claimant first posting the bond required under Minn. Stat. § 565.25, subd. 1; this is a condition the court imposes, not something the debtor has to ask for. 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.

The debtor also has the separate right to post its own bond to retain or regain possession of the property (Minn. Stat. § 565.25, subd. 2), and that right is not lost by staying silent at the initial hearing.