Articles Posted in Conversion

Where defendant in a conversion case admitted all of plaintiff’s statement of facts and only asserted in his additional facts that he acted in good faith and honesty, summary judgment for plaintiff on the conversion claim was affirmed.

In Melton v. Melton, No. E2023-00649-COA-R3-CV (Tenn. Ct. App. Dec. 27, 2023), plaintiff was the personal representative of his mother’s estate, and he filed this breach of fiduciary duty and conversion claim against his brother both in his capacity as personal representative and his individual capacity. The facts showed that a few months before the mother’s death, defendant had traveled to her home in Tennessee and had the mother execute a power of attorney naming defendant her attorney-in-fact. In the weeks before the mother’s death, defendant drained the mother’s bank accounts, purchasing multiple vehicles and a recreational vehicle for himself, cashing checks to himself, and only paying one small bill for the mother. One of these accounts was payable to plaintiff brother on death, and the others would have gone to the estate.

Plaintiff filed a motion for summary judgment supported by a detailed statement of material facts. Defendant responded by admitting all of plaintiff’s facts, and filing only one additional material fact which stated that defendant “at all times acted with the utmost good faith, honesty, and loyalty to his mother…” The trial court ruled that defendant had not created an issue of material fact and granted plaintiff summary judgment, and the Court of Appeals affirmed.

Where defendant’s counterclaim asserted the conversion of its real property through a transfer that “was not supported by consideration, was commercially unreasonable, and made under economic duress,” and that alleged conversion occurred less than ten years ago, summary judgment in favor of plaintiff was vacated. Summary judgment on defendant’s counterclaim for civil conspiracy was likewise vacated.

Bryan College v. National Association of Christian Athletes, No. E2021-00931-COA-R3-CV, 2023 WL 128275 (Tenn. Ct. App. Jan. 9, 2023) arose out of a transfer of property to Bryan College from National Association of Christian Athletes (NACA). NACA had owned a Christian camp with extensive facilities for many years. After allegations of misconduct were made in 2009 against one of NACA’s founders, NACA began “to pursue a change to leadership with the help of Bryan College.” Several members of the NACA board were replaced with individuals associated with Bryan College, including Steven Livesay, who was the president of Bryan College and became the chairman of NACA’s board.

In 2016, NACA’s board passed a motion to transfer ownership of the camp from NACA to Bryan College. As part of the deal, NACA would retain use of the camp and Bryan College would assume the debt owed on the camp ($920,000). At the time, the camp appraised for $7 million. When contemplating the transfer, NACA was given a lease that said it would only have to pay rent during years that Bryan College failed to end “its fiscal year in the black.”

Where plaintiffs could have discovered in October 2009 that funds had been transferred out of an account payable to them upon decedent’s death and into an account payable to defendant, the conversion claim filed in 2019 was time-barred.

In Kidd v. Lewis, No. E2021-01156-COA-R3-CV, 2022 WL 2866006 (Tenn. Ct. App. July 21, 2022), plaintiffs were the adult daughters of decedent and defendant was the widow of decedent. During the later years of decedent’s life, he suffered from Alzheimer’s and his competency was disputed.

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Where plaintiffs witnessed defendants loading their personal property onto a truck but did not file their complaint for conversion until more than three years later, dismissal based on the statute of limitations was affirmed. In Bender v. Attorney S. Madison Roberts, No. M2019-01699-COA-R3-CV (Tenn. Ct. App. Aug. 13, 2021), plaintiffs alleged in their pro se complaint that their home was sold at a property sale to satisfy a lien for unpaid property taxes. The successful bidder took possession of the house, and on August 13, 2015, plaintiffs drove by the house and saw people who worked for defendants loading plaintiffs’ personal property onto a truck and trailer. Plaintiffs asserted that that they were told the items were being taken to a recycling center, but in the days that followed plaintiffs were unable to get the personal property items back.

Plaintiffs filed this conversion suit on April 16, 2019, which was three years and eight months after the personal property was taken. The trial court granted defendants’ motion to dismiss, finding that the case was time-barred, and the Court of Appeals affirmed.

Claims for conversion of personal property are subject to a three-year statute of limitations, and a “claim for conversion accrues when the plaintiff knows or reasonably should know that the defendant has appropriated the plaintiff’s personal property to the defendant’s own use and benefit in defiance of the plaintiff’s right.” (Tenn. Code Ann. § 28-3-105(2); internal citation omitted). According to the allegations in the complaint, plaintiffs witnessed their personal property being taken by defendants and were not able to retrieve said property in the days that followed. Because plaintiffs did not file this conversion claim until well outside the three-year limitations period from when they knew their property had been taken, dismissal based on the statute of limitations was affirmed.

