On March 27, 2024, Justice Livote of the Queens County Commercial Division issued a decision in Pagoulatos v. Trahanas, 2024 NY Slip Op 50352(U), holding that a conversion claim cannot be based on the misappropriation of a license, explaining:
A conversion takes place when someone, intentionally and without authority, assumes or exercises control over personal property belonging to someone else, interfering with that person’s right of possession. To establish a cause of action in conversion, the plaintiff must show legal ownership or an immediate superior right of possession to a specific identifiable thing and must show that the defendant exercised an unauthorized dominion over the thing in question, to the alteration of its condition or to the exclusion of the plaintiff’s rights. Tangible personal property or specific money must be involved. Here, Plaintiffs’ derivative claim is based on the alleged conversion of EGB’s rights to the license, and Plaintiffs’ direct claim is based on the alleged conversion of Plaintiffs’ membership interests in EGB, and Plaintiffs’ belongings stored in EGB’s office. With respect to the derivative claim, Plaintiffs fail to identify tangible personal property or a specifically identifiable thing. A license is intangible. The license is a contract granting EGB the right to operate and manage the Licensed Premises; it is not tangible property. Thus, as a matter of law, Defendants could not have converted the license. Accordingly, the branch of the motion to dismiss Plaintiffs’ sixth cause of action for conversion is granted.
Plaintiffs’ seventh cause of action is a direct claim for conversion. Plaintiffs allege that Defendants have prevented them from accessing or retrieving their computer from EGB’s office. The computer is specifically identifiable tangible personal property. Thus, Plaintiffs have stated a cause of action for conversion.
(Internal quotations and citations omitted).