What Is The Tort of Conversion? Types, Elements & Defenses

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Conversion is one of the oldest property torts in common law, tracing its roots to medieval England, yet it remains remarkably relevant in modern litigation — from disputes over borrowed vehicles and wrongfully withheld inheritance property to cutting-edge cases involving stolen cryptocurrency and unauthorized use of digital assets. At its core, conversion occurs when someone intentionally exercises dominion or control over another person's property in a manner so serious that it justifies requiring the wrongdoer to pay the full value of the property. Unlike simple trespass to chattels, which addresses minor interferences, conversion applies when the interference is substantial enough to warrant treating the property as if it had been taken outright.

The tort serves a dual function in civil law: it allows rightful owners to recover the value of property they cannot physically retrieve, and it deters others from unauthorized appropriation by imposing financial liability even when the defendant acted without malicious intent or knowledge of wrongdoing. This strict liability nature distinguishes conversion from theft or larceny — you don't need to prove the defendant intended to steal or knew the property belonged to someone else, only that they intentionally exercised control over property to which they had no lawful right.

Courts have increasingly grappled with applying this medieval doctrine to intangible assets, including cryptocurrency, NFTs, and digital information, raising novel questions about what constitutes "property" for conversion purposes and how to calculate damages when traditional valuation methods fail.

Quick Summary

• In some cases, the plaintiff may sue multiple people or businesses for conversion.
• If the defendant took the plaintiff's property without their permission, they would be interfering with the plaintiff's right to that property.
• Conversion can happen in a variety of ways, depending on the type of property involved.

What is Conversion?

Conversion is the wrongful taking or using of another person's property without the rightful owner's consent or lawful justification [1].

Conversion is not just taking property but the act of depriving the rightful owner of it or unreasonably withholding possession from them. 

That's what makes it a civil wrong.

Conversion is a type of intentional tort in civil law, and its equivalent in criminal law includes interference with personal property, including trespass and theft.

3 Types of Conversion

There are several types of conversion other than civil and criminal conversion, and they are:

1. Intellectual Property Rights Conversion

IPR conversion occurs when someone uses copyrighted material without permission.

In a notable case, Bridgeport Music, Inc. v. Dimension Films, the court ruled that even a small sample of a sound recording could constitute copyright infringement.

The defendants had used a two-second sample from a Funkadelic song without permission. The court awarded $88,980 in damages to Bridgeport Music.

2. Wrongful Conversion

Wrongful conversion happens when borrowed items aren't returned on demand.

In the case of Popov v. Hayashi, a dispute arose over the ownership of Barry Bonds' 73rd home run ball.

The court ruled that both parties had an equal claim to the ball and ordered it to be sold, with the proceeds split equally. The ball ultimately sold for $450,000.

3. Real Property Conversion

Real property conversion involves unauthorized use or possession of land or buildings. In the case of Wanger v. Zeh, a neighbor built a fence that encroached on the plaintiff's property.

The court ordered the removal of the fence and awarded damages for trespass. The settlement included $10,000 in compensatory damages and $5,000 in punitive damages.

Digital Property and Cryptocurrency Conversion

Courts worldwide are increasingly recognizing conversion claims for digital assets, applying medieval property tort principles to 21st-century disputes. In cryptocurrency cases, courts have permitted conversion claims where digital wallet holders lose access to their assets through hacking, fraud, or unauthorized transfers. The Singapore High Court's 2024 decision in Fantom Foundation Ltd v Multichain Foundation Ltd addressed the unique challenge of valuing cryptocurrency for damages purposes, noting that extreme price volatility requires courts to determine both the appropriate valuation method (spot value versus volume-weighted average) and the correct reference date for computing losses. New Zealand courts extended conversion to digital information in Henderson v Walker (2019), holding that refusing access to or deleting private email correspondence could constitute conversion, though mere copying does not yet meet the threshold.

