Chapter 53 - § 53.21 • CIVIL THEFT|CONVERSION|UNJUST ENRICHMENT

• Jurisdiction: Colorado

§ 53.21 • CIVIL THEFT/CONVERSION/UNJUST ENRICHMENT

In Scott v. Scott, 2018 COA 25, the Colorado Court of Appeals reversed the trial court's order dismissing the claims of the plaintiff, the decedent's first wife (Roseann), against the decedent's second wife (Donna), for conversion and unjust enrichment for failure to state a claim.

When Roseann's marriage to the decedent was dissolved, their separation agreement provided that the decedent's life insurance policies were to be maintained until Roseann remarried, and at that time the beneficiaries could be changed to the children of the parties. Upon emancipation of the children, if Roseann had remarried, the decedent could change the beneficiary to whomever he wished.

After the divorce, the decedent married Donna and remained married to her until his death. Roseann never remarried. A few years before the decedent died and decades after his divorce from Roseann, the decedent changed the named beneficiary on his life insurance policies to Donna. When the decedent died, Donna received the proceeds from his life insurance policies. Roseann sent a demand letter to Donna, requesting the proceeds pursuant to the separation agreement. The proceeds were placed in a trust account pending the outcome of the litigation.

Roseann's complaint against Donna alleged a mix of legal and equitable claims, including civil theft, conversion, and unjust enrichment. Donna moved to dismiss all three claims for failure to state a claim pursuant to C.R.C.P. 12(b)(5). The Colorado Court of Appeals upheld the trial court in dismissing Roseann's civil theft claim because of lack of any plausible evidence of Donna's intent to permanently deprive Roseann of insurance policy proceeds. The court of appeals held that in order to state a claim for civil theft against the taker of stolen property under C.R.S. § 18-4-405, the plaintiff must allege that the defendant knowingly obtains, retains, or exercises control over anything of value of another without authorization or by threat or deception and acts intentionally or knowingly in ways that deprive the other person of the property permanently. Thus, civil theft requires specific intent of the defendant to permanently deprive the owner of the benefit of the property. Van Rees v. Unleaded Software, Inc., 373 P.3d 603 (Colo. 2016).

However, the court of appeals also held that the trial court erred in dismissing the conversion and unjust enrichment claims because Roseann had plausible claims that she had a vested and irrevocable interest in the insurance...