Elements of Nevada's Theories of Liability

Conversion

 

Conversion

Elements

“Conversion ” is

  • a distinct act of dominion wrongfully exerted over another’s personal property
  • in denial of, or inconsistent with his title or rights therein or
  • in derogation, exclusion, or defiance of such title or rights.

Evans v. Dean Witter Reynolds, Inc., 116 Nev. 598, 5 P.3d 1043, 1048 (2000).

Example Cases

Proof

  • Wrongful Intent Is Not Needed

Further, conversion is an act of general intent, which does not require wrongful intent and is not excused by care, good faith, or lack of knowledge. See id.; Bader v. Cerri, 96 Nev. 352, 357 n. 1, 609 P.2d 314, 317 n. 1 (1980). Whether a conversion has occurred is generally a question of fact for the jury. See Bader, 96 Nev. at 356, 609 P.2d at 317.FN7.
Evans v. Dean Witter Reynolds, Inc., 116 Nev. 598, 5 P.3d 1043 (Nev.,2000).

Damages

  • Returned and unreturned property

Nevada case law does not suggest that the measure of damages is a part of the definition of conversion. Neither does Nevada case law declare the full value of the property converted to be the sole measure of damages. Of course, the full value of the property at the time of conversion may be one measure of the damage sustained. Dixon v. Southern Pacific Co., 42 Nev. 73, 172 P. 368, 177 P. 14, 179 P. 382 (1918). This measure is appropriate when the defendant keeps possession of the property he has converted. This measure of damage, however, is not appropriate when the property is returned by the converter to the injured party. That is what happened in the case at hand.
Bader v. Cerri, 96 Nev. 352, 356, 609 P.2d 314, 317 (Nev., 1980).

  • Recovery of full value of chattel.

The importance of the distinction between trespass to chattels and conversion, which has justified its survival long after the forms of action of trespass and trover have become obsolete, lies in the measure of damages. In trespass the plaintiff may recover for the diminished value of his chattel because of any damage to it, or for the damage to his interest in its possession or use. Usually, although not necessarily, such damages are less than the full value of the chattel itself. In conversion the measure of damages is the full value of the chattel, at the time and place of the tort. When the defendant satisfies the judgment in the action for conversion, title to the chattel passes to him, so that he is in effect required to buy it at a forced judicial sale. Conversion is therefore properly limited, and has been limited by the courts, to those serious, major, and important interferences with the right to control the chattel which justify requiring the defendant to pay its full value.
REST 2d TORTS § 222A, comment c.

    • Comment by TruCounsel editor

When comparing the selections from , 96 Nev. 352, 356, 609 P.2d 314, 317 (Nev., 1980) to the REST 2d TORTS § 222A, comment c. listed in this Damages subheading, it seems possible that Nevada’s tort of conversion completely encompasses the traditional trespass to chattels tort because Nevada’s conversion tort envisions the possible return of the chattel.

Defenses

Intangible Property

  • Intangible Property Can Be Converted/Rejection of archaic trend

In so doing, we note a trend toward recognizing intangible property as personal property that can be converted and expressly reject the rigid limitation that personal property must be tangible in order to be the subject of a conversion claim.
M.C. Multi-Family Development, L.L.C. v. Crestdale Associates, Ltd., 193 P.3d 536, 543 (Nev., 2008).

  • Adoption of 9th Circuit test for intanglibe property

By way of example, in Kremen v. Cohen, the United States Court of Appeals for the Ninth Circuit, applying California law in a diversity action, set forth a three-part test for determining whether a property right exists. According to that court, a property right exists when
(1) there is an interest capable of precise definition,
(2) the interest is capable of exclusive possession or control, and
(3) the putative owner has established a legitimate claim to exclusivity.
Applying this test, the court in Kremen explained that property is a broad concept encompassing ” ‘every intangible benefit and prerogative susceptible of possession r disposition.’ ” Under Kremen, such rights included the right to use of an Internet website domain name. Because we conclude that the Ninth Circuit’s formulation for determining whether a property right exists is consistent with Evans, we now apply to the intangible property at issue here-the contractor’s license issued to Walter Homes.
M.C. Multi-Family Development, L.L.C. v. Crestdale Associates, Ltd., 193 P.3d 536, 543 (Nev., 2008).

  • Intangible rights merged with documents/Adoption of Rest. 2d.

In addition, the Restatement (Second) of Torts Section 242 outlines when intangible personal property can be converted. It states that “[w]here there is conversion of a document in which intangible rights are merged, the damages include the value of such rights.”
M.C. Multi-Family Development, L.L.C. v. Crestdale Associates, Ltd., 193 P.3d 536, 543 (Nev., 2008).

Misc

A conversion is defined as a distinct act of dominion wrongfully exerted over another’s personal property in denial of, or inconsistent with his title or rights therein or in derogation, exclusion, or defiance of such title or rights. 53 Am.Jur. 819. ‘Moreover, an act, to be a conversion, must be essentially tortious; a conversion imports an unlawful act, or an act which cannot be justified or excused in law.’ Ibid. at page 820.
Wantz v. Redfield, 74 Nev. 196, 326 P.2d 413 (Nev. 1958).