Yung v. Institutional Trading Company

UNITED STATES DISTRICT COURT
DISTRICT OF COLUMBIA
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:
KWONG YUNG, : CASE NO. 1:08-CV-662
:
Plaintiff , :
:
vs. : OPINION AND ORDER
: [Resolving Doc. No. 34]
INSTITUTIONAL TRADING :
COMPANY, et al., :
:
Defendants. :
:
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JAMES S. GWIN,1/ UNITED STATES DISTRICT JUDGE:
In this breach of employment contract case, the Defendants Institutional Trading Company
and IT.com move for summary judgment against their former director of research Plaintiff Kwong
Yung. [Doc. 34.] With his Complaint, Plaintiff Yung brings claims against the Defendants for
breach of his employment contract, failure to pay wages, conversion of a laptop computer, and fraud.
[Doc. 1 at 10.]
For the following reasons, the Court GRANTS IN PART and DENIES IN PART the
Defendants’ motion for summary judgment.
I. Background
This case arose after Defendant IT.com, a technology company, fired Plaintiff Kwong Yung
on December 12, 2006. Before firing Yung, Defendant IT.com employed him as director of research
1/
The Honorable James S. Gwin of the United States District Court for the Northern District of Ohio, sitting by
designation.
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and chief scientist. According to Yung, his termination violated a three-year employment contract.
Yung also alleges that IT.com has refused to pay him wages for his final month of employment,
refused to reimburse him for travel expenses, and refused to return a laptop computer he used at
work.
In 1983, Mark Cordover founded Defendant Institutional Trading Company, a private
investment company. [Doc. 34-3 at 2.] In 2005, Cordover created Defendant IT.com, a start-up
technology company based in Washington, D.C. [Id.] In staffing the new company, Cordover
interviewed and ultimately hired Plaintiff Yung to work as IT.com’s director of research.2/ [Doc. 34-3
at 2-3.] Cordover hired Yung, who holds a Ph.D. from Stanford University in statistics and machine
learning, to help engineer a vertical search engine for the company. [Doc. 34-3 at 2, 34-5 at 13.]
Between November 18, 2005, and November 20, 2005, Cordover and Plaintiff Yung
negotiated Yung’s employment terms. [Doc. 34-5 at 14-16.] On November 26, 2005, Cordover sent
Yung an Engagement Letter, formally offering him a position with the company. [Doc. 34-5 at 13.]
According to this letter, Yung would receive a three percent ownership interest in IT.com. [Doc. 34-5
at 13.] The Engagement Letter, however, also gave the company the right to:
[R]epurchase all of the stock should [Yung] leave IT.com’s employ within the first
year, [repurchase] two-thirds of the stock should [Yung] leave between the first and
second years, and [repurchase] one-third of the stock should [Yung] leave between
the second and third years. Thereafter, IT.com will hold no right to repurchase
[Yung’s] stock.
[Doc. 34-5 at 13. ]
Second, the Engagement Letter stated that IT.com would: “pay the expenses of your visiting
California for business reasons at least three times (at your discretion) any time during the next
2/
At times, the parties and evidence refer to Yung as IT.com’s “Chief Scientist.”
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calendar year.” [Doc. 34-5 at 13.] Ultimately, Plaintiff Yung accepted the offer and moved from
California to Washington, D.C., to begin work at IT.com.
On Yung’s first day with the company, December 1, 2005, he signed a Restricted Stock
Agreement. [Doc. 34-5 at 4-11.] This agreement required Defendant IT.com to repurchase Yung’s
shares on a pro rata basis if he left the company within his first three years. [Doc. 34-5 at 4.] The
agreement also stated:
Nothing in this Agreement shall be construed as constituting a commitment,
guarantee, agreement or understanding of any kind or nature that the Corporation
shall continue to employ [Yung], nor shall this Agreement affect in any way the right
of the Corporation to terminate the employment of [Yung] at any time. In the
absence of an employment agreement, or of a provision in such an agreement to the
contrary, [Yung] acknowledges that he is an employee at will.
