Opinion ID: 1957708
Heading Depth: 1
Heading Rank: 2

Heading: Hill's Liability to Capitol City Leasing

Text: Hill's liability to Capitol has been determined, to a great extent, by the provisions of the lease contract between them. This contract is set forth in pertinent part in the statement of facts. Hill will be cast to pay the liquidated damages due under the lease. The liquidated damages are computed as the amount of the accelerated rental payments minus the net proceeds from the sale of the skidders at auction. In addition, Hill will pay Capitol's attorney's fees in the amount specified in the lease as 20% of the liquidated damages. Additionally, Hill will be required to reimburse Capitol for the costs of taking possession, storing, repairing and selling the equipment. He will not, however, have to pay Capitol for the costs of repairing the equipment since Capitol will not be required to pay Minton for the repairs for the following reasons. Capitol had Minton repair the equipment so that it could re-sell the equipment at auction for the highest possible price. At auction, Capitol received $8,000 for each skidder. This Court accepted the $8,000 figure to represent the amount which a reasonable buyer, who knew of the defects, would pay for a skidder. We then used this amount to determine the reduced value of each skidder in granting relief in quanti minoris. Since the skidders brought $8,000 each at auction, Minton only had to reimburse Hill $8,905 for each skidder. Had Minton not repaired the skidders prior to the sale, they would have brought less at auction. Therefore, Minton would have been required to pay more to Hill to compensate for the difference in the value of the skidders as warranted by Minton and the value of the skidders with the defects. For example, in this case, each skidder cost $16,905. Capitol re-sold each skidder for $8,000, which meant Minton only had to reimburse Hill for $8,905 for each. However, if Capitol had sold the skidders at auction without having Minton repair them prior to sale, and they had brought only $4,000 each, Minton would have had to pay Hill $12,905 for each. Minton has been compensated for the value of the repair work done on the skidders because Minton will have to pay less money to Hill in the action for a reduction in price. Since they have already been compensated for the value of their repair work once in having to pay less to Hill, Minton cannot collect again for the cost of the repairs by charging them to Capitol. To allow Minton the benefit of paying a lower amount to Hill and then to receive payment for the repairs from Capitol would allow them to recover twice. The failure of the skidders to work because of the defects attributable to Minton's work was a major factor in the present litigation. It is enough that Minton will be compensated for repairing the skidders for resale by paying less to Hill. He will not be allowed to make a profit on it by also charging Capitol for the repairs. Since Capitol will not be required to pay Minton for the repairs, Hill owes Capitol no money to cover the cost of repairs. This case is remanded to the trial court to determine the amount of actual damages Hill suffered as a result of the defective equipment and, thereafter, that court shall render a judgment granting relief according to the views expressed herein. LEMMON, J., dissents.