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Great American Insurance Co. v. Nextday Network Hardware Corp.
United States District Court for the District of Maryland
73 F. Supp. 3d 636 (2014)
Christopher Crowe was a network analyst at Vectren Corporation (Vectren), an information technology company. Crowe stole equipment from Vectren worth over $900,000 and sold it on Ebay to Nextday Network Hardware Corporation (Nextday) (defendant). Nextday resold some of the equipment. Crowe was eventually found out and arrested. The police informed Nextday that the equipment was stolen. Nextday nonetheless continued selling the equipment it had purchased from Crowe. Vectren’s insurer, Great American Insurance Company (Great American) (plaintiff), paid Vectren’s claims for the stolen equipment. Great American then sued Nextday, alleging conversion of the equipment, which is like alleging a type of theft. Nextday filed a motion to dismiss the conversion claim. Nextday argued that, as a buyer in the ordinary course of business, it was protected under the entrustment doctrine in Uniform Commercial Code (UCC) § 2-403(2).
Rule of Law
Holding and Reasoning (Chuang, J.)
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