Skapinetz v. CoesterVMS.com, Inc. et al
Filing
105
MEMORANDUM OPINION. Signed by Judge Paula Xinis on 6/24/2019. (heps, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
MARK SKAPINETZ,
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Plaintiff,
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v.
*
COESTERVMS.COM, INC., et al.,
Defendants.
Civil Action No. 8:17-cv-01098-PX
*
*
***
MEMORANDUM OPINION
Pending before the Court is Plaintiff and Counter-Defendant Mark Skapinetz’ motions
for summary judgment (ECF Nos. 98 & 100); Defendant and Counter-Plaintiff
CoesterVMS.com, Inc. (“CoesterVMS”)’s motion for reconsideration (ECF No. 87); counsel for
CoesterVMS’ motion to withdraw (ECF No. 90); and Skapinetz’ requests for attorneys’ fees.
ECF Nos. 68 & 86. Although several motions have been briefed by each side, the motions for
summary judgment and the second request for attorneys’ fees went unopposed.1 No hearing on
these motions is necessary. See Loc. R. 105.6. For the following reasons, the Court grants the
motions for summary judgment, denies the motion for reconsideration, grants the motion to
withdraw, and denies without prejudice the requests for attorneys’ fees.
I.
Skapinetz’ Motions for Summary Judgment
A.
Background
At the center of this case is a single email authored by Plaintiff, Mark Skapinetz, about
Brian Coester and his business, CoesterVMS. Skapinetz, a real estate appraiser based in
Georgia, had performed appraisals as a subcontractor for CoesterVMS, an appraisal management
1
Apparently, CoesterVMS did not authorize counsel to file oppositions to the motions for summary
judgment. ECF No. 103 at 1. Coester also has not opposed the motions for summary judgment.
company. ECF No. 100-3 at 5. On November 10, 2016, Skapinetz sent a CoesterVMS client an
email critical of CoesterVMS, describing the operation as a “criminal and fraudulent company,”
and attaching documents reflecting ongoing litigation between CoesterVMS and a third party.
ECF No. 10-2 at 2. Skapinetz sent the email unsigned, but from his personal,
mappraiser14@gmail.com account. Id.; ECF No. 100-2 at 3. The recipient and CoesterVMS
client, Finance of America, forwarded the email to Brian Coester with the following message:
“Hey Bro because I really like you and I respect you and think you need to see that this
mappraiser14@gmail.com is sending me this crap to disparage your name.” ECF No. 10-2 at 1.
Coester became concerned about the email and decided to investigate the identity of the
author, using the help of a CoesterVMS development contractor. ECF No. 100-3 at 6; ECF No.
100-4 at 2. The contractor identified the last four digits of the telephone number associated with
the email address. ECF No. 100-4 at 2. Using the computer located in his office, Coester
entered the digits into a CoesterVMS sales database, which generated a list of individuals whose
phone numbers included those digits. ECF No. 100-4 at 2. Skapinetz was among those listed.
Id. Because of Coester’s role as CEO and owner, he was able to access the database that also
included the password Skapinetz had used to log into the CoesterVMS online appraiser site.
ECF No. 100-3 at 7.
Much to Coester’s surprise, he was able to log into Skapinetz’ mappraiser14@gmail.com
account using the same password. Id.; ECF No. 100-4 at 2. Nothing in the record suggests that
in connection with their business relationship, Skapinetz had ever given Coester or CoesterVMS
permission to obtain wholesale access to his Gmail account. Once logged in, Coester saw the
emails in Skapinetz’ account, including emails from the Finance of America appraiser, as well as
another individual Robert Scheer, with whom Coester was engaged in ongoing litigation. ECF
2
No. 100-3 at 8.
Coester next logged out of the mappraiser14@gmail.com account and attempted access
into Skapinetz’ business email account, wiwapp@gmail.com. Id. Coester contends that he did
so to confirm Skapinetz’ identity as author of the disparaging email and to also learn whether
Skapinetz possessed any unlawfully obtained confidential and proprