of [plaintiff's] sales and marketing professionals . . . ." Compl. at P 30. Defendant contends that this count must be dismissed because plaintiff has failed to state a claim of conversion.
The elements of conversion are "(1) an unlawful exercise, (2) of ownership, dominion, or control, (3) of the personal property of another, (4) in denial or repudiation of that person's rights thereto." O'Callaghan v. District of Columbia, 741 F. Supp. 273, 279 (D.D.C. 1990) (citing Duggan v. Keto, 554 A.2d 1126, 1137 (D.C. 1989)); see also Shea v. Fridley, 123 A.2d 358, 361 (D.C. 1956) (footnote omitted).
Traditionally, intangible property interests have not been subject to conversion. See, e.g., W. Page Keeton, et al., Prosser and Keeton on the Law of Torts § 15, at 91 (5th. Ed. 1984). Although courts have relaxed this limitation and allowed actions for conversion in cases involving intangibles, "the process of expansion has stopped with the kind of intangible rights which are customarily merged in, or identified with some document." Id. at 92. This Court has not found, nor have the parties cited, District of Columbia law that circumscribes the bounds of personal property subject to conversion. Based on the law in other jurisdictions, this Court is persuaded that the District of Columbia would not expand conversion to encompass the appropriation of an intangible such as a business or a marketing system. See, e.g., N.J., Inc. v. International Tel. & Tel. Corp., 867 F.2d 1531, 1547-48 (8th Cir. 1989) (no basis under Minnesota law to expand conversion to protect intangible interest in a business relationship); Union Sav. Am. Life Ins. Co. v. North Cent. Life Ins. Co., 813 F. Supp. 481, 493 (S.D. Miss. 1993) (no action for conversion of an insurance business under Alabama, Louisiana, or Minnesota law); Holmes v. Holmes, 1991 Conn. Super. LEXIS 2114 (Sept. 13, 1991) (no action for conversion of a partnership interest); Southern Cellular Telecom. Inc. v. Banks, 208 Ga. App. 286, 431 S.E.2d 115, 120 (Ga. Ct. App. 1993) (conversion not available as a cause of action with respect to a minority interest in a business). But see In re Estate of Corbin, 391 So. 2d 731 (Fla. Dist. Ct. App. 1980) (allowing action for conversion of an intangible interest in a business venture). Therefore, the Court finds that plaintiff has failed to state a claim with respect to these items.
Plaintiff also has failed to state a claim of conversion with respect to the items of tangible personal property allegedly misappropriated. Plaintiff concedes that it voluntarily transferred ownership of its database and 800 telemarketing phone number. See Pl.'s Opp at 6. Therefore, plaintiff has failed to establish that defendant unlawfully exercised control over this property. See, e.g., Chase Manhattan Bank v. Burden, 489 A.2d 494 (D.C. 1985). Finally, because persons are not property, plaintiff has not stated a claim for conversion of its sales staff. Accordingly, the Court dismisses Count I in its entirety.
Breach of Contract
Count II of plaintiff's complaint alleges that defendant entered into an oral contract with plaintiff in the second quarter of 1991 for three specific offerings. Plaintiff contends that "Painewebber breached its contract with Equity Group when without prior notice, it informed Equity Group that it would not use the services of Equity Group to market the Jacobs offering, the Standard Federal offering, and the Preferred Yield Fund II offering." Compl. at P 35.
Under District of Columbia law, in order for an enforceable contract to exist, there must be agreement both with respect to all material terms and the intention of the parties to be bound. Redwood Ctr. Ltd. Partnership v. Riggs Nat'l Bank, 737 F. Supp. 671, 674 (D.D.C. 1990) (citations omitted). In the absence of direct evidence of an express contract, a court may imply a contract from the course of the parties' performance, when a reasonable person would view the acts and conduct of the parties as evidencing the existence of a contract. Richardson v. J.C. Flood Co., 190 A.2d 259, 261 (D.C. 1963).
