AROMA WINES & EQUIPMENT, INC V COLUMBIA DISTRIBUTION SERVICES, INC
Docket Nos. 148907 and 148909
Michigan Supreme Court
Decided June 17, 2015
497 Mich. 337
Argued March 10, 2015 (Calendar No. 1). Chief Justice: Robert P. Young, Jr. Justices: Stephen J. Markman, Mary Beth Kelly, Brian K. Zahra, Bridget M. McCormack, David F. Viviano, Richard H. Bernstein. Reporter of Decisions: Corbin R. Davis.
This syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader.
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
In a unanimous opinion by Justice KELLY, the Supreme Court held:
The statutory action for conversion under
- 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 underMCL 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. - 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
AROMA WINES & EQUIPMENT, INC., Plaintiff/Counterdefendant-Appellee/Cross-Appellant, v COLUMBIAN DISTRIBUTION SERVICES, INC., Defendant/Counterplaintiff-Appellant/Cross-Appellee.
Nos. 148907 and 148909
Michigan Supreme Court
FILED June 17, 2015
KELLY, J.
KELLY, J.
By 2005 PA 44, the Legislature amended
We hold that “converting property to [that] person’s own use,” as used in
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
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
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
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
[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
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
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
We begin, then, with the text of
- 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:
- Another person’s stealing or embezzling property or converting property to the other person’s own use.
- 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.
- The remedy provided by this section is in addition to any other right or remedy the person may have at law or otherwise.18
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
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
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
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
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
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,
“(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
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,
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,
In 2005, the Legislature amended
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
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
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 and33 .]
C. DEFINITION OF “OWN USE”
The word “use” is one of the most common words in the English language52 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
1 a : the act or practice of employing something : EMPLOYMENT, APPLICATION <he made good ~ of his spare time> b : the fact or state of being used <a dish in daily ~> . . . 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
The Court of Appeals thus implicitly acknowledged the placement of the word “use” within
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
Accordingly, we agree with the Court of Appeals that someone alleging conversion to the defendant’s “own use” under
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
Under this standard, our application of
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,
[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
V. CONCLUSION
Although its language is rooted in common-law conversion, the tort established in
Mary Beth Kelly
Robert P. Young, Jr.
Stephen J. Markman
Brian K. Zahra
Bridget M. McCormack
David F. Viviano
Richard H. Bernstein