However, significant limitations exist. In the March 2024 U.S. case Singh v. Illusory Systems (D. Del.), a federal court dismissed conversion claims arising from a cryptocurrency bridge hack, ruling that plaintiffs could not use tort theories to recover damages when their contracts with the platform contained broad liability limitations — the economic loss rule barred tort claims where contracts governed the relationship. This highlights a critical vulnerability in digital asset conversion claims: when users agree to Terms of Service that disclaim liability for losses, they may be unable to pursue conversion remedies even for substantial theft or unauthorized access. Successfully pursuing conversion for digital assets often requires demonstrating either the absence of contractual limitations or conduct so egregious (fraud, intentional misconduct) that it falls outside contractual protection.

What Is A Conversion Claim?

A conversion claim is a civil lawsuit that is filed when someone unlawfully uses or takes another person's property without their permission. 

Based on my experience, most conversion claims are often filed in situations where the plaintiff has loaned or rented property to the defendant, and the defendant refuses to return the property after it has been requested. 

"Conversion is a tort involving strict liability where even an innocent third party recipient of stolen goods may commit the tort of conversion."- Trevor Todd, Estate Litigation Lawyer

How Can Conversion Be Committed?

Conversion can be committed by selling someone else's property without their permission, acquiring a property through an unauthorized sale with the intent to secure a proprietary interest in it for oneself, or refusing to return someone else's property after it has been requested.

As you can see, there are many ways to commit conversion. For example, another form of conversion is if someone takes your car without your permission and uses it as their own vehicle.

4 Elements in a Tort of Conversion Claim

Four elements must be present to establish conversion:

1. Plaintiff's Right to Property

The plaintiff must have an immediate or legal right to the specific property. This element establishes the plaintiff's legal standing to bring the claim.

• Burden of Proof: The plaintiff must demonstrate ownership or right to possession at the time of conversion.
• Evidence: Title documents, purchase receipts, or proof of rightful possession.
• Challenges: Disputes over ownership or possession rights, especially in shared or borrowed property cases.
• Court Interpretation: Courts typically require clear evidence of the plaintiff's superior right to the property, though absolute ownership is not always necessary.

2. Defendant's Wrongful Act

The defendant's conversion by the wrongful act is inconsistent with the property rights of the rightful owner.

This element focuses on the defendant's actions interfering with the plaintiff's property rights.

• Burden of Proof: The plaintiff must show the defendant's act was unauthorized and incompatible with the plaintiff's rights.
• Evidence: Witness testimony, surveillance footage, or unauthorized use or sale documentation.
• Challenges: Determining what constitutes "inconsistent" use, especially in cases of minor interference.
• Court Interpretation: Courts consider whether the defendant's actions significantly impaired the plaintiff's rights to use or possess the property.

3. Legal Causation

The defendant's actions were the legal cause of the plaintiff's loss or damage. This element directly links the defendant's actions and the plaintiff's loss.

• Burden of Proof: The plaintiff must demonstrate that the defendant's actions directly resulted in their loss or damage.
• Evidence: Financial records showing losses, expert testimony on property value, or documentation of repair costs.
• Challenges: Proving the extent of damages, especially for intangible losses.
• Court Interpretation: Courts typically require a clear causal connection between the defendant's act and the plaintiff's loss.

4. Intentional Interference

The defendants intentionally interfered in the plaintiff's lawful possession, causing damage. This element focuses on the defendant's state of mind and the intentional nature of the act.

• Burden of Proof: The plaintiff must show the defendant acted intentionally, though not necessarily with malicious intent.
• Evidence: Communications indicating intent, pattern of behavior, or admissions by the defendant.
• Challenges: Proving intent, especially in cases where the defendant claims mistake or ignorance.
• Court Interpretation: Courts generally do not require proof of bad faith or knowledge of wrongdoing, focusing instead on the intentional nature of the act itself.

In a conversion claim, the plaintiff must prove all these elements, with particular emphasis on demonstrating the defendant's intentional interference with their property rights.

The court will evaluate each element based on the specific facts and circumstances of the case, considering the nature of the property, the extent of interference, and the resulting damages.

What Are the Defenses In a Tort of Conversion?

In a conversion case, the defendant can raise several defenses to argue that their actions were justified or excusable.

