Vondjidis v. Hewlett Packard Corporation
In the Court of Appeal of the State of California
25 November 2008; Cite as 2008 SOS 6455

Corporation’s Immunity Set Aside in Unlawful Transfer of Shares

Alexander Vondjidis was employed as an engineer by the Hewlett Packard Corporation at its Athens, Greece office sometime from 1974 to late 1978. He was living in Athens at that time.

Vondjidis purchased 17 shares of HP stock through the HP’s employee stock purchase plan. When he filled out an application, he provided HP with his Athens home address. While he was still employed, all communications relating to HP shares were sent from HP’s California office to Vondjidis HP’s Athens office which the company had listed as Vondjidis shareholder address of record.

Communications continued to be sent at the Athens office, and HP employees there forwarded the same to Vondjidis Athens home address after his employment with HP was terminated.

When Vondjidis eventually moved to Canada sometime on 1981, he continued to maintain the same house address in Athens and continued to receive mail that was sent to his Athens home address. However, when HP closed its Athens office, Vondjidis stop receiving correspondence from HP.

Sometime in 1993, HP transferred Vondjidis’ share to the state as unclaimed property, considering him as “lost shareholder”. Prior to the transfer, he did not receive any actual notice, neither there was evidence that any notice was sent or attempted to be sent prior to the transfer. Vondjidis learned that his stock was transferred to the state only on 2001. He eventually recovered about $22,000 from the State.

Vondjidis sued Hewlett Packard alleging the following, among others:

• breach of contract
• breach of fiduciary duty
• conversion
• fraud in the transfer of plaintiff’s share to the state

HP moved for summary judgment on immunity and statute of limitations grounds. The superior court granted the same. The court entered judgment in HP’s favor and dimissed the action.

On appeal, the Court of Appeal of the State of California held that:

• Title 10 of Part 3 of the Code of Civil Procedure immunity provisions do not shield a corporation that transfers property to the State in violation thereof
• HP failed to meets its burden of demonstrating the nonexistence of any triable issue of material fact
• A reasonable jury could have concluded that Vondjidis failure to suspect misfeasance was reasonable in light of the history of his relationship with HP and the informal manner in which HP had dealt with his stock ownership
• HP did not establish entitlement to summary judgment on statute of limitations grounds

The Court, therefore, reversed the judgment of the superior court and remands the case with directions to vacate the order granting HP’s summary judgment.