Larson v. Liberty Mutual Fire Insurance Company et al
Filing
17
ORDER GRANTING DEFENDANTS' MOTION TO DISMISS VERIFIED COMPLAINT 9 - Signed by CHIEF JUDGE SUSAN OKI MOLLWAY on 8/11/11. (Larson is given leave to file an Amended Complaint no later than September 2, 2011. If fails to timely file an Amended Complaint, the Clerk of Court is directed to automatically enter judgment in favor of the Defendants and to close this case.) (emt, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Lonnie E. Larson served by first class mail at the address of record on August 11, 2011.
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
LONNIE E. LARSON,
)
)
Plaintiff,
)
)
vs.
)
)
LIBERTY MUTUAL FIRE INSURANCE )
COMPANY; and TOM PETRUS &
)
MILLER, LLC,
)
)
Defendants.
)
_____________________________ )
CIVIL NO. 11-00272 SOM/BMK
ORDER GRANTING DEFENDANTS’
MOTION TO DISMISS VERIFIED
COMPLAINT
ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS VERIFIED COMPLAINT
I.
INTRODUCTION.
Plaintiff Lonnie E. Larson claims to have been hit by
lightning on February 26, 2002.
No. 1, Apr. 26, 2011.
See Verified Complaint ¶ 6, ECF
At the time of the alleged lightning
strike, Larson says he was working for Altres Staffing Inc.,
which was providing construction labor to JAS Glover.
Id.
Larson sought workers’ compensation insurance benefits from
Altres’s carrier, Defendant Liberty Mutual Fire Insurance
Company.
Id.
Liberty Mutual appears to have been concerned
about potential insurance fraud and hired a private investigator
to conduct surveillance of Larson.
Id. ¶ 10 and Exhibit 1.
Liberty Mutual denied Larson’s workers compensation claim on July
7, 2002. Id. ¶ 15.
In the aftermath of that denial, Larson
ultimately filed the present lawsuit against Liberty Mutual and
its former counsel, the law firm of Tom Petrus & Miller LLC,
complaining that they obtained computer records relating to him
without authorization.
claims.
II.
Defendants now move to dismiss Larson’s
The court grants the motion.
FACTUAL BACKGROUND.
On or about November 22, 2002, Frank Stephenson, of
Hyperion International Technologies, LLC, which says it was
Larson’s former employer, sent Liberty Mutual a facsimile letter.
Id., Ex. 1.
This letter was addressed to a claims adjuster for
Liberty Mutual and indicated that, from September 25, 2002, to
November 5, 2002, Larson was working for Hyperion in Arizona.
Id.
The letter stated:
Your customer service was contacted last
Tuesday (November 5, 2002) by telephone . . .
and a report was made regarding a possible
insurance fraud. . . . Since that report was
made, I have discovered other pertinent
information . . . and, since I have not heard
anything further on this matter, I thought it
best to send this letter via fax notifying
you of the report and a few other details
that are not in the report.
The person filing this claim, Lonnie Larson,
spent over a month in our offices (Hyperion
International) in Tempe, AZ working on a
project. . . . He arrived at Phoenix’s Sky
Harbor Airport on September 25th and departed
for Hawaii on November 5th. During that
time, he walked from his apartment to our
office (0.3 miles one way) four times a day.
On weekends, he walked to and from shopping
areas that vary in total round trip distances
of between 3 and 6 miles. He also assembled
various components of equipment, lifted
relatively heavy solar panels, sketched out
diagrams, typed various letters and emails;
for all intents and purposes, appeared to be
a healthy, active man.
2
While none of us dispute that Mr. Larson may
have been struck by lightning on February 26,
2002, as he contends, the after effects, both
physical and psychological, appear to be
whatever he chooses them to be, and bother
him whenever he thinks it is appropriate for
his audiences. For example, until the
morning of his departure for Hawaii, he was
as I have described in the previous
paragraph. However, for some strange reason,
he required a wheelchair to get from airport
curbside to the gate.
The report I have referenced above contains
the names of five other people in our offices
who witnessed this behavior by Mr. Larson.
They may, or may not be willing to testify to
those facts, that is completely up to them.
I, for one, believe Mr. Larson is trying to
pull off a scam.
Facsimile Letter dated Nov. 10, 2002, from Frank Stephenson to
Theresa Boller, attached to Verified Complaint as Exhibit 1, ECF
No. 1-1.
