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.

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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

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.

Statute of Limitations Tolled Against John Doe

Decision of Washington Supreme Court: 141211 Powers v WB Mobile December 11, 2014 Under RCW 4.16.1 70, service of process on one defendant tolls the statute of limitations as to unserved defendants. Sidis v. Brodie/Dohrmann, Inc., 11 7 Wn.2d 325, 329, 815 P.2d 781...

Mental Health Advance Directives Enhance Estate Planning

Mental Health Advance Directives enhance estate planning because they provides a person with the ability to coordinate directives and direct their care during times when they do not have capacity to make treatment decisions. They are most useful for persons who have faced mental health issues including traumatic brain injury, those who are concerned about the possibility of future dementia or traumatic brain injury, or who are planning during the onset of dementia issues. It provides a structure for discussing issues and making decisions and is the means to ensure that those making decisions for a person follow the person’s wishes at times when he or she is unable to express them. In addition to providing certainty and dignity for the person making the directive, the document can help the person’s family by providing a level of comfort and security during challenging times.

Implied Discovery Rule

Katherine L. Tavtigian-Coburn v  All Star Custom Homes, LLC (Or App, October 8, 2014) Decision: 141008-Tavtigian-All-Star-Custom-Homes The implied discovery rule tolls the statute of limitation until the plaintiff knows sufficient facts to bring the action. It is...