Lacagnina v. Comprehend Sys., Inc.
236 Cal. Rptr. 3d 641
| Cal. Ct. App. 5th | 2018Background
- Plaintiff David Lacagnina left his reseller business to join startup Comprehend as director of business development (June 2012–Nov 2013) based on oral and written promises of salary, commissions, and stock options.
- Lacagnina helped Comprehend secure initial customers and materially assisted in obtaining Series A financing.
- In June 2013 Comprehend presented an amended offer with new conditions (commission conditions, no repayment promise for e-Clinical investment); Lacagnina signed after oral assurances to "revisit" terms.
- Comprehend later hired a new VP of Sales, directed Lacagnina to transition accounts, and terminated him in November 2013; Lacagnina claimed lost commissions and emotional distress.
- Jury found for Lacagnina on fraud, breach of contract, and breach of the implied covenant, awarding $556,446 total. Trial court granted JNOV on fraud (finding no harm from misrepresentations) and entered amended judgment of $255,000; trial court also granted nonsuit on Penal Code §496 claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether JNOV on fraud was proper | Lacagnina argued he was fraudulently induced to sign amended offer and was harmed (lost commissions, left e-Clinical) | Comprehend argued reliance was unreasonable and no substantial evidence of actionable fraud or harm | Reversed: JNOV on fraud was erroneous; evidence of harm and reliance for jury to decide |
| Whether Penal Code §496 treble‑damages claim (receipt of stolen property) applies to "theft" of labor | Lacagnina contended defendants received his "labor" by false pretenses, so §496(c) treble damages and fees apply | Comprehend argued §496 applies only to property as defined in Penal Code (not labor) and essential elements of §496 not met | Affirmed: §496 does not cover labor; nonsuit proper |
| Whether breach of contract and breach of covenant awards should stand | Lacagnina relied on jury verdict awarding contract and covenant damages (including unpaid commissions/options) | Comprehend sought JNOV/relief; argued at‑will terms and contract language precluded damages | Affirmed: trial court properly denied JNOV on contract and covenant claims; those jury awards reinstated on remand |
| Whether punitive damages predicate met and effect on judgment | Lacagnina sought punitive damages; jury found no malice/oppression/despicable conduct | Defendants argued no basis for punitive damages | Jury verdict (no punitive) stands; not disturbed on appeal |
Key Cases Cited
- Flanagan v. Flanagan, 27 Cal.4th 766 (establishing view‑favorably‑to‑verdict standard for JNOV review)
- People v. Prunty, 62 Cal.4th 59 (de novo review of statutory interpretation on undisputed facts)
- Bell v. Feibush, 212 Cal.App.4th 1041 (treble damages under §496(c) may be awarded without criminal conviction — discussed and distinguished)
- People v. Gonzales, 2 Cal.5th 858 (Penal Code definition of "property" excludes labor/services for purposes of theft statutes)
- Delaney v. Superior Court, 50 Cal.3d 785 (if statute unambiguous, legislative history need not be considered)