Opinion ID: 2299356
Heading Depth: 2
Heading Rank: 3

Heading: Conversion of the Ashmere Interests' Proceeds

Text: The general rule is that monies are intangible and, therefore, not subject to a claim for conversion. See Lawson v. Commonwealth Land Title Ins. Co., 69 Md.App. 476, 482, 518 A.2d 174,177 (1986); see also Limbaugh v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 732 F.2d 859, 862 (11th Cir.1984) (interpreting Alabama law); Pioneer Commercial Funding Corp. v. United Airlines, Inc., 122 B.R. 871, 885 (S.D.N.Y.1991) (interpreting New York law); Warm Springs Properties, Inc. v. Andora Villa, Inc., 96 Idaho 270, 272, 526 P.2d 1106, 1108 (1974); Sandy Creek Condominium Ass'n v. Stolt & Egner, Inc., 267 Ill.App.3d 291, 294, 204 Ill.Dec. 709, 642 N.E.2d 171, 174-75 (1994); Reason v. Payne, 793 S.W.2d 471, 474 (Mo.Ct. App.1990). An exception exists, however, when a plaintiff can allege that the defendant converted specific segregated or identifiable funds. See Lawson, 69 Md.App. at 482, 518 A.2d at 177; see also Mitchell Energy Corp. v. Samson Resources Co., 80 F.3d 976, 984 (5th Cir.1996) (interpreting Texas law); Limbaugh, 732 F.2d at 862; NPF IV, Inc. v. Transitional Health Servs., 922 F.Supp. 77, 81 (S.D.Ohio 1996) (interpreting Ohio law); Pioneer Commercial Funding, 122 B.R. at 885; Johnson v. Life Ins. Co., 581 So.2d 438, 442-43 (Ala. 1991); Hudspeth v. A & H Constr., Inc., 230 Ga.App. 70, 71, 495 S.E.2d 322, 323 (1997); Warm Springs Properties, 96 Idaho at 272, 526 P.2d at 1108; Sandy Creek Condominium, 267 Ill.App.3d at 294, 204 Ill.Dec. 709, 642 N.E.2d at 174; Reason, 793 S.W.2d at 474-75; Manufacturers Hanover Trust Co. v. Chemical Bank, 160 A.D.2d 113, 124, 559 N.Y.S.2d 704, 712 (1990), appeal denied, 77 N.Y.2d 803, 568 N.Y.S.2d 15, 569 N.E.2d 874 (1991); DeChristofaro v. Machala, 685 A.2d 258, 263 (R.I.1996); SSI Med. Servs., Inc. v. Cox, 301 S.C. 493, 498, 392 S.E.2d 789, 792 (S.C.1990). This rule is well-synthesized in 1 Fowler V. Harper et al., The Law of Torts, § 2.13, at 2:56 (3d ed.1986), which notes that conversion claims generally are recognized in connection with funds that have been or should have been segregated for a particular purpose or that have been wrongfully obtained or retained or diverted in an identifiable transaction. (Footnote omitted). [4] In Limbaugh, 732 F.2d 859, the United States Court of Appeals for the Eleventh Circuit reviewed a suit for conversion against a broker who transferred money from a mutual fund account without the owner's consent. The court noted, in dicta, that the transferred money had to be sufficiently identifiable, meaning the plaintiff must describe the funds with such reasonable certainty that the jury may know what money is meant. Id. at 862 (quotation omitted). That the money was in the form of specific mutual fund shares made the funds sufficiently identifiable to be tortiously converted. In Mitchell Energy, 80 F.3d 976, Mitchell Energy sued for conversion of gas royalties it believed that Samson Resources owed them under a lease. The court stated: Although Mitchell does have a right to a percentage of the profits of production, this does not give Mitchell a right to a specific and identifiable portion of the proceeds received that could be considered [a] specific chattel. Rather, Mitchell's right is to an amount equal to its proportionate share of the value of gas produced....[T]he obligation owed to Mitchell ... is more analogous to an obligation to pay money generally than to return or deliver money as specific chattel. Id. at 984. The court held that Mitchell has no action in conversion against its cotenant, Samson, to recover its share of profits in the mineral estate. Id. The Court of Special Appeals has noted that, if a defendant maintains possession of the proceeds in question, but commingles it with other monies, the cash loses its specific identity. See Lawson, 69 Md.App. at 482-83, 518 A.2d at 177 (holding that the plaintiff could not sue for conversion to recover an overpayment on a check received by the defendant and deposited into his personal bank account); see also Warm Springs Properties, 96 Idaho at 272, 526 P.2d at 1108 (noting that a conversion claim failed because the defendant placed the funds in its general checking account). Applying these principles to the case sub judice, petitioners, if secured creditors in the Ashmere Interests, also were entitled to the proceeds of those interests after a default. Those proceeds, however, were not readily identifiable. The facts do not allege that respondent received any identifiable dollar amount of profits, assets, distributions, dividends, or other monetary reward from his purported ownership of the Ashmere Interests. Further, even if respondent did receive such monies from the Ashmere Partnership, Ashmere Corporation, or Mr. Miller, neither party alleges those monies were maintained in a separate, segregated account by respondent. Thus, any proceeds respondent may have retained from the Ashmere Interests are not specifically identifiable enough to be the subject of a conversion claim. In fact, petitioners' inability to identify any proceeds from the Ashmere Interests is what may have led them to file the accounting claim.