CRS Recovery Inc et al v. Laxton et al

Filing 170

ORDER by Judge Claudia Wilken granting 118 Plaintiffs' Motion for Summary Judgment; denying 131 Defendants' Cross Motion for Summary Judgment; denying as moot 161 Ex Parte Application to Shorten Time for Extension of Time to Complete Discovery (scc, COURT STAFF) (Filed on 9/26/2008)

1 2 3 4 5 6 7 8 9 10 United States District Court For the Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 In addition to Laxton and NRE, the second amended complaint names a number of additional Defendants. At the hearing on the present motion, Plaintiffs stated that they would voluntarily dismiss the claims they have asserted against Defendants other than
1

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA

CRS RECOVERY, INC., a Virginia Corporation, and DALE MAYBERRY, Plaintiffs, v. JOHN LAXTON, aka [e-mail], et al., Defendants. /

No. C 06-7093 CW ORDER GRANTING PLAINTIFFS' MOTION FOR SUMMARY ADJUDICATION AND DENYING DEFENDANTS' CROSS-MOTION FOR SUMMARY ADJUDICATION

Plaintiffs CRS Recovery, Inc. and Dale Mayberry move for summary adjudication on their claims for conversion and declaratory relief. Defendants John Laxton and Northbay Real Estate, Inc.

(NRE) oppose Plaintiffs' motion and cross-move for summary judgment or, in the alternative, summary adjudication.1 The matter was

1 2 3 4 5 6 7 8 9 10 United States District Court For the Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

heard on September 18, 2008.

Having considered oral argument and

all of the papers submitted by the parties, the Court grants Plaintiffs' motion and denies Defendants' motion. BACKGROUND This case arises from the theft of two internet domain names from Mayberry: rl.com and mat.net. Since this action was Defendants

initiated, Mayberry has recovered control of mat.net. currently maintain control of rl.com. Mayberry is a citizen of Virginia.

On July 23, 1995, he

registered the domain name rl.com through Network Solutions, Inc. (NSI). RL was intended to be an acronym for "real life," a term Mayberry also registered the MAT stands for Micro

used in the online gaming world.

domain name mat.net at an unspecified time.

Access Technologies, Inc., an internet service provider company that was owned and operated by Mayberry. The company went out of

business in 2001, but Mayberry continued to maintain the mat.net domain name through NSI. As the registered administrator of both

domain names, Mayberry provided NSI with the email address [e-mail] as part of his contact information. To maintain a domain name registration with NSI, the registrant must pay yearly registration fees. These fees can be Mayberry

paid several years in advance or on a yearly basis.

states in his declaration that he renewed the registration of rl.com on July 23, 2002 for three years, leading to an expiration date of July 24, 2005. This account is confirmed by NSI's business

Laxton and NRE. Those claims are therefore dismissed. The term, "Defendants," as used in this order, refers to Laxton and NRE only. 2

1 2 3 4 5 6 7 8 9 10 United States District Court For the Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

records.2 According to NSI's records, on December 19, 2003, control over the mat.net domain was transferred to Beijing Sinonets Network & Telecom. Hosting for mat.net was transferred from NSI's servers to After this transfer, Mayberry was unable to At some

servers at bim.com.

send or receive emails using the [e-mail] address.

point thereafter, Li Qiang was listed as the administrative contact for the mat.net domain, with an email address of [e-mail].3 the administrator of mat.net, Qiang was able to use the [e-mail] email address. The circumstances surrounding the transfer of mat.net are not entirely clear. Defendants' expert submits, with some support in As

the record, that Mayberry failed to renew mat.net's registration when it expired on October 2, 2003. At his deposition, Mayberry

testified that he did not attempt to renew this registration until sometime in December, 2003, at which point his registration would have already expired.
2

If Mayberry's registration of mat.net had

Defendants object to the use of the records because Plaintiffs allegedly failed to serve them with notice of the deposition of Natalie Sterling, the NSI records custodian to whose declaration the records are attached. However, while failure to serve notice of a third-party deposition is improper under the Federal Rules of Civil Procedure, it does not appear that Plaintiffs actually deposed Ms. Sterling. Instead, Ms. Sterling submitted the declaration in lieu of giving deposition testimony. Defendants also object to Ms. Sterling's interpretation of the records because she has not laid a proper foundation for her testimony. However, the Court has not relied on Ms. Sterling's interpretation of the documents, but rather on the documents themselves. Plaintiffs assert that the administrative contact information was changed on December 19, 2003, but the record they cite in support of this assertion appears to identify the administrative contact as of March 28, 2004. See Sterling Dec. Ex. B at 14. 3
3

