Aroma Wines & Equipment Inc v. Columbian Distribution Services Inc

Michigan Supreme Court
Lansing, Michigan
Chief Justice: Justices:
Syllabus Robert P. Young, Jr. Stephen J. Markman
Mary Beth Kelly
Brian K. Zahra
Bridget M. McCormack
David F. Viviano
Richard H. Bernstein
This syllabus constitutes no part of the opinion of the Court but has been Reporter of Decisions:
prepared by the Reporter of Decisions for the convenience of the reader. Corbin R. Davis
AROMA WINES & EQUIPMENT, INC V COLUMBIA DISTRIBUTION SERVICES, INC
Docket Nos. 148907 and 148909. Argued March 10, 2015 (Calendar No. 1). Decided
June 17, 2015.
Aroma Wines & Equipment, Inc., brought an action in the Kent Circuit Court against
Columbian Distribution Services, Inc., alleging (1) breach of contract, (2) violation of the
Uniform Commercial Code, (3) common-law conversion, and (4) statutory conversion under
MCL 600.2919a(1)(a). Aroma had rented climate-controlled warehouse space from Columbian
to store its wine while awaiting sale. Columbian was required to maintain the wine within a
specific temperature range. After Aroma fell behind in its monthly rental payments, Columbian
removed the wine from its climate-controlled space to an uncontrolled environment. Aroma
alleged that Columbian moved the wine to rent the space to higher-paying customers and that the
temperature changes destroyed the wine’s salability. Columbian claimed that the move was
temporary, to allow it to renovate the climate-controlled space and increase its storage capacity,
and that none of the wine was exposed to extreme temperature conditions. In its statutory
conversion claim, Aroma alleged that Columbian converted Aroma’s wine inventory to its own
use and sought treble damages. Columbian countersued for breach of contract in light of
Aroma’s nonpayment of rent. At the close of Aroma’s proofs, Columbian moved for a directed
verdict on the statutory conversion claim. Columbian asserted that implicit in the word “use” in
MCL 600.2919a is an inference limiting the definition of that word to using something for the
purpose intended by the nature of the product or good, such as drinking or selling the wine.
Aroma, however, argued for a broader interpretation, namely, that use encompassed acts by
which the converter exercised its dominion and control over the wine, such as Columbian’s using
the wine as leverage in the contract dispute. The court, Dennis B. Leiber, J., agreed with
Columbian and granted its motion for a directed verdict on Aroma’s statutory conversion claim.
The jury then found that Columbian had breached its contract with Aroma and converted
Aroma’s wine. The jury also found that Aroma did not breach its contract with Columbian. The
court denied Aroma’s motion for attorney fees. Aroma appealed, and the Court of Appeals,
WHITBECK, P.J., and HOEKSTRA and GLEICHER, JJ., affirmed in part, reversed in part, and
remanded, concluding that the most relevant definition of “use” in the context of conversion was
to employ the property for some purpose. The panel held that if the jury believed the evidence
showing that Columbian moved Aroma’s wine for its own purposes, whether to sell the space to
other customers, complete a construction project, or use the wine as leverage against Aroma, the
jury could have determined that Columbian converted the wine to its own use. The panel also
affirmed the trial court’s ruling on attorney fees. 303 Mich. App. 441 (2013). Aroma and
Columbian filed separate applications for leave to appeal, which the Supreme Court granted,
limited to the issue regarding the proper interpretation of the language “converting property to
the other person’s own use” in MCL 600.2919a. 497 Mich. 864 (2014).
In a unanimous opinion by Justice KELLY, the Supreme Court held:
The statutory action for conversion under MCL 600.2919a(1)(a) is not the same as an
action for common-law conversion. Rather, by requiring the conversion of property to be to the
defendant’s own use, MCL 600.2919a(1)(a) requires the plaintiff to show that the defendant
employed the converted property for some purpose personal to the defendant’s interests, even if
that purpose was not the property’s ordinarily intended purpose.
1. At common law, conversion was any distinct act of dominion wrongfully exerted over
another’s personal property in denial of or inconsistent with that person’s rights therein. MCL
600.2919a(1)(a) created a remedy against a person who steals or embezzles property or converts
property to the other person’s own use. A defendant who violates the statute may be liable for
treble damages. A plaintiff who has proved common-law conversion does not necessarily have a
cause of action under MCL 600.2919a(1)(a) because the Legislature’s inclusion of the phrase “to
the other person’s own use” indicated its intent to limit the statute’s application to a subset of
common-law conversions in which the common-law conversion was to the other person’s own
use. Converting property to the defendant’s own use means only that the defendant employs
another person’s property for any purpose, as long as it is to the defendant’s own purposes, that
is, for a purpose personal to the converter.
2. The circuit court erred by granting Columbian’s motion for directed verdict on the
statutory conversion claim. Aroma proffered evidence that would have allowed the jury to
conclude that Columbian used the wine for some purpose personal to its interests. If the jury
believed Aroma’s evidence that Columbian moved the wine from the controlled-temperature
storage area for its own purposes (whether to sell the space to other customers, complete a
construction project, or use the wine as leverage against Aroma), the jury could have determined
that Columbian converted the wine to its own use.
Affirmed and remanded to the circuit court for further proceedings.
©2015 State of Michigan
Michigan Supreme Court
Lansing, Michigan
Chief Justice: Justices:
OPINION Robert P. Young, Jr. Stephen J. Markman
Mary Beth Kelly
Brian K. Zahra
Bridget M. McCormack
David F. Viviano
Richard H. Bernstein
FILED June 17, 2015
STATE OF MICHIGAN
SUPREME COURT
AROMA WINES & EQUIPMENT, INC.,
Plaintiff/Counterdefendant- No. 148907
Appellant,
v
COLUMBIAN DISTRIBUTION
SERVICES, INC.,
Defendant/Counterplaintiff-
Appellee.
