Understanding Money Conversion Under New Jersey Law

Conversion is an unauthorized act that deprives another person of their property permanently or for an indefinite period. In New Jersey, common law conversion is defined as 'the exercise of any act of dominion in denial of another's title to...chattels, or inconsistent with such title. The elements of conversion in New Jersey are that the property and right to immediate possession thereof belong to the plaintiff, and there is a wrongful act of interference with that right by the defendant. To prove conversion, the plaintiff must show that the defendant assumed and exercised the right of ownership over their goods or chattels without permission and excluded the owner from exercising dominion over them. Money can be the subject of conversion if it is specific, segregated, or identifiable.

Can you convert money under New Jersey Law of Conversion?

Money must be identifiable

Under New Jersey law, conversion is defined as "the exercise of any act of dominion in denial of another's title to...chattels, or inconsistent with such title." This means that the money in question must be identifiable as belonging to the plaintiff and must be capable of being described as a specific fund or amount.

In other words, the plaintiff must be able to prove that the defendant assumed and exercised the right of ownership over their money without permission and excluded the plaintiff from exercising dominion over it. This is supported by the ruling in Marsellis-Warner Corp. v. Rabens, which states that conversion can be thought of as the civil remedy for theft, unlawful taking, or unlawful keeping.

To establish a claim for conversion, the plaintiff must prove the following elements:

• The defendant's unauthorized and wrongful assumption of control, dominion, or ownership of the plaintiff's personal property.
• The plaintiff's right in the property.
• The plaintiff's right to immediate possession of the property, absolutely and unconditionally.
• The plaintiff's demand for possession of the property.

It is important to note that the money in question must be capable of being identified as belonging to the plaintiff. This can be done through a description, such as a specific fund or a determinable amount, as seen in Swervo Entertainment Group, LLC v. Mensch, where an advance deposit qualified as "specific chattel."

Additionally, in New Jersey, a negotiable instrument, such as drafts, checks, money orders, certificates of deposit, and notes, is converted when it is taken by transfer from a person not entitled to enforce the instrument or when a bank makes or obtains payment for a person not entitled to receive it.

Plaintiff must prove ownership

In New Jersey, a plaintiff must prove the following to establish a claim for conversion:

The defendant's unauthorised and wrongful assumption of control, dominion, or ownership

The plaintiff must prove that the defendant assumed control, dominion, or ownership of their personal property without authorisation and in a wrongful manner. This includes situations where the defendant's actions are inconsistent with the plaintiff's rights, even if the defendant acted in good faith without knowing about the plaintiff's rights.

The plaintiff's right in the property

The plaintiff must establish their legal right to the property in question. This can include tangible personal property or, in certain circumstances, money. For example, in Swervo Entertainment Group, LLC v. Mensch, the plaintiff sought the return of a $500,000 good faith deposit, which the court considered as "specific chattel".

The plaintiff's right to immediate possession of the property

The plaintiff must demonstrate that they have an absolute and unconditional right to immediate possession of the property. This means that the plaintiff should be able to prove that they are entitled to possess the property without any conditions or restrictions.

The plaintiff's demand for possession of the property

While not always required, demand for the return of property or money can strengthen a plaintiff's claim. This is particularly relevant when the defendant still possesses the property or funds.

The defendant's exclusion of the plaintiff from exercising dominion

The plaintiff must show that the defendant's actions prevented them from exercising control or ownership over their property. This can include situations where the defendant sold the plaintiff's property without their consent or notification.

The money in question is identifiably the plaintiff's property

In cases involving the conversion of money, the plaintiff must prove that the funds in question are specifically theirs. This can include situations where the money has been adequately identified, described, or segregated in a specific manner.

Defendant's wrongful assumption of control

Conversion is an intentional tort that involves the unlawful taking or keeping of another's property, which can include money. In New Jersey, common law conversion is defined as "the exercise of any act of dominion in denial of another's title to...chattels, or inconsistent with such title".

