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Damages for Conversion of Funds May Not Include Purely Speculative Losses
Description Appeals court held that the wrongful attachments of funds was conversion. The party who wrongfully converted the funds must return the money and cover both the attorney fees and lost interest. Damages beyond that must be shown to be more than speculative use of the funds. There must be evidence that the funds had a particular use, and the value of that use was lost.
Topic Real and Personal Property
Key Words Conversion; Wrongful Attachment; Damages
C A S E   S U M M A R Y
Facts Vanderbeek obtained a prejudgment writ of attachment and garnished $1 million that was in Vernon Corporation's bank account. The court later determined that the attachment was improper. It dissolved the writ and dismissed the lawsuit that had been filed. Vernon then sued for lost profits. Vernon contended it intended to use the money to buy a certain stock, which it did after the funds had been released, but by that time the stock price had risen substantially. The trial court granted Vernon its costs, attorney fees, and interest lost on the $1 million while it was attached, but denied the speculative lost profits. Both parties appealed.
Decision "Damages resulting from wrongful attachment are governed by tort principles." The tort is one of conversion. Ordinarily, the measure of damages would be the legal rate of interest for the period of conversion. But the victim may also recover for other damages caused by the wrongful attachment. Such damages are not to be speculative, but should be ones that could have been contemplated at the time of the wrongful act. Vernon had clearly intended to buy $450,000 of the stock in question; it can recover for the lost profits from that purchase not having occurred when it should have. However, the claim that another $550,000 worth of the stock would have been bought was not clear from the evidence, so that was a speculative matter. Only interest can be recovered from the wrongful attachment of that part of the total sum.
Citation Vanderbeek v. Vernon Corp., 2000 WL 1509940 (Ct. App., Colo., 2000)

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