AROMA WINES & EQUIPMENT, INC.,
Plaintiff/Counterdefendant-
Appellee/Cross-Appellant,
No. 148909
COLUMBIAN DISTRIBUTION
SERVICES, INC.,
Defendant/Counterplaintiff-
Appellant/Cross-Appellee.
BEFORE THE ENTIRE BENCH
KELLY, J.
By 2005 PA 44, the Legislature amended MCL 600.2919a(1)(a) to create a cause
of action against someone “converting property to [that] person’s own use.” In this case,
we consider whether this statutory language is coextensive with the common-law tort of
conversion or, if not, what additional conduct is required to show that a defendant
converted property to his, her, or its “own use.”
We hold that “converting property to [that] person’s own use,” as used in
MCL 600.2919a, is not coextensive with common-law conversion. By enacting
MCL 600.2919a, the Legislature intended to create a separate statutory cause of action
for conversion “in addition to any other right or remedy” a victim of conversion could
obtain at common law. 1 In this case, defendant argues that conversion “to the other
person’s own use” requires a showing that the other person used the converted property
for the property’s common or intended purpose. We decline to adopt such a narrow
interpretation of “own use.” Rather, we hold that the separate statutory cause of action
for conversion “to the other person’s own use” under MCL 600.2919a(1)(a) requires a
showing that the defendant employed the converted property for some purpose personal
to the defendant’s interests, even if that purpose is not the object’s ordinarily intended
purpose.
1
MCL 600.2919a(2). See Dep’t of Agriculture v Appletree Mktg, LLC, 485 Mich. 1, 10;
779 NW2d 237 (2010).
2
In this case, plaintiff proffered evidence at trial that would allow the jury to
conclude that defendant used the wine for some purpose personal to defendant’s interests.
As a result, the circuit court erred by granting defendant’s motion for directed verdict on
this claim. We affirm the judgment of the Court of Appeals and remand this case to the
Kent Circuit Court for further proceedings consistent with this opinion.
I. FACTS AND PROCEDURAL HISTORY
Plaintiff, Aroma Wines & Equipment, Inc., is a wholesale wine importer and
distributor. Defendant, Columbian Distribution Services, Inc., operates warehouses in
Michigan. Starting in 2006, Aroma agreed to rent some of Columbian’s climate-
controlled warehouse space to store its wine while awaiting sale. 2 According to the
parties’ agreement, Columbian was required to maintain the wine within a temperature
range of 50 to 65 degrees Fahrenheit. While the agreement required Columbian to
provide Aroma with notice before Columbian could transport Aroma’s wine to a different
warehouse complex, Columbian reserved the right under the agreement to move the wine
without notice “within and between any one or more of the warehouse buildings which
comprise the warehouse complex” identified in the agreement.
Aroma’s sales declined sharply during 2008, and Aroma began falling behind on
its monthly payments to Columbian. In January 2009, Columbian notified Aroma that it
was asserting a lien on Aroma’s wine and that Aroma could not pick up any more wine or
ship any more orders until past due invoices were paid. In March 2009, Columbian
2
The parties signed a second agreement in February 2008, and this agreement governs
the dispute arising here.
3
released to Aroma a small portion of its wine in exchange for a $1,000 payment on
Aroma’s account. Notwithstanding this payment, Columbian asserted that Aroma had
accrued a past-due balance of more than $20,000 on the account.
At some point during this dispute, and contrary to the terms of the contract,
Columbian removed the wine from its climate-controlled space and transported it to an
uncontrolled environment. 3 Aroma alleges that Columbian moved its wine to rent the
space to higher-paying customers. Columbian concedes that it moved Aroma’s wine but
claims that the move was temporary, that its purpose was to renovate the climate-
controlled space and thereby increase its storage capacity, and that none of the wine was
exposed to extreme temperature conditions. Aroma claims that the temperature changes
destroyed the wine’s salability.
Aroma filed the instant suit in the Kent Circuit Court. Its second amended
complaint alleged four separate causes of action: (1) breach of contract, (2) violation of
the Uniform Commercial Code, (3) common-law conversion, and (4) statutory
conversion under MCL 600.2919a(1)(a). As part of its statutory conversion claim,
Aroma alleged that Columbian “converted [Aroma’s] wine inventory to its own use” and
sought treble damages for the alleged statutory conversion. In response, Columbian
countersued for breach of contract based on Aroma’s nonpayment of rent.
The case proceeded to trial. At the close of Aroma’s proofs, Columbian moved
for a directed verdict on Aroma’s fourth count, the statutory conversion claim, arguing
3
For the purposes of our review, the exact timing of Columbian’s removal of the wine is
irrelevant.
4
that Aroma had failed to provide any evidence to support its assertion that Columbian
converted Aroma’s wine to its own use. In support of the motion, Columbian
emphasized that implicit in the definition of the word “use” is an inference limiting the
definition to “using something for the purpose . . . intended by the nature of the product
or good.” Aroma sought a broader interpretation of “use” that did not limit its scope to
acts involving the wine’s intended purpose but instead encompassed acts by which the
converter exercised its dominion and control over the wine. Under this interpretation,
then, Columbian could “use” Aroma’s wine by asserting dominion and control over that
wine as leverage in the dispute over the balance due Columbian. The court agreed with
Columbian’s interpretation of “use,” concluded that “one would have to drink [the wine]
or perhaps sell it” to use it, and granted Columbian’s motion for a directed verdict on
Aroma’s statutory conversion claim.