[Doc. 34-5 at 9.] On January 1, 2006, Cordover gave Yung a stock certificate transferring thirty
shares of IT.com stock to Yung. [Doc. 34-5 at 2.]
A few months later, IT.com purchased three laptop computers and provided one to Plaintiff
Yung. [Doc. 34-3 at 3, 7.] The parties dispute whether IT.com gave Yung the computer outright or
merely permitted him to use it for work. [Doc. 34-3 at 3, 39-1 at 2.] In support of his claim that IT
gave him the laptop, Yung says that he put personal files and software he had purchased on the
computer. [Doc. 39-1 at 1.] On December 11, 2006, Cordover confiscated the laptop from Yung.
[Doc. 39-1 at 1.]
During his employment, Yung submitted one travel reimbursement request to Defendant
IT.com. [Doc. 34-4 at 44.] IT.com paid Yung the full $3,692.11 he requested. [Doc. 34-3 at 13-15.]
Plaintiff Yung says that he took several other trips in 2006 at a cost of $7,608.40 but did not submit
reimbursement requests to IT.com. [Doc. 34-4 at 44.]
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On December 10, 2006, more than a year after Yung joined the company, Cordover placed
Yung on two weeks probation, apparently because Yung had spent time on what Cordover believed
to be unnecessary projects and had unexplainedly left the office for extended periods of time. [Doc.
39-7.] Two days later, December 12, 2006, Cordover fired Yung. [Doc. 34-4 at 10.]
According to Yung, later on December 12, 2006, he and Cordover orally agreed that Yung
would write up the details of a key mathematical algorithm he had developed for IT.com in exchange
for “payment of wages through December 31, 2006, and my computer.” [Doc. 39-1 at 2.] Yung says
he worked on the algorithm summary for the next week and gave it to Cordover on December 19,
2006. [Doc. 39-1 at 2.] Yung claims that Cordover then asked him to sign an Employment
Separation Agreement containing what Yung viewed as unfavorable terms. [Doc. 39-1 at 2.] Yung
thus refused to sign. [Id.]
On September 28, 2007, Plaintiff Yung sued the Defendants in San Francisco Superior Court.
[Doc. 1 at 8.] In his Complaint, Yung claimed that the Defendants breached his employment
contract by terminating him without cause, not paying his full December 2006 salary, and not
reimbursing him $7,608.40 in travel expenses. [Doc. 1 at 10.] Yung also made claims for unpaid
wages, conversion of the laptop computer, and fraud. [Doc. 1 at 10-12.]
On November 26, 2007, the Defendants removed the case to the U.S. District Court for the
Northern District of California. [Doc. 1 at 1.] On April 14, 2008, the district court granted the
Defendants’ motion to transfer the case to this Court. [Doc. 18.] Finally, on March 16, 2009, the
Defendants filed the instant motion for summary judgment. [Doc. 34.] The Plaintiff has responded,
[Doc. 39], and the Defendants have replied. [Doc. 41.] Accordingly, the motion is ripe for ruling.
II. Legal Standard
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Summary judgment is appropriate when “there is no genuine issue as to any material fact and
that the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c).
A defendant moving for summary judgment has the initial burden of showing the absence
of a genuine factual issue with respect to one or more essential elements of the plaintiff’s claim. See
Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). The moving defendant meets his burden by
“informing the district court of the basis for its motion, and identifying those portions of ‘the
pleadings, depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any,’ which [he] believes demonstrate the absence of a genuine issue of material fact.”
Id. at 323 (quoting Fed. R. Civ. P. 56(c)). However, the moving defendant is under no “express or
implied” duty to “support [his] motion with affidavits or other similar materials negating the
opponent’s claim.” Id.
Once the moving defendant satisfies his burden, the burden shifts to the nonmoving plaintiff
to set forth specific facts showing a triable issue. See Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 587 (1986). The nonmoving plaintiff may not defeat the summary judgment
motion merely by showing some existence of doubt as to the material facts. See id. at 586. Nor can
the nonmoving plaintiff rely upon the mere allegations or denials of her pleadings. Fed. R. Civ. P.
56(e).
