Qayumi v. Talent Net, Inc.

Background

Ariana Qayumi’s second amended complaint asserted 14 federal and California employment claims against RBC Capital Markets, LLC and TalentNet, Inc. Qayumi alleged that RBC recruited her in 2016 as a product manager but hired her as a contractor through TalentNet. Her allegations included wage and reimbursement issues, conversion, breach of contract, unfair business practices, and wrongful termination.

RBC moved under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal when a complaint does not state a legally sufficient claim. RBC targeted the eighth cause of action for conversion and the tenth cause of action for breach of contract. The tenth cause of action also appeared to include a fiduciary-duty theory.

Conversion claim

Under California law, conversion requires a plaintiff to show ownership or an immediate right to possess property, a defendant’s wrongful interference with that property, and damages. Qayumi alleged that an RBC supervisor instructed her to purchase office furniture, computer equipment, and other supplies with her own money, and that RBC promised to reimburse her.

The court held that these allegations did not plausibly show that Qayumi owned the items or had an immediate right to possess them when the alleged conversion occurred. The court reasoned that Qayumi bought the items at RBC’s direction and on RBC’s behalf, and that a contractual right to payment, without more, does not establish ownership or a right to possession. Because the first element was missing, the court did not decide whether the allegations adequately showed the other elements.

RBC argued that the conversion claim should be dismissed with prejudice because California Labor Code section 2802 provided the exclusive remedy. The court rejected that argument at this stage. It explained that the rules allow a plaintiff to plead alternative or inconsistent theories, so the conversion claim was dismissed with leave to amend.

Contract claims

A breach-of-contract claim under California law requires a contract, the plaintiff’s performance or an excuse for nonperformance, the defendant’s breach, and resulting damages. The court found that Qayumi did not plausibly allege that RBC promised to provide her pay and benefits. Her allegations instead indicated that RBC told her TalentNet would hire her and handle payroll and other employment administration.

The court also found that Qayumi’s alleged oral promise of $50 per hour conflicted with the written employment agreement attached to the complaint. That agreement identified TalentNet and Qayumi as the parties, stated that it was the entire agreement concerning the subject matter, and superseded prior oral or written agreements. The court therefore found the separate oral employment-contract theory implausible as pleaded.

Qayumi separately alleged that RBC breached an oral agreement to reimburse purchases for an RBC office. The court found that the complaint did not specify important terms, including the budget, the authorized items, what Qayumi purchased, when she completed the project, what expenses she submitted, or when RBC breached. The related claims for breach of the implied duty of good faith also were not plausibly alleged because that duty depends on an existing contract.

The court further found that Qayumi had not pleaded facts showing that she could sue for an alleged breach of the staffing contract between RBC and TalentNet as a third-party beneficiary. A third-party beneficiary is someone the contracting parties intended to benefit from their agreement. The court also dismissed, to the extent alleged against RBC, the theory that RBC was liable for TalentNet’s alleged breach of fiduciary duty. The complaint relied on conclusory assertions that TalentNet acted as RBC’s agent in administering Qayumi’s wages and benefits and alleged no facts showing RBC controlled that administration.

The court did not resolve RBC’s statute-of-limitations argument because it was not appropriate for decision on this motion to dismiss.

Disposition

The court granted RBC’s motion to dismiss and dismissed the eighth and tenth causes of action against RBC with leave to amend. Qayumi could file an amended complaint consistent with the order by February 3, 2023. The order stated that failure to meet the deadline or otherwise comply would result in dismissal with prejudice under Rule 41(b).