Let's look at three common defenses: Necessity, Abatement, and Consent.

1. Necessity Defense

The necessity defense can be used when the defendant's actions were necessary to prevent greater harm.

This defense is typically invoked when obtaining prior permission would have been impractical or impossible, and the defendant’s actions were crucial in an emergency.

Examples of Successful Necessity Defense

• During extreme heat, rescue a child or pet by breaking into a locked car.
• Destroying property to prevent the spread of fire, such as breaking down a fence to control an uncontrolled blaze.

Required Evidence

• Proof of imminent peril or danger that justified the action.
• No reasonable legal alternative was available to address the situation.
• Proportionality: The harm inflicted must have been less than the harm avoided.

Common Pitfalls

• Failure to prove urgency: The defense will likely fail if the defendant cannot show that the action was truly unavoidable.
• Excessive force: Acting beyond what was necessary to handle the emergency can undermine this defense.

Procedural Requirements

• The defendant bears the evidentiary burden of raising the necessity.
• Once raised, the prosecution must disprove the necessity beyond a reasonable doubt.

2. Abatement Defense

The abatement defense allows individuals to take action to remove interference with their property, particularly when a neighbor’s actions are impacting their land or rights.

This defense is rooted in stopping the nuisance or harm immediately.

Examples of Successful Abatement Defense

• Cutting overhanging branches from a neighbor's tree that extends onto your property.
• Blocking water runoff that is damaging your land or home.

Required Evidence

• Proof of actual interference with the defendant’s property rights.
• Documentation that the defendant notified the other party before taking action.
• This demonstrated that the abatement action was reasonable and appropriate in addressing the interference.

Common Pitfalls

• Taking excessive action beyond what was necessary to address the problem
• Failing to provide adequate notice before taking action

3. Consent Defense

The consent defense arises when the defendant can show that the plaintiff permitted the act of conversion.

If the plaintiff agreed to or allowed the defendant to take or use the property, the defendant is not liable for conversion.

Examples of Successful Consent Defense

• Borrowing a friend's car with their permission.
• Using someone’s equipment or property based on prior consent.

Required Evidence

• Proof of explicit or implied consent from the plaintiff.
• Documentation (written or verbal) showing that the defendant had permission to use the property.

Common Pitfalls

• Exceeding the scope of the granted permission
• Relying on implied consent without clear evidence

Time Limitations

While specific time limits vary by jurisdiction, generally:

• The defense must be raised during pre-trial proceedings or at trial
• Failure to assert the defense promptly may result in a waiver

These defenses can effectively shield a defendant from liability in a conversion case if the necessary evidence is provided.

However, the burden of proof rests heavily on the defendant, and failure to substantiate the defense can result in unfavorable outcomes.

What Are Conversion Remedies?

Related Articles:

• What Is a Tort Claim?
• Intentional Tort vs Negligence
• Strict Liability Tort

See the other toxic torts and product liability lawsuits our lawyers have taken on.

FAQs

1. Can You Get Punitive Damages For Conversion?

Yes, you can get punitive damages for conversion in some cases; however, they are not guaranteed. To be eligible, you must be able to show the defendant's interference with your property was with malicious intent.

2. What Is The Difference Between Conversion And Trespass?

The difference between conversion and trespass is that conversion is when someone unlawfully uses or takes another person's property without permission. Trespass is an unauthorized entry onto another person's property.

3. Who Is Liable in a Tort of Conversion?

The person liable in a tort of conversion is someone who committed unlawful and illegal acts by taking or using another person's property without their permission.

4. Who Can Sue for Conversion?

Those who can sue for conversion are the lawful processors with immediate possession of property that was unlawfully taken or used. 

Do You Want To File a Conversion Claim?

If you believe you have a potential conversion claim, you should contact Schmidt & Clark, LLP and have a free consultation with an experienced attorney to discuss your legal options. 

Our attorneys can help you understand conversion rules and determine whether you have a valid claim.

They can also explain the different types of remedies available to you and assist you in filing a claim.

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References:

1. https://www.law.cornell.edu/wex/conversion