In deciding a motion for summary judgment, the Court views the factual evidence and draws
all reasonable inferences in favor of the nonmoving plaintiff. Adickes v. S.H. Kress & Co., 398 U.S.
144, 158-59 (1970). To be sure, the Court need not conclusively resolve an allegedly disputed issue
in favor of the nonmoving plaintiff; rather, the plaintiff must present “sufficient evidence supporting
the claimed factual dispute . . . to require a jury or judge to resolve the parties’ differing versions of
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the truth at trial.” First Nat’l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 288-89 (1968).
Ultimately the Court must decide “whether the evidence presents sufficient disagreement to require
submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986).
III. Analysis
In moving for summary judgment, the Defendants largely argue that Plaintiff Yung can
provide no evidence in support of any of his four claims for relief.
As an initial matter, however, the Court finds no evidence that Defendant Institutional
Trading Company employed Plaintiff Yung. The Court also finds no evidence that ITC owed Yung
wages, unlawfully retained his laptop, or defrauded him. Instead, as the Plaintiff’s memorandum in
opposition implicitly recognizes, all of the evidence in this case indicates that he contracted and
ultimately dealt only with Cordover and Defendant IT.com. Accordingly, the Court GRANTS
summary judgment to Defendant Institutional Trading Company on all of Plaintiff Yung’s claims.
The Court considers the claims against Defendant IT.com below.
A. Breach of Contract
Plaintiff Yung alleges that the Defendants breached their contracts with him by: (1)
terminating him after only one year of employment, (2) failing to give him three percent of IT.com
stock, (3) failing to reimburse his travel expenses, and (4) refusing to pay him wages for December
12, 2006, to December 31, 2006. The Defendants move for summary judgment on each aspect of
this breach of contract claim.
1. Three-Year Employment Contract
Yung claims that the Engagement Letter and Restricted Stock Agreement guaranteed him
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three years of employment with IT.com. Defendant IT.com responds that none of the documents on
which that Yung relies upon provides support for a three-year term. In fact, IT.com says that the
stock agreement actually confirms that Yung was terminable at will.
“There is a presumption that a hiring not accompanied by an expression of a specific term
of duration creates an employment relationship terminable at will by either party at any time.”
Nickens v. Labor Agency of Metro. Wash., 600 A.2d 813, 816 (D.C. 1991) (citing Sorrells v.
Garfinckel’s, Brooks Brothers, Miller & Rhoads, Inc., 565 A.2d 285, 289 (D.C. 1989)). This
presumption applies unless the parties state clearly their intention to limit the employer’s right to
terminate, such as by a contract provision setting out employment for a fixed term or language that
allows termination only for cause. Daisley v. Riggs Bank, N.A., 372 F. Supp. 2d 61, 67-68 (D.D.C.
2005); see also Taylor v. Wash. Metro. Transit Auth., 922 F. Supp. 665, 674 (D.D.C. 1996).
Thus, “[i]n order to rebut the presumption of at-will employment, and proceed with a cause
of action for wrongful discharge under a breach of contract theory, ‘a plaintiff must provide evidence
of clear contractual intent on the part of both the employer and the employee.’” Daisley, 372 F. Supp.
2d at 68 (quoting Lance v. UMW 1974 Pension Trust, 355 F. Supp. 2d 358, 360 (D.D.C. 2005)).
Here, Plaintiff Yung does not produce sufficient evidence to show that he had a three-year
employment contract. First, the Engagement Letter says only that Yung’s stock ownership will be
fully vested after three years, not that he is guaranteed a job until the vesting date. [Doc. 34-5 at 13.]
Although the vesting schedule is not conclusive proof of at-will employment, it does not meet
Yung’s burden to show a clear intention to limit IT.com’s right to terminate him.
As to the Restricted Stock Agreement, Cordover did strike out some language from the
contract that would have confirmed Yung’s at will status, such as a clause providing that IT.com
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would purchase Yung’s stock after his dismissal “with or without just cause.” [Doc. 34-5 at 4.] This
strikeout is largely immaterial, however, because Yung does not make any argument that he was
fired without just cause. Instead, he argues that he could not be fired at all for three years. Absent
the deletions, the Stock Agreement specifically provides that IT.com could dismiss or remove Yung.
