Contractor's License is Intangible Personal Property that is Subject to a Claim for Conversion
In M.C. Multi-Family Dev. v. Crestdale Assoc., 124 Nev. Adv. Op. No. 77 (Oct. 2, 2008), the Nevada Supreme Court concluded that a contractor's license is the personal property of the entity or individual named on the license. Therefore, it is subject to a claim of conversion if another entity or individual exercises "wrongful dominion" over the license. The qualifying employee of Walter Homes, Ltd. used Walter Homes' contractor's license to develop real property under a separate company, Crestdale Associates, Ltd., without the permission of the majority interest owners of Walter Homes. During trial, after the plaintiff's case in chief, the district court entered a directed verdict against the plaintiff's conversion claim. The district court found that Crestdale Associates had not "taken" the license.
On appeal,
the Nevada Supreme Court determined first that a contractor's license embodies
the intangible rights of the entity or person named on the license, and it is
therefore intangible personal property subject to a conversion claim under
Nevada law. Second, the Court concluded that a claimant for conversion of a
contractor's license need not establish a physical "taking" of the license.
"While the unauthorized use of a contractor's license does not involve an actual
physical appropriation or 'taking' as the district court concluded, it
nonetheless may constitute an act inconsistent with the rights of the
titleholder. . . ." Accordingly, the Court reversed the district court's
directed verdict and remanded the case for a jury trial on the conversion
claim.
Note to qualified employees:
The Court
specifically held that a person's status as the qualified employee does not give
that person an "ownership or possessor interest in the corporate contractor's
license and . . . such license can only be used by the individual or entity to
which it is issued."
Posted by Anthony Golden at 6:37 AM |
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Categories: Construction | Nevada