Proving Compensatory Damages for Tenant's Possessions

Q: My lease with a tenant gave me the right to evict it if it defaulted on the lease. After the tenant failed to pay rent, it also moved out of the space but left behind a few items that seemed worthless. I engaged in a self-help eviction, by hiring a company to dispose of the items left behind, rather than legally evicting the tenant. Now, the tenant is suing me, claiming that I must pay it for the value of the items. It says that I should’ve used my eviction remedy in the lease instead of self-help. What will the tenant have to prove in order for it to prevail on its claims?

A: To get compensatory damages—that is, damages for the loss of its items that occurred as a result of your conduct, the tenant will have to provide evidence of the value of the items. But, like a recent New Jersey commercial lease case, yours involves another complex issue—your use of self-help.  

In the New Jersey case, a retail tenant sued the owner of its space for unlawfully disposing of his possessions. The trial court ruled in favor of the owner, and the tenant appealed.

In its lease with the tenant, the owner had reserved its “right of re-entry” allowing it to end the lease and re-enter the space if the tenant violated the lease. But the lease also specified that it would be done by a formal eviction. The lease also provided that if the tenant left any property in the space, the owner could dispose of it and charge the tenant for the cost of disposal.

Several years into the lease, the tenant closed down its store and used the site primarily for storage purposes. It continued to pay rent until February 2013, when it discovered a less expensive storage facility and provided written notice to the owner that it was terminating the lease on March 1, 2013.

In mid-March, the owner removed the items the tenant left behind.

When the tenant, using keys that it still had, went back to the space in late March to pick up its possessions but found an empty space, it constructed an itemized list of the merchandise, which it said totaled $45,000.

The trial court judge determined that, although the tenant didn’t pay March rent, the owner had a contractual duty to file an eviction action in landlord-tenant court, rather than engage in a self-help eviction. The trial court also found that, as evidenced from the tenant’s possession of the keys to the space, it still technically had “possession” of the space.  

Although the owner would be liable for any damages resulting from the removal of the tenant’s possessions, ultimately, the tenant failed to prove damages. Based on the evidence presented, the judge was unable to determine the value of the items, or whether some of the items were fixtures—which would have been the property of the owner after lease termination—or personal possessions of the tenant.  

Also, while the tenant alleged that the store contained $45,000 worth of merchandise, witnesses’ testimony proved the existence of “at best some piled furniture and boxes,” the trial court said. The appeals court agreed with the trial court that the tenant couldn’t prove compensatory damages.

“Generally, plaintiffs have the burden of proving damages…and the proof must allow the court to at least rationally estimate a compensatory award,” said the appeals court [Machado v. McKinnon, February 2016].