1 2 3 4 5 6 7 8 9 10 United States District Court For the Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

expired, the domain would have been available for someone else to register. NSI's documents show that on December 19, 2003, before

the transfer was initiated, Mayberry's contact information was associated with mat.net's registration. But the same document also

shows that NSI's record of mat.net's registration was created on December 18, 2003 and was set to expire on October 2, 2004 -- less than the one-year interval for which registration is purchased. Plaintiffs do not fully explain these discrepancies. However,

these details are not dispositive of the present motion because Plaintiffs' claims concern the theft of rl.com, not mat.net.4 On December 23, 2003, Qiang changed the email address associated with his NSI user account from [e-mail] to [e-mail]. He then submitted a transfer request to NSI asking NSI sent an email to

that the domain rl.com be transferred to him.

[e-mail], which was still listed as the administrative contact for rl.com, requesting authorization for the transfer. The email

contained a link to a secure web page from which the transfer could be approved. Mayberry did not receive this email because he no The recipient of

longer had access to email sent to [e-mail].

the email -- presumably Qiang -- approved the transfer, and control of rl.com passed out of Mayberry's hands. It is not clear exactly when Mayberry learned that mat.net and rl.com had been "hijacked." In his declaration, he states that he

learned of rl.com's status on or about January 19, 2004, when a

Although Defendants assert that "Mayberry gave up rl.com when he let mat.net expire," they do not support this conclusory statement with any legal authority, as discussed below. 4

4

1 2 3 4 5 6 7 8 9 10 United States District Court For the Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

third party informed him that the domain was no longer registered under his name. However, it appears that he learned of problems Mayberry made several phone calls

with mat.net at an earlier date.

to attempt to recover control of the domains, but met with no success. There are some discrepancies in the record concerning the

details of Mayberry's efforts to recover the domains, but these details are not material, as discussed below. Rl.com was eventually transferred to an individual in India named Barnali Kalita. In 2005, Laxton learned that Kalita owned

the domain and contacted him to inquire whether it was for sale. Laxton is a citizen of California and was interested in purchasing the domain to serve as a website for his business, NRE, headquartered in California. $15,000. Kalita sold rl.com to Laxton for A visit to the

The sale was completed on May 20, 2005.

website rl.com retrieves a page entitled, "Real Estate Loans." In October, 2004, Richard Lau, a principal of CRS Recovery, a Virginia corporation, learned of the hijacking of rl.com and contacted Mayberry. Mayberry agreed to transfer all of his rights

to the domain to CRS Recovery in exchange for a monetary payment and the promise that CRS Recovery would attempt to return mat.net to him. Plaintiffs assert claims against Defendants for conversion, intentional interference with contract, violation of the California Unfair Competition Law, and declaratory relief. LEGAL STANDARD Summary judgment is properly granted when no genuine and disputed issues of material fact remain, and when, viewing the 5

1 2 3 4 5 6 7 8 9 10 United States District Court For the Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

evidence most favorably to the non-moving party, the movant is clearly entitled to prevail as a matter of law. Fed. R. Civ. P.

56; Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Eisenberg v. Ins. Co. of N. Am., 815 F.2d 1285, 1288-89 (9th Cir. 1987). The moving party bears the burden of showing that there is no material factual dispute. Therefore, the court must regard as true

the opposing party's evidence, if it is supported by affidavits or other evidentiary material. 815 F.2d at 1289. Celotex, 477 U.S. at 324; Eisenberg,

The court must draw all reasonable inferences in

favor of the party against whom summary judgment is sought. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Intel Corp. v. Hartford Accident & Indem. Co., 952 F.2d 1551, 1558 (9th Cir. 1991). Material facts which would preclude entry of summary judgment are those which, under applicable substantive law, may affect the outcome of the case. are material. (1986). Where the moving party does not bear the burden of proof on an issue at trial, the moving party may discharge its burden of production by either of two methods: The moving party may produce evidence negating an essential element of the nonmoving party's case, or, after suitable discovery, the moving party may show that the nonmoving party does not have enough evidence of an essential element of its claim or defense to carry its ultimate burden of persuasion at trial. Nissan Fire & Marine Ins. Co., Ltd., v. Fritz Cos., Inc., 210 F.3d 6 The substantive law will identify which facts

