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Criteria for Judicial Estoppel Not Met/Conversion Action Cannot Be Based Upon a Right To Payment

The Second Department determined that, although the criteria judicial estoppel had not been met and Supreme Court should not have dismissed the conversion cause of action on that ground, the court properly dismissed the conversion cause of action. The court explained that the mere right to payment cannot be the basis of conversion:

“Under the doctrine of judicial estoppel or inconsistent positions, a party who assumes a certain position in a prior legal proceeding and secures a favorable judgment therein is precluded from assuming a contrary position in another action simply because his or her interests have changed” … . “The doctrine rests upon the principle that a litigant should not be permitted . . . to lead a court to find a fact one way and then contend in another judicial proceeding that the same fact should be found otherwise'” … .

Here, the Supreme Court erred in, in effect, applying the doctrine of judicial estoppel as a ground for directing the dismissal of the second cause of action, which alleged conversion. The plaintiff’s allegations in a prior action entitled Barker v Hussain, commenced in the Supreme Court, Nassau County, under Index No. 6382/11, were neither sufficiently definite nor so clearly inconsistent with her current position in this action so as to warrant the application of the doctrine of judicial estoppel against her … . * * *

A cause of action alleging conversion should be dismissed when the plaintiff does not allege “legal ownership or an immediate right of possession to specifically identifiable funds and that the defendant exercised an unauthorized dominion over such funds to the exclusion of the plaintiff’s rights” … . “Moreover, the mere right to payment cannot be the basis for a cause of action alleging conversion since the essence of a conversion cause of action is the unauthorized dominion over the thing in question'” … . In other words, “[t]angible personal property or specific money must be involved” … . Barker v Amorini, 2014 NY Slip Op 06931, 2nd Dept 10-15-14

 

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