To prove the defendant's wrongful assumption of control, the plaintiff must show the following:

• The defendant's unauthorized and wrongful assumption of control, dominion, or ownership of the plaintiff's personal property. This includes money and negotiable instruments such as checks, drafts, money orders, and certificates of deposit.
• The plaintiff's right to the property and their right to immediate possession. The plaintiff must show that the money in question was identifiable as their property or that the defendant was obligated to segregate the funds for their benefit.
• A demand for the return of the property by the plaintiff.
• The defendant's exclusion of the plaintiff from exercising dominion over their property.

It is important to note that the defendant's intent to act wrongfully is not necessary to establish conversion. Instead, the plaintiff must prove that the defendant intended to exercise control or dominion over the property, which is inconsistent with the plaintiff's rights.

Plaintiff's right to immediate possession

In New Jersey, common law conversion is defined as "the exercise of any act of dominion in denial of another's title to... chattels, or inconsistent with such title." This can be understood more simply as the civil remedy for theft, for unlawful taking, or for unlawful keeping.

To prove conversion, the plaintiff must prove the following elements by a preponderance of the evidence:

• The defendant's unauthorized and wrongful assumption of control, dominion, or ownership of the plaintiff's personal property.
• The plaintiff's right in the property.
• The plaintiff's right to immediate possession of the property, absolutely and unconditionally.
• The plaintiff's demand for possession of the property.

The plaintiff's right to immediate possession of the property is a critical aspect of a conversion claim. This right must be absolute and unconditional, and the money in question must be specifically identifiable as belonging to the plaintiff. For example, in Swervo Entertainment Group, LLC v. Mensch, the plaintiff sought the return of a $500,000 good faith deposit, which they argued should have been escrowed. The court noted that an advance deposit qualifies as "specific chattel," as it constitutes a determinable amount that was segregated in an escrow account.

In another case, Quan v. Arcotech Uniexpat, Inc., the plaintiff executed a written service agreement with Arcotech, guaranteeing a paid internship offer in the plaintiff's chosen field. The plaintiff paid a $1,000 non-refundable deposit and the remaining balance within 30 days. The refund policy stated that $1,000 of the program tuition was non-refundable if an internship offer was not secured. However, the plaintiff alleged that Arcotech's failure to secure an internship offer entitled them to a refund of the entire $7,250, and that the refusal to authorize the refund constituted wrongful control over their money. The plaintiff's right to immediate possession of the money was a key element of their conversion claim.

In summary, to establish a claim for conversion under New Jersey law, a plaintiff must prove that they had an absolute and unconditional right to the immediate possession of the property or funds in question, and that the defendant wrongfully interfered with that right.

Defendant's interference with plaintiff's right

In New Jersey, common law conversion is defined as "the exercise of any act of dominion in denial of another's title to...chattels, or inconsistent with such title". This means that the defendant need not intend to act wrongfully to convert another's property, but they must have intended to exercise "dominion" or "control" over the property, which is inconsistent with the plaintiff's rights.

To prove conversion, the plaintiff must prove the following elements by a preponderance of the evidence:

• The defendant's unauthorised and wrongful assumption of control, dominion, or ownership of the plaintiff's personal property.
• The plaintiff's right in the property.
• The plaintiff's right to immediate possession of the property, absolutely and unconditionally.
• The plaintiff's demand for possession of the property.

It is essential that the money claimed, or its equivalent, belonged to the plaintiff at all times and that the defendant converted it to their own use. This means that the money cannot represent a general debt or obligation or an indeterminate sum.

In New Jersey, a negotiable instrument, such as certain drafts, checks, money orders, certificates of deposit, and notes, is converted when:

• It is taken by transfer, other than a negotiation, from a person not entitled to enforce the instrument.
• A bank makes or obtains payment with respect to the instrument for a person not entitled to enforce the instrument or receive payment.

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