Opinion ID: 1712735
Heading Depth: 1
Heading Rank: 4

Heading: did the trial court err in refusing to consider catalog prices in determining the fair market value of the converted rings?

Text: The measure of damages for conversion is the value of the property at the time and place of conversion, with interest from the date of conversion. SDCL 21-3-3; Mapledge, 93 N.W.2d at 373; Richtmyer v. Mutual Live Stock Commission Co., 122 Neb. 317, 240 N.W. 315, 316 (1932). Generally, in a bailment action followed by a conversion, the bailee's liability in damages is the value, or the reasonable value of the property at the time of the conversion plus interest. 8 Am.Jur.2d § 348. The trial court set forth the correct measure of damages as follows: The measure of damages is the fair market value of the rings in question at the time and place of the loss. Fair market value is ascertained by determining what a willing seller, under no compulsion to sell, and a willing buyer, under no compulsion to buy, would arrive at as the purchase price of the rings. Riddle's urged the trial court to consider the prices of catalog companies such as LaBelle's, J.C. Penney, and S.A. Peck for rings similar to Rensch's, in determining the fair market value on October 28, 1982. The trial court disallowed this evidence because the local price of diamonds in Rapid City was higher than the prices which diamonds could be purchased for from catalog stores. Riddle's further contended that catalog companies doing business in Rapid City are as much a part of the retail market as jewelry stores actually located there. The trial court concluded: So called wholesale jewelry merchants who sell their products through catalogs, such as S.A. Peck and Co., make their products available to their catalog customers at prices that are lower than can be obtained at local jewelry stores in Rapid City, South Dakota. The market value of the large ring cannot be determined by ascertaining what the ring could have been purchased for from S.A. Peck and Co. in 1982 since the local price of diamonds in Rapid City is higher than the prices which diamonds may be purchased for from catalog stores such as S.A. Peck and Co. The problem with the trial court's conclusion is that the local price is the retail price, and the retail price [3] includes catalog prices. Indeed, Rensch purchased the large ring from the S.A. Peck catalog in Rapid City. It follows that S.A. Peck does business in Rapid City and is part of the retail market. Therefore, it was error to exclude prices from catalog companies such as LaBelle's, J.C. Penney, and S.A. Peck. As indicated above, the trial court heard considerable expert testimony concerning the value of the rings, especially the larger ring. The trial court expressed the opinion that it was very impressed with the expert testimony offered by Riddle's, especially that of Mr. Jess Riddle. The large ring was assessed by all of Riddle's expert witnesses and the mid-point of their price ranges were as follows: Mr. Jess Riddle  $ 6,875.00 Mr. Richard Baumann  9,637.50 Mr. Frederick Goynshor  11,000.00 ___________ Average Mid-Point $ 9,170.83 The trial court expressly acknowledged the expertise of Riddle's experts, but chose to reject their evaluations because they were based in part on catalog prices. As indicated above, the trial court valued the large ring at $15,000. However, the basis for this determination was erroneous because the court improperly excluded catalog prices. Accordingly, we hold that the trial court abused its discretion in denying admission of the catalog evidence. The fact that catalog prices are indeed lower than other establishments in Rapid City is exactly the point, given that catalog companies reflect a part of the retail market, and thus, should have been included to measure the fair market value. Therefore, the determination of damages is reversed, and this case remanded to the trial court to consider catalog prices in arriving at the fair market value of the rings. [4]