73 F. Supp. 3d 636
D. Maryland2014Background
- Vectren employee Christopher Crowe stole IT equipment valued at $919,338.05 and sold large quantities via eBay to Next-day Network Hardware Corp. for $228,609.15.
- Great American, Vectren’s insurer, paid Vectren for the loss and sued Nextday, its president Donald Banyong, and unnamed employees for conversion, aiding and abetting conversion, and civil conspiracy.
- Evansville Police notified Nextday in March 2013 that the equipment was stolen; Great American alleges Nextday continued selling remaining items and resisted returning them.
- Defendants moved to dismiss under Fed. R. Civ. P. 12(b)(6); the court treated the motion as a pure Rule 12(b)(6) dismissal (excluding extraneous exhibits) and applied Maryland law.
- The court found the complaint plausibly pleaded conversion, aiding and abetting conversion, and civil conspiracy, and denied the motion to dismiss.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Conversion — whether Nextday can be liable for conversion for buying/selling stolen goods | Nextday purchased and later sold Crowe’s stolen equipment and continued sales after police notice; this is dominion inconsistent with Vectren’s ownership | Entrustment (UCC § 2-403) protects buyers in ordinary course; Nextday was a good-faith buyer/merchant so conversion claim barred | Denied dismissal: complaint plausibly pleads conversion; entrustment provision inapplicable because Crowe was a thief (void title), Nextday cannot be both merchant and protected buyer, and entrustment would not shield Nextday itself from owner’s claim |
| Applicability of UCC entrustment rule (Md. Code Ann., Com. Law § 2-403) | N/A (focused on conversion/aiding/conspiracy) | § 2-403 allows merchants to transfer entruster’s rights to buyers in ordinary course, protecting those buyers | § 2-403 does not apply where the “entruster” is a thief (void title) or where no voluntary entrustment occurred; § 2-403 would protect only downstream buyers, not Nextday if treated as merchant |
| Aiding and abetting conversion — whether buying/selling can constitute aiding | Nextday provided an outlet for Crowe to dispose of stolen goods and allegedly persisted after notice; circumstantial facts support knowing assistance | Purchasing after Crowe’s conversion was lawful; no underlying tort by Nextday | Denied dismissal: complaint alleges facts (below-market bulk purchases, notice of theft, continued sales) supporting that Nextday knowingly aided Crowe’s conversion |
| Civil conspiracy — whether agreement or understanding is plausibly alleged | Conduct and circumstances (large low-price bulk purchases from an atypical seller, continued sales after police notice) permit inference of a common understanding to facilitate conversion | Complaint lacks explicit agreement or meeting of minds | Denied dismissal: conspiracy may be proved circumstantially; facts alleged permit inference of a confederation to facilitate conversion |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard: plausible claim required)
- Allied Inv. Corp. v. Jasen, 731 A.2d 957 (definition of conversion under Maryland law)
- Inmi-Etti v. Aluisi, 492 A.2d 917 (entrustment/UCC § 2-403 inapplicable where seller had void title from theft)
- Robison v. Gerber Prods. Co., 765 F.2d 431 (discussion of entrustment protection for buyers in ordinary course)
- Duke v. Feldman, 226 A.2d 345 (principles for aiding and abetting torts under Maryland law)
- Lloyd v. Gen. Motors Corp., 916 A.2d 257 (elements of civil conspiracy in Maryland)
- United States v. Blackman, 746 F.3d 137 (evidence can support a finding that a defendant acted as a fence in stolen-goods schemes)