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A Manhattan judge has relied on analogy to determine that the common-law concept of conversion — the wrongful retention of another person’s physical property — applies to electronic records. Supreme Court Justice Herman Cahn held that a terminated real estate agent who was prevented from accessing her work computer to obtain an electronic list she kept has a conversion cause of action against her former employer, the Corcoran Group. “Plaintiff had an ‘access code’ which presumably protected the materials she put on her computer from being read by, or forwarded to, others, without her consent,” Justice Cahn wrote in Shmueli v. The Corcoran Group, 104824/03, in which he denied Corcoran’s motion to dismiss the conversion claim. “This would be similar to a paper list being kept in plaintiff’s desk or file cabinet, furnished to her by Corcoran. Either the computer or the desk or the file cabinet could, in final analysis, be opened over plaintiff’s objection by someone who had another key or a record of the access code.” Sarit Shmueli was retained by Corcoran as “an independent contractor real estate agent” in 1996, according to the decision. Corcoran executive vice president Tresa Hall fired Shmueli in Hall’s office in 2002. When Shmueli returned to her office after her termination, she discovered her computer-access code had been changed, she claimed. She could no longer retrieve her records, including a detailed list of all the deals in which she participated over the past 14 years, dating back some eight years before she joined Corcoran. Shmueli initiated an action against Hall and Corcoran, one of New York City’s most well-known realtors, alleging conversion and misappropriation of proprietary information, among other things. “The question is,” according to Cahn’s decision, “does the common law tort of conversion become an extinct vestige of the past as to documents maintained on a computer, merely because traditional definitions of documents evolve over time to the point where wood pulp is no longer the only required medium upon which to record data?” Their lack of wood pulp notwithstanding, Shmueli’s electronic records still comprised property, Cahn ruled. The history of “conversion” has centered “exclusively on the physical theft” of tangible property, according to Cahn. “Property,” he added, includes much that is not tangible. Previous conversion causes of action have been allowed for the taking of trade orders and stock options, he noted, citing Hartford Accident & Indem. Co. v. Walston & Co., 21 NY2d 219. In Hartford, the Court of Appeals ruled that a person has the same ownership rights in “intangible personal property” as in, for example, a watch. Cahn extended that analogy to the present case. “There should be no reason why that practical view should not apply equally to the present generation of documents — electronic documents — which are just as vulnerable to theft and wrongful transfer as paper documents, if not more so,” he concluded. Like Internet domain names and ideas for Internet-based businesses, electronic documents are property capable of being converted, Cahn ruled. Barry M. Viuker of Morris, Duffy, Alonso & Faley represented Shmueli and could not be reached for comment. John J. Pribish and Michael A. Rowe of Saul Ewing, who represented the defendants, also could not be reached for comment.

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