Commercial Division Blog

Posted: April 5, 2023 / Written by: Jeffrey M. Eilender, Samuel L. Butt, Seth D. Allen, Joshua Wurtzel, Channing J. Turner / Category Conversion

Conversion Claim Upheld Despite Dispute Over Whether Plaintiff Was "Exclusive" Owner of Allegedly Converted Property

On March 22, 2023, Justice Melissa A. Crane of the New York County Commercial Division issued a decision in NW Media Holdings Corp. v. IBT Media Inc., 2023 NY Slip Op 30875(U), holding that to state a conversion claim, a plaintiff need not allege that it was the "exclusive" owner of the allegedly converted property, even though plaintiff did plead exclusive ownership here, explaining:

Nor does the court accept Defendant's argument that Plaintiffs fail to allege that they were "exclusive" owners of the data (Opening Mem., p. 9). Nowhere in Defendant's opening or reply memoranda does Defendant cite any case law to support the argument that Plaintiffs need to allege an exclusive interest in the data to maintain a claim of conversion. Contrary to Defendant's assertion, Plaintiffs only are required to allege that they had legal ownership or a "superior right [**8] of possession" (Grocery Delivery E-Services USA, Inc. v Flynn, 201 AD3d 585, 586, 160 N.Y.S.3d 249 [1st Dept 2022] [emphasis added]; NY Medscan, LLC v JC-Duggan Inc., 40 AD3d 536, 537, 837 N.Y.S.2d 80 [1st Dept 2007]; see also Abrams v Pecile, 115 AD3d 565, 565-566, 983 N.Y.S.2d 502 [1st Dept 2014] [finding motion court should not have dismissed conversion claim because "Plaintiff has a possessory right or interest in the property . . . and there is evidence that defendant has interfered with that right by refusing a demand for the goods"] [emphasis added]).

In any event, as discussed above, Plaintiffs have alleged that the data contained on the Workspace was "exclusively" owned by Newsweek (Complaint, ¶ 141, n 9). To the extent Defendant argues that allegations in the complaint "contradict" this claim of [*11] exclusive ownership (Reply Mem., NYSCEF Doc. No. 117, p. 6), these arguments present questions of fact not suited to adjudication on this motion (see Abrams, 115 AD3d at 566 [reversing summary judgment dismissal of conversion claim based on issue of fact as to whether property was jointly owned marital property]). Because Plaintiffs have alleged that they were exclusive owners of the Workspace data and had a possessory right to the data that Choi allegedly destroyed, Plaintiffs have stated a cause of action for conversion.

A plaintiff asserting a conversion claim must allege that it had a possessory right or interest in the allegedly converted property that is superior to that of the defendant. Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions about conversion claims.