Farmers Ins. Exchange v. Zerin – Case Brief Summary (California)

In Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, an insurance company paid its insureds' claims. Under the policy, the company was entitled to recover from the insureds any money they received from third parties up to the extent of its payment. When the insureds recovered money, they refused to pay, and the company sued for conversion. However, the trial court granted the insureds' motion to dismiss that claim. (Id. at pp. 450-451.) On appeal, the court affirmed.

The court explained, " 'Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion are the plaintiff's ownership or right to possession of the property at the time of the conversion; the defendant's conversion by a wrongful act or disposition of property rights; and damages. It is not necessary that there be a manual taking of the property; it is only necessary to show an assumption of control or ownership over the property, or that the alleged converter has applied the property to his own use. ' Money can be the subject of an action for conversion if a specific sum capable of identification is involved. " (Farmers, supra, 53 Cal.App.4th at pp. 451-452.)

The court continued, "Neither legal title nor absolute ownership of the property is necessary. A party need only allege it is 'entitled to immediate possession at the time of conversion.' However, a mere contractual right of payment, without more, will not suffice." (Farmers, supra, 53 Cal.App.4th at p. 452.)