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Keywords

contracttortequity

contracttortliabilityappealtrialmotionsummary judgmentfiduciarycase lawfiduciary dutygood faithbreach of fiduciary dutymotion for summary judgment

Related Cases

Voris v. Lampert, 7 Cal.5th 1141, 446 P.3d 284, 250 Cal.Rptr.3d 779, 170 Lab.Cas. P 61,987, 2019 IER Cases 304,464, 19 Cal. Daily Op. Serv. 8126, 2019 Daily Journal D.A.R. 7736

Facts

Brett Voris worked for three startup companies owned by Greg Lampert and others, receiving promises of wages and equity in return for his services. After raising concerns about financial improprieties, Voris was terminated and subsequently sued the companies for unpaid wages, winning judgments against them. However, he struggled to collect on these judgments due to the companies' insolvency and sought to hold Lampert personally liable for the unpaid wages through a conversion claim.

Voris sued the three companies, as well as Bristol and Lampert. The operative complaint raised 24 causes of action, including breach of oral contract, quantum meruit, fraud, failure to pay wages in violation of the Labor Code, conversion, breach of the implied covenant of good faith, and breach of fiduciary duty.

Issue

Can an employee maintain a common-law conversion claim against an employer or its officer for unpaid wages?

The question before us is whether such a conversion claim is cognizable.

Rule

The tort of conversion applies to the wrongful exercise of dominion over personal property, but California law does not recognize a conversion claim for unpaid wages, as such claims are typically addressed through contract law and statutory remedies.

The conversion tort is not the right fit for the wrong that Voris alleges, nor is it the right fix for the deficiencies Voris perceives in the existing system of remedies for wage nonpayment.

Analysis

The court analyzed the nature of the conversion tort and determined that Voris's claim did not fit within its traditional framework. It noted that conversion requires a specific, identifiable property interest, and the failure to pay wages does not constitute the wrongful exercise of dominion over such property. The court emphasized that existing statutory remedies for wage nonpayment are sufficient and that expanding conversion claims to include unpaid wages would blur the lines between tort and contract law.

The majority concluded that neither existing case law nor policy considerations warranted extending the tort of conversion to the wage context.

Conclusion

The California Supreme Court affirmed the lower court's ruling, concluding that Voris could not maintain a conversion claim for unpaid wages, as the existing legal framework adequately addresses wage disputes.

We affirm the judgment of the Court of Appeal, which reached a similar conclusion.

Who won?

Greg Lampert prevailed in the case because the court found that the conversion claim for unpaid wages was not legally cognizable under California law.

The trial court agreed that Voris failed to adequately support his claims of alter ego liability and granted Lampert's motion for summary judgment.

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Keywords

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