A dishonest investment advisor stole $490,000 from plaintiff and used the stolen funds to pay defendant in settlement of defendant’s claims on a defaulted promissory note and for misappropriating its funds. Held, summary judgment for defendant is reversed. A person who innocently and in good faith accepts money from a thief is not liable to the victim, but one who has reason to believe the funds were stolen may be liable for restitution to the victim. Here, plaintiff presented sufficient evidence to raise a triable issue of fact as to whether the defendant had sufficient knowledge of suspicious circumstances to put it on notice that the funds it received were stolen. The defendant knew that the thief had defaulted on the note more than a year before, had been fired from his brokerage firm, was being investigated by that firm for wrongdoing, and had stolen substantial sums from clients including the defendant.
California Court of Appeal, Second Appellate District, Division 2 (Goodman, J.); April 25, 2018; 2018 Cal. App. LEXIS 365