Replevin actions are a versatile tool for obtaining or regaining personal property which you have the right to possess. In Minnesota, replevin actions are also known by the more modern phrase, “claim and delivery of personal property,” and are governed by a statutory scheme found in Minnesota Statutes chapter 565. Lenders often use replevin actions to obtain personal property in which they have a security interest, when a debtor has defaulted under the terms of the loan secured by said property. However, a secured-lending relationship is not the only context in which a replevin action may be useful. Some other examples include recovering converted, stolen, or lost property1 or determining the ownership of disputed personal property.2 The key advantage of a replevin action is that the claimant can seek possession of the property during the pendency of the action, allowing the claimant to preserve the property and prevent it from being sold, destroyed, damaged, or hidden.
To obtain possession of property prior to a final judgment, a lawsuit must be initiated against the person who has possession of the property to be recovered, known as the respondent, and the person seeking to recover the property, known as the claimant, must file a motion with the court. In most situations, the claimant must give the respondent notice that the claimant is seeking an order of the court, and the court must hold a hearing, where both parties can be heard, before issuing an order for seizure and delivery of the property.3 In some situations, a claimant can obtain their order prior to notice and hearing.4 To recover possession prior to notice and hearing, the claimant must show that (1) a good faith effort to inform the respondent of the motion was made or informing the respondent would endanger the claimant’s ability to recover the property, (2) the claimant is likely entitled to possession of the property, (3) the respondent is about to either remove the property from the state or conceal, damage, or dispose of the property to hinder, delay or defraud the claimant or the claimant will suffer irreparable harm if possession of the property is not obtained prior to a hearing, and (4) the only way to protect the claimant’s interest in the property is by an order for seizure of the property.5
A motion for recovery of property must be accompanied by an affidavit setting forth the property to be recovered, the facts and evidence showing the claimant’s right to possession of the property and any underlying obligation supporting that right, facts showing that the respondent is wrongfully detaining the property, in the case of security interests, information about the underlying obligation, in the case of a contractual breach for a reason other than failure to pay money, facts regarding the underlying contract and breach, and a good-faith approximation of the current market value of each item claimed.6 For lenders, the evidence necessary for a motion for recovery of property will be all relevant loan documents, including promissory notes, loan agreements, and security agreements and all documents evidencing perfection of the security interest including filed UCC-1 Financing Statements and lien cards. Lenders will also need to provide the original principal amount of the underlying obligation, the amount paid to date, and the amount due and owing. When a claimant seeks an order for seizure of property prior to notice and hearing, the affidavit accompanying the motion will also state facts establishing the grounds for the pre-hearing seizure.7
By statute, a claimant must post a bond which is 1.5 times the fair market value of the property to be seized in order to be entitled to possession of the property.8 The purpose of the bond is to protect the claimant in the event the property is sold or damaged by the claimant, and the court later decides the claimant did not have a right to the property.9 Upon entry of final judgment, the bond is released back to the claimant, assuming the judgment is in the claimant’s favor. In some instances, the bond may be waived. A respondent may also post a bond in order to regain or retain possession of the property in the lesser amount of either 1.25 times the fair market value of the property of 1.5 times the claimant’s claim.10 In lieu of filing a bond, a party may deposit cash, a cashier’s check, or a certified check with the court.11
If a claimant shows they are likely to be entitled to possession of the property, subject to any bonding requirement, discussed below, the court must issue an order for seizure of the property, unless it finds that (1) the respondent has a fair defense which, if established, would entitle the respondent to retain possession of the property, (2) the respondent’s interests cannot be protected by a bond, and (3) the respondent will suffer greater harm from seizure of the property than the claimant will suffer from nonseizure of the property.12 If the court does not order seizure of the property, it can order that the respondent make partial payment of the debt due, post a bond, allow inspections, restrain the respondent from things like selling, disposing, or otherwise encumbering the property, or otherwise take action to protect the rights of the claimant.13 An order for seizure of property will direct the sheriff of the county where the property is located or may be found to seize the property and specify places that the sheriff may forcibly enter to seize the property.14 The order will also authorize the sale or other disposal of the property by the claimant, unless the court finds that the interests of the respondent cannot be adequately protected by a bond.15
Replevin actions, or actions for claim and delivery of personal property, are a key component of most actions to recover debts secured by personal property, as well as a useful means for obtaining and determining title to personal property in other situations. Chapter 565’s robust framework allows lenders and others with claims to property possessed by others to protect their rights in a swift and efficient manner, without waiting for the often slow wheels of normal litigation to turn, while still affording borrowers and possessors due process of law and mechanisms to protect themselves as well, without prejudicing the claimant.
1 Storms v. Schneider, 802 N.W.2d 824 (Minn. Ct. App. 2011); Somers v. Kane, 162 Minn. 40, 202 N.W. 27 (1925).
2 A & A Credit Co. v. Berquist, 230 Min. 303, 306, 41 N.W.2d 582, 584 (1950).
3 Minn. Stat. § 565.23.
4 Minn. Stat. § 565.24.
5 Minn. Stat. § 565.24, subd. 2.
6 Minn. Stat. § 565.23, subd. 1.
7 Minn. Stat. § 565.24, subd. 1(2).
8 Minn. Stat. § 565.25, subd. 1.
9 Minn. Stat. § 565.25, subd. 2(b).
10 Minn. Stat. § 565.25, subd. 2(a).
11 Minn. Stat. § 565.25, subd. 4.
12 Minn. Stat. § 565.23, subd. 3.
13 Minn. Stat. § 565.23, subd. 4.
14 Minn. Stat. § 565.26.
15 Id.
