NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

LA TECH AND CONSULTING, LLC, a 

California Limited Liability Company, 

Plaintiff-Appellant, 

 v. 

AMERICAN EXPRESS COMPANY, a Utah 

Corporation Erroneously Sued As American 

Express Company, Inc.; DOES, 1 to 50, 

inclusive, 

Defendants-Appellees.

No. 22-56221 

D.C. No. 

8:22-cv-01213-DOC-KES 

MEMORANDUM*

Appeal from the United States District Court

for the Central District of California

David O. Carter, District Judge, Presiding

Argued and Submitted November 9, 2023 

Pasadena, California

Before: W. FLETCHER and OWENS, Circuit Judges, and SCHREIER,** District 

Judge.

LA Tech and Consulting, LLC (“LA Tech”) appeals from the district court’s 

* This disposition is not appropriate for publication and is not precedent 

except as provided by Ninth Circuit Rule 36-3.

** The Honorable Karen E. Schreier, United States District Judge for the 

District of South Dakota, sitting by designation.

FILED

NOV 24 2023

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS
2 

judgment dismissing its claims against American Express Company (“AMEX”). 

The district court dismissed LA Tech’s claims with prejudice, holding that LA 

Tech failed to plead factual allegations sufficient to support its (1) claim for receipt 

of stolen property under section 496 of the California Penal Code (“section 496”), 

(2) section 496 claims for withholding and concealing of stolen property, and (3) 

claim for conversion. As the parties are familiar with the facts, we do not recount 

them here. We affirm the district court’s dismissal of LA Tech’s claims for receipt 

of stolen property and conversion. We reverse and remand the district court’s 

dismissal of LA Tech’s claims for withholding and concealing of stolen property. 

We review de novo a district court’s dismissal for failure to state a claim

under Federal Rule of Civil Procedure 12(b)(6). Barrett v. Belleque, 544 F.3d 

1060, 1061 (9th Cir. 2008) (per curiam). The complaint’s factual allegations are 

assumed true, and all reasonable inferences are drawn in the plaintiff’s favor. Id. 

The claim must be “plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 

(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). 

Conclusory legal statements are not sufficient. Id. 

The district court properly determined that LA Tech failed to plead sufficient 

factual allegations to state a plausible claim for receipt of stolen property under 

section 496. For this claim, the plaintiff must establish (1) the property was stolen, 

(2) the defendant knew the property was stolen, and (3) the defendant received the 
3 

stolen property. Switzer v. Wood, 247 Cal. Rptr. 3d 114, 121 (Ct. App. 2019). A 

necessary element of receipt of stolen property is the defendant’s actual knowledge 

at the time of receipt that the property was stolen. People v. Tessman, 168 Cal. 

Rptr. 3d 29, 35 (Ct. App. 2014). 

LA Tech argues that the online payment system AMEX designed was 

susceptible to fraud and AMEX must have known it was subject to exploitation.

Even if LA Tech’s sole factual allegation were assumed true (i.e., AMEX’s online 

system is susceptible to fraud), its legal conclusion that AMEX must have known 

that the funds it was receiving from LA Tech were stolen is not entitled to an 

assumption of truth under Rule 12(b)(6), nor is it facially plausible. See Iqbal, 556 

U.S. at 678. LA Tech alternatively argues that actual knowledge is not required, 

the property does not have to be stolen at the time of receipt, the issue of actual 

knowledge is left to the jury, and an alleged agency relationship between AMEX 

and the unknown persons that stole the money could impute actual knowledge to 

AMEX. We are not persuaded by these alternative arguments. 

The district court also properly determined that LA Tech failed to plead 

sufficient factual allegations to state a claim for conversion. Conversion claims for 

money require a “specific” and “identifiable” sum and “typically involve those 

who have misappropriated, commingled, or misapplied specific funds held for the 

benefit of others.” PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & 
4 

Shapiro, LLP, 58 Cal. Rptr. 3d 516, 524-25 (Ct. App. 2007). The money here was 

not a “specific sum capable of identification” because it was not held in a 

segregated fund for the benefit of LA Tech. Software Design & Application, Ltd. 

v. Hoefer & Arnett, Inc., 56 Cal. Rptr. 2d 756, 764 (Ct. App. 1996). 

However, contrary to the district court’s determination, LA Tech sufficiently 

pled facts to support its section 496 claims for withholding and concealing stolen 

property. See Bell v. Feibush, 151 Cal. Rptr. 3d 546, 552 (Ct. App. 2013) (noting

that withholding stolen property is a distinct offense from receipt of stolen property

under section 496). For withholding and concealing of stolen property, the 

plaintiff must establish (1) the property was stolen, (2) the defendant knew the 

property had been stolen, and (3) the defendant had received the stolen property. 

Switzer, 247 Cal. Rptr. 3d at 121. Because LA Tech established (for the purpose of 

pleading) that the property had been stolen, and AMEX does not dispute that it 

received the stolen property, the primary issue here is AMEX’s knowledge. As 

with a claim for receipt of stolen property, a “necessary element” is actual 

knowledge that the property had been stolen. Tessman, 168 Cal. Rptr. 3d at 35. 

LA Tech argues its March 14 letter put AMEX on notice that the property 

had been stolen. Assuming LA Tech’s factual allegations are true (i.e., LA Tech 

did not authorize the withdrawals from its account and AMEX received the March 

14 letter), the claims that AMEX had actual knowledge the funds were stolen when 
5 

it withheld and concealed the funds are facially plausible. See Iqbal, 556 U.S. at 

678. AMEX was allegedly told the funds were stolen and withheld them 

regardless. See Williams v. Superior Court, 146 Cal. Rptr. 311, 319 (Ct. App. 

1978) (“One reason for including both receiving and concealing stolen property 

within the proscription of Penal Code section 496 is that it enables prosecution of 

one who innocently acquires property, but later learns that it was stolen and 

thereafter conceals it.”); People v. McFarland, 376 P.2d 449, 452 (Cal. 1962) 

(“Possession of recently stolen property is so incriminating that to warrant 

[liability] there need only be, in addition to possession, slight corroboration in the 

form of statements or conduct of the defendant tending to show [its liability].”); 

see also generally Naftzger v. Am. Numismatic Soc’y, 49 Cal. Rptr. 2d 784, 791 

(Ct. App. 1996) (noting that there is “a continuing affirmative duty to return stolen 

property to its rightful owner”). 

Because the district court’s dismissal of LA Tech’s section 496 claims for 

withholding and concealing stolen property was premature at this early stage of the 

proceedings, we reverse the district court’s dismissal and remand. We affirm the 

district court’s dismissal of LA Tech’s claims for receipt of stolen property and 

conversion.

Each party shall bear its own costs on appeal. 

AFFIRMED in part, REVERSED in part, and REMANDED.