Great American Insurance Co. v. Nextday Network Hardware Corp.
United States District Court for the District of Maryland
73 F. Supp. 3d 636 (2014)
Vectren employee Crowe stole over $900,000 in company equipment and sold it on eBay to Nextday (defendant), which resold some of it even after police informed Nextday the equipment was stolen; Vectren's insurer, Great American (plaintiff), paid Vectren's claim and sued Nextday for conversion. Nextday moved to dismiss, arguing the UCC's entrustment doctrine, protecting good-faith buyers in the ordinary course of business, shielded its purchases from Crowe.
Whether, under the entrustment doctrine in UCC Section 2-403(2), a merchant not authorized to sell goods can pass valid title to a good-faith purchaser only if the true owner voluntarily transferred or entrusted the goods to the merchant.