Larson claims that Stephenson also sent facsimile
transmissions to Liberty Mutual on November 10 and 26, 2002.
Larson attaches to his Verified Complaint two cover sheets for
transmissions on November 26, 2002.
The first states:
Dear Karen:
Thanks again for calling me last Friday,
November 22, 2002. Attached are copies of
the documents I spoke to you about regarding
the above referenced claim. The other five
witnesses I mentioned to you that were
present between September 25, 2002 and
November 5, 2002 are also employees of
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Hyperion. Let me know if you need their
names, etc., or if you need additional
information from us.
See ECF No. 1-2.
The second cover sheet states: “Dear Karen.
stuff.
More
I have a document approximately 40 pages in length that
amounts to a daily diary Lonnie kept to record his ‘symptoms’ –
let me know if you need a copy.”
See ECF No. 1-3.
Larson alleges that “Stephenson acted as Liberty
Mutual’s agent in the acquisition, use and disclosure of . . .
Larson’s personal and private communications.”
Complaint ¶ 16.
Verified
Larson provides no factual support for his legal
conclusion that Stephenson was acting as Liberty Mutual’s agent.
Larson says that he did not consent to Hyperion’s obtaining of
his private information (documents and emails) and that he “had
no notice Hyperion would access his personal computers and/or
Internet email servers to retrieve, intercept, use or disclose
his confidential information.”
Id. ¶¶ 18-19.
that he “was not an employee of Hyperion.”
Larson alleges
Id. ¶ 19.
Larson alleges that Liberty Mutual gave his private
information to its counsel, Defendant Tom Petrus & Miller, LLC,
“during the course of litigation in civil action number 09-308.”
Id. ¶ 20.
Larson further alleges that Tom Petrus & Miller
further disclosed this information to “its partners, associates,
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officers and/or employees . . . knowing or having reason to know
that” the information was acquired illegally.
Id. ¶ 23.
Larson alleges that, by accessing his computer,
Hyperion and Liberty Mutual caused him more than $5,000 in
monetary loss in a one-year period, including the loss of
workers’ compensation payments1 and his failure to recover
damages in Civil Number 09-00308 SOM/BMK.
Id. ¶ 22.
Larson alleges that he is a “resident” of Hawaii, that
Liberty Mutual is organized in and has a principal place of
business in Massachusetts, and that Tom Petrus & Miller is a
limited liability corporation with a principal place of business
in Hawaii.
Id. ¶¶ 1-3.
On June 27, 2011, Liberty Mutual and Tom Petrus &
Miller moved to dismiss Larson’s Verified Complaint.
9.
See ECF No.
That motion is granted without a hearing pursuant to Local
Rule 7.2(d).
III.
MOTION TO DISMISS STANDARD.
When reviewing motions to dismiss brought under Rule
12(b)(6) of the Federal Rules of Civil Procedure, the court is
generally limited to the contents of the complaint.
Sprewell v.
Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001);
Campanelli v. Bockrath, 100 F.3d 1476, 1479 (9th Cir. 1996).
1
If
Larson’s worker’s compensation claim remains pending before
the State of Hawaii, Department of Labor. Id. ¶ 22.
5
matters outside the pleadings are considered, the Rule 12(b)(6)
motion is treated as one for summary judgment.
See Keams v.
Tempe Tech. Inst., Inc., 110 F.3d 44, 46 (9th Cir. 1997);
Anderson v. Angelone, 86 F.3d 932, 934 (9th Cir. 1996).
However,
courts may “consider certain materials--documents attached to the
complaint, documents incorporated by reference in the complaint,
or matters of judicial notice--without converting the motion to
dismiss into a motion for summary judgment.”
Ritchie, 342 F.3d 903, 908 (9th Cir. 2003).
United States v.
Documents whose
contents are alleged in a complaint and whose authenticity are
not questioned by any party may also be considered in ruling on a
Rule 12(b)(6) motion to dismiss.
See Branch v. Tunnell, 14 F.3d
449, 453-54 (9th Cir. 1994).
On a Rule 12(b)(6) motion to dismiss, all allegations
of material fact are taken as true and construed in the light
most favorable to the nonmoving party.
Fed’n of African Am.
Contractors v. City of Oakland, 96 F.3d 1204, 1207 (9th Cir.
