Judge Christopher K. Lui, Case Number: 23STCV23892, Date: 2024-04-17 Tentative Ruling

Pursuant to California Rule of Court 3.1308(a)(1), the Court does not desire oral argument on the motion addressed herein. Counsel must contact the staff in Department 76 to inform the Court whether they wish to submit on the tentative, or to argue the matter. As required by Rule 3.1308(a), any party seeking oral argument must notify ALL OTHER PARTIES and the staff of Department 76 of their intent to appear and argue.

Notice to Department 76 may be sent by email to smcdept76@lacourt.org or telephonically at 213-830-0776.

Per Rule of Court 3.1308, if notice of intention to appear is not given, the Court may adopt the tentative ruling as the final ruling.

Plaintiff alleges wage and hour violations and termination in retaliation for complaining about his supervisor, Defendant Lee, smoking in the workplace.

Defendants filed a Cross-Complaint alleging that Plaintiff/Cross-Defendant actually resigned and copied or deleted Defendant A&O’s files which contained A&O’s confidential and trade secret information, and using such information to acquire A&O’s clients and vendors for his own.

Plaintiff/Cross-Defendant Jung Jin Park demurs to the Cross-Complaint. Plaintiff/Cross-Defendant reserved the instant hearing as a demurrer with a motion to strike, but only a demurrer was filed. Although opposition and reply briefs were filed in reference to the motion to strike, the Court has no notice of motion to strike and supporting memorandum and thus no basis to rule on the motion to strike.

Plaintiff/Cross-Defendant Jung Jin Park’s demurrer to the Cross-Complaint is OVERRULED as to the eighth cause of action.

The motion to strike is ordered off calendar for failure to file a notice of motion and supporting memorandum as required by Code of Civil Procedure setion 1010 and Rules of Court 3.1110, 3.1112 and 3.1113.

The Declaration of Sang Hyun Park reflects that Cross-Defendant’s counsel satisfied the meet and confer requirement set forth in Civ. Proc. Code, § 430.41.

Cross-Defendant argues that the Cross-Complaint does not allege property which is capable of being converted, as computer files are intangible, and there is no certain or definite value pled.

Cross-Defendant also argues that the Cross-Complaint is uncertain as it omits the dates of conversion, nor the date of discovery.

Cross-Complainant argues that the computer files were property, merged with or reflected in tangible property, capable to being taken and destroyed by Cross-Defendant.

Cross-Complainant also argues that there are sufficient facts pled that the alleged conversion occurred after Cross-Defendant’s verbal altercation with Lee, and the value of the information is $10,077,000.00.

98. Shortly after his verbal altercation with Lee, or later through remote access from his home, Park accessed A&O’s computer system without authorization, as described herein, to make copies of A&O’s files which contained valuable trade secrets and confidential information and subsequently deleted or otherwise destroyed those files.

99. By copying A&O’s computer files for his own use and subsequently deleting those computer files, Park established dominion over A&O’s computer files thereby depriving A&O of its property rights therein.

102. As a direct, actual, and proximate result of Park’s conversion of A&O’s computer files, as alleged, A&O has suffered damages in the amount of $10,077,000.

“ ‘Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion claim are: (1) the plaintiff's ownership or right to possession of the property; (2) the defendant's conversion by a wrongful act or disposition of property rights; and (3) damages. …’ [Citation.]” (Citations omitted.) “ ‘Conversion is a strict liability tort. The foundation of the action rests neither in the knowledge nor the intent of the defendant. Instead, the tort consists in the breach of an absolute duty; the act of conversion itself is tortious. Therefore, questions of the defendant's good faith, lack of knowledge, and motive are ordinarily immaterial. [Citations.]’ [Citation.] The basis of a conversion action ‘ “rests upon the unwarranted interference by defendant with the dominion over the property of the plaintiff from which injury to the latter results. Therefore, neither good nor bad faith, neither care nor negligence, neither knowledge nor ignorance, are the gist of the action.” [*209] [Citations.]’ [Citation.]” (Citations omitted.) The unauthorized transfer of property constitutes a conversion. (Citation omitted.) Money may be the subject of conversion if the claim involves a specific, identifiable sum; it is not necessary that each coin or bill be earmarked. (Citation omitted.)

(Welco Electronics, Inc. v. Mora (2014) 223 Cal.App.4th 202, 208-09 [bold emphasis added].)

