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TRAVELTOWN, INC. v. GERHARDT INV. GROUP

February 15, 1984

TRAVELTOWN, INC., Plaintiff,
v.
GERHARDT INVESTMENT GROUP and Marketing America, Inc., and The Travelers Corporation d/b/a Murgo & Sanborn, Associates, Defendants.



The opinion of the court was delivered by: MCCURN

MEMORANDUM-DECISION AND ORDER

McCURN, District Judge.

 This constitutes the court's findings of fact anc 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.

 The plaintiff corpo10509ement to arrange financing for plaintiff's 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 subsquently 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's 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 returned. They were not.

 Plaintiff's next witness, Phil Feena, was one of the engineers associated with Rist-Frost 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 ordered 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., 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 § 185 (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 the 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:

 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 materials 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 ...


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