Minnesota Civil Theft Statute and Conversion

What Does Minnesota’s Civil Theft Statute Provide?

Minnesota’s civil theft statute makes a person who steals personal property liable to its owner for the property’s value plus a punitive amount. Under Minn. Stat. § 604.14, subd. 1, “A person who steals personal property from another is civilly liable to the owner of the property for its value when stolen plus punitive damages of either $50 or up to 100 percent of its value when stolen, whichever is greater.”

The Minnesota Court of Appeals summarized the remedies in TCI Business Capital, Inc. v. Five Star American Die Casting, LLC, 890 N.W.2d 423 (Minn. App. 2017): “The statute authorizes potent remedies: liability for the value of the property stolen and punitive damages in the same amount.” The statute’s own words make the punitive amount a ceiling, “up to 100 percent of its value when stolen,” so an owner who proves a $20,000 theft can recover the $20,000 plus up to another $20,000.

Three limits come from the statute’s own words. The claim belongs to “the owner of the property,” so ownership must be shown; my page on proving ownership in a Minnesota conversion case covers that proof. The property must be “personal property.” The value is measured “when stolen,” not at trial.

What Counts as Stealing Under the Civil Theft Statute?

In TCI, the Court of Appeals held that the word “generally means that a person wrongfully and surreptitiously takes another person’s property for the purpose of keeping it or using it.” The statute does not define the word, and the court quoted a dictionary definition: “[t]o take or appropriate without right or leave and with intent to keep or make use of wrongfully.” The court said “steals” does not include moving property to another person and back to the owner “if there is no intent to keep or use the property or to allow another person to keep or use the property.”

In TCI, a company officer falsified records and moved company money by wire transfer to make a customer’s debt look smaller, planning to reverse the entries later. The court said “There is no evidence that Flynn intended to keep the money at issue or that he actually kept it,” and no evidence that he used it or “that he intended to allow Five Star,” the customer, “to so use it.” It concluded that “In light of the unusual circumstances of this case,” the officer did not steal the money, and it affirmed summary judgment for him on civil theft. For money in an intangible form, the court said it is used “only if a person spends the money or invests it.” Judge Reyes dissented on this point and would have read “steal” to include appropriating money to make wrongful use of it.

TCI also rejected an earlier approach. Two federal trial court decisions had “interpreted the civil-theft statute expansively by incorporating the concept of criminal theft.” The Court of Appeals answered that “there is no textual basis for interpreting the civil-theft statute in that manner because the plain language of the statute does not use the word ’theft.’” TCI is the published Minnesota appellate decision on the word, so its narrower reading is the one to plan around.

How Is Conversion Different From Civil Theft?

Conversion is a common-law claim that reaches serious, intentional interference with another’s personal property, without proof that the taker meant to keep or use it. In Christensen v. Milbank Insurance Co., 658 N.W.2d 580 (Minn. 2003), the Minnesota Supreme Court, quoting earlier authority, defined conversion as “an act of willful interference with [the personal property of another], done, without lawful justification, by which any person entitled thereto is deprived of use and possession.” On intent, the court quoted the rule that “The intention necessary to subject to liability one who deprives another of the possession of his chattel is merely the intention to deal with the chattel so that such dispossession results.”

The intent required differs from civil theft. Christensen quoted the rule that “It is not necessary that the actor intend to commit what he knows to be a trespass or a conversion.” The same passage requires that the actor’s act be one “which he knows to be destructive of any outstanding” possessory right, “if such there be.” That requirement defeated the conversion claim in TCI on the same facts, because the results the officer intended “would not have deprived TCI of possession of a property interest ‘permanently or for an indefinite length of time,’ as required by the caselaw concerning conversion.”

A refusal to give property back can be enough. In Williamson v. Prasciunas, 661 N.W.2d 645 (Minn. App. 2003), the court quoted an earlier decision: “Wrongfully refusing to deliver property on demand by the owner constitutes conversion.” A holder who refuses only until the claimant proves ownership is not a converter when that condition has a reasonable purpose, but the holder must give the claimant a chance to prove it. In McKinley v. Flaherty, 390 N.W.2d 30 (Minn. App. 1986), the Court of Appeals, relying on an earlier decision, stated that “where the refusal to deliver the property is qualified and the qualification has a reasonable purpose, the bailee is not a converter,” and that one such condition “is that the owner first prove his title or right to possession.” The holder there lost that defense “because he never gave respondent an opportunity to prove the property was hers until she brought suit against him.”

