Recently, the California Supreme Court clarified that California Penal Code section 496 applies to business disputes. This is significant as Section 496 outlines penalties for someone who buys or receives stolen property, or property obtained through theft or extortion. (Penal Code § 496.) Of particular concern is 496, subdivision (c), which allows triple damages and attorneys’ fees as available remedies for someone who converts stolen property. (Id.) Over the years, there has been a longstanding debate in California on whether Penal Code section 496 applies to business disputes.
On the one hand, California appellate courts held that section 496 did apply to business disputes according to the wording of the statute. On the other hand, California appellate courts also held that section 496 did not apply to business disputes involving theft through fraud or misrepresentation. A recent California Supreme Court case finally resolved the split.