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Legal Update: Civil Theft Statute Does Not Apply To Repayment of Advanced But Unearned Commissions

Posted by Michael J. Rose | May 04, 2021 | 0 Comments

What are the limitations of Connecticut's Civil Theft Statute and when can an employee recover against an employee in Connecticut? According to a recent Superior Court decision, Global Staffing Services, LLC v. Brian Murray, advanced but unearned commissions are not entitled to the treble damages award which usually accompanies a civil theft action.

Connecticut's Civil Theft statute (C.G.S. 52-564) provides for an award of treble damages for any person who “steals the property of another, or knowingly receives and conceals stolen property.”

In Global Staffing Services, the plaintiff attempted to recover advanced commissions it had extended to the defendant for a variety of computer service projects the defendant had undertaken. The Court determined that an award of treble damages would turn on whether or not the advanced commissions were a “mere obligation to pay money” pursuant to an agreement or whether the commissions were actual theft.

Applying an appellate court decision in Hamann v. Carl, 196 Conn.App. 583 (2020), the Court found fatal to a Civil Theft statute claim that failure to repay money when the conversion was not based on a specific amount of money but was instead given to satisfy an existing debt.

In Global Staffing Services, too, Court found unpersuasive the qualities of the payments themselves. Rather than a single lump sum payment, the advanced commissions that the Plaintiff attempted to recover were “weekly payments made by the plaintiff to the defendant, rather than specific identifiable money.”

In short, the Court determined that the Civil Theft statute here could not permit recovery for money that would effectively repay a debt. For a Civil Theft claim to prevail, there must be a specific amount of money in contest and, critically, it must have been stolen or knowingly received.

Before bringing an action to recover advance commissions, you should think carefully about the type of payment and the terms under which it was given.  If you are evaluating actions against employees under the Civil Theft statute, consult with the experienced attorneys at Rose Kallor, LLP to support your case and understand the possible damages you could recover by calling 860.361.7999.

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Michael J. Rose

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