Money is harder to fit into conversion. In TCI, the Court of Appeals read its own precedent to mean “a conversion claim is viable with respect to money only if the money is in a tangible form (such as a particular roll of coins or a particular stack of bills) and is kept separate from other money.” The court did not decide whether money in intangible form, moved by wire transfer, can be converted, because it ruled on intent instead. The trade-off for a plaintiff is the remedy: conversion has no built-in punitive amount like § 604.14. My pages on what a plaintiff must prove for conversion and on defenses to a conversion claim cover each side in detail.

How Do Punitive Damages Work in a Civil Theft Claim?

The civil theft statute sets its own punitive amount: at least $50, and up to 100% of the property’s value when stolen. That figure comes from § 604.14, subd. 1. The “up to” wording leaves the amount to the fact finder. In OnePoint Solutions, LLC v. Borchert, 486 F.3d 342 (8th Cir. 2007), a federal appeals court applying Minnesota law said that “‘up to 100 percent’ caps the punitive award and makes clear that not every victim is entitled to the full punitive recovery.”

Punitive damages on other claims follow a different procedure. Under Minn. Stat. § 549.191, “Upon commencement of a civil action, the complaint must not seek punitive damages.” Instead, “After filing the suit a party may make a motion to amend the pleadings to claim punitive damages.” Under Minn. Stat. § 549.20, subd. 1, “Punitive damages shall be allowed in civil actions only upon clear and convincing evidence that the acts of the defendant show deliberate disregard for the rights or safety of others.”

The two tracks meet in Williamson. The owner moved for summary judgment on her conversion claim and, in the same motion, for permission to amend her complaint to seek punitive damages under § 549.191. The district court denied the amendment “because she had already been awarded $12,000 in punitive damages,” the theft statute’s amount equal to the jewelry’s value. The Court of Appeals held: “We conclude that it was within the discretion of the district court to deny the motion to seek additional punitive damages.” OnePoint, following Williamson, concluded that a civil theft plaintiff may seek the statute’s punitive amount “without receiving permission from the court to amend its complaint to seek punitive damages.” That is a federal court’s reading, and TCI stated the weight of such a reading: “A federal court’s interpretation of Minnesota law is not binding on this court, though it may have persuasive value.”

What Happens to the Claim When the Property Comes Back?

Getting the property back affects only liability for its value; it does not affect the punitive amount under the civil theft statute. Minn. Stat. § 604.14, subd. 5 provides: “The recovery of stolen property by a person does not affect liability under this section, other than liability for the value of the property.”

Williamson shows how this plays out. A home seller left two pieces of jewelry in a wall safe and gave the buyers the combination. The buyers denied having the jewelry for years, to her and to the police, until a relative told her otherwise and the buyers turned it over to the police. The owner got her jewelry back, and the Court of Appeals noted that she “also has received a punitive damage award equal to the property’s value.”

The same case carries a timing point. The court held that the buyers’ fraudulent concealment tolled the statute of limitations until she learned they had the jewelry. To toll it that way, she had to show that the buyers’ statements concealed her potential claim, that “the statement or statements were intentionally false,” and that “the concealment could not have been discovered by reasonable diligence.” The court pointed to her attorney’s demand for the jewelry and her police report as that diligence. Each claim carries its own limitations period, and my page on the statute of limitations for conversion in Minnesota covers the deadlines.

How Does a Civil Theft Claim Relate to a Criminal Case?

A civil theft claim does not depend on any criminal case. Minn. Stat. § 604.14, subd. 4 provides: “The filing of a criminal complaint, conviction, or guilty plea is not a prerequisite to liability under this section.” The same subdivision protects the person who pays: “Payment or nonpayment may not be used as evidence in a criminal action.”

The criminal track has its own money remedy. Under Minn. Stat. § 611A.04, subd. 1, “A victim of a crime has the right to receive restitution as part of the disposition of a criminal charge or juvenile delinquency proceeding against the offender if the offender is convicted or found delinquent.” A civil lawsuit does not cost a victim that right: “An actual or prospective civil action involving the alleged crime shall not be used by the court as a basis to deny a victim’s right to obtain court-ordered restitution under this section.” Under § 611A.04, subd. 3, “The offender shall be given credit, in any order for judgment in favor of a victim in a civil action, for any restitution paid to the victim for the same injuries for which the judgment is awarded.”

The two tracks answer to different decision makers. A prosecutor decides whether to charge and what to accept in a plea. The business controls its own civil claim, including whether to settle. A settlement has a criminal-law limit: under Minn. Stat. § 609.42, subd. 1(5), accepting a benefit upon an agreement, “express or implied,” to refrain from giving information that may lead to prosecution, or to abstain from, discontinue, or delay prosecution, can be bribery. The next section quotes the clause with its exception and its penalty.