Importantly, the agreement also contains an express “at-will employment” provision. [Doc. 34-5 at
9.]
For similar reasons, Yung’s new promissory estoppel argument fails as well.3/ To hold an
employer liable on a theory of promissory estoppel, “there must be evidence of a promise, the
promise must reasonably induce reliance upon it, and the promise must be relied upon to the
detriment of the promisee.” Simard v. Resolution Trust Corp., 639 A.2d 540, 552 (D.C. 1994).
Thus, “Demonstration of a promise is a prerequisite to invocation of the doctrine of promissory
estoppel.” Id.
Here, Yung points to no evidence of a promise made to him that he would be employed at
IT.com for three years. Instead, Yung alleges that “Cordover knew that Yung was operating under
the assumption that he would be guaranteed employment with IT.com for 3 years.” [Doc. 39 at 14.]
The only affirmative statement Yung references is Cordover’s promise to “cover some expenses of
your move from California to DC.” [Doc. 34-5 at 13.] It does not follow, however, that a promise
to cover moving expenses can be construed as a promise for a specific term of employment. In fact,
3/
Although the Defendants argue that this Court should reject Plaintiff Yung’s promissory estoppel claim
outright because he did not raise it in his Complaint, the court of appeals has held that where the factual basis for a
party’s new claim is “substantially similar” to a claim already alleged, striking that claim is improper. Wiley v. Glassman,
511 F.3d 151, 159 (D.C. Cir. 2007). Even under Tunica-Biloxi Tribe of La. v. United States, 577 F. Supp. 2d 382, 412
(D.D.C. 2008), on which the Defendants rely, the proper remedy is not to grant summary judgment on the newly-raised
claim but instead to dismiss the claim with leave to amend the complaint. Given the similarity of the claims in this case
and the inefficiency of granting dismissal with leave to amend at this stage of the litigation, the Court considers the
promissory estoppel claim on its merits.
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in Simard, the court affirmed summary judgment against the employee on language much more
relevant and specific than the language in this case. See Simard, 639 A.2d at 544 (affirming summary
judgment against employee even though employer stated that “the job . . . would be a stable one and
there would be long term . . . possibility for growth and opportunity” and that “we . . . look forward
to a long and mutually beneficial relationship.”).
Therefore, the Court finds no material evidence to support Yung’s claim that he had a three-
year employment contract with Defendant IT.com.
2. IT.com Stock
In his Complaint, Plaintiff Yung also says that the Defendants owe him three percent of their
outstanding shares, as promised in the Engagement Letter. [Doc. 1 at 10, ¶5.] Defendant IT.com,
however, says that the company transferred thirty shares of IT.com stock to Yung on January 1,
2006. [Doc. 34-5 at 2.] Moreover, Yung admitted that he received those shares and that he and the
Defendant agreed that those shares represented three percent of the company. [Doc. 34-4 at 5.]
Responding to this evidence, Yung shifts focus and argues that the Defendants breached his
employment contract by failing to pay him the stipulated value of the IT.com stock. [Doc. 39 at 15.]
Although the Engagement Letter makes no promise that the Defendants would purchase Yung’s
stock, [Doc. 34-5 at 13], the Restricted Stock Agreement does. Specifically, the agreement’s
“Mandatory Purchase” clause provides:
In the event of the termination of employment of [Yung] with the Corporation during
the three(3)-year period from and after the Effective Date [December 1, 2005] hereof,
. . . the Corporation shall purchase (or shall cause its designee to Purchase) the
“Applicable Percentage” (as defined below) of the Shares (including, if applicable,
fractional Shares) of the Corporation owned by [Yung] . . . at the purchase price and
upon such other terms and provision set forth in this Section 2 below.
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[Doc. 34-5 at 4-5.]
No one disputes that Cordover fired Plaintiff Yung within his first three years of
employment. Thus, Yung has presented sufficient evidence to preclude summary judgment on the
claim that Defendant IT.com breached its contract to purchase his IT.com stock.
