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A trial court erred when it vacated a $250,000 punitive damages award to a leasing company that had its assets held captive by a bank foreclosing on another party’s loan, and then held by the bank for three years “without an articulated, arguable excuse,” the Alabama Supreme Court said on April 25. Industrial Technologies v. Jacobs Bank, No. 1011966. After American Detention Products Inc. (ADPI)-a maker of jail bars and prison equipment-defaulted on its loan from the Jacobs Bank, the bank foreclosed on the security interest it held in ADPI’s assets. Acting under court order, Jacobs took possession of all the equipment located at ADPI’s Scottsboro, Ala., facility. Among ADPI’s equipment was equipment that had been leased to it by Industrial Technologies. After Jacobs seized Industrial’s assets, Industrial promptly notified the bank of its error. But, despite presenting papers documenting its ownership of the equipment in question, Jacobs refused to surrender it to Industrial and then let another party use it, forcing Industrial to sue for conversion. At trial, Industrial won a jury award of $148,000 in compensatory damages and $250,000 in punitives. But in response to Jacobs’ post-trial motion arguing that Industrial failed to mitigate its damages, the trial court vacated the punitive award. Reversing, the high court said that conversion is an intentional tort. It added that there was no dispute that Jacobs not only converted the equipment but withheld it from Industrial for almost four years, for no apparent reason, under aggravating circumstances.

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