Business Torts

Tollefsen Law has in depth experience litigation business torts such as negligent misrepresentation, fraud in the inducement, and tortious interference with prospective advantage. In addition there are some statutory tort-like causes of action including consumer protection claims, criminal profiteering, and securities fraud. We have represented our clients both as plaintiffs and defendants. Fingerprint on computer chip Email us regarding a potential new matter – no confidential information

Tollefsen Law has extensive experience complex business and commercial litigation including business torts.

Civil Conspiracy

The elements of civil conspiracy are that (1) a combination or more people to accomplish an unlawful purpose, or to accomplish a lawful purpose by unlawful means; and (2) entering into an agreement to accomplish the conspiracy.((Adams v. King County, 164 Wash. 2d 640, 192 P.3d 891 (2008) (trial court erroneously dismissed claim for civil conspiracy where defendants allegedly removed organ from plaintiff’s decedent without her consent); Woody v. Stapp, 146 Wash. App. 16, 189 P.3d 807 (Div. 3 2008) (trial court properly dismissed claim for civil conspiracy where speculation did not meet clear, cogent and convincing standard); All Star Gas, Inc., of Washington v. Bechard, 100 Wash. App. 732, 998 P.2d 367 (Div. 3 2000) (evidence supported trial court’s finding that no civil conspiracy had been formed).)) Both elements must be established by clear, cogent, and convincing evidence.(( Woody v. Stapp, 146 Wash. App. 16, 189 P.3d 807 (Div. 3 2008); All Star Gas, Inc., of Washington v. Bechard, 100 Wash. App. 732, 998 P.2d 367 (Div. 3 2000).)) Civil conspiracy is not a separate cause of action but is a theory to make defendants jointly and severally liable for another civil cause of action. Conspirators who join the conspiracy after it was formed between become liable for all acts committed by any of the other parties, either before or after their entrance, in furtherance of the common design.(( Lyle v Haskings, 24 Wash.2d 883, 900, 168 P.2d 797, 807 (1946); Sterling Business Forms, Inc. v. Thorpe, 82 Wash.App. 446, 454, 918 P.2d 531, 535 (Div. 3, 1996).))

Consumer Protection What is Fraud?

Unjust Enrichment Four Theories of Recovery for Misrepresentation

Negligent Misrepresentation Securities Fraud

Uniform Fraudulent Transfer Act

Under the Uniform Fraudulent Transfer Act (UFTA) a transfer is fraudulent “whether the creditor’s claim arose before or after the transfer was made or the obligation was incurred” if the debtor conducted it with “actual intent to hinder, delay, or defraud any creditor of the debtor”.((RCW § 19.40.041(a)(1).)) Subsection (b) of the statute provides 11 nonexclusive factors for determining actual intent.

(1) The transfer or obligation was to an insider;

(2) The debtor retained possession or control of the property transferred after the transfer;

(3) The transfer or obligation was disclosed or concealed;

(4) Before the transfer was made or obligation was incurred, the debtor had been sued or threatened with suit;

(5) The transfer was of substantially all the debtor’s assets;

(6) The debtor absconded;

(7) The debtor removed or concealed assets;

(8) The value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred;

(9) The debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred;

(10) The transfer occurred shortly before or shortly after a substantial debt was incurred; and

(11) The debtor transferred the essential assets of the business to a lienor who transferred the assets to an insider of the debtor.

RCW 26.16.210 requires spouses to prove good faith in the transfer if a plaintiff questions their motive. “In every case, where any question arises as to the good faith of any transaction between spouses or between domestic partners, whether a transaction between them directly or by intervention of third person or persons, the burden of proof shall be upon the party asserting the good faith.” ((RCW § 26.16.210; Clayton v. Wilson, 168 Wash.2d 57, 227 P.3d 278 (2010).)) See Fraudulent Transfer in Washington


