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Thyroff v. Nationwide Mut. Ins. Co. - 2007 NY Slip Op 2442, 8 N.Y.3d 283, 832 N.Y.S.2d 873, 864 N.E.2d 1272

Rule:

Electronic records that are stored on a computer and are indistinguishable from printed documents are subject to a claim of conversion in New York.

Facts:

Nationwide Mutual Insurance Company (“Nationwide”) leased Louis Thyroff, an insurance agent, computer hardware and software and the agency office-automation (AOA) system to facilitate the collection and transfer of customer information. When Thyroff’s agreement was terminated, the AOA system was repossessed, and Nationwide denied Thyroff further access to the computers and all electronic records and data, including Thyroff’s customer and other personal information stored on the computers. The conversion claim was dismissed in the federal action. On appeal to the CCA, Nationwide argued that a conversion claim could not be based on the misappropriation of electronic records as New York did not recognize a cause of action for the conversion of intangible property.

Issue:

Does the common-law cause of action of conversion apply to certain electronic computer records and data?

Answer:

Yes

Conclusion:

The court held that the information had value to Thyroff regardless of whether the format in which it was stored was tangible or intangible, the court determined that, in keeping with the contemporary realities of widespread computer use, New York recognized a cause of action for conversion of electronic records that were stored on a computer and were indistinguishable from printed documents.

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