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Medical Recovery Services, LLC v. Bonneville Billing and Collections

January 18, 2013

MEDICAL RECOVERY SERVICES, LLC, PLAINTIFF-RESPONDENT,
v.
BONNEVILLE BILLING AND COLLECTIONS, INC.,
DEFENDANT-APPELLANT.



Appeal from the District Court of the Seventh Judicial District, State of Idaho, Bonneville County. Hon. Dane H. Watkins, Jr., District Judge. Hon. Linda J. Cook, Magistrate.

The opinion of the court was delivered by: Melanson, Judge

2013 Opinion No. 4

Stephen W. Kenyon, Clerk

Order of the district court, on intermediate appeal from the magistrate, vacating award of summary judgment, reversed.

Bonneville Billing and Collections, Inc. (BBC) appeals from the district court's order, on intermediate appeal, vacating the magistrate's award of summary judgment in BBC's favor. For the reasons set forth below, we reverse and reinstate the judgment of the magistrate.

I. FACTS AND PROCEDURE

BBC is a collection agency which had outstanding accounts for a debtor. Medical Recovery Services (MRS) is also a collection agency and had outstanding accounts for the same debtor. In the summer of 2008, BBC received three checks from the debtor's employer, payable to BBC, for a total amount of $1,083.21. Because BBC had an open account against the debtor, it assumed that a voluntary wage assignment had occurred in which the debtor would pay off the amount owed. Unbeknownst to BBC at the time, these checks were mailed in error and were intended to be sent to the Bonneville County Sheriff's Office in accordance with a continuing garnishment of wages obtained by MRS. When MRS became aware of the mistaken payment, it contacted BBC and demanded that such funds be turned over to MRS. BBC refused to do so, and MRS subsequently brought suit, alleging conversion and unjust enrichment. MRS also discontinued the garnishment against the debtor, despite an outstanding balance in addition to the mistaken payments. Both parties moved for summary judgment. The magistrate granted BBC's motion and denied MRS's motion. Following summary judgment, the magistrate also awarded attorney fees to BBC. MRS appealed to the district court, which reversed the magistrate on the grounds that BBC unlawfully converted MRS's property and that BBC was unjustly enriched at MRS's expense. BBC appeals.

II. STANDARD OF REVIEW

On review of a decision of the district court, rendered in its appellate capacity, we review the decision of the district court directly. Losser v. Bradstreet, 145 Idaho 670, 672, 183 P.3d 758, 760 (2008). When reviewing an order for summary judgment, this Court applies the same standard of review that was used by the trial court in ruling on the motion for summary judgment. Vreeken v. Lockwood Eng'g, B.V., 148 Idaho 89, 101, 218 P.3d 1150, 1162 (2009).

Summary judgment under I.R.C.P. 56(c) is proper only when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. On appeal, we exercise free review in determining whether a genuine issue of material fact exists and whether the moving party is entitled to judgment as a matter of law. Edwards v. Conchemco, Inc., 111 Idaho 851, 852, 727 P.2d 1279, 1280 (Ct. App. 1986). When assessing a motion for summary judgment, all controverted facts are to be liberally construed in favor of the nonmoving party. Furthermore, the trial court must draw all reasonable inferences in favor of the party resisting the motion. G & M Farms v. Funk Irrigation Co., 119 Idaho 514, 517, 808 P.2d 851, 854 (1991); Sanders v. Kuna Joint Sch. Dist., 125 Idaho 872, 874, 876 P.2d 154, 156 (Ct. App. 1994).

III. ANALYSIS

A. Conversion

BBC argues that the district erred by vacating the magistrate's award of judgment in favor of BBC on the conversion claim. BBC asserts the checks in possession of BBC were not the legal property of MRS, either because no lien ever attached under the garnishment statutes or, after the employer mailed them to BBC instead of the sheriff's office, any existing lien was extinguished. MRS contends that, because it had a continuing garnishment on the debtor's wages, it possessed a lien on the checks enabling it to maintain an action for conversion.

Generally, conversion is any distinct act of dominion wrongfully exerted over another's personal property in denial or inconsistent with his or her rights therein depriving him or her of possession, permanently or for an indefinite time. Schlieff v. Bistline, 52 Idaho 353, 357, 15 P.2d 726, 728 (1932). An action for conversion arises at the moment such property is wrongfully taken or converted. Peasley Transfer & Storage Co. v. Smith, 132 Idaho 732, 743, 979 P.2d 605, 616 (1999). Intent is not a necessary element for conversion--all which is required is that the defendant exercised dominion or control over the property of another. Id. However, in such cases where the defendant is unaware of the rights with which he or she is interfering, a proper demand for possession by the owner must be made, followed by the possessor wrongfully refusing delivery. Id. at 743-44, 979 P.2d at 616-17. Actual possession of the property by the owner is not necessary; all that is required is either title to the property or a "right to possess the property at the time of the conversion." W. Idaho Prod. Credit Ass'n v. Simplot Feed Lots, Inc., 106 Idaho 260, 262, 678 P.2d 52, 54 (1984). Last, in certain circumstances, a lien on ...


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