Trial continued on Aroma’s remaining counts and on Columbian’s counterclaim.
At the conclusion of the trial, the jury found that Columbian had breached its contract
with Aroma and converted Aroma’s wine, awarding Aroma damages totaling $275,000.
The jury also found that Aroma did not breach its contract with Columbian and, as a
result, did not offset the award granted to Aroma by any amount.
Aroma appealed the circuit court’s decision to grant Columbian’s motion for a
directed verdict on Aroma’s statutory conversion claim. The Court of Appeals reversed,
holding that the circuit court’s interpretation of “use” was too narrow. 4 While the panel
4
Aroma Wines & Equip, Inc v Columbian Distrib Servs, Inc, 303 Mich. App. 441-448;
844 NW2d 727 (2013).
5
noted the various definitions of “use,” it determined that “most relevant in the context of
conversion, ‘use’ is defined as ‘to employ for some purpose[.]’ ” 5 The panel explained
that contrary to the circuit court’s conclusion, “drinking or selling the wine are not the
only ways that [Columbian] could have employed [Aroma’s] wine to its own purposes.” 6
Because Aroma “presented some evidence to support its theory that [Columbian] filled
the temperature-controlled storage space that [Aroma’s] wine was moved out of with
other customers’ products,” and because Columbian’s claim that it was engaged in an
expansion project “itself could be considered an act of employing the wine to [its] own
purposes,” Columbian was not entitled to a directed verdict. 7 Rather, the panel
concluded that
[i]f a jury believed the evidence showing that [Columbian] moved
[Aroma’s] wine for its own purposes—whether it be to sell the space to
other customers or complete a construction project—or that it used the wine
as leverage against [Aroma], it could have determined that [Columbian]
converted the wine to its own use.[8]
As a result, the Court of Appeals remanded this case to the circuit court for such a jury
determination. 9
5
Id. at 447-448, quoting Random House Webster’s College Dictionary (1992) (alteration
in original).
6
Aroma Wines, 303 Mich. App. at 448.
7
Id. at 448-449.
8
Id. at 449.
9
The Court of Appeals also held that it “cannot simply order treble damages upon a
finding of [statutory] conversion” and that if on remand the jury were to find that
Columbian committed statutory conversion, the jury must also determine whether to
award treble damages. Id. at 449-450.
6
Both parties then sought leave to appeal the Court of Appeals’ interpretation of
“own use.” Aroma’s appeal (Docket No. 148907) claimed that, like the circuit court, the
Court of Appeals had erroneously defined statutory conversion as containing an
additional element beyond those required to show common-law conversion. On this
theory, and on the basis of the jury’s finding of common-law conversion at trial, no
further proceedings on the question of statutory conversion would be necessary and
Columbian would be liable for statutory conversion. Columbian agreed with the Court of
Appeals that statutory conversion requires a separate finding that the conversion was to
the converter’s “own use,” but filed a separate application for leave to appeal (Docket
No. 148909) that sought to reinstate the circuit court’s narrower definition of “own use.”
We granted both parties’ applications for leave to appeal, limited to the single
issue regarding “the proper interpretation of ‘converting property to the other person’s
own use,’ as used in MCL 600.2919a.” 10
10
Aroma Wines & Equip, Inc v Columbian Distrib Servs, Inc, 497 Mich. 864 (2014).
Aroma’s application for leave to appeal in Docket No. 148907 also asserted an issue
outside this Court’s limited order granting leave: that the Court of Appeals erred by
concluding that treble damages were discretionary upon a finding of statutory conversion.
We deny the application for leave to appeal with respect to this issue because we are not
persuaded that the question presented should be reviewed by this Court. Our order
granting leave to appeal also indicated that an application for leave to appeal as cross-
appellant by Aroma in Docket No. 148909 remained pending. Because this application
as cross-appellant raised the same issues presented in Aroma’s application for leave to
appeal in Docket No. 148907, the application for leave to appeal as cross-appellant in
Docket No. 148909 is denied as moot.
7
II. STANDARD OF REVIEW
We review de novo a trial court’s decision on a motion for a directed verdict. 11 A
party is entitled to a directed verdict if the evidence, when viewed in the light most
favorable to the nonmoving party, fails to establish a claim as a matter of law. 12
We also review de novo questions of statutory interpretation. 13 “When
interpreting a statute, we follow the established rules of statutory construction, the
foremost of which is to discern and give effect to the intent of the Legislature.” 14 The
language of the statute is the most reliable evidence of that intent, and we enforce the
clear and unambiguous language of the statute as written. 15 “Effect should be given to
every phrase, clause, and word in the statute and, whenever possible, no word should be
treated as surplusage or rendered nugatory.” 16
III. LEGAL ANALYSIS
Under the common law, conversion is “ ‘any distinct act of dominion wrongfully
exerted over another’s personal property in denial of or inconsistent with his rights
11
Krohn v Home-Owners Ins Co, 490 Mich. 145, 155; 802 NW2d 281 (2011).
12
Id., citing Sniecinski v Blue Cross & Blue Shield of Mich, 469 Mich. 124, 131; 666
NW2d 186 (2003).
13
Whitman v City of Burton, 493 Mich. 303, 311; 831 NW2d 223 (2013).
14
Id., citing Sun Valley Foods Co v Ward, 460 Mich. 230, 236; 596 NW2d 119 (1999).
15
Whitman, 493 Mich. at 311, citing Sun Valley Foods, 460 Mich. at 236.
