thyroff v nationwide 09 - 1 Thyroff v. Nationwide Mutual...

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Thyroff v. Nationwide Mutual Insurance Company 8 N.Y. 3d 283 (2007) New York Court of Appeals Graffeo, J. The United States Court of Appeals for the Second Circuit has certified a question to us that asks whether the common-law cause of action of conversion applies to certain electronic computer records and data. Based on the facts of this case, we hold that plaintiff may maintain a conversion claim. I Plaintiff Louis Thyroff was an insurance agent for defendant Nationwide Mutual Insurance Company. In 1988, the parties had entered into an Agent's Agreement that specified the terms of their business relationship. As part of the arrangement, Nationwide agreed to lease Thyroff computer hardware and software, referred to as the agency office-automation (AOA) system, to facilitate the collection and transfer of customer information to Nationwide. In addition to the entry of business data, Thyroff also used the AOA system for personal e-mails, correspondence and other data storage that pertained to his customers. On a daily basis, Nationwide would automatically upload all of the information from Thyroff's AOA system, including Thryoff's personal data, to its centralized computers. The Agent's Agreement was terminable at will and, in September 2000, Thyroff received a letter from Nationwide informing him that his contract as an exclusive agent had been cancelled. The next day, Nationwide repossessed its AOA system and denied Thyroff further access to the computers and all electronic records and data. Consequently, Thyroff was unable to retrieve his customer information and other personal information that was stored on the computers. Thyroff initiated an action against Nationwide in the United States District Court, asserting several causes of action, including a claim for the conversion of his business and personal information stored on the computer hard drives. In response to Nationwide's motion to dismiss, District Court held that the complaint failed to state a cause of action for conversion because Thyroff did not allege that Nationwide exercised dominion over the electronic data to his exclusion and it was undisputed that Nationwide owned the AOA system. In his appeal to the United States Court of Appeals for the Second Circuit, Thyroff sought reinstatement of his conversion cause of action, along with other relief. Nationwide countered that a conversion claim cannot be based on the misappropriation of electronic records and data because New York does not recognize a cause of action for the conversion of intangible property. The Second Circuit determined that the issue was unresolved in New York and therefore certified the following question of law to this Court: is a claim for the conversion of electronic data cognizable under New York law? II
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thyroff v nationwide 09 - 1 Thyroff v. Nationwide Mutual...

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