Key Takeaways:

  • Conversion of property occurs when someone wrongfully takes or interferes with another’s personal property without permission.
  • Damages for conversion aim to compensate for financial losses, including fair market value, loss of use, and, in some cases, punitive damages.
  • Different types of property can be subject to conversion, including tangible personal property and, in some cases, intangible property.
  • Legal defenses against a conversion claim include consent, lack of intent, abandonment, and lawful authority.
  • Legal remedies may involve monetary compensation, return of property, or injunctive relief.
  • Statutes of limitations vary by jurisdiction but are critical in determining when a claim must be filed.
  • UpCounsel provides access to experienced attorneys for guidance on conversion claims and damages.

Damages for conversion are the awards someone seeks in a conversion case. They are compensation for actual losses of personal property. Conversion is depriving an individual's rights to use or possess his or her personal property. It's often defined as interference in someone's right to property without that person's permission and without lawful justification.

What Are Damages?

Damages are intended to compensate the aggrieved party for its loss of personal property. This is property that was wrongfully taken by another.

The owner of the property may be able to recover its value at the time it was taken, along with interest up to the date of the trial. Damages should be full compensation for actual losses. Damages must be proven in court by displaying sufficient evidence that would enable a jury to figure a fair and reasonable value of damages.

The amount of damages may differ when conversion is tainted with fraud or other types of serious acts. In a case of conversion with fraud, gross negligence, or willful wrongdoing, the plaintiff has an option to determine the highest rate of the property's fair market value. This allows the plaintiff to maximize damages to punish particularly outrageous acts of conversion.

When a defendant doesn't convert property using fraud or willful wrongdoing, damages shouldn't be subject to a plaintiff's whims. Courts will not grant exorbitant damages as a way to unjustly enrich the plaintiff or unjustly punish the wrongdoer.

The fair market value is considered to be a price the property would bring in the open market between two willing parties. If there isn't enough market information available to determine the value, damages are calculated based on a reasonable value for the property when it was taken.

Factors Affecting the Calculation of Damages

Several factors influence the damages awarded in a conversion case, including:

  • Fair Market Value: Courts often assess the value of the property at the time of conversion. This can include depreciation or appreciation based on market conditions.
  • Loss of Use: Plaintiffs may recover compensation for being deprived of their property, even if they eventually recover it. For example, rental costs for a replacement vehicle while a converted car is unavailable.
  • Punitive Damages: If the conversion was intentional, malicious, or fraudulent, courts may award punitive damages to deter future misconduct.
  • Interest: In many cases, courts grant interest from the date of conversion to the date of judgment.
  • Mitigation of Damages: Plaintiffs are expected to take reasonable steps to minimize their losses. Failing to do so could reduce the damages awarded.

What Is Conversion of Property?

Conversion of property happens when an individual deprives another person of using or possessing his or her personal property. Conversion may also be called “trespass to chattel,” and it typically involves personal property, not real property.

Most conversion claims state that the defendant hindered the plaintiff's ability to use his or her own property. Damages are usually calculated based on the loss of use instead of the loss of possession. As a result, figuring out damages can be complicated.

Consider this example: your neighbor takes your bicycle without your permission and bends the frame. Your bike isn't rideable in this condition, and your neighbor refuses to replace the bike. While you can file a criminal complaint against your neighbor, that doesn't fix your bike. To reclaim the value of your damaged personal property, you have the option of filing a lawsuit for conversion.

Conversion may occur when a person, acting without your permission, engages in the following with your property:

  • Takes it
  • Fails to return it
  • Sells it
  • Substantially alters it, like cutting down your trees to use the wood
  • Severely misuses or damages it

Conversion occurs when someone intentionally takes an individual's personal property without the consent of that individual. The injured party may seek legal relief.

Legal Defenses Against Conversion Claims

Defendants in conversion cases may use several defenses, including:

  • Consent: If the owner granted permission for the use or transfer of the property, a conversion claim may not hold.
  • Lack of Intent: Conversion requires an intentional act. If the defendant mistakenly took the property without wrongful intent, they may avoid liability.
  • Abandonment: If the property owner abandoned the item, the defendant could argue there was no ownership to convert.
  • Lawful Authority: If a law enforcement agency or a legal right allowed the defendant to take possession, it may serve as a valid defense.