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248

1 2 3 4 5 6 7 8 9 10 United States District Court For the Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

1099, 1106 (9th Cir. 2000). If the moving party discharges its burden by showing an absence of evidence to support an essential element of a claim or defense, it is not required to produce evidence showing the absence of a material fact on such issues, or to support its motion with evidence negating the non-moving party's claim. Id.; see also

Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 885 (1990); Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 1991). If the

moving party shows an absence of evidence to support the non-moving party's case, the burden then shifts to the non-moving party to produce "specific evidence, through affidavits or admissible discovery material, to show that the dispute exists." F.2d at 1409. If the moving party discharges its burden by negating an essential element of the non-moving party's claim or defense, it must produce affirmative evidence of such negation. F.3d at 1105. Nissan, 210 Bhan, 929

If the moving party produces such evidence, the

burden then shifts to the non-moving party to produce specific evidence to show that a dispute of material fact exists. Id.

If the moving party does not meet its initial burden of production by either method, the non-moving party is under no obligation to offer any evidence in support of its opposition. Id.

This is true even though the non-moving party bears the ultimate burden of persuasion at trial. Id. at 1107.

Where the moving party bears the burden of proof on an issue at trial, it must, in order to discharge its burden of showing that no genuine issue of material fact remains, make a prima facie 7

1 2 3 4 5 6 7 8 9 10 United States District Court For the Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

showing in support of its position on that issue.

UA Local 343 v. That

Nor-Cal Plumbing, Inc., 48 F.3d 1465, 1471 (9th Cir. 1994).

is, the moving party must present evidence that, if uncontroverted at trial, would entitle it to prevail on that issue. Id. Once it

has done so, the non-moving party must set forth specific facts controverting the moving party's prima facie case. 48 F.3d at 1471. UA Local 343,

The non-moving party's "burden of contradicting Id. This

[the moving party's] evidence is not negligible."

standard does not change merely because resolution of the relevant issue is "highly fact specific." Id.

DISCUSSION I. Choice of Law The parties dispute whether California or Virginia law should apply to Plaintiffs' conversion claim. This issue is potentially

dispositive because California law recognizes a property interest in domain names, Kremen v. Cohen, 337 F.3d 1024 (9th Cir. 2003), whereas Virginia law does not, Network Solutions Inc. v. Umbro, 259 Va. 759 (2000). "When a federal court sitting in diversity hears state law claims, the conflicts laws of the forum state are used to determine which state's substantive law applies." Orange Street Partners v. The Court thus looks to

Arnold, 179 F.3d 656, 661 (9th Cir. 1999).

California choice-of-law doctrine to determine whether to apply Virginia or California law to the conversion claim. California has adopted the "governmental interest" approach to choice of law issues. explained, 8 As the California Supreme Court has

1 2 3 4 5 6 7 8 9 10 United States District Court For the Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

the governmental interest approach generally involves three steps. First, the court determines whether the relevant law of each of the potentially affected jurisdictions with regard to the particular issue in question is the same or different. Second, if there is a difference, the court examines each jurisdiction's interest in the application of its own law under the circumstances of the particular case to determine whether a true conflict exists. Third, if the court finds that there is a true conflict, it carefully evaluates and compares the nature and strength of the interest of each jurisdiction in the application of its own law to determine which state's interest would be more impaired if its policy were subordinated to the policy of the other state, and then ultimately applies the law of the state whose interest would be the more impaired if its law were not applied. Kearney v. Salomon Smith Barney, Inc., 39 Cal. 4th 95, 107-08 (2006) (citation and internal quotation marks omitted). "A party

advocating application of foreign law must demonstrate that the foreign rule of decision will further the interest of that foreign state and therefore that it is an appropriate one for the forum to apply to the case before it." Tucci v. Club Mediterranee, S.A., 89 If California law can be applied

Cal. App. 4th 180, 188-89 (2001).

without violating the policy of the foreign state, there is a false conflict, and California law should be applied. See id.