3. Travel Expenses
Plaintiff Yung further claims that the Defendants breached his employment contract by
failing to reimburse him for $7,608.40 in travel expenses. [Doc. 1 at 10.] Yung admits, however,
that he did not submit a reimbursement request to IT.com for these expenses. [Doc. 34-4 at 44.]
Nevertheless, the parties’ contract does not contain a condition requiring Yung to make such
a request. Instead, the Engagement Letter simply says that Defendant IT.com “shall pay the expenses
of your visiting California for business reasons at least three times (at your discretion) any time
during the next calendar year.” [Doc. 34-5 at 13.] Yung has produced evidence that he incurred at
least some travel expenses. [Doc. 39-6.] Moreover, the Defendants do not allege that they have in
fact reimbursed Yung.
Instead, the Defendants essentially ask the Court to find that Plaintiff Yung was required to
make a demand for payment prior to filing this lawsuit. Although this argument makes some
intuitive sense, the Court declines to read a demand condition into the parties’ contract. Permitting
the Plaintiff to proceed on this claim promotes judicial efficiency and does not prejudice the
Defendants in any way. See 8-31 Corbin on Contracts § 31.5 (LexisNexis 2009) (“The suit itself is
then often said to operate as the necessary demand. The peculiarity of the case is that the action is
not thought to be premature. No doubt the rule operates without injustice, in most cases. For, if the
case should be dismissed, another suit could instantly be brought and maintained without any new
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demand.”).
Thus, Yung has provided sufficient evidence to preclude summary judgment on this claim.
4. Oral Contract for December 2006 Wages
As the final basis of his breach of contract claim, Plaintiff Yung alleges that the Defendants
owe him $9,248.92 in wages for December 2006. [Doc. 1 at 10, ¶5.] In moving for summary
judgment, Defendant IT.com argues that it paid Yung all wages owed for work performed up through
his date of termination, December 12, 2006, and that no written contract requires payment beyond
that date. [Doc. 34-2 at 17.]
Responding, Plaintiff Yung claims that he entered into an oral contract with Cordover for
payment of wages through December 31, 2006, in return for Yung preparing “transition documents”
for IT.com. [Doc. 39 at 17.] In support of this contention, Yung states in his declaration that
“Cordover and I agreed that I would write up the details of a mathematical algorithm ‘horizontal-
vertical LDA’ that formed the underpinnings of IT.com in exchange for payment of wages through
December 31, 2006 . . . I worked on these documents in the days between December 12-19, 2006.”
[Doc. 39-1 at 2.]
In his deposition, Yung similarly testifies that he spent the week prior to December 19, 2006,
writing out three pages of the “technical details” that formed the “underpinnings of the company.”
[Doc. 34-4 at 38, 43.] Yung further says that he gave these pages to Cordover on December 19,
2006. [Id.] In opposing summary judgment, Yung submitted a two-page summary of the algorithm
he had created for the company, dated August 18, 2006. [Doc. 39-1 at 2, 39-9.]
Although the Defendants note the discrepancy in the date on the algorithm summary, this
discrepancy is not conclusive proof that Yung did not in fact draft most if not all of the summary in
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December. Moreover, this Court does not weigh issues of credibility on summary judgment.
Notably, the Defendants do not dispute that Cordover entered into an oral contract with
Yung. Instead, they argue that Yung cannot raise the argument for the first time on summary
judgment. [Doc. 41 at 6-7.] As previously noted, however, where the factual basis for a party’s new
claim is “substantially similar” to a claim already alleged, striking that claim is improper. Wiley, 511
F.3d at 159. Moreover, although Young states in his Complaint that he brings his wrongful
termination claim pursuant to a “written agreement,” he does not make a similar statement in
reference to his salary. Instead, he merely claims that “Plaintiff was owed salary . . . for the month
of December 2006.” [Doc. 1 at 10, ¶5.] Thus, the Court declines to hold that Plaintiff Yung
somehow waived his oral contract claim and finds that Yung has produced sufficient evidence to
preclude summary judgment on this claim.