1996).
However, conclusory allegations of law, unwarranted
deductions of fact, and unreasonable inferences are insufficient
to defeat a motion to dismiss.
Sprewell, 266 F.3d at 988; Syntex
Corp. Sec. Litig., 95 F.3d 922, 926 (9th Cir. 1996).
Additionally, the court need not accept as true allegations that
contradict matters properly subject to judicial notice or
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allegations contradicting the exhibits attached to the complaint.
Sprewell, 266 F.3d at 988.
Dismissal under Rule 12(b)(6) may be based on either:
(1) lack of a cognizable legal theory, or (2) insufficient facts
under a cognizable legal theory.
Balistreri v. Pacifica Police
Dept., 901 F.2d 696, 699 (9th Cir. 1988) (citing Robertson v.
Dean Witter Reynolds, Inc., 749 F.2d 530, 533-34 (9th Cir.
1984)).
“[T]o survive a Rule 12(b)(6) motion to dismiss,
factual allegations must be enough to raise a right to relief
above the speculative level, on the assumption that all the
allegations in the complaint are true even if doubtful in fact.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)) (internal
quotation marks omitted); accord Ashcroft v. Iqbal, 129 S. Ct.
1937, 1949 (2009) (“the pleading standard Rule 8 announces does
not require ‘detailed factual allegations,’ but it demands more
than an unadorned, the-defendant-unlawfully-harmed-me
accusation”).
“While a complaint attacked by a Rule 12(b)(6)
motion to dismiss does not need detailed factual allegations, a
plaintiff’s obligation to provide the ‘grounds’ of his
‘entitlement to relief’ requires more than labels and
conclusions, and a formulaic recitation of the elements of a
cause of action will not do.”
Twombly, 550 U.S. at 555.
The
complaint must “state a claim to relief that is plausible on its
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face.”
Id. at 570.
“A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to draw
the reasonable inference that the defendant is liable for the
misconduct alleged.”
IV.
Iqbal, 129 S. Ct. at 1949.
ANALYSIS.
The Verified Complaint asserts seven causes of action:
Count I--violation of the federal Computer Fraud and Abuse Act,
18 U.S.C. §§ 1030(a)(4) and (g); Count II--violation of the
federal Computer Fraud and Abuse Act, 18 U.S.C. §§ 1030(a)(5) and
(g); Count III--violation of the federal Stored Communications
Act, 18 U.S.C. §§ 2701 and 2707; Count IV--violation of the
federal Wiretap Act, 18 U.S.C. §§ 2511(1)(c) and (d), and 2520;
Count V--state-law invasion of privacy claim; Count VI--state-law
intentional infliction of emotional distress (“IIED”) claim; and
Count VII--state-law punitive damage claim.
A.
Counts I, II, and III Are Dismissed Because the
Verified Complaint Fails to Allege Any Basis For
Holding Liberty Mutual Responsible.
In Counts I and II of the Verified Complaint, Larson
asserts that Liberty Mutual violated the federal Computer Fraud
and Abuse Act, 18 U.S.C. §§ 1030(a)(4) and (5), which states:
Whoever-. . . .
(4) knowingly and with intent to defraud,
accesses a protected computer without
authorization, or exceeds authorized access,
and by means of such conduct furthers the
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intended fraud and obtains anything of value,
unless the object of the fraud and the thing
obtained consists only of the use of the
computer and the value of such use is not
more than $5,000 in any 1-year period;
(5)(A) knowingly causes the transmission of a
program, information, code, or command, and
as a result of such conduct, intentionally
causes damage without authorization, to a
protected computer; (B) intentionally
accesses a protected computer without
authorization, and as a result of such
conduct, recklessly causes damage; or
(C) intentionally accesses a protected
computer without authorization, and as a
result of such conduct, causes damage and
loss;
. . . .
shall be punished as provided in subsection
(c) of this section.
Under 18 U.S.C. §§ 1030(g), any person damaged by a violation of
§ 1030 may file a civil action against the alleged violator.
Count III of the Verified Complaint asserts that
Liberty Mutual violated the federal Stored Communications Act, 18
U.S.C. §§ 2701, which provides in relevant part:
whoever--(1) intentionally accesses without
authorization a facility through which an
electronic communication service is provided;
or (2) intentionally exceeds an authorization
to access that facility; and thereby obtains,
alters, or prevents authorized access to a
wire or electronic communication while it is
in electronic storage in such system shall be
punished as provided in subsection (b) of
this section.