16
Whitman, 493 Mich. at 311-312, citing Baker v Gen Motors Corp, 409 Mich. 639, 665;
297 NW2d 387 (1980).
8
therein.’ ” 17 At issue here is whether a plaintiff who has proved common-law conversion
necessarily has a cause of action under MCL 600.2919a(1)(a) and, if not, what additional
conduct is required to show that a defendant converted property to his, her, or its own
use.
We begin, then, with the text of MCL 600.2919a, which states in full:
(1) A person damaged as a result of either or both of the following
may recover 3 times the amount of actual damages, plus costs and
reasonable attorney fees:
(a) Another person’s stealing or embezzling property or converting
property to the other person’s own use.
(b) Another person’s buying, receiving, possessing, concealing, or
aiding in the concealment of stolen, embezzled, or converted property when
the person buying, receiving, possessing, concealing, or aiding in the
concealment of stolen, embezzled, or converted property knew that the
property was stolen, embezzled, or converted.
(2) The remedy provided by this section is in addition to any other
right or remedy the person may have at law or otherwise.[18]
17
Thoma v Tracy Motor Sales, Inc, 360 Mich. 434, 438; 104 NW2d 360 (1960), quoting
Nelson & Witt v Texas Co, 256 Mich. 65, 70; 239 N.W. 289 (1931).
18
While the parties and this Court refer to a claim pursued under MCL 600.2919a as a
“statutory conversion” claim, the plain language of MCL 600.2919a(1)(a) makes clear
that a claim also accrues to the victim of “[a]nother person’s stealing or embezzling”
property. Moreover, MCL 8.3l provides that “[t]he word ‘person’ may extend and be
applied to bodies politic and corporate, as well as to individuals.” As a result, whether
one or both of the parties involved in an action pursuant to MCL 600.2919a are
corporations does not alter the foregoing analysis.
9
Aroma’s second amended complaint alleges that Columbian “converted [Aroma’s] wine
inventory to its own use” and that, as a result, MCL 600.2919a(1)(a) “applies to the facts
of this case.” 19
Words in a statute are interpreted “according to the common and approved usage
of the language,” but “technical words and phrases, and such as may have acquired a
peculiar and appropriate meaning in the law, shall be construed and understood according
to such peculiar and appropriate meaning.” 20 In addition, “when the Legislature chooses
to employ a common-law term without indicating an intent to alter the common law, the
term will be interpreted consistent with its common-law meaning.” 21 The word
“converting,” used in MCL 600.2919a(1)(a), is one word that has acquired a peculiar and
appropriate meaning in the law because it is derived from the common-law tort identified
above and is used in that context here. 22
19
In disputing the meaning of “conversion . . . to [Columbian’s] own use,” the parties
essentially concede that no “stealing” or “embezzling” occurred within the meaning of
MCL 600.2919a(1)(a) and that MCL 600.2919a(1)(b) is not at issue in this case. Indeed,
under any reading of the statute, MCL 600.2919a applies to all “stealing” and
“embezzling.” Furthermore, we note that “possessing . . . converted property” with the
knowledge “that the property . . . was converted” also exposes a person to liability under
MCL 600.2919a(1)(b). But because Aroma has not alleged Columbian’s potential
violation of MCL 600.2919a(1)(b), we leave for another day the interpretation of that
provision.
20
MCL 8.3a.
21
In re Bradley Estate, 494 Mich. 367, 377; 835 NW2d 545 (2013), citing Stone v
Williamson, 482 Mich. 144, 170; 753 NW2d 106 (2008) (opinion by CAVANAGH, J.).
22
See Appletree, 485 Mich. at 9 (referring to MCL 600.2919a as “the statutory conversion
provision”).
10
Nevertheless, that is only the beginning of our analysis of the phrase “converting
property to the other person’s own use.” Aroma claims that the jury’s verdict against
Columbian for common-law conversion necessarily means that Columbian had violated
its statutory counterpart, namely, MCL 600.2919a(1)(a). Under this theory, common-law
conversion originated as “conversion to the other person’s own use” and, as a result, the
Legislature’s use of the phrase “converting to the other person’s own use” simply
identified common-law conversion as, by itself, sufficient to establish a defendant’s fault
for purposes of MCL 600.2919a(1)(a). To assess the validity of this argument we turn to
the history of common-law conversion.
A. COMMON-LAW CONVERSION
According to Blackstone, several distinct actions in tort originated from the
principle that “if an acquisition of goods by either force or fraud were allowed to be a
sufficient title, all property would soon be confined to the most strong, or the most
cunning” and all other people “could never be secure of their possessions.” 23 The
common law secures this right to personal property by allowing someone wrongfully
deprived of his or her property to recover either that property or monetary damages, or
both, for the wrongful deprivation.
Three distinct causes of action are relevant to our analysis. Each arose out of the
distinct ways that a wrongful deprivation could occur. Someone who wrongfully took
23
3 Blackstone, Commentaries on the Law of England, p *145.
11
property was liable in trespass to the property owner. 24 Someone who wrongfully
detained property that came to that person legally was liable in detinue to the property
owner. 25 Someone who refused to return lost property to its rightful owner, instead using
it himself or herself or disposing of it to another, was liable in trover. 26 This latter cause
of action, arising out of the finder’s conversion of the property, was “invented through
the ingenuity of some long forgotten common law pleader” who sought “to fill in the
gaps left by the actions of trespass . . . and detinue . . . .” 27
Correspondingly, Blackstone explained the origin of trover as allowing the
“recovery of damages against such person as had found another’s goods, and refused to
deliver them on demand, but converted them to his own use.” 28 In a technical sense,
trover was originally actionable only when the property was “lost to the true owner” in
perpetuity, because to convert goods meant to dispose of them, that is, “to make away
with them, to deal with them in such a way that neither owner nor wrongdoer had any
further possession of them; for example, by consuming them, or by destroying them, or
24
Prosser, Nature of Conversion, 42 Cornell L Rev 168, 169 (1957). See also Salmond,
Observations on Trover and Conversion, 21 Law Q Rev 43, 44 (1905).
