BUSINESS LAW
Supreme Court of Alaska (2024)
Ryan Ciemny
In Societe Financial, LLC v. MJ Corporation, 542 P.3d 1159 (Alaska 2024), the supreme court held that a corporation or individual may commit a conversion on money that was wrongfully diverted into its bank account, even if by mistake, because intent to exercise dominion or control does not require fault. (Id. at 1170–71). MJ Corporation (MJ Corp) owned an ATM, supplied the ATM with vault cash, and received a fee for each ATM transaction. (Id. at 1163). Societe Financial (Societe), owned by Dainis, provided processing services for MJ Corp’s ATM and received a minor portion of the transaction fee in exchange, meanwhile MJ Corp received the major portion of the fee and reimbursement for the vault cash. (Id.). MJ Corp discovered that deposits were missing from its bank account, and presented evidence showing that the disputed transfers had erroneously been deposited into Societe’s bank accounts. (Id. at 1163–64). In response, Dainis submitted an affidavit stating that Societe had not intentionally prevented MJ Corp from receiving the ATM funds. (Id. at 1164–65). On appeal, Societe argued that the affidavit creates a genuine issue of material fact as to third element of a conversion claim: intent to interfere with the plaintiff’s possession. (Id. at 1170–72). In affirming the lower court’s decision, the supreme court reasoned that for purposes of conversion, intent to merely exercise dominion or control over the property is all that is required. (Id. at 1171). Thus, the affidavit did not directly contradict the evidence showing intent to exercise dominion and control over the deposits, but rather denied an intent to prevent MJ Corp from receiving the ATM funds, which is a different inquiry. (Id. at 1170, 1172). The supreme court further reasoned that it did not matter whether Societe knew of MJ Corp’s possessory interest, only that Societe intended to obtain a proprietary interest in those funds. (Id. at 1171). Affirming the lower court’s decision as to the conversion claim, the supreme court held that a corporation or individual may commit a conversion on money that was wrongfully diverted into its bank account, even if by mistake, because intent to exercise dominion or control does not require fault. (Id. at 1170–71).
