Traveltown, Inc. v. Gerhardt Investment Group

586 F. Supp. 256, 1984 U.S. Dist. LEXIS 19459
CourtDistrict Court, N.D. New York
DecidedFebruary 15, 1984
Docket78-CV-594
StatusPublished
Cited by2 cases

This text of 586 F. Supp. 256 (Traveltown, Inc. v. Gerhardt Investment Group) is published on Counsel Stack Legal Research, covering District Court, N.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Traveltown, Inc. v. Gerhardt Investment Group, 586 F. Supp. 256, 1984 U.S. Dist. LEXIS 19459 (N.D.N.Y. 1984).

Opinion

MEMORANDUM-DECISION AND ORDER

McCURN, District Judge.

This constitutes the court’s findings of fact and conclusions of law based upon a non-jury hearing on the issue of damages, liability having been established by default. The background of this diversity action is as follows.

*257 The plaintiff corporation alleged in its complaint that (1) the defendants breached an agreement to arrange financing for plaintiffs commercial development project, and refused to return a consulting and/or finder’s fee of $6,000 paid to The Travelers Corporation d/b/a Murgo & Sanborn, Associates (“Travelers Corporation”) to secure defendants’ services; and (2) the defendants failed to return upon demand certain engineering blueprints that had been sent to Travelers Corporation. The value of the blueprints, as alleged in the complaint, is $30,000.

A default judgment was entered against the defendants on December 20, 1982, but was subsequently vacated with respect to defendants Gerhardt Investment Group and Marketing America, Inc. Memorandum-Decision and order of August 25, 1983. 577 F.Supp. 155. By Order filed that same date, this court held that damages of $6,000 were established with respect to the first cause of action, but that a non-jury hearing was necessary for determination of damages against the defaulting defendant with respect to the second cause of action.

A hearing was held on October 5, 1983, at which plaintiff produced two witnesses and documentary evidence as proof of damages. Defaulting defendant Travelers Corporation did not appear despite notice by mail to it and to its attorney of record.

According to plaintiff’s first witness, Traveltown President Stephen Borgos, the plaintiff corporation was formed to build and operate roadside rest areas that would service various needs of long distance travelers. Plaintiff began its project by engaging the services of Rist-Frost Associates to devise detailed engineering blueprints in accordance with Borgos’ general conception of the project. Rist-Frost prepared such plans at a cost of approximately $35,000, which was duly paid by plaintiff.

Borgos further testified that plaintiff then sought financing for construction of the project, and was referred to defendant Travelers Corporation. At the behest of that defendant, plaintiff sent it a copy of the blueprints for review. Later, after it became evident to plaintiff that the financing would not materialize, Borgos repeatedly demanded that the blueprints be re.turned. They were not.

Plaintiffs next witness, Phil Feena, was one of the engineers associated with RistFrost who had worked on the preparation of the blueprints. Feena testified in some detail as to the means by which Rist-Frost determines the cost of their services, as well as the billing methods common to the engineering field in general. ■ He then offered his professional opinion that the fair market value of the blueprints, based on the cost of preparing them, was $35,000.

Based on the evidence adduced at the hearing, plaintiff now asks that damages of $35,000 be entered into the default judgment against Travelers Corporation. Although the court finds that the cost to plaintiff of preparing the plans was $35,-000, it nevertheless holds that under the circumstances of this case, only nominal damages may be awarded.

“The usual measure of damages for conversion is the value of the property at the time and place of conversion, plus interest.” Fantis Foods, Inc. v. Standard Importing Co., Inc., 49 N.Y.2d 317; 425 N.Y.S.2d 783, 786, 402 N.E.2d 122 (1980). If the property is a type that is dealt in on the market, then the measure of its value is generally determined by reference to the market price. 9 Encyclopedia NY Law Damages § 182 (1965 ed.); 13 N.Y.Jur. § 96 (1960 ed.).

In this instance, however, the property converted is a copy of blueprints that were specially prepared by an engineering firm for the plaintiff. As Feena testified, the blueprints were to some extent “site specific”, and in any event, are not a product that is normally sold on a market. Given the special nature of the property, the absence of a true “market value” is not extraordinary. As noted in 22 Am.Jr.2d Damages § 149 at 215:

*258 There are many instances in which the item of personal property destroyed, injured, or taken has no market value in the normal sense of that term. A family photograph, a specially designed machine, a manuscript, some lecture notes, and plans of a draftsman can each be examples of personal property which have no market value beyond the value of the paper or material which went into their construction.

(Emphasis added). See also, “Measure of Damages for Conversion or Loss of, or Damage to, Personal Property Having No Market Value,” 12 A.L.R.2d 902, 906 (observing that, “creations of writers, draftsmen, and the like ... while designed for commercial ends, cannot be said to have any regular market value.”).

The absence of a market price does not necessarily preclude a determination of value for the purpose of recovering damages from a tortfeasor where there is some alternative rational means of ascertaining value. MacGregor v. Watts, 254 App.Div. 904; 5 N.Y.S.2d 525, 526 (2d Dept.1938) (conversion of two manuscript plays). The primary underlying objective in such instances is the compensation of the injured party for his loss. See "Measure of damages ... no market value,” supra, 12 A.L.R.2d at 906; 13 N.Y.Jur. Damages § 9.

Thus, in instances where a tortfeasor has converted, destroyed, or lost the only embodiment of an architect’s plan, a manuscript, or some other valuable document without an ascertainable market price, courts have fashioned awards based on evidence of the original cost of the property to the plaintiff, or the estimated replacement or reproduction cost. See, e.g., Veeco Instruments, Inc. v. Candido, 70 Misc. 333; 334 N.Y.S.2d 321 (S.Ct. Nassau Cty.1972) (conversion of computer programming data by former employee of plaintiff; award based on programming hours required to reproduce the material so as to restore employer to position it occupied); Newman v. Clayton F. Summy Co., 133 F.2d 465 (2d Cir.1942) (loss of musical manuscript; award based on reasonable worth of time and effort to replace manuscript); Wood v. Cunard S.S. Co., 192 F. 293 (2d Cir.1911) (loss of manuscript manual on Greek grammar; award based on reasonable worth of time and effort to replace manuscript); Austin v. Millspaugh, 909 Miss. 354, 43 So. 305 (1907) (loss of architect’s plans; award based on cost to the plaintiff in producing it); Mather v. American Express Co., 138 Mass. 55 (1884) (converted architect’s plans; award based upon replacement value).

In the instant case, plaintiff has been deprived of a copy of its blueprints; it retains another copy.

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586 F. Supp. 256, 1984 U.S. Dist. LEXIS 19459, Counsel Stack Legal Research, https://law.counselstack.com/opinion/traveltown-inc-v-gerhardt-investment-group-nynd-1984.