Understanding these defenses can help both plaintiffs and defendants navigate legal proceedings effectively.

Types of Property in Wrongful Conversion

Wrongful conversion doesn't apply to all of the personal property you can own. It only applies to physical property, such as the following:

  • Bicycle
  • Computer
  • Cell phone

Basically, anything you own that can be moved is subject to conversion. Because real estate isn't property that you can move, it isn't covered under conversion.

Most types of property that don't have a physical substance — such as intellectual property rights or trade secrets — aren't subject to conversion. However, they may be covered if they've been merged into a physical form, such as insurance policies or stocks. Some state courts are moving toward recognizing certain kinds of intangible property as personal property.

Property that can be converted isn't "real property,” which is generally defined as land and any attached improvements on the land. Outside of real estate, all other property is usually considered personal property.

When someone takes another's personal property without permission, the law gives the aggrieved party some avenues for compensation. It's not always easy to place a value on that property, but courts try to provide some guidelines.

Conversion of Intangible Property

While traditional conversion claims focus on tangible property, courts are increasingly recognizing certain types of intangible property, such as:

  • Electronic Data & Digital Assets: Some jurisdictions acknowledge conversion claims for stolen or improperly accessed digital files, cryptocurrency, or domain names.
  • Stock Certificates & Negotiable Instruments: When physical documents representing ownership (such as stock certificates) are taken or withheld, courts may treat them as subject to conversion.
  • Trade Secrets & Intellectual Property: While traditional conversion laws do not always cover intellectual property, some legal doctrines allow claims when proprietary business information is misused.

This evolving legal landscape highlights the importance of consulting a legal professional for guidance on specific cases.

Legal Remedies for Conversion of Property

Victims of conversion have several legal remedies, depending on the circumstances of their case:

  1. Monetary Compensation: Courts may award damages equivalent to the property’s value and loss of use.
  2. Replevin (Return of Property): If the property is still available, the court may order its return rather than awarding financial compensation.
  3. Injunctive Relief: In some cases, courts issue orders preventing further misuse or disposal of the converted property.
  4. Punitive Damages: If the defendant acted with malice or fraud, additional damages may be imposed to deter future misconduct.

Each remedy serves to restore the plaintiff to their rightful position before the conversion occurred.

Statute of Limitations for Conversion Claims

The statute of limitations for conversion claims varies by jurisdiction and typically ranges from two to six years. Factors affecting the timeframe include:

  • Discovery Rule: In some cases, the statute begins when the owner discovers (or should have reasonably discovered) the conversion.
  • Fraudulent Concealment: If the defendant intentionally hid the conversion, courts may extend the filing deadline.
  • Tolling Provisions: Certain legal conditions, such as the plaintiff’s incapacity, may pause the statute of limitations.

Filing within the appropriate period is crucial to preserving legal rights. Consulting an attorney ensures compliance with deadlines and strengthens the case.

FAQs

1. What is the difference between conversion and theft?

Conversion is a civil wrong (tort), whereas theft is a criminal act. Conversion may involve wrongful possession without criminal intent, while theft typically involves intent to permanently deprive the owner.

2. Can I sue for conversion if my property was accidentally taken?

Generally, conversion requires an intentional act. If the defendant took the property by mistake but returned it promptly, a claim may not be successful.

3. Can conversion apply to digital assets?

Yes, courts are increasingly recognizing conversion claims related to digital assets, including stolen cryptocurrency, unauthorized access to digital files, and domain name disputes.

4. How do I prove damages in a conversion case?

Plaintiffs must present evidence such as receipts, expert valuations, or market comparisons to establish the fair market value and loss of use damages.

5. What if the converted property was later returned?

Even if the property is returned, the owner may still claim damages for the period it was wrongfully withheld, including loss of use and interest.

If you need help with conversion of property or damages for conversion, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.