A De Novo Review, LLC flex-time lawyer recently researched and prepared a memorandum for a law firm client on the issue of whether a party can state a claim for conversion of money when that money takes the form of a check?
Yes. “There is nothing in the nature of money as personal property which makes it an improper subject of conversion so long as it consists of specific money capable of identification.” See Belford Trucking Co. v. Zagar, 243 So. 2d 646, 648 (Fla. 4th DCA 1970). “To be a proper subject of conversion each coin or bill need not be earmarked, but there must be an obligation to keep intact or deliver the specific money in question, so that such money can be identified.” Id. “Money is capable of identification where it is delivered at one time, by one act and in one mass, or where the deposit is special and identical money is kept for the money making the deposit, or where wrongful possession of such property is obtained.” Id. (emphasis added). Examples of money that may be subject to conversion are where a sum of money sealed in an addressed envelope is delivered to the wrong person or where a specified sum of money in a deposit bag was credited to the wrong account. Id.
On the other hand, a debt that can be discharged by payment of money, is not the subject of conversion. Id. As an example, when a party has an open account and the defendant need not pay the identical monies he collected, no action in tort for conversion can lie. Id. (finding that the precise nature of the $6,000 claimed could not be specifically identified in the pleadings or by way of proof, invalidating the claim for conversion). See also Allen v. Gordon, 429 So. 2d 369 (Fla. 1st DCA 1983)(holding that money could be identified when it involved two separate ascertainable amounts and accounts and the conversion occurred when the defendant withdrew the money from the accounts).
When the funds claimed by the plaintiff, however, are unsegregated and placed in a general operating account, the monies cannot be identified for specific individuals and cannot form the basis of a conversation claim. See Florida Desk, Inc. v. Mitchell Int’l, Inc., 817 So. 2d 1059 (Fla. 5th DCA 2002). In Mitchell, the defendant was a middle-man purchasing equipment for a hospital. Id. The defendant requested a 50% deposit from the hospital, which it deposited into its operating account, once the hospital approved a vendor purchase order. Id. Upon delivery of the goods to the hospital, the defendant obtained the remaining 50% of the funds from the hospital to pay the vendor. Id. The plaintiff, a vendor, did not request a deposit and had no knowledge that the defendant was holding 50% of the monies for the purchase order in its general operating account. Id. These monies were deemed unidentifiable for purposes of a conversion claim because the defendant obtained the money from the hospital and deposited it into its general operating account with no way to determine where the money came from or for whom the money was intended. Id. There was likewise no evidence the defendant had an obligation to keep the money intact for the benefit of the plaintiff. Id. It was necessary to show that the same money the defendant received was to be held for the benefit of the plaintiff. Id.
Conversion of money in the form of a check is more akin to the bag of money being credited to the wrong bank account or the envelope containing money being delivered to the wrong person. Unlike in Mitchell where the plaintiff did not pay the money to the defendant, could not establish that the money was for its benefit, that the defendant had an obligation to hold the money for the plaintiff or that it otherwise required a 50% deposit, a check reflects money delivered at one time, in one act, and in one mass. Thus, it is readily identifiable and properly the basis of a conversion claim.
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