Where plaintiff’s brother surrendered an annuity fund, signed plaintiff’s name on the check from the fund, and deposited the funds in his own account, all without plaintiff’s consent or knowledge, the trial court’s verdict that defendant brother was liable for conversion was affirmed, as was the finding that the statute of limitations was tolled by defendant’s fraudulent concealment. In Pomeroy v. McGinnis, No. E2020-00960-COA-R3-CV (Tenn. Ct. App. July 16, 2021), plaintiff and defendant were brother and sister. When their mother sold her house and moved in with defendant, the proceeds from the sale were used to purchase an annuity. Plaintiff and defendant were named as co-owners and beneficiaries of the annuity, with the mother named as the annuitant (although the annuity never produced an income stream). The trial court found, based on the testimony of the parties, that the purpose of the annuity was to ensure that the mother would eventually qualify for Medicaid benefits.

In 2012, defendant submitted a form surrendering the annuity, and a check was made payable to plaintiff and defendant. Defendant signed both his own name and plaintiff’s name on the check, then deposited the proceeds into a joint account he shared with his then wife. When defendant and his wife were later divorcing in 2019, the annuity came to light, and the wife informed plaintiff that she had seen a check that appeared to have been endorsed by someone else on her behalf. Plaintiff alleged that she had no knowledge of the annuity, the surrender, or the check until these divorce proceedings in 2019, and accordingly filed this suit for conversion against defendant.

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Where 23 months had passed between the filing of the complaint and the conversion of a truck, and where plaintiff sought “such other relief as he may be entitled to” in his ad damnum clause, the trial court did not err by awarding him a sum much larger than the amount specified in his complaint.

In Parker v. Clayton, No. M2017-02556-COA-R3-CV (Tenn. Ct. App. Sept. 10, 2019), plaintiff filed a conversion claim related to his former friend taking possession of his truck. According to plaintiff, he and defendant had been friends for many years. When plaintiff was preparing to have surgery, he had to take time away from his work as a commercial truck driver. Around this time, defendant asked plaintiff for help getting his CDL. Plaintiff believed defendant already had some knowledge about operating a truck, so he offered to have defendant essentially work under him for a period of time with plaintiff’s former trucking employer, and plaintiff and defendant would split the profits made. To facilitate this arrangement, however, plaintiff had to add defendant’s name to his truck’s title. The title was changed to reflect both plaintiff and defendant as owners, and the transfer was noted as a gift by the clerk. According to plaintiff, the truck was to be titled back to plaintiff alone once defendant obtained his CDL. Plaintiff and defendant also opened a joint account in which money from their employer could be deposited and divided. Sometime during this time period, plaintiff took his RV to defendant’s property and began living there with defendant’s permission.

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Where a landlord evicted a tenant by locking him out and bypassed the legal process outlined in the lease, the landlord was liable for conversion, and the Court of Appeals affirmed an award based on “the present day value of the personal property which Plaintiff claimed was not returned.”

In Philp v. Southeast Enterprises, LLC, No. M2016-02046-COA-R3-CV (Tenn. Ct. App. Feb. 9, 2018), plaintiff tenant had rented an office space from defendant landlord. After plaintiff failed to pay rent for two months, defendant “changed the locks on the doors and posted a notice on the building entrance stating that Plaintiff had been evicted.” Plaintiff filed suit for various causes of action related to the lease and eviction, including a claim for conversion and punitive damages. After a trial, the trial court found that defendant was liable for conversion, which the Court of Appeals affirmed. The trial court also awarded plaintiff $5,000 in punitive damages, and although the Court of Appeals affirmed the decision to award punitive damages, it vacated the amount and instructed the trial court “to make specific findings of fact and conclusions of law relative to the appropriate factors and enter judgment accordingly.”

Regarding the conversion claim, the Court of Appeals first affirmed that defendant was liable for conversion damages. The Court pointed out that “[b]y locking Plaintiff out, Defendants maintained possession of all of Plaintiff’s property inside the building.” The Court noted that “Defendants bypassed legal process and changed the locks on the door,” and that their “actions of wrongfully evicting Plaintiff from the property allowed them to exercise dominion and maintain control over Plaintiff’s personal property.” The finding that defendants were liable for conversion was thus affirmed.

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