In summary, the Court finds Plaintiff Yung has shown a genuine dispute of material fact on
his breach of contract claim for purchase of his stock, reimbursement of his travel expenses, and
payment of his December 2006 wages. Plaintiff Yung has not, however, provided sufficient
evidence on his wrongful termination in breach of contract claim, and the Court DISMISSES that
claim.
B. Wages Due
In count two of his Complaint, Plaintiff Yung seeks unpaid wages for December 2006
pursuant to the D.C. Payment of Wages Act, D.C. Code § 32-1301 et seq. (2009).4/ In their motion
for summary judgment, the Defendants argue that the Act does not cover Plaintiff Yung because he
4/
Although the Plaintiff’s Complaint does not specify the law supporting his wage claim, in opposing summary
judgment, Plaintiff Yung states that D.C. Code § 32-1303(1) provides his right to recover the wages at issue. [Doc. 39
at 19.]
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worked in a “professional capacity.”
The section of the Act under which Plaintiff Yung seeks relief applies only to “employees.”
Id. § 32-1303(1). The Act defines an employee as: “any person suffered or permitted to work by an
employer except any person employed in a bona fide executive, administrative, or professional
capacity (as such terms are defined and delimited by regulations promulgated by the Council of the
District of Columbia).” Id. § 32-1301(2).
In turn, the D.C. Municipal Regulations define “professional capacity” as an employee
who[se]:
(1) Primary duty must be either (a) work requiring knowledge of an advanced type
in a field of science or learning. Usually obtained by a prolonged course of
specialized instruction and study or (b) work that is original and creative in character
in a recognized field of artistic endeavor and the result of which depends primarily
on his or her invention, imagination, or talent or (c) work as a teacher certified or
recognized as such in the school system or educational institution by which he or she
is employed; and
(2) Consistently exercise discretion and judgment; and
(3) Do work that is mainly intellectual and varied, as distinguished from routine or
mechanical duties; and
(4) Must not spend more than 20 percent of his or her workweek on activities not
essentially a part of and necessarily incident to professional duties; and
(5) Paid on a salary or fee basis at a rate of not less than $170 a week.
D.C. Mun. Regs. tit. 7, § 999.1(2010).
As an initial matter, the parties do not dispute that Plaintiff Yung satisfies the first, third,
fourth, and fifth elements of the exemption. Reviewing the record, the Court finds no evidence to
the contrary. For example, the parties agree that Yung holds a Ph.D. from Stanford University in
statistics and machine learning, a Master’s degree from Stanford in statistics, and a Bachelor’s
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degree from the Massachusetts Institute of Technology. In addition, the parties agree that IT.com
hired Yung to be its director of research or “chief scientist” and to oversee and develop a
complicated algorithm for the company’s new search engine product. Moreover, IT.com paid Yung
an annual salary of $110,000.
The parties do dispute whether Yung “consistently exercised discretion and judgment.” On
this issue, Yung himself testified, however, “My title was chief scientist, but I was actually doing
a lot more. I was the main guy in charge. Mark Cordover was not technically savvy, so he let me
run the show.” [Doc. 34-4 at 51.] In fact, the probation letter Cordover sent Yung two days before
his termination actually indicates that if anything, the Company believed Yung had too much
discretion: “I need you to cooperate with IT.com in the production of our products, and by
cooperation I mean on my terms, with my direction. Answering to our needs insofar as the leader
of our technological development can.” [Doc. 39-7.] Thus, the Court finds no material dispute that
Yung satisfies the second prong of the professional capacity exemption.
Because Yung worked in a “professional capacity,” the Payment of Wages Act expressly
exempts him from its coverage. Accordingly, the Court GRANTS the Defendant’s motion for
summary judgment on Plaintiff Yung’s Wage Act claim.
C. Conversion
Plaintiff Yung also alleges that the Defendants converted his laptop computer when Cordover
confiscated it from him on December 11, 2006. [Doc. 1 at 11, 39-1 at 1.] The Defendants move for
summary judgment on this claim, arguing that Yung provides no evidence that he owned the
computer.