25
Salmond, 21 Law Q Rev at 44.
26
Prosser, 42 Cornell L Rev at 169.
27
Id.
28
3 Blackstone, p *152 (emphasis omitted).
12
by selling them, or otherwise delivering them to some third person.” 29 “[M]ere
detention” of another person’s property “is not a conversion in the original sense.” 30
Nevertheless, “[a]lmost from the beginning . . . the effort was made to expand
trover into the field of the wrongful detention of chattels [that were] not found.” 31 A
plaintiff who brought an action for trover was able to claim that the defendant refused to
deliver property upon the plaintiff’s demand as “evidence of a conversion—evidence,
that is to say, that the defendant has already made away with the property and therefore
cannot and does not restore it.” 32 Eventually, “[j]uries were directed as a matter of law to
find a conversion on proof of demand and refusal without lawful justification.” 33
Before the turn of the twentieth century, the meaning of conversion as originally
understood at common law began to evolve. Justice COOLEY’s treatise on torts defined
conversion as “[a]ny distinct act of dominion wrongfully exerted over one’s property in
29
Salmond, 21 Law Q Rev at 44. Trover initially arose out of an allegation that the
plaintiff “was possessed of certain goods, that he casually lost them, that the defendant
found them, and that the defendant ‘converted them to his own use.’ ” Prosser, 42
Cornell L Rev at 169.
30
Salmond, 21 Law Q Rev at 47.
31
Prosser, 42 Cornell L Rev at 169.
32
Salmond, 21 Law Q Rev at 47 (emphasis omitted). See also 3 Blackstone, p *152
(“[A]ny man may take the goods of another into possession, if he finds them; but no
finder is allowed to acquire a property therein . . . and therefore he must not convert them
to his own use, which the law presumes him to do, if he refuses to restore them to the
other: for which reason such refusal alone is, prima facie, sufficient evidence of a
conversion.”).
33
Salmond, 21 Law Q Rev at 47.
13
denial of his right, or inconsistent with it . . . .” 34 Importantly, Justice COOLEY quoted
Georgia caselaw from 1846 for the proposition that “ ‘it is not necessary that it should be
shown that he has applied [the converted property] to his own use.’ ” 35 While “it is a
conversion where one takes the plaintiff’s property and sells or otherwise disposes of it, it
is equally a conversion if he takes it for a temporary purpose only, if in disregard of the
plaintiff’s right[,] . . . though he return [the property] to the owner.” 36
This Court’s conversion caselaw bears out this development in the common law.
Justice COOLEY’s 1874 decision for this Court in Kreiter v Nichols involved the
conversion of beer and emphasized that if someone “converts [beer] to his own use in any
form, a civil action will lie to recover from him the value,” and “this civil action would
not depend in any degree upon the method or purpose of the conversion.” 37 In explaining
that conversion of beer to the other person’s “own use” was broad in purpose, the Court
observed that “the legal responsibility to pay for [the beer’s] value would be the same”
whether the converter “destroyed [it] from a belief in its deleterious effects, or made way
with [it] in carousals or private drinking . . . .” 38 By 1884, Justice COOLEY’s decision for
34
Cooley, Torts (2d ed), p *448.
35
Id., quoting Liptrot v Holmes, 1 Ga 381, 391 (1846).
36
Cooley, pp *448-449.
37
Kreiter v Nichols, 28 Mich. 496, 498 (1874). Note that, to the extent Kreiter held that
“the brewing of beer is a lawful business,” id., the decision was abrogated by US Const,
Am XVIII, and subsequently unabrogated by US Const, Am XXI. See generally Kyvig,
Repealing National Prohibition (Kent, Ohio: Kent State Univ Press, 2d ed 2000).
38
Kreiter, 28 Mich. at 498-499.
14
this Court in Daggett v Davis recognized that under certain circumstances, there may be
“a technical conversion . . . , though no use was made of the” property. 39 Under those
circumstances, a plaintiff is “entitled to recover only his actual damages,” not the full
value of the property. 40
From this development in the common law, the scope of a common-law
conversion is now well-settled in Michigan law as “ ‘any distinct act of dominion
wrongfully exerted over another’s personal property in denial of or inconsistent with his
rights therein.’ ” 41 More recently, Thoma v Tracy Motor Sales, Inc reaffirmed this
definition of conversion and adopted the Restatement of Torts to illustrate examples of
“the ways in which a conversion may be committed.” 42 The excerpt adopted by the
Court states:
“A conversion may be committed by
“(a) intentionally dispossessing another of a chattel,
“(b) intentionally destroying or altering a chattel in the actor’s
possession,
“(c) using a chattel in the actor’s possession without authority so to
use it,
39
Daggett v Davis, 53 Mich. 35, 38; 18 N.W. 548 (1884).
40
Id. at 39.
41
Nelson & Witt, 256 Mich. at 70, quoting Aylesbury Mercantile Co v Fitch, 22 Okla 475;
99 p 1089 (1908) (Syllabus).
42
Thoma, 360 Mich. at 438, citing Nelson & Witt, 256 Mich. at 70.
