Poor pleading of conversion in a case involving trust required dismissal of conversion claim. Particularity in pleading is required for such claims.
In Stalnaker v. Cupp, No. M2023-00404-COA-R3-CV (Tenn. Ct. App. June 18, 2024), plaintiff was the sole beneficiary of a residual trust, and plaintiff and defendant were co-trustees. A related surviving spouse trust existed, and when the surviving spouse passed away, defendant was the executor of her estate and her sole beneficiary.
Three years after the surviving spouse’s estate was closed, plaintiff had a stroke that left him impaired for several years. When he regained his mental faculties, he requested an accounting of the residual trust from defendant, but defendant did not respond to the request. Plaintiff eventually filed suit in California, which was dismissed, then later filed this suit in Tennessee. The trial court dismissed plaintiff’s claims for breach of fiduciary duty and conversion, and the Court of Appeals affirmed dismissal.
“Conversion is the appropriation of tangible property to a party’s own use in exclusion or defiance of the owner’s rights.” (internal citation omitted). Plaintiff’s conversion claim was based on his allegation that defendant misappropriated funds as the trustee. Pursuant to Tenn. R. Civ. P. 9.02, a plaintiff “must plead all acts of misappropriation with particularity.” (internal citation omitted).
The complaint alleged that defendant “converted funds of the [residual] trust into property of the estate of [surviving spouse],” and that defendant “provided no accounting.” The Court wrote that “[t]hese allegations fail to identify any specific property belonging to [plaintiff] and, therefore, fall short of the particularity requirements set forth in Tenn. R. Civ. P. 9.02 for pleadings sounding in fraud.” Further, the Court noted that the trust documents attached to the complaint failed to identify any actual property that was part of the trust. Plaintiff thus “failed to allege facts establishing what, if any, assets were in the [residual trust], much less any assets that belonged to him, that could have been converted by [defendant].”
Due to insufficient pleading, the Court of Appeals accordingly affirmed dismissal.
This opinion was released five months after oral arguments.