Catlin Insurance Company, Inc. v. Danko

Background

Catlin Insurance Company, Inc. provided liability insurance coverage for Able Air Corporation after a 2012 plane crash. Danko Meredith represented the heirs of one person who died in the crash. Able Air settled that heir’s claims for $180,000. Catlin first wired $180,000 to Danko Meredith’s client trust account on April 30, 2018. Two days later, Catlin sent a second $180,000 check to the same account. Catlin said the check was unauthorized and resulted from an accounting error.

The firm initially was confused about the second payment but learned by May or June 2018 that it was duplicative. Catlin later requested that the firm return the money. The firm refused, citing a later mutual waiver agreement related to the plane-crash litigation. The court had previously dismissed Catlin’s breach-of-fiduciary-duty claim, leaving claims for conversion and unjust enrichment.

Summary-judgment standard

Summary judgment is appropriate when the evidence shows no genuine dispute about a fact that could affect the result and the moving party is entitled to judgment under the law. The court viewed the evidence in the light most favorable to Danko Meredith but could not resolve the motion based merely on unsupported factual possibilities.

Conversion

Under California law, conversion means wrongfully exercising control over someone else’s property. Catlin had to show a right to possess the money, wrongful control by Danko Meredith, and resulting damages. The court held that depositing the check into the firm’s client trust account gave the firm sufficient control over the funds. Professional-conduct rules governing trust accounts did not eliminate that control.

The court also held that Danko Meredith did not need to use the money for its own benefit, or still possess it outside the account, to be responsible for conversion. The undisputed evidence showed that Catlin requested the return of an identifiable sum and the firm refused. The court therefore granted summary judgment for Catlin on conversion.

Unjust enrichment

Unjust enrichment requires showing that the defendant received and unjustly kept a benefit at the plaintiff’s expense. The court treated Catlin’s claim as a restitution claim based on a quasi-contract theory. Receiving the duplicate $180,000 payment was a benefit, and the firm had control over the funds.

The court rejected Danko Meredith’s reliance on the mutual waiver agreement for two reasons. First, the court found that the firm was not a party to that agreement; Michael Danko signed it only as the heir’s attorney to approve its form and content. Second, the agreement covered claims arising from the plane-crash incident, the jury trial, and related matters, but the duplicate payment resulted from a separate accounting error and was not litigated at trial. The court found that Danko Meredith knew about Catlin’s mistake and refused to return the money, making the retention unjust. It therefore granted summary judgment for Catlin on unjust enrichment as well.

Disposition

The court granted Catlin’s motion for summary judgment. Catlin clarified that it sought only return of the $180,000 and waived other requests for attorney fees or additional damages. The Clerk was directed to enter judgment for Catlin in the amount of $180,000 and close the case.