The parties do not dispute that, as noted above, the rule in California differs from that in Virginia in a material respect. Accordingly, the Court proceeds to determine whether Virginia has an interest in applying its law to this case. Defendants argue generally that Virginia has an interest in not having the "underlying policies" of its property law "negated" by the Court's recognition of a property right, rather than just a contract right, to a domain name. But they have not identified any

specific policy advanced by the rule, and their argument thus 9

1 2 3 4 5 6 7 8 9 10 United States District Court For the Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

amounts to saying that Virginia's interest in having its rule applied is in not having another State's rule applied. This is no

more of an interest than any State will always have in any comparative interest analysis -- California likewise has an generalized interest in not having the "underlying policies" of its property law, which recognizes a property right to domain names, negated. The question is whether the policies underlying

Virginia's rule would actually be furthered by applying the rule in the specific context of this case. Accordingly, the Court must

focus on the specific interests that are advanced by the rule. Virginia's rule protects the purchaser of a domain name from liability for conversion. Because Virginia has established that no

property rights can be exercised over a domain name, individuals who purchase a domain within the State can justifiably expect that they will not be held liable for conversion in connection with that purchase. Virginia's interest is thus appropriately characterized

as in providing these purchasers with a predictable limitation of their potential liability. See Tucci, 89 Cal. App. 4th at 190.

Defendants have cited no authority to support the view that the State's decision not to impose liability for conversion should instead be seen as expressing a particular interest in preventing its citizens, like Mayberry, from recovering a domain name that has been stolen from them. If Defendants resided in Virginia or if Laxton had purchased rl.com in Virginia, Virginia could be said to have an interest in applying its rule in this case. However, Laxton is a citizen of

California and the conduct that gave rise to Defendants' liability 10

1 2 3 4 5 6 7 8 9 10 United States District Court For the Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

for conversion is Laxton's purchase of rl.com from Kalita.

See

Soc'y of Cal. Pioneers v. Baker, 43 Cal. App. 4th 774, 781-83 (1996) (noting the long-standing rule that a cause of action for conversion against a subsequent purchaser of the property accrues when the purchaser obtains possession, not at the time of the original conversion). Virginia. No aspect of that transaction took place in

It is not clear that Laxton would even be subject to the

personal jurisdiction of the Virginia courts if this action had been brought there. Virginia has no interest in protecting the

conduct of a California resident when that conduct has no connection to Virginia. As California residents, Defendants had no

justifiable expectation that their conduct would be shielded from liability for conversion. Applying Virginia law in this instance

would thus do nothing to further that State's interest in providing its residents with a predictable definition of liability.5 In

contrast, California has an interest in regulating conduct that occurs within its borders and in ensuring that redress is available when such conduct is tortious. See Zimmerman v. Allstate Ins. Co., California therefore has an

179 Cal. App. 3d 840, 846 (1986).

interest in seeing its rule applied to this case. Defendants rely heavily on choice-of-law doctrine as it applies to contract disputes. They note that the registration

agreement between Mayberry and NSI provided that all disputes Nor does the fact that Mayberry was originally injured in Virginia indicate that Virginia law should apply; in adopting the governmental interest approach to choice of law questions, California displaced the previous approach of applying the law of the state where the injury occurred. Hurtado v. Superior Court, 11 Cal. 3d 574, 579-80 (1974). 11
5

1 2 3 4 5 6 7 8 9 10 United States District Court For the Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

concerning their contractual obligations would be governed by Virginia law. contract. But this is not an action for breach of the NSI

Likewise, the existence of an agreement between Mayberry

and Laxton is wholly irrelevant to Plaintiffs' conversion claim. Plaintiffs are asserting a property right against Defendants. the same reason, the terms of the contract between Laxton and Kalita (which has no connection to Virginia other than that the domain registration information is allegedly located in a database on computers in that State) has no bearing on the law that should be applied to the conversion claim. Defendants further assert that Virginia has an interest in applying its law because, if California law were applied in this case, it would "impact domain name registration services for some of the largest domain name registrars and registries in the world, including NSI, VeriSign and others, which have their computer databases located in Virginia." Defs.' Br. At 8. Defendants fail For

to explain, however, how applying California law to Plaintiffs' conversion claim would have any effect whatsoever on the operations of the providers of domain registration services. The liability of

those providers is simply not at issue here, and thus applying California law to the conversion claim would not "encourage plaintiffs to forum shop in order to try to circumvent the settled law of Virginia" and hold providers liable. Id. at 9. Nor does

the fact that the domain registration information is allegedly located in a database on computers in Virginia6 give Virginia an

