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Current Developments in the Commercial Divisions of the
New York State Courts
Posted: April 21, 2018

Conversion Claim Cannot be Based on Deleting E-Mail Absent Evidence That No Copies Remained

On April 11, 2018, Justice Kornreich of the New York County Commercial Division issued a decision in Young Adult Inst., Inc. v. Corporate Source, Inc., 2018 NY Slip Op. 30640(U), holding that deleting e-mails could not be the basis for a conversion claim absent evidence that no copies of the e-mails remained, explaining:

YAI’s cause of action for conversion also is dismissed. A conversion takes place when someone, intentionally and without authority, assumes or exercises control over personal property belonging to someone else, interfering with that person’s right of possession. Two key elements of conversion are (1) plaintiffs possessory right or interest in the property and (2) defendant’s dominion over the property or interference with it, in derogation of plaintiffs rights. YAI alleges that Quinn converted her YAI work emails and other electronic files by deleting them before she left the company. Electronic files can be converted. Nonetheless, just because one deletes electronic files does not mean they cease to exist. Indeed, it appears from the allegations in the AC that YAI managed to get access to some of these files. To state a claim for conversion, whether for tangible or intangible property, the plaintiff must plead it was deprived of access to its property. The deletion of emails by a departing employee is not, in the court’s experience, an uncommon allegation in commercial cases. To state a claim against the former employee for conversion, this court believes the employer should have to unequivocally allege in the complaint that, as a result of the deletion, it actually lost access to the files. If such access was not lost, the employer has suffered no deprivation and, therefore, cannot maintain a claim for conversion. Since the AC does not clearly allege that YAI lost access to Quinn’s emails and files, its conversion claim is dismissed without prejudice and with leave to replead.

(Internal quotations and citations omitted) (emphasis added).

Commercial litigation often involves conversion claims. As this decision shows, conversion can involve not just physical objects, but also electronic data. However, as this decision also shows, not just any interference with electronic data can constitute a conversion. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have a question regarding one person depriving another of her property, whether that property is tangible or intangible, or even involves money or electronic files.

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