Conversion is the willful interference with a chattel without lawful justification, whereby a person entitled to possession of the chattel is deprived of the possession of it.((Davenport v. Washington Educ. Ass’n, 147 Wash. App. 704, 197 P.3d 686, 239 Ed. Law Rep. 715 (Div. 2 2008), review granted, 166 Wash. 2d 1005, 208 P.3d 1124 (2009) (plaintiffs failed to state a cause of action for conversion of union dues where they had no property interest in the money); Consulting Overseas Management, Ltd. v. Shtikel, 105 Wash. App. 80, 18 P.3d 1144 (2001) (trial court erroneously found that corporate officers had committed conversion by applying loan proceeds); Washington State Bank v. Medalia HealthCare L.L.C., 96 Wash. App. 547, 984 P.2d 1041 (1999) (trial court properly granted summary judgment to bank on conversion action against purchaser of collateral).)) In order to state a cause of action for conversion, one must have a possessory or other “property interest” in the chattel in question. Thus, where teachers sought recovery of amounts paid in union dues that were spent by the union in violation of the statute, they failed to state a cause of action because of the lack of a possessory or property interest in the funds.((In re Marriage of Langham and Kolde, 153 Wash. 2d 553, 106 P.3d 212 (2005) (husband’s claim of good faith was irrelevant); Paris American Corp. v. McCausland, 52 Wash. App. 434, 759 P.2d 1210 (1988); Olin v. Goehler, 39 Wash. App. 688, 694 P.2d 1129 (1985); Judkins v. Sadler-MacNeil, 61 Wash. 2d 1, 376 P.2d 837 (1962).)) Wrongful intent is not a necessary element of conversion, and good faith cannot be shown as a defense to conversion.((Restatement (Second) of Torts § 223, Comment b. )) One who takes a chattel from its owner without right but under a mistaken belief it is his own is still guilty of conversion.((Senn v. Northwest Underwriters, Inc., 74 Wash. App. 408, 875 P.2d 637 (1994).)) The intent required is simply the intent to exercise dominion over the plaintiffs’ property. The director or officer of a company may also be held personally liable for failing to discover another director’s conversion of funds. Directors and officers have an affirmative duty to be aware of the company’s affairs.((Restatement (Second) of Torts § 222A.)) Conversion can occur in a number of ways. These include wrongfully detaining chattels by refusing to return them to the rightful owner; destroying or altering chattel; wrongfully taking a chattel from another, (e.g. theft); wrongfully transferring another’s chattel to someone; and misusing a chattel. The Restatement offers six factors to be considered in determining the seriousness of a defendant’s alleged control or dominion: (1) the extent and duration of the actor’s exercise of dominion or control; (2) the defendant’s intent to assert a right-in-fact inconsistent with the plaintiff’s right-of-control; (3) the defendant’s good-faith; (4) the extent and duration of the resulting interference; (5) the harm done to the chattel; and (6) the inconvenience and expense caused to the plaintiff.

Liability for Opinions – Omnicare

Putting Omnicare v Laborers District Counsel in Historical Perspective Omnicare, Inc., et al. v. Laborers District Council Construction Industry Pension Fund et al. Argued November 3, 2014—Decided March 24, 2015 Copy of Decision: 1503-Omnicare Overview The author is a...

Fraud on the Market

Although the Oregon securities law statute does not on its face require proof of scienter (intent to manipulate, deceive or defraud), the Oregon Court of Appeals read the requirement into the statute if the theory for relief is fraud on the market. Copy of the...

Failure to Reconvey: Quiet Title Without a Quiet Title Action

What do you do when a seller fails to reconvey the title to property following payment of the loan, then dies? Failure to reconvey puts a cloud on the title that must be quieted. Quiet title actions can be drawn out and expensive. Is there a way to obtain a quiet title without the quiet title action? This article explores four possible tools for obtaining a quiet title outside a traditional quiet title action.

Why Organize Early?

Although many company founders are reluctant to take the plunge into creating a corporate entity, often putting this step off for as long as possible, there are some good reasons to consider forming as soon as possible. Holding Period Stock Value The IRS will look at...