Financial information and intangible interests in a check or customer list may be the subject of conversion:

Credit card, debit card, or PayPal information may be the subject of a conversion. In In re Easysaver Rewards Litig., supra, 737 F.Supp.2d 1159, the plaintiffs filed a class action lawsuit against defendants Provide and EMI. The plaintiffs alleged that as a part of the “ ‘revenue generating efforts’ ” of Provide, an operator of several Internet businesses, it “ ‘routinely and fraudulently transmit[ted] its consumers’ credit card, debit card and/or Paypal information (“Private Payment Information”) to its third party marketing partners.’ ” (Id. at p. 1163.) The plaintiffs alleged that EMI was Provide's marketing partner, and EMI “ ‘fraudulently charge[d] the cards or accounts [*213] without permission under the guise that’ Provide's customers have ‘supposedly joined a savings program known as EASYSAVER Rewards, which [EMI] manages on [Provide's] behalf.’ ” (Id. at pp. 1163–1164.) The plaintiffs further alleged that “ ‘the EASYSAVER Rewards program … [was] nothing more than a sham.’ ” (Id. at p. 1164.) The plaintiffs in that case alleged, inter alia, that Provide wrongfully converted their private payment information. (Id. at p. 1179.) Provide filed a motion to dismiss, inter alia, the conversion claim alleged against it for failure to state a claim upon which relief could be granted. (Id. at pp. 1163, 1180.) The federal district court denied the motion as to that claim, stating, “Plaintiffs define ‘Private Payment Information’ as the consumers' credit card, debit card and/or PayPal account information. … Provide argues that … the intangible financial information … [does not] qualify as ‘property’ that can be converted. [¶] … Historically, the tort [of conversion] was limited to tangible property and did not apply to intangible property (with an exception for intangible property represented by documents, such as stock certificates). [Citation.] Modern courts, however, have permitted conversion claims against intangible interests such as checks and customer lists. Acme Paper Co. v. Goffstein, [supra,] 125 Cal.App.2d [at p.] 179 … ; Palm Springs-La Quinta Dev. Co. v. Kieberk Corp., 46 Cal.App.2d 234 [115 P.2d 548] (1941)(conversion of index cards with information on potential customers, including their financial standing); see Thrifty-Tel, Inc. v. Bezenek, 46 Cal.App.4th 1559 [54 Cal.Rptr.2d 468] (1996) (leaving open question whether confidential codes to gain computer access could be converted because trespass to personal property claim existed); see generally Kremen v. Cohen, [supra,] 337 F.3d [at p.] 1030 … (noting modern rejection of hard line between tangible and intangible property and holding plaintiff could state conversion claim as to internet domain name). [¶] … [¶] Although there is no clear authority, the Court concludes that [the] Plaintiffs may state a conversion claim based upon the misappropriation of their Private Payment Information, which was then used to make allegedly unauthorized debits from their financial accounts. Possession of the debit card or PayPal account information is similar to the intangible property interest in a check. Acme Paper, 125 Cal.App.2d at 179. [The p]laintiffs assert the right to control the use of their Private Payment Information, which can be used to withdraw funds from their bank accounts. See In Re Checking Account Overdraft Litig., 694 F.Supp.2d 1302, 1323 (S.D. Fla. 2010) (applying California law, holding that conversion action is available for wrongful debiting of funds from customer's account because it interfered with [the] plaintiffs' right to possess and use those funds).” (Id. at pp. 1179–1180, citation omitted.)

(Welco Electronics, Inc. v. Mora (2014) 223 Cal. App. 4th 202, 212-13 [bold emphasis and underlining added].)

Based on the above authorities, conversion of confidential customers lists may be the subject of conversion. Moreover, the tort of trespass to chattels is another possible theory of liability[1].

Dubbed by Prosser the "little brother of conversion," the tort of trespass to chattels allows recovery for interferences with possession of personal property "not sufficiently important to be classed as conversion, and so to compel the defendant to pay the full value of the thing with which he has interfered." (Prosser & Keeton, Torts (5th ed. 1984) § 14, pp. 85-86.)

Though not amounting to conversion, the defendant's interference must, to be actionable, have caused some injury to the chattel or to the plaintiff's rights in it. Under California law, trespass to chattels "lies where an intentional interference with the possession of personal property has proximately [*1351] caused injury." (Thrifty-Tel, Inc. v. Bezenek (1996) 46 Cal.App.4th 1559, 1566 [54 Cal. Rptr. 2d 468], italics added.) In cases of interference with possession of personal property not amounting to conversion, "the owner has a cause of action for trespass or case, and may recover only the actual damages suffered by reason of the impairment of the property or the loss of its use." ( Zaslow v. Kroenert, supra, 29 Cal.2d at p. 551, italics added; accord, Jordan v. Talbot (1961) 55 Cal.2d 597, 610 [12 Cal. Rptr. 488, 361 P.2d 20].) In modern American law generally, "[t]respass remains as an occasional remedy for minor interferences, resulting in some damage, but not sufficiently serious or sufficiently important to amount to the greater tort" of conversion. (Prosser & Keeton, Torts, supra, § 15, p. 90, italics added.)

Here, the eighth cause of action alleges that Cross-Defendant caused a loss of use by remotely deleting the information, which caused Cross-Complainant damage in the amount of the value of the information. At the very least, this would state a cause of action for trespass to chattel. The details which Cross-Defendant seeks may be ascertained through discovery.

[1] “Regardless of the label attached to the cause of action, we examine the complaint's factual allegations to determine whether they state a cause of action on any available legal theory.” (Doe v. Doe 1 (2012) 208 Cal.App.4th 1185, 1188.)