15
“(d) receiving chattel pursuant to a sale, lease, pledge, gift or other
transaction intending to acquire for himself or for another a proprietary
interest in it,
“(e) disposing of a chattel by sale, lease, pledge, gift or other
transaction intending to transfer a proprietary interest in it,
“(f) misdelivering a chattel, or
“(g) refusing to surrender a chattel on demand.”[43]
These examples crystallize the common law’s development over the centuries to
encompass many different ways in which property may be converted, beyond the original
meaning of finding lost property and converting that property to the converter’s own use.
In addition to the Restatement’s example, this Court has held that a sheriff or court
officer who unlawfully seizes personal property is, in the absence of governmental
immunity, liable for conversion, even if he or she does so in the execution of a court
order. 44
To summarize: While the tort of conversion originally required a separate showing
that the converter made some use of the property that amounted to a total deprivation of
that property to its owner, by the twentieth century common-law conversion more
broadly encompassed any conduct inconsistent with the owner’s property rights. In this
context, the Legislature enacted MCL 600.2919a, to which we now turn.
43
Thoma, 360 Mich. at 438, quoting 1 Restatement, Torts, § 223.
44
Kenney v Ranney, 96 Mich. 617, 618; 55 N.W. 982 (1893) (“We understand it to be the
settled law that when one, by a trespass, takes the property of another, and sells it, he is
liable for the conversion, and that no demand is necessary, and the question of good or
bad faith is not necessarily involved. This doctrine is applied daily in cases against
sheriffs and constables, where property is unlawfully seized and sold upon execution.”).
16
B. STATUTORY CONVERSION
For most of Michigan’s history, conversion was a tort for which the only redress
was an action at common law. Indeed, when the Legislature first enacted what we now
refer to as the statutory conversion remedy, in 1976, its terms did not provide a separate
remedy against a converter. As originally enacted, MCL 600.2919a stated:
A person damaged as a result of another person’s buying, receiving,
or aiding in the concealment of any stolen, embezzled, or converted
property when the person buying, receiving, or aiding in the concealment of
any stolen, embezzled, or converted property knew that the property was
stolen, embezzled, or converted may recover 3 times the amount of actual
damages sustained, plus costs and reasonable attorney’s fees. This remedy
shall be in addition to any other right or remedy the person may have at law
or otherwise.[45]
In interpreting this now-defunct provision, the Court of Appeals has explained that,
initially, MCL 600.2919a was not “designed to provide a remedy against the individual
who has actually stolen, embezzled, or converted the property.” 46 Rather, it proscribed
conduct that “occur[s] after the property has been stolen, embezzled, or converted by the
principal . . . .” 47
In 2005, the Legislature amended MCL 600.2919a to its present language. 48 In
particular, Subsection (1)(a) created a remedy against a person who “steal[s] or
45
Former MCL 600.2919a as added by 1976 PA 200.
46
Marshall Lasser, PC v George, 252 Mich. App. 104, 112; 651 NW2d 158 (2002).
47
Id.
48
2005 PA 44 took immediate effect on June 16, 2005. See Appletree, 485 Mich. at 9
n 16 (“Before its amendment, MCL 600.2919a applied only to third parties who aided
another’s act of conversion or embezzlement, and did not apply to the person who
directly converted or embezzled, as it does now.”).
17
embezzl[es] property or convert[s] property to the other person’s own use.” The
interpretive issue before us is whether this language in Subsection (1)(a) allows a plaintiff
to recover treble damages in all instances of common-law conversion or, instead, whether
a plaintiff seeking damages for conversion under Subsection (1)(a) must allege additional
conduct to show that the defendant converted the plaintiff’s property “to the [defendant’s]
own use.”
The historical analysis of the common-law tort of conversion discussed earlier
shows that Michigan law’s understanding of conversion shifted away from requiring an
additional showing that the conversion occurred for the other person’s “own use” and
toward allowing a property owner to recover for any act of dominion inconsistent with
that person’s rights in that property. This shift in the common law occurred long before
the Legislature’s 2005 amendments of MCL 600.2919a. As a result, the Legislature’s
inclusion of the phrase “to the other person’s own use” in § 2919a(1)(a) indicates its
intent to limit § 2919a(1)(a) to a subset of common-law conversions in which the
common-law conversion was to the other person’s “own use.” 49
49
Aroma claims that the House legislative analysis shows that the Legislature intended to
extend liability under MCL 600.2919a to all converters simply because it identified “the
apparent problem” of the former MCL 600.2919a as failing to allow “a victim [to] sue the
person who actually commits the theft,” embezzlement, or conversion. House Legislative
Analysis, HB 4356 (March 16, 2005). As a matter of logic, this assertion is faulty
because MCL 600.2919a, as initially enacted, did not apply to every instance of theft,
embezzlement, or conversion, and only provided a cause of action against a third party
who had knowledge of the status of stolen, embezzled, or converted property. See former
MCL 600.2919a. As a result, the Legislature had a range of options open to it when it
decided to enact policy that expanded § 2919a to encompass additional conduct, and it
chose one of those options by requiring a victim of conversion to show that the
conversion was to the other person’s “own use.”
18
The Court of Appeals did not specifically address whether an additional element is
required to transform common-law conversion into conversion to the other person’s “own
use” pursuant to MCL 600.2919a(1)(a). However, implicit in its analysis is that a
plaintiff seeking treble damages pursuant to § 2919a(1)(a) must “present[] evidence that
the conversion was to defendant’s ‘own use’ as required by MCL 600.2919a(1)(a).” 50
Moreover, as a matter of statutory interpretation, Aroma’s reading of the statute in
light of the House legislative analysis is faulty on two levels. First, the language of the
amended MCL 600.2919a is unambiguous and, as a result, the examination of legislative
history “of any form” is not proper. In re Certified Question from the United States
Court of Appeals for the Sixth Circuit, 468 Mich. 109, 115 n 5; 659 NW2d 597 (2003).