Conversion is “any unlawful exercise of ownership, dominion or control over the personal
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property of another in denial or repudiation of his rights thereto.” Curaflex Health Servs. v. Bruni,
P.C., 877 F. Supp. 30, 32 (D.D.C. 1995) (citing Duggan v. Keto, 554 A.2d 1126, 1138 (D.C. 1989)).
In this case, the parties dispute which of them owns the laptop computer. IT.com founder
Cordover says that Jason Pratt, IT.com vice president, purchased three MacBook Pro laptop
computers for the company on March 27, 2006. [Doc. 34-3 at 3.] The Defendants also submit an
electronic receipt from the Apple Store for the three laptops, showing that vice president Pratt
purchased the computers and had them shipped to IT.com’s business address. [Doc. 34-3 at 7.]
Plaintiff Yung also testified at his deposition that after his termination, he admitted to Cordover that
IT.com owned the laptop. [Doc. 34-4 at 39.] Yung claims, however, that he made that admission
out of fear that Cordover would otherwise destroy the laptop and its contents. [Id.]
Although Plaintiff Yung admits that IT.com purchased the computer, [Doc. 34-4 at 41], he
says that Cordover told him that he could keep it. [Id. at 41-42.] Plaintiff Yung also points to a
service receipt, showing that he sent the laptop for service in June 2006 and requested that it be
returned to his home address in California. [Doc. 39-8.] In addition, Yung says that the laptop
contains some of his personal files as well as software he purchased. [Doc. 39-1 at 1.]
Given these conflicting assertions, the Court finds that a genuine dispute of material fact
exists as to the ownership of the laptop. Accordingly, the Court DENIES the Defendant’s motion
for summary judgment on Plaintiff Yung’s conversion claim.
D. Fraud
Finally, Plaintiff Yung alleges that the Defendants committed fraud by promising him a
three-year term of employment with no intention of performing on that promise. [Doc. 1 at 12.] The
Defendants move for summary judgment on this claim, arguing that there is no evidence it made
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such a promise or that IT.com founder Cordover intended to break the promise when he allegedly
made it. [Doc. 34-2 at 22-23.]
To make out a fraud claim in the District of Columbia, Yung must prove: (1) a false
representation or willful omission in reference to a material fact, (2) made with knowledge of its
falsity, and (3) with intent to induce the party to rely on the representation or omission, where (4)
the party relies upon the representation or omission, (5) to his detriment. Bell v. Rotwein, 535 F.
Supp. 2d 137, 144 (D.D.C. 2008).
In support of his fraud claim, Plaintiff Yung points only to an email he sent to IT.com
founder Cordover while negotiating his compensation package. Yung told Cordover: “I would like
to earn 5% of the company over 5 years. Currently, you offer me 3% over 3 years, but I want to
consider a longer horizon.” [Doc. 34-5 at 15.] Ultimately, the parties settled on three percent with
a three year vesting schedule, as set out in the Engagement Letter. [Id. at 13.]
As an initial matter, Yung’s fraud claim is merely a recasting of his wrongful termination in
breach of contract and promissory estoppel claim , which the Court has dismissed supra. See Morris
v. Buvermo Props., 510 F. Supp. 2d 112, 119 (D.D.C. 2007) (granting summary judgment to
employer where former employed alleged that executive misrepresented that employee had ten-year
employment contract). Moreover, Plaintiff Yung points to no statement made by IT.com outside his
employment contract that was false and made with knowledge of its falsity. Instead, Yung relies
only on his own statements to Cordover. In addition, even if Cordover had promised Yung a three-
year employment contract, Yung provides no evidence that Cordover did so without intending to
keep that promise.
Because Plaintiff Yung has not shown that a genuine dispute of material fact exists as to his
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fraud claim, the Court GRANTS the Defendant’s motion for summary judgment on that claim.
IV. Conclusion
For the foregoing reasons, the Court GRANTS IN PART and DENIES IN PART the
Defendants’ motion for summary judgment.
IT IS SO ORDERED.
Dated: March 15, 2010 s/ James S. Gwin
JAMES S. GWIN
UNITED STATES DISTRICT JUDGE
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