A civil remedy is provided in 18 U.S.C. § 2707 for violations of
§ 2701.
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Counts I, II, and III of the Verified Complaint are
brought only against Liberty Mutual and assert that Liberty
Mutual is vicariously liable for Stephenson’s and/or Hyperion’s
actions.
The Supreme Court has stated that it “is well
established that traditional vicarious liability rules ordinarily
make principals or employers vicariously liable for acts of their
agents or employees in the scope of their authority or
employment.”
Meyer v. Holley, 537 U.S. 280, 285 (2003).
The
court need not reach the issue of whether Liberty Mutual could be
held liable as a matter of law for the violations alleged in
Counts I, II, and III of the Verified Complaint, as there are no
factual allegations supporting vicarious liability.
Although Larson alleges in paragraph 16 of the Verified
Complaint that Stephenson was acting as Liberty Mutual’s agent
when Stephenson allegedly accessed Larson’s information, no facts
are alleged supporting an agency relationship.
For example,
nothing in the Verified Complaint indicates that Stephenson was a
Liberty Mutual employee or that Liberty Mutual had any control
over him.
See, e.g., Burrey v. Pac. Gas & Elec. Co., 159 F.3d
388, 393 n.3 (9th Cir. 1998).
To the contrary, Exhibit 1 of the
Verified Complaint shows that Stephenson is a regional supervisor
for Hyperion.
Larson even concedes in his Opposition that
Stephenson is not a Liberty Mutual employee.
4, ECF No. 13.
See Opposition at
At best, Larson alleges that Karen, a Liberty
10
Mutual employee, “requested” that Stephenson provide her with
Larson’s “personal and private communications.”
Complaint ¶ 16.
Verified
But a “request,” without more, is insufficient
to establish vicarious liability.
There are, for example, no
allegations indicating that Stephenson or Hyperion was compelled
to grant the request or had actual or apparent authority to act
on Liberty Mutual’s behalf.
See Frankl v. HTH Corp., __ F.3d __,
2011 WL 3250637, *27 (9th Cir. July 13, 2011).
Larson’s
conclusory allegation that Stephenson was Liberty Mutual’s agent
is insufficient to defeat the present motion.
F.3d at 988.
See Spreewell, 266
Without facts or an identified basis for holding
Liberty Mutual liable for Stephenson’s and/or Hyperion’s actions,
Counts I, II, and III fail to allege a claim upon which relief
can be granted and are therefore dismissed.
B.
Count IV is Dismissed Because No Communication Was
Intercepted During Transmission.
Count IV of the Verified Complaint alleges that Liberty
Mutual and Tom Petrus & Miller violated the federal Wiretap Act,
18 U.S.C. §§ 2511(1)(c) and (d), which states:
Except as otherwise specifically provided in
this chapter any person who–
. . . .
(c) intentionally discloses, or
endeavors to disclose, to any other person
the contents of any wire, oral, or electronic
communication, knowing or having reason to
know that the information was obtained
through the interception of a wire, oral, or
11
electronic communication in violation of this
subsection;
(d) intentionally uses, or endeavors to
use, the contents of any wire, oral, or
electronic communication, knowing or having
reason to know that the information was
obtained through the interception of a wire,
oral, or electronic communication in
violation of this subsection
. . . .
shall be punished as provided in subsection
(4) or shall be subject to suit as provided
in subsection (5).
Larson asserts a right to bring a civil action for a violation of
§ 2511 under 18 U.S.C. § 2520.
The portion of Defendants’ motion seeking dismissal of
Count IV is granted.
In addition to the lack of factual detail
supporting Liberty Mutual’s vicarious liability, Count IV must be
dismissed because there are no allegations that any communication
was intercepted during transmission.
In Konop v. Hawaiian Airlines, Inc., 302 F.3d 868, 87778 (9th Cir. 2002), the Ninth Circuit interpreted § 2511(1)(a)’s
prohibition on intentionally “intercept[ing] . . . any wire,
oral, or electronic communication.”
The Ninth Circuit held that,
“to be ‘intercepted’ in violation of the Wiretap Act,
[communications] must be acquired during transmission, not while
it is in electronic storage.”