What Are the Ways to Recover Stolen Property Before a Lawsuit?

A business may be able to recover property or its value without filing suit, through a direct conversation, a written demand, an insurance claim, or a police report. Each fits a different situation:

1. A direct conversation. When the taker is a long-time employee, a business partner, or a customer the business wants to keep, a calm conversation can bring the property back without a dispute. The risk is that the person hides or spends the property once warned.
2. A written demand under the statute. Minn. Stat. § 604.14, subd. 6 provides: “A person may make a written demand for payment for the liability imposed by this section before beginning an action, including a copy of this section and a description of the liability contained in this section.” A demand that encloses the statute shows the recipient the punitive amount before any court is involved.
3. An insurance claim. A crime or employee-dishonesty policy may cover the loss, depending on its terms, so I suggest reading the policy before choosing a path.
4. A police report. A report creates a record and, if a conviction follows, a victim’s restitution right under § 611A.04.

One legal boundary on a demand applies to anyone who writes it. Under Minn. Stat. § 609.27, subd. 1, “Whoever orally or in writing makes any of the following threats and thereby causes another against the other’s will to do any act or forbear doing a lawful act is guilty of coercion.” One listed threat is “a threat to make or cause to be made a criminal charge, whether true or false.” I suggest leaving any mention of criminal charges out of a payment demand, because a demand that ties payment to whether charges are brought reads as that kind of threat. A second boundary applies to whoever accepts the payment: under § 609.42, subd. 1(5), a person who “accepts directly or indirectly a benefit, reward or consideration upon an agreement or understanding, express or implied, that the acceptor will refrain from giving information that may lead to the prosecution of a crime or purported crime or that the acceptor will abstain from, discontinue, or delay prosecution therefor, except in a case where a compromise is allowed by law” is “guilty of bribery and may be sentenced to imprisonment for not more than ten years or to payment of a fine of not more than $20,000, or both.”

An employer has another boundary. Under Minn. Stat. § 181.79, subd. 1, “No employer shall make any deduction, directly or indirectly, from the wages due or earned by any employee, who is not an independent contractor, for lost or stolen property” unless the employee voluntarily authorizes the deduction in writing after the loss, or a court holds the employee liable. Any authorization “shall set forth the amount to be deducted from the employee’s wages during each pay period,” and under subdivision 1(b), “A deduction may not be in excess of the amount established by law as subject to garnishment or execution on wages.” The statute adds: “Such authorization shall not be admissible as evidence in any civil or criminal proceeding.” Under subdivision 1(c), the section does not apply “in cases where a contrary provision in a collective bargaining agreement exists.” My page on employee theft walks through the first steps after an internal theft.

What Does the Statute Add for Retail Stores?

The civil theft statute gives retail stores two specific rules: stolen merchandise is valued at its retail price, and a shopping-cart claim needs a posted notice. Under § 604.14, subd. 1, “If the property is merchandise stolen from a retail store, its value is the retail price of the merchandise in the store when the theft occurred.” That measure sets both the value recovery and the cap on the punitive amount.

Under subdivision 2, “In order to recover under subdivision 1 for the theft of a shopping cart, a store must have posted at the time of the theft a conspicuous notice describing the liability under subdivision 1.” A store without that notice cannot use the statute for a cart.

The Court of Appeals in TCI observed that “The statute appears to be intended primarily to provide for a recovery if merchandise or other property is stolen from a retail store.” The statute’s text still reaches any person who steals personal property, and TCI itself applied it to a company officer.

Civil Theft and Conversion Claims in Minnesota

Under TCI, a taking is not civil theft without an intent to keep or use the property, or to allow another person to keep or use it. Conversion does not require that intent; the intent it requires is “merely the intention to deal with the chattel so that such dispossession results,” and conversion carries no built-in punitive amount. A business that lost property can plead both. I suggest that a business accused of taking property test each claim against its own elements, because claims over the same conduct can come out differently. In TCI, the civil theft and conversion claims both failed for lack of intent, while the fraudulent misrepresentation and breach of fiduciary duty claims over the same conduct were remanded “for trial on the issue of damages.” My page on business tort claims covers the related claims, from fraud to interference with contracts.

If someone has taken your company’s property, or your company has been accused of taking someone else’s, email [email protected] with a brief description of what happened. I can then start an intake and conflict check before you send any confidential documents.