Opinion ID: 2102034
Heading Depth: 2
Heading Rank: 1

Heading: The Time of Conversion

Text: Conversion has generally been defined as any unlawful exercise of ownership, dominion or control over the personal property of another in denial or repudiation of his rights thereto. Shea v. Fridley, 123 A.2d 358, 361 (D.C.1956); accord, Blanken v. Harris, Upham & Co., 359 A.2d 281, 283 (D.C.1976). The traditional standard for calculating damages for conversion is the fair market value of the property at the time of the conversion. See, e.g., Mearns v. Chatard, 47 App.D.C. 257, 265-266 (1918); Kalb v. Vega, 56 Md.App. 653, 665-67, 468 A.2d 676, 683 (1983), cert. denied, 299 Md. 427, 474 A.2d 219 (1984); DOBBS ON REMEDIES, supra, § 5.14, at 403. [13] Thus a court deciding a claim of conversion must first determine when the conversion actually took place, for only when that is done can the damages be ascertained. In the case at bar that is a critical issue. Determination of the date of conversion is important not only because the value of the converted property on that date must be computed, but also because that date establishes when title passes to the converter. In this case that is significant because James would be entitled to any coupon interest he received on or after the date of conversion, when title to the bonds legally passed to him. See Annotation, Damages for Conversion of Stock, supra, 31 A.L.R.3D at 1302; 89 C.J.S. Trover and Conversion § 173 (1955). There are three dates on which it could be said that James converted the bonds. See Kalb v. Vega, supra, 56 Md.App. at 665-67, 468 A.2d at 683. First, James unlawfully exercised control over the bonds when he removed them from the safe deposit box immediately after Mary's death on October 2, 1981. W. KEETON, PROSSER & KEETON ON THE LAW OF TORTS § 15, at 93 (5th ed. 1984) (hereinafter PROSSER ON TORTS). Second, James acted unlawfully when he refused to return the bonds to the estate, their true owner, after the estate's representative learned in August 1984 that they had been removed and requested their return. See, e.g., Boiseau v. Morrissette, 78 A.2d 777, 780 (D.C.1951); Horne v. Francis I. duPont & Co., 428 F.Supp. 1271, 1275 (D.D.C. 1977); PROSSER ON TORTS, supra, § 15, at 98. Finally, James converted five of the bonds when he redeemed them for cash. See Mearns v. Chatard, supra, 47 App.D. C. at 265; PROSSER ON TORTS, supra, § 15, at 96. Since the estate maintained that James converted five bonds by redeeming them, the trial court correctly computed damages for the conversion of those bonds when it awarded to the estate the proceeds from their sale. The sale price is an appropriate measure of a bond's fair market value at the time of conversion. See Kalb v. Vega, supra, 56 Md.App. at 665-67, 468 A.2d at 683. There is no triable issue of fact as to these five bonds, since James disputes only the finding of liability for conversion; he does not challenge the award of the sale proceeds as the proper measure of damages. It should be noted, however, that James is not entitled to any coupon interest on these five bonds since title did not pass to him until he redeemed them. This interest is properly included as part of the damages. The trial court erred in awarding to the estate the present fair market value of the six bonds remaining in James' possession. As we have said, conversion of these bonds occurred either upon James' removal of the bonds from the safe deposit box or upon his refusal to return them to the estate when asked to do so. The estate argued, and the trial court apparently agreed, that James committed a continuing conversion for the entire time he kept the bonds, so that the converted stock must be assessed at its market value on the date of the damage award. But there is no such thing as a continuing conversion; the tort of conversion is a discrete exercise of dominion and control which can occur only once. Cf. Press v. Howard University, 540 A.2d 733, 735 (D.C.1988) (rejecting assertion of a continuing breach of contract). The law regards a conversion as a forced sale of the converted property. E.g., Horne, supra, 428 F.Supp. at 1275. Once conversion occurs, title passes to the converter, whose continued possession thereafter is entirely lawful. See generally PROSSER ON TORTS, supra, § 15. We therefore remand this case to the trial court with directions to determine the date of conversion of the six bonds that James did not redeem and to compute the damages with reference to that date. The estate may be allowed to choose the date upon which the conversion occurred, either when James removed the bonds from the safe deposit box or when he refused to return them. See Mearns v. Chatard, supra, 47 App.D.C. at 265-266 (defendant pledged plaintiff's stock, redeemed it, and pledged it again; therefore he was liable for [conversion] either as of the date of the first or the second hypothecation, and plaintiff could have selected one or the other); Kalb v. Vega, supra, 56 Md.App. at 665-67, 468 A.2d at 683 ([t]he fact that [plaintiff] may have been able to treat either or both of the first two acts as actionable conversions ... does not ... preclude his treating the third act also as a conversion). [14] On remand, the trial court should be mindful of two important considerations. First, James is entitled to all the coupon interest from the date of conversion. The estate may recover as damages any interest that James received on the five bonds which he redeemed, since that interest accrued before conversion. But if the estate elects to treat James' removal of the six remaining bonds from the safe deposit box as the act of conversion, James is entitled to all the interest on those bonds that he received thereafter. Similarly, if the estate treats James' refusal to return the bonds as the act of conversion, James may keep the interest he received after the date of that refusal. Second, James may very well dispute the calculation of the bonds' market value on the date chosen for determining damages. He previously presented evidence that the calculation of current market value was factually incorrect. If he offers evidence on remand sufficient to raise a triable issue as to the value of the bonds, summary judgment will be inappropriate, and the damages will have to be determined by a trier of fact.