Second, even if legislative history were relevant to the interpretation of MCL 600.2919a,
legislative analyses
are entitled to little judicial consideration in resolving ambiguous statutory
provisions because: (1) such analyses are not an official form of legislative
record in Michigan, (2) such analyses do not purport to represent the views
of legislators, individually or collectively, but merely to set forth the views
of professional staff offices situated within the legislative branch, and (3)
such analyses are produced outside the boundaries of the legislative process
as defined in the Michigan Constitution, and which is a prerequisite for the
enactment of a law. [Id., citing Const 1963, art 4, §§ 26 and 33.]
50
Aroma Wines, 303 Mich. App. at 447. Although the Court of Appeals’ opinion in this
case is the first published decision to interpret the amended version of MCL 600.2919a,
Aroma claims that several unpublished decisions of the Court of Appeals support its
assertion that common-law conversion and conversion to the other person’s “own use”
are synonymous. We address these cases for the sake of completeness and to observe
that none of these cases withstands scrutiny even as merely persuasive authority. See
MCR 7.215(C)(1) (“An unpublished opinion is not precedentially binding under the rule
of stare decisis.”).
Three of Aroma’s cited cases concluded that no common-law conversion
occurred, so they can only stand for the uncontroversial principle that common-law
conversion is a threshold to conversion to the other person’s own use. See Victory
Estates LLC v NPB Mortgage LLC, unpublished opinion per curiam of the Court of
Appeals, issued November 20, 2012 (Docket No. 307457); Paul v Paul, unpublished
opinion per curiam of the Court of Appeals, issued December 17, 2013 (Docket No.
19
Similarly, Aroma’s counsel in opposition to the motion for directed verdict also
presumed that common-law conversion “has a slightly different standard” than
§ 2919a(1)(a). We turn now to the scope of that difference—what conduct satisfies the
additional statutory requirement that the conversion was to the other person’s “own
use.” 51
311609); Armstrong v O’Hare, unpublished opinion per curiam of the Court of Appeals,
issued April 22, 2014 (Docket No. 308635). A fourth case, JP Morgan Chase Bank v
Jackson GR, Inc, unpublished opinion per curiam of the Court of Appeals, issued July 15,
2014 (Docket No. 311650), simply held that treble damages are unavailable when no
damages occurred in the first place or would not have even been contested. Other cases
did not discuss the “own use” language of § 2919a(1)(a), presumably because the issue
was not raised. See J Franklin Interests, LLC v Meng, unpublished opinion per curiam of
the Court of Appeals, issued September 29, 2011 (Docket No. 296525); Stockbridge
Capital, LLC v Watcke, unpublished opinion per curiam of the Court of Appeals, issued
March 4, 2014 (Docket No. 313241).
Finally, Aroma cites J & W Transp, LLC v Frazier, unpublished opinion per
curiam of the Court of Appeals, issued June 1, 2010 (Docket No. 289711), which bears
examining in slightly more detail. There, the panel suggested a two-step process for
determining whether a plaintiff could properly assert a statutory conversion claim
because it observed that “defendants failed to return plaintiffs’ property after demand had
been made and used property in their possession without the authority to do so.” Id. at
15 (emphasis added). As a result, this decision, far from supporting Aroma’s theory of
§ 2919a, actually undercuts it. Nevertheless, none of the unpublished Court of Appeals
opinions cited for Aroma’s theory provides this Court with any meaningful analysis of
§ 2919a, because the issue has not been squarely presented to any appellate court until
this case.
51
We further emphasize that the Legislature intended MCL 600.2919a to work alongside
the common law by creating a nonexclusive statutory cause of action in addition to other
remedies available, including that for common-law conversion. See MCL 600.2919a(2);
Appletree, 485 Mich. at 10.
20
C. DEFINITION OF “OWN USE”
The word “use” is one of the most common words in the English language 52 and
conveys different shades of meaning as either a noun (as in, “an object’s use”) or a verb
(as in, “to use an object”). Within the phrase “converting property to the other person’s
own use,” the word “use” is employed as a noun. Merriam-Webster’s Collegiate
Dictionary identifies many different definitions and senses of the word “use” as a noun,
including the following most relevant within the context of MCL 600.2919a(1)(a):
1 a : the act or practice of employing something : EMPLOYMENT,
APPLICATION b : the fact or state of
being used . . . 2 a (1) : habitual or customary usage
(2) : an individual habit or group custom[.][53]
Columbian proffered, and the circuit court adopted, a narrow definition of “use”
focused on the intended purpose of the converted property, such as the definition of the
word as “habitual or customary usage” quoted above. Under this definition, to convert
Aroma’s wine to Columbian’s “own use” means that “one would have to drink it or
perhaps sell it.”
In reversing the circuit court’s decision, the Court of Appeals held that “the
definition of ‘use’ encompasses a much broader meaning” than the circuit court’s
definition allows. 54 Under the Court of Appeals’ preferred definition, “use” “requires
52
A study by Dictionaries of the Oxford English Corpus found that the word “use” is the
83d most frequently used word in the English language. See Oxford Dictionaries, The
OEC: Facts about the language, available at
(accessed
June 12, 2015) [http://perma.cc/BDP4-2UB5].
53
Merriam-Webster’s Collegiate Dictionary (2014).
54
Aroma Wines, 303 Mich. App. at 448.
