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Thursday, September 19, 2019

New York High Court answers conversion question

By John O'Brien | Mar 27, 2007


ALBANY, N.Y. - New York's Court of Appeals has decided that a conversion claim may be brought by a former Nationwide Mutual Insurance Co. agent who says the company took information he needed when it reclaimed its computer.

The U.S. Court of Appeals for the Second Circuit certified the question to New York's highest court, where it was answered in the affirmative in a unanimous opinion Thursday authored by Justice Victoria Graffeo.

"We believe that the tort of conversion must keep pace with the contemporary realities of widespread computer use," Graffeo wrote. "We therefore answer the certified question in the affirmative and hold that the type of data that Nationwide allegedly took possession of -- electronic records that were stored on a computer and were indistinguishable from printed documents -- are subject to a claim of conversion in New York.

"Because this is the only type of intangible property at issue in this case, we do not consider whether any of the myriad other forms of virtual information should be protected by the tort."

Louis Thyroff became a Nationwide agent in 1988 and was leased a computer until 2000, when Nationwide informed him that his contract had been cancelled.

Nationwide reclaimed the computer, which Thyroff says caused him to lose customer information and other types of personal information that was stored on it.

Thyroff filed suit against Nationwide, asserting several causes of action. Eleven causes were dismissed, and a district court granted Nationwide summary judgment.

Thyroff appealed to the Second Circuit, which asked the Court of Appeals to answer the conversion question.

"(It) generally is not the physical nature of a document that determines its worth, it is the information memorialized in the document that has intrinsic value," Graffeo wrote. "A manuscript of a novel has the same value whether it is saved in a computer's memory or printed on paper.

"So too, the information that Thyroff allegedly stored on his leased computers in the form of electronic records of customer contacts and related data has value to him regardless of whether the format in which the information was stored was tangible or intangible. In the absence of a significant difference in the value of the information, the protections of the law should apply equally to both forms -- physical and virtual."

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