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What's New in the Law

Highlights of the latest equipment leasing cases from around the country.

13 minute readFebruary 26, 2013 at 01:10 PM
By
Robert W. Ihne
What's New in the Law

Lessors' Damages: Measures and Entitlement

Andersons, Inc. v. Lafarge North America, Inc.

, 2012 WL 5259149 (U.S.Ct.App. 6th Cir. Oct. 25, 2012) (not for publication)

After a lessee returned 200 railcars to a lessor at the end of a 10-year lease, the lessor deemed the cars to require substantial repairs in order to bring them into the condition required by the lease and, after being unable to agree with the lessee as to the repair costs, sued the lessee for damages consisting of the cost of repair, holdover rent, prejudgment interest and attorneys' fees. The Court of Appeals affirms the District Court's awards of the cost of repair and holdover rent and its denial of prejudgment interest and attorneys' fees. Of greatest interest is the description of the District Court's reasoning regarding the cost of repairs (disregarding the highest and lowest estimates of repair costs and averaging the two intermediate estimates) and the discussion of the award of holdover rent. With respect to the latter, the lease gave the lessor the right to demand holdover rent at the rate of one and one-half times the lease rate if the cars were not delivered in the specified condition within 30 days of lease expiration.

The court finds that because

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