Opinion ID: 1927947
Heading Depth: 1
Heading Rank: 1

Heading: Fireman's Appeal

Text: The Bank brought its claim of conversion against Fireman's alleging (1) that Fireman's had notice of the Bank's lien on any settlement proceeds made payable to Crochere on her claim against Wentworth, and (2) that Fireman's, representing Wentworth, had nonetheless sent the settlement check for $6,500 to Attorney Murphy, who represented Crochere, without setting aside the $4,771.44 due the Bank. The Superior Court found that Fireman's conduct constituted conversion. `The gist of conversion is the invasion of a party's possession or right to possession at the time of the alleged conversion.' Ocean National Bank of Kennebunk v. Diment, 462 A.2d 35, 39 (Me.1983) (quoting G.M.A.C. v. Anacone, 160 Me. 53, 82, 197 A.2d 506, 524 (1964)). Fireman's whole case before the Superior Court, as well as here on appeal, is based upon its contention that plaintiff Bank failed to prove four necessary elements of conversion. Specifically, Fireman's argues (1) that it merely forgot about the Bank's lien and had no intent to commit a conversion of the Bank's property interest; (2) that Fireman's did not interfere with the Bank's lien rights to the Crochere v. Wentworth settlement proceeds; (3) that the Bank never made an adequate demand followed by an unequivocal refusal by Fireman's; and (4) that conversion does not lie because the Bank did not have an immediate right of possession to the settlement proceeds. On the basis of the rules of law applicable to the facts found by the Superior Court, that court quite properly rejected all four of Fireman's arguments and so do we. Intention to convert. The only intention needed to prove conversion in this case is an intention by Fireman's to exercise dominion or control over the settlement proceeds that in fact seriously interfered with the lien rights of the Bank. See Ocean National Bank, 462 A.2d at 39-40; Restatement (Second) of Torts § 224 comment c (1965). Fireman's asserts, however, that it did not have any intent to exercise that dominion or control as is evidenced by the fact that it was releasing the settlement proceeds to Murphy, not keeping them for itself. The act of releasing the check to Murphy nonetheless represented the exercise of dominion and control by Fireman's. A defendant may be liable for conversion even where he thinks the property is his or he is unaware of the existence of another's rights in the property. Restatement § 224 comment c. The Superior Court did not err in finding that Fireman's had the necessary intention to exercise dominion and control over the settlement proceeds. Interference with the Bank's lien rights. Fireman's relies on Fitzgerald v. Cleland, 498 F.Supp. 341, 352-53 (D.Me. 1980), for the proposition that the limited possession of another's property for a lawful and proper purpose without any intention to deprive the owner of possession does not constitute conversion. Fitzgerald, however, is distinguishable from the case at bar. In Fitzgerald the court found no conversion where the Veterans Administration had removed the personal property of the plaintiffs from their home after they had defaulted on their mortgage. The VA had made repeated requests for the plaintiffs to remove their belongings before it had eventually moved them into nearby storage. The VA paid the costs of moving and one month's storage fee. Illustration 5 of comment d, § 222A of the Restatement (Second) of Torts recites a fact pattern identical to that in Fitzgerald, and also concludes that no conversion occurs. The fact pattern in the case at bar, however, is better compared to illustrations 9 and 10 of the same section and comment of the Restatement: 9. A ships goods over B carrier, consigned to himself. By mistake B delivers the goods to C. B discovers the mistake immediately, and within twenty-four hours recovers the goods from C, and delivers them to A. This is not a conversion. 10. The same facts as in Illustration 9, except that the goods are not recovered, and remain in the possession of C. This is a conversion. If Fireman's had recovered the lien money before Murphy disbursed it, then this case would be similar to illustration 9. Instead it never recovered the money, and therefore the facts here parallel illustration 10. The Superior Court was correct to conclude that Fireman's act of releasing the settlement proceeds to Murphy constituted a wrongful interference with the Bank's property interest. Demand and refusal. Fireman's takes nothing by its argument that the Bank made no demand after the settlement proceeds had come into existence. As a factual matter, the Bank already had made a demand by notifying Fireman's of the existence of the lien. To require it to make a second demand would have required the impossible: to foresee when the case would be settled and a check issued. When Fireman's drew the settlement check it had an outstanding demand from the Bank, and its mailing constituted an unequivocal refusal to respect the Bank's lien rights therein. The Bank's immediate right to possession. The Bank's lien was impressed upon the settlement proceeds in whosever hands they were at any time, whether Fireman's, Murphy, or Crochere. When the funds were set aside by Fireman's and the check drawn, the lien immediately attached. Similarly, that lien existed when the check representing those proceeds reached Murphy and when any part of those proceeds reached Crochere. It is those settlement proceeds, or rather the Bank's interest therein, that was converted by Fireman's by paying over those proceeds to a third party, Murphy, without any regard to the Bank's lien. In any event, even if the Bank were viewed as having only a right to future possession of a part of the settlement proceeds, the interference by Fireman's with that future right is itself an actionable tort, whether or not denominated conversion. See Restatement (Second) of Torts § 222A comment b; § 243 comment b. In conclusion, the Superior Court committed no error in finding Fireman's liable for conversion, and we reject Fireman's appeal.