Insights

Holiday Movie Lessons About the Law of Business Disputes - Lesson # 1: It’s a Wonderful Life (Unless Mr. Potter Converts Your Property)

By: Ellen D. Marcus

‘Tis the season to watch our favorite holiday movies—again! In my family, the debate over which movies will make this year’s lineup starts well before Thanksgiving. Some are beyond debate. For example, as the season begins, The Sound of Music always brings our hills alive. Later in the season, when we roast the beast with all the trimmings, How the Grinch Stole Christmas plays on repeat.

Even after umpteen viewings, these classics still have lessons to teach us. They are meditations on happiness and meaning, friendship and love, struggle and triumph.

But did you know that holiday film classics also offer insights into business torts and other laws meant to set guardrails on behavior in the business world? These lessons may be harder to appreciate. They jump out at me, though. This is one of the many perks of nearly 25 years of representing clients in high-stakes business disputes. Rather than keep these holiday movie lessons about the law of business disputes to myself, I have made them the subject of my next few blog posts. Consider them an early holiday gift from HCM!

For the first lesson, let’s consider It’s a Wonderful Life because it is. And because it beautifully illustrates the elements of conversion—a tort that often appears in lawsuits between business adversaries but can just as often be misunderstood.

In a critical scene towards the end of the film, Uncle Billy goes to the bank to deposit $8,000 of the Building and Loan’s money. There, he runs into the evil Mr. Potter and—without realizing it—accidentally drops the cash into Mr. Potter’s newspaper. Upon realizing Uncle Billy’s mistake, Mr. Potter pockets the money. He never lets on that he has it. Even when our hero George Bailey (fearing criminal charges and financial ruin that will follow the discovery that the Building and Loan “lost” $8,000) begs him for a loan, Mr. Potter does not let on. That’s how evil he is.

Being evil does not necessarily expose you to liability in a civil lawsuit. But these facts expose Mr. Potter to a powerful claim by the Building and Loan for conversion.

Let me explain. In Virginia and most other jurisdictions, conversion is wrongfully exerting control over another’s property, depriving the owner of possession. Although there are exceptions, money can be the subject of a conversion claim.

Mr. Potter had no right to that $8,000. It was the Building and Loan’s money. By failing to correct Uncle Billy’s mistake, even if he did not intentionally take the money, Mr. Potter wrongfully exerted control over property that was not his, depriving the Building and Loan of possession.

The Building and Loan would of course have to unearth these facts before pursuing a conversion claim. Upon realizing the money is missing, George and Uncle Billy retrace his steps to find it. That fails. They should have then called the Building and Loan’s lawyer about next steps, including reporting the loss to the authorities and further investigation. Instead, George spirals into a dark place, making everything worse until Mary Bailey (arguably the real hero of this holiday classic) comes to the rescue. And then an angel gets his wings. As far as I know, that never happens with my cases, but I will keep listening for the bell.