Articles Posted in Conversion

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.

Where defendant in a conversion case admitted all of plaintiff’s statement of facts and only asserted in his additional facts that he acted in good faith and honesty, summary judgment for plaintiff on the conversion claim was affirmed.

In Melton v. Melton, No. E2023-00649-COA-R3-CV (Tenn. Ct. App. Dec. 27, 2023), plaintiff was the personal representative of his mother’s estate, and he filed this breach of fiduciary duty and conversion claim against his brother both in his capacity as personal representative and his individual capacity. The facts showed that a few months before the mother’s death, defendant had traveled to her home in Tennessee and had the mother execute a power of attorney naming defendant her attorney-in-fact. In the weeks before the mother’s death, defendant drained the mother’s bank accounts, purchasing multiple vehicles and a recreational vehicle for himself, cashing checks to himself, and only paying one small bill for the mother. One of these accounts was payable to plaintiff brother on death, and the others would have gone to the estate.

Plaintiff filed a motion for summary judgment supported by a detailed statement of material facts. Defendant responded by admitting all of plaintiff’s facts, and filing only one additional material fact which stated that defendant “at all times acted with the utmost good faith, honesty, and loyalty to his mother…” The trial court ruled that defendant had not created an issue of material fact and granted plaintiff summary judgment, and the Court of Appeals affirmed.

Where defendant’s counterclaim asserted the conversion of its real property through a transfer that “was not supported by consideration, was commercially unreasonable, and made under economic duress,” and that alleged conversion occurred less than ten years ago, summary judgment in favor of plaintiff was vacated. Summary judgment on defendant’s counterclaim for civil conspiracy was likewise vacated.

Bryan College v. National Association of Christian Athletes, No. E2021-00931-COA-R3-CV, 2023 WL 128275 (Tenn. Ct. App. Jan. 9, 2023) arose out of a transfer of property to Bryan College from National Association of Christian Athletes (NACA). NACA had owned a Christian camp with extensive facilities for many years. After allegations of misconduct were made in 2009 against one of NACA’s founders, NACA began “to pursue a change to leadership with the help of Bryan College.” Several members of the NACA board were replaced with individuals associated with Bryan College, including Steven Livesay, who was the president of Bryan College and became the chairman of NACA’s board.

In 2016, NACA’s board passed a motion to transfer ownership of the camp from NACA to Bryan College. As part of the deal, NACA would retain use of the camp and Bryan College would assume the debt owed on the camp ($920,000). At the time, the camp appraised for $7 million. When contemplating the transfer, NACA was given a lease that said it would only have to pay rent during years that Bryan College failed to end “its fiscal year in the black.”

Where plaintiffs could have discovered in October 2009 that funds had been transferred out of an account payable to them upon decedent’s death and into an account payable to defendant, the conversion claim filed in 2019 was time-barred.

In Kidd v. Lewis, No. E2021-01156-COA-R3-CV, 2022 WL 2866006 (Tenn. Ct. App. July 21, 2022), plaintiffs were the adult daughters of decedent and defendant was the widow of decedent. During the later years of decedent’s life, he suffered from Alzheimer’s and his competency was disputed.

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Where plaintiffs witnessed defendants loading their personal property onto a truck but did not file their complaint for conversion until more than three years later, dismissal based on the statute of limitations was affirmed. In Bender v. Attorney S. Madison Roberts, No. M2019-01699-COA-R3-CV (Tenn. Ct. App. Aug. 13, 2021), plaintiffs alleged in their pro se complaint that their home was sold at a property sale to satisfy a lien for unpaid property taxes. The successful bidder took possession of the house, and on August 13, 2015, plaintiffs drove by the house and saw people who worked for defendants loading plaintiffs’ personal property onto a truck and trailer. Plaintiffs asserted that that they were told the items were being taken to a recycling center, but in the days that followed plaintiffs were unable to get the personal property items back.

Plaintiffs filed this conversion suit on April 16, 2019, which was three years and eight months after the personal property was taken. The trial court granted defendants’ motion to dismiss, finding that the case was time-barred, and the Court of Appeals affirmed.

Claims for conversion of personal property are subject to a three-year statute of limitations, and a “claim for conversion accrues when the plaintiff knows or reasonably should know that the defendant has appropriated the plaintiff’s personal property to the defendant’s own use and benefit in defiance of the plaintiff’s right.” (Tenn. Code Ann. § 28-3-105(2); internal citation omitted). According to the allegations in the complaint, plaintiffs witnessed their personal property being taken by defendants and were not able to retrieve said property in the days that followed. Because plaintiffs did not file this conversion claim until well outside the three-year limitations period from when they knew their property had been taken, dismissal based on the statute of limitations was affirmed.