21
only that a person ‘employ for some purpose . . . .’ ” 55 As a result, converting to the other
person’s “own use” means merely that a defendant “employ[s]” another person’s
property for any purpose, as long as it is “to [the defendant’s] own purposes.” 56
The Court of Appeals thus implicitly acknowledged the placement of the word
“use” within MCL 600.2919a(1)(a). In particular, the word “own” modifies “use,”
suggesting that any use of the converted property must be intentionally geared toward a
purpose personal to the person converting the property. When examining the phrase
“own use” in this light, it becomes clear that the Legislature did not seek to restrict the
application of MCL 600.2919a(1)(a) on the basis of the intended or common purpose of
the converted property. Rather, the only restriction to the application of MCL
600.2919a(1)(a) to a common-law conversion offense is that it must be used for a
purpose personal to the converter. Therefore, we agree with the Court of Appeals’
definition of “use” and hold that conversion “to the other person’s own use” requires a
showing that the defendant employed the converted property for some purpose personal
to the defendant’s interests, even if that purpose is not the object’s ordinarily intended
purpose.
This broad definition of “own use” finds support in our early conversion caselaw.
As explained earlier, in Kreiter, this Court held that conversion to someone’s own use
need not be geared toward the intended purpose of the converted property and held that a
converter of beer was liable regardless of whether he or she “destroyed [it] from a belief
55
Id.
56
Id.
22
in its deleterious effects, or made way with [it] in carousals or private drinking.” 57
Similarly, our precedent also illustrates that not every common-law conversion is to the
converter’s “own use,” and therefore that additional language is not surplusage. For
instance, this Court has also held that, leaving aside any potential governmental immunity
defenses, a sheriff or court officer is liable for conversion if he or she unlawfully seizes
personal property pursuant to a court order. 58 While the sheriff has converted that
property, the sheriff has not converted the property to his or her “own use” within the
meaning of MCL 600.2919a(1)(a).
Accordingly, we agree with the Court of Appeals that someone alleging
conversion to the defendant’s “own use” under MCL 600.2919a(1)(a) must show that the
defendant employed the converted property for some purpose personal to the defendant’s
interests, even if that purpose is not the object’s ordinarily intended purpose. We now
turn to the specific evidence presented in this case to determine whether Columbian is
entitled to a directed verdict on Aroma’s statutory conversion claim.
IV. APPLICATION
In determining whether the circuit court properly granted Columbian’s motion for
a directed verdict on Aroma’s statutory conversion claim, we reiterate that we are not
making any factual determinations, only whether sufficient evidence has been presented
57
Kreiter, 28 Mich. at 498-499.
58
Kenney, 96 Mich. at 618.
23
for the fact-finder—in this case, the jury—to conclude that Columbian converted
Aroma’s wine to its “own use,” that is, for some purpose personal to Columbian. 59
Under this standard, our application of MCL 600.2919a(1)(a) is straightforward.
Whether Columbian committed a common-law conversion is not at issue here, for the
jury has already decided that question against Columbian. In arguing that it did not
commit statutory conversion, Columbian claims that it moved the wine from its
temperature-controlled storage area to complete a renovation project at its warehouse.
Even considering just this admission, we agree with the Court of Appeals that a jury
could consider “the act of moving plaintiff’s wine contrary to the contract in order to
undertake an expansion project to benefit itself” to be “an act of employing the wine to
[Columbian’s] own purposes constituting ‘use’ of the wine.” 60
Moreover, Aroma proffered various e-mails between its owner and Columbian’s
employees to support its claim that Columbian limited Aroma’s access to its wine during
a period when Columbian declared Aroma’s account to be delinquent. Furthermore, the
Court of Appeals also observed that Aroma proffered evidence that, if believed, would
allow a jury to conclude that Columbian “filled the temperature-controlled storage
space . . . with other customers’ products.” 61 As a result,
59
Krohn, 490 Mich. at 155, citing Sniecinski, 469 Mich. at 131.
60
Aroma Wines, 303 Mich. App. at 448-449.
61
Id. at 448.
24
[i]f a jury believed the evidence showing that defendant moved plaintiff’s
wine for its own purposes—whether it be to sell the space to other
customers or complete a construction project—or that it used the wine as
leverage against plaintiff, it could have determined that defendant
converted the wine to its own use.[62]
Therefore, we affirm the Court of Appeals’ conclusion that the circuit court erred
when it granted Columbian’s motion for a directed verdict on Aroma’s statutory
conversion claim. Aroma presented evidence during its case-in-chief that would allow a
jury to find that Columbian converted Aroma’s property to its own use within the
meaning of MCL 600.2919a(1)(a). As a result, Columbian is not entitled to a directed
verdict on Aroma’s statutory conversion claim.
V. CONCLUSION
Although its language is rooted in common-law conversion, the tort established in
MCL 600.2919a(1)(a) is not the same as common-law conversion. Rather, the separate
statutory cause of action for conversion “to the other person’s own use” requires a
showing that the defendant employed the converted property for some purpose personal
to the defendant’s interests, even if that purpose is not the object’s ordinarily intended
purpose. Aroma has alleged facts that, if believed by a jury, would indicate Columbian’s
conversion of Aroma’s wine for its own purposes. Therefore, we affirm the Court of
62
Id. at 449.
25
Appeals’ conclusion that Columbian is not entitled to a directed verdict on Aroma’s
statutory conversion claim and remand this case to the Kent Circuit Court for further
proceedings consistent with this opinion.
Mary Beth Kelly
Robert P. Young, Jr.
Stephen J. Markman
Brian K. Zahra
Bridget M. McCormack
David F. Viviano
Richard H. Bernstein
26