Plaintiff has failed to raise a genuine issue of material fact either with respect to whether the parties reached agreement as to the material terms of the contract or whether the parties intended to be bound contractually. Plaintiff concedes that no express contract existed; the undisputed facts demonstrate that although the parties discussed and attended preliminary meetings with respect to some of the disputed offerings, the parties never reached a formalized, express agreement with respect to material terms such as compensation.
Plaintiff attempts to create a genuine issue of material fact as to the existence of an implied contract, however, by pointing to industry practice and the course of dealing between the parties. Plaintiff argues that previously, each time defendant consulted plaintiff regarding an offering, defendant used plaintiff as the wholesaler. For each of the previous offerings, the agreement was not immediately formalized in writing. In addition, the material terms of the previous contracts between the parties were similar.
In effect, plaintiff seeks to imply the existence of a contract based on the mere fact that the parties had a previous course of dealing and subsequently engaged in informal discussions and/or meetings with respect to prospective offerings. Notwithstanding the parties' previous history, a reasonable person would not believe that such discussions manifested an intent to be bound. Thus plaintiff has failed to raise a genuine issue of material fact regarding the existence of a contract. Accordingly, the Court grants summary judgment for defendant on Count II of the complaint.
Tortious Interference with Contract
Count III of plaintiff's complaint alleges a claim for tortious interference with contract based on defendant's actions in offering employment to each of plaintiff's six sales and marketing professionals ("wholesalers"). To state a claim for tortious interference with contract, plaintiff must show: (1) that a legal contract existed; (2) that defendant had knowledge of the contract; 3) that defendant intentionally interfered with the contract without justification; and (4) that damages resulted from defendant's actions. Conservative Club of Wash. v. Finkelstein, 738 F. Supp. 6, 11 (D.D.C. 1990) (citing Dunn v. Cox, 163 A.2d 609, 611 (D.C. 1960); In re Ashby Enterprises, 47 Bankr. 394, 397 (D.D.C. 1985)). Defendant contends that plaintiff has failed to raise a genuine issue of material fact with respect to whether legal contracts between the six wholesalers and plaintiff existed. The Court agrees.
It is undisputed that the wholesalers did not have specific contracts with plaintiff for the offerings at issue in this case. Plaintiff alleges, however, that because the wholesalers were its employees, defendant interfered with its continuing employment contracts with the wholesalers. The undisputed facts show, however, that the wholesalers were not employees, but rather independent contractors: plaintiff retained and compensated them on a project by project basis; plaintiff did not pay any employment benefits on their behalf; plaintiff submitted 1099 forms, rather than W-2 forms, to the Internal Revenue Service; and plaintiff exercised minimal control over the means and manner by which the individual wholesalers performed their work. See Restatement (Second) of Agency § 220(2) (1958).
In addition, four of the six wholesalers have submitted affidavits stating that they considered themselves to be independent contractors.
As independent contractors, the wholesalers did not have enforceable, continuing contracts with plaintiff. Therefore, plaintiff has failed to raise a genuine issue of material fact as to whether an enforceable, legal contract existed. Accordingly, the Court grants summary judgment for defendant on Count III of plaintiff's complaint.
For the foregoing reasons, the Court grants defendant's motion to vacate, and to reconsider, and denies plaintiff's motion for leave to file an amended complaint. The Court also grants defendant's motion for summary judgment. An appropriate Order accompanies this Opinion.
Stanley S. Harris
United States District Judge
Date: DEC 13 1993
For the reasons stated in the accompanying Opinion, it hereby is
ORDERED, that defendant's motion to vacate and to reconsider the Court's Order of October 6, 1993, is granted. It hereby further is
ORDERED, that plaintiff's motion for leave to file an amended complaint is denied. It hereby further is
ORDERED, that defendant's motion for summary judgment is granted.
Stanley S. Harris
United States District Judge
Date: DEC 13 1993