Fraud Law Resources for Oregon and Washington
Damages for Conversion by Fiduciary: The Value of the Property Plus Prejudgment Interest
Generally the measure of damages for breach of fiduciary duty resulting in conversion is the value of the property. The Restatement 2d of Agency, § 402 provides:
(1) An agent is subject to liability to the principal for the value of a chattel, a chose in action, or money which he holds for the principal and to the immediate possession of which the principal is entitled, together with interest thereon if the amount is liquidated, or damages, if the agent:
(a) intentionally or negligently destroys it or causes its loss;
(b) uses it for his own purposes under an adverse claim;
(c) unreasonably refuses to surrender it on demand;
(d) manifests that he will not surrender it except on conditions which he is not privileged to exact;
(e) makes delivery of it to a person to whom he is not authorized to deliver it;
(f) improperly causes the title or indicia of title to be placed in his own name, if either this is done in bad faith or the thing substantially depreciates in value while the title is so held because of his wrongful conduct;
(g) deviates substantially from his authority in its transfer to a third person in a sale or purchase; or
(h) intentionally and substantially deviates from his authority in dealing with the possession of the thing, and the chattel suffers substantial harm during the course of such wrongful dealing or because of it.
(2) An agent who deviates substantially from his authority in the transfer of land belonging to the principal or who, in bad faith, causes the title of such land to be placed in his own name, is subject to liability to the principal for the value of the land.The Principal is entitled to prejudgment interest of 12 percent per annum (judgment rate) on all liquidated claims.