6

The parties dispute the location of the registry information. 12

1 2 3 4 5 6 7 8 9 10 United States District Court For the Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

interest in protecting Defendants' conduct. Because Virginia does not have an interest in the application of its rule to this case whereas California does, the posited conflict is a false one. law. II. Liability for Conversion Under California Law Under California law, conversion is defined as "the wrongful exercise of dominion over the personal property of another." Fremont Indem. Co. v. Fremont General Corp., 148 Cal. App. 4th 97, 119 (2007). "The basic elements of the tort are (1) the The Court will therefore apply California

plaintiff's ownership or right to possession of personal property; (2) the defendant's disposition of the property in a manner that is inconsistent with the plaintiff's property rights; and (3) resulting damages." actions. Id. Damages are presumed in conversion

See Cal. Civ. Code §§ 3336-3337.

Defendants argue that, even if California law applies to Plaintiffs' claim against them, in order to prove that they are liable for conversion, Plaintiffs must establish that the original theft of rl.com by Qiang constituted conversion under Virginia law. This argument is not persuasive. It does not appear that Virginia

law would apply to a conversion claim in this Court by Plaintiffs against Qiang, in that Qiang is not a Virginia citizen and does not appear to have stolen rl.com in Virginia. But even if it did, the

conversion claim before the Court is not against Qiang, it is against Defendants. Pursuant to California law, which the Court

has already determined applies to Plaintiffs' claim against Defendants, Mayberry had a property right to rl.com at the time it 13

1 2 3 4 5 6 7 8 9 10 United States District Court For the Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

was taken from him.

He was not lawfully dispossessed of that right

by Qiang's seizure of the domain without Mayberry's authorization, and thus it was not possible for Defendants to acquire a right to the domain superior to Mayberry's by virtue of Laxton's purchase from Kalita. conversion. It is of no consequence that Defendants purchased rl.com in good faith and without knowledge of Qiang's previous theft of the domain name. In Express Media Group, LLC v. Express Corp., 2007 WL Defendants are therefore prima facie liable for

1394163 (N.D. Cal.), the court addressed the applicability of the good-faith-purchaser defense in an action for conversion of a stolen domain name. The court noted that California law

"distinguishes between the person who purchased from someone who obtained title to the property by fraud and the person who purchased from a thief who had no title to sell. . . . An involuntary transfer results in void title, while a voluntary transfer, even if fraudulent, results in voidable title." Id. at

*5 (citing Cal. Com. Code § 2403(1); Suburban Motors, Inc. v. State Farm Mut. Auto. Ins. Co., 218 Cal. App. 3d 1354, 1360-61 (1990)). "[A]n innocent purchaser for value and without actual or constructive notice that his or her vendor has secured the goods by a fraudulent purchase is not liable for conversion." Id. But the

rule is different when it comes to involuntary transfers: because "[s]tolen property remains stolen property," a thief "cannot convey valid title to an innocent purchaser of stolen property." v. Am. Numismatic Soc'y, 42 Cal. App. 4th 421, 432 (1996). Accordingly, mere possession of a domain name that was 14 Naftzger

1 2 3 4 5 6 7 8 9 10 United States District Court For the Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

involuntarily transferred from the rightful owner is sufficient to convey liability for conversion. 1394163, at *5-*6. See Express Media, 2007 WL

Defendants have not pointed to any evidence

that Mayberry voluntarily transferred the title of rl.com to Qiang as a result of fraud.7 suggests otherwise. Defendants argue that Mayberry abandoned his right to possess rl.com, and therefore Plaintiffs cannot prevail on their conversion claim. In order to succeed on an abandonment defense to conversion To the contrary, all of the evidence

under California law, however, a defendant must show a "clear, unequivocal, and decisive act" demonstrating a waiver of the plaintiff's property rights. See Hopson v. Nat'l Union of Marine

Cooks and Stewards, 116 Cal. App. 2d 320, 325 (1953) (addressing waiver or abandonment of a legal right generally); see also Ananda Church of Self-Realization v. Mass. Bay Ins. Co., 95 Cal. App. 4th 1273, 1281-82 (2002) (upholding an abandonment defense to a conversion claim where the property at issue had been discarded in an outdoor garbage receptacle). Defendants point to no such

affirmative relinquishment of Mayberry's right to exercise control over rl.com. It is undisputed that Mayberry had paid to register After he learned that

the domain with NSI through July 24, 2005.

the domain had been stolen, he attempted to rectify the situation, but met with no success. The fact that, at one point, he had

resigned himself to losing the domain (as he stated at his

Qiang may have committed fraud on NSI, but insofar as the transfer was "voluntary," the volition is attributable to NSI, not to Mayberry, the actual possessor of the property rights at issue. 15

7

1 2 3 4 5 6 7 8 9 10 United States District Court For the Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

deposition) does not demonstrate a voluntary abandonment of his rights. It simply indicates that he had concluded that further

attempts to recover the domain would continue to meet with failure so long as Qiang, who was effectively immune from any legal recourse in the United States, controlled it. Nor do Defendants

cite any authority for their assertion that Mayberry's failure to maintain a live website at rl.com signifies an abandonment of his right to the domain. The "use-it-or-lose-it" rule proposed by

Defendants may express their preferred policy with respect to domain ownership, but as a legal theory it is not supported by case law. The Court can also divine no intent to abandon rl.com from

Mayberry's failure to update his contact information with NSI once he lost access to the email address, [e-mail]. It is not clear

when Mayberry first learned that he no longer could access his email, and only four days passed between mat.net's transfer to Qiang and the theft of rl.com. In any event, Mayberry's failure to

change the contact information for rl.com immediately following the loss of mat.net cannot be interpreted as an affirmative abandonment of his rights to the domain. Defendants also assert that the equitable doctrine of laches should bar Plaintiffs' conversion claim because Plaintiffs delayed unreasonably in bringing this lawsuit. However, as Plaintiffs The

point out, conversion is a legal claim, not an equitable one.

statute of limitations thus governs the timeliness of Plaintiffs' claim, not the equitable doctrine of laches. Defendants do not

refute this argument in their reply, nor do they argue that Plaintiffs failed to file this action within the applicable 16

1 2 3 4 5 6 7 8 9 10 United States District Court For the Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

limitations period. argument.

It appears that they have withdrawn this

In any event, Plaintiffs did not delay unreasonably in

bringing this lawsuit, and thus the doctrine of laches, even if it applied, would not prevent them from asserting their claim. Finally, Defendants argue that CRS Recovery's entitlement to relief is based on an invalid transfer and assignment. This

argument is based on a provision in Mayberry's service agreement with NSI for the registration of rl.com. The agreement provides

that Mayberry's rights under the contract are not assignable or transferrable. But Plaintiffs do not assert claims against

Defendants for breach of the service agreement; they assert a conversion claim. The non-assignment clause of the NSI contract is

therefore irrelevant. For these reasons, the Court finds that Defendants are liable to Plaintiffs for conversion of the rl.com domain. As a remedy, See

Plaintiffs are entitled to specific recovery of the domain.

Cal. Civ. Code §§ 3379-3380; Express Media, 2007 WL 1394163, at *4. III. Claim for Declaratory Relief Plaintiffs also seek a declaration of their rightful title to rl.com. Although such a declaration is arguably no different than

judgment in their favor on the conversion claim, the Court will grant this claim for the reasons stated above. CONCLUSION For the foregoing reasons, Plaintiffs' motion for summary adjudication is GRANTED (Docket No. 118). The Court grants summary

judgment against Defendants John Laxton and Northbay Real Estate on Plaintiffs' claims for conversion and declaratory relief. 17

1 2 3 4 5 6 7 8 9 10 United States District Court For the Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Defendants' cross-motion for summary adjudication is DENIED (Docket No. 131). At the hearing, Plaintiffs agreed to dismiss the second and third causes of action against Defendants if Plaintiffs prevailed on the present motion. Those claims are therefore dismissed.

Plaintiffs' motion for an extension of the discovery period (Docket No. 161) is DENIED as moot. Plaintiffs shall, within ten days, file a proposed judgment conforming to the terms of this order. IT IS SO ORDERED.

Dated:9/26/08__________________ ____

CLAUDIA WILKEN United States District Judge

18