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Damages for Conversion Vary Under Michigan Law

Pursuing Litigation for Civil Theft

“Conversion” is a civil cause of action that is similar to the criminal cause of action for “theft.” Conversion claims are filed in civil court as a means of recovering losses resulting from stolen or damaged property. Michigan law provides two different methods of recovery for conversion, common law and statutory, both of which may be pursued simultaneously. Prior to pursuing a claim, it is important to understand the nuances between these two types of conversion.

Common Law Conversion

Under common law, the Michigan Supreme Court has recognized conversion as “any act of dominion wrongfully exerted over another’s personal property in denial of, or consistent with his (or her) rights therein.” In other words, the common law form of conversion involves one party’s wrongful control over another’s personal property. For instance, if your neighbor destroys your 26 garden gnomes and then refuses to pay you for the loss, you likely have a claim against your neighbor for conversion. The remedy for common law conversion is straight-forward: the plaintiff may recover the value of the property converted by the defendant, plus statutory interest, from the date of conversion.

Statutory Conversion

Statutory conversion, created by the Michigan Legislature and codified as MCL § 600.2919a, includes the basic common law definition, plus one additional element: a claim for statutory conversion can be made if the rightful owner proves that the converting party used the property for its own purpose, as opposed to simply depriving the owner of the use of the property. Because of this added element, you would not have a claim for statutory conversion against your neighbor who hates garden gnomes.
The Michigan Supreme Court ruled that converting property to a defendant’s “own use” simply requires a showing that the defendant employed the converted property for some purpose personal to the defendant’s interests, even if that purpose is not the object’s ordinarily intended purpose. Aroma Wines and Equipment, Inc. v. Columbia Distrib. Svcs., Inc., 303 Mich. App. 441 (2013). Thus, statutory conversion may be triggered by obvious (i.e., spending converted money) and more subtle applications. For instance, in Aroma Wines, the Court of Appeals found that “if a jury believed the evidence showing that defendant moved plaintiff’s wine for its own purposes—whether it be to sell the space to other customers or complete a construction project—or that it used the wine as leverage against plaintiff, it could have determined that defendant converted the wine to its own use.” Id.

Why Pursue Statutory Conversion?

The remedies for statutory conversion under MCL § 600.2919a are robust compared to those prescribed by the common law. Specifically, a plaintiff harmed by statutory conversion “may (emphasis added) recover three times the amount of actual damages sustained, plus costs and reasonable attorney fees.”

The statute’s use of the word “may” allows the court to exercise discretion when deciding the amount of damages. Whether treble damages, costs, and attorney fees are awarded depends on the merits of each specific case, and the egregious nature of the defendant’s conversion.

No Cumulative Damages

Often, plaintiffs harmed by conversion will simultaneously pursue claims for both common law conversion and statutory conversion. Plaintiffs who succeed in such efforts may not collect cumulative damage awards. The ceiling for the plaintiff’s recovery is set at three times the actual damages, plus costs and reasonable attorney fees.

Do you have a claim for common law or statutory conversion? Or have you been sued by someone claiming that you committed statutory conversion? If so, contact the experienced lawyers at Drew, Cooper & Anding and we may be able to help you.

Amanda Narvaes

Amanda P. Narvaes, a Partner, joined Drew Cooper & Anding in 2011. Ms. Narvaes is a civil litigator in the areas of complex commercial litigation, lender liability, copyright litigation, and consumer protection. She graduated cum laude from Carleton College with a bachelor’s degree in history. She earned her law degree at WMU-Thomas M. Cooley Law School, graduating magna cum laude, and received Cooley’s Distinguished Student Award. Ms. Narvaes represents clients before Michigan trial courts across the state and in the Michigan Court of Appeals, and before the United States District Courts for the Western and Eastern District of Michigan. Ms. Narvaes has been a guest speaker in Ron Foster’s “Litigation for Paralegals” class. Ms. Narvaes discusses differences between Federal civil discovery rules and Michigan civil discovery rules.