This definition appears applicable
to §§ 2511(1)(c) and (d), meaning that those sections can only be
violated when a defendant intentionally discloses, or endeavors
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to disclose, or intentionally uses, or endeavors to use
communications that the defendant knows or has reason to know
were intercepted during the transmission of the communications.
See Konop, 302 F.3d at 877-78.
Larson alleges that the
information was obtained from his “personal computers and or
Internet email servers” and that the information was obtained
“while it was in electronic storage.”
and 21.
Verified Complaint ¶¶ 19
Because the Verified Complaint does not allege that
Stephenson intercepted Larson’s communications during their
transmission, §§ 2511(1)(c) and (d) are inapplicable, and
Count IV fails to state a claim upon which relief can be granted.
See Konop, 302 F.3d at 877-78; Pines v. McLaughlin, 2011 WL
1361540 (S.D. Cal. Apr. 11, 2011) (ruling allegations
insufficient under § 2511(1)(a) when they merely alleged that
communications were obtained from stolen computers, not that they
were acquired during transmission).
C.
The Court Declines to Exercise Supplemental
Jurisdiction Over the Remaining State-Law Claims.
The dismissal of Counts I through IV of the Verified
Complaint leaves for adjudication the state-law claims for
invasion of privacy, IIED, and punitive damages asserted in
Counts V, VI, and VII.
Because Larson has failed to allege facts
demonstrating complete diversity, the only jurisdictional basis
remaining for these claims is the court’s supplemental
jurisdiction.
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Supplemental jurisdiction, unlike federal question or
diversity jurisdiction, is not mandatory.
A court may decline to
exercise supplemental jurisdiction over a state law claim if:
(1) the claim raises a novel or complex issue of state law;
(2) the state law claim substantially predominates over the claim
or claims over which the district court has original
jurisdiction; (3) the district court has dismissed all claims
over which it has original jurisdiction; or (4) in exceptional
circumstances, there are other compelling reasons for declining
jurisdiction.
See 28 U.S.C. § 1367.
Supplemental jurisdiction is thus a doctrine of
discretion, not of a plaintiff’s right.
City of Chicago v. Int’l
College of Surgeons, 522 U.S. 156, 172 (1997); United Mine
Workers of Am. v. Gibbs, 383 U.S. 715, 726 (1966).
When, as
here, “the federal claims are dismissed before trial, even though
not insubstantial in a jurisdictional sense, the state claims
should be dismissed as well.”
Gibbs, 383 U.S. at 726.
Such a
dismissal is not “a mandatory rule to be applied inflexibly in
all cases,” but “in the usual case in which all federal-law
claims are eliminated before trial, the balance of factors to be
considered under the pendent jurisdiction doctrine--judicial
economy, convenience, fairness, and comity--will point toward
declining to exercise jurisdiction over the remaining state-law
14
claims.”
Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 n.7
(1988).
This court has dismissed all of the claims over which
it had original jurisdiction and identifies no factors making
this case anything but the usual case in which supplemental
jurisdiction is better declined.
Larson’s state-law claims are
therefore dismissed without prejudice.
V.
CONCLUSION.
For the foregoing reasons, the court dismisses the
Verified Complaint.
Because Larson is proceeding pro se and
because it may be possible for him to allege viable claims,
Larson is given leave to file an Amended Complaint no later than
September 2, 2011.
Any Amended Complaint must be a complete
document and may not incorporate anything by reference.
If
Larson’s Amended Complaint asserts claims over which this court
has original jurisdiction, Larson may reallege the state-law
claims asserted in Counts V, VI, and VII of the original
Complaint.
Of course, in allowing Larson to reallege those
claims, this court is not indicating that those claims are
meritorious.
If Larson fails to timely file an Amended Complaint,
the Clerk of Court is directed to automatically enter judgment in
favor of Defendants and to close this case.
If, on the other
hand, Larson timely files an Amended Complaint, judgment will not
15
automatically be entered and this action will proceed based on
the Amended Complaint.
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, August 11, 2011.
/s/ Susan Oki Mollway
Susan Oki Mollway
Chief United States District Judge
Larson v. Liberty Mutual; Civil No. 11-00272 SOM/BMK; ORDER GRANTING DEFENDANTS’
MOTION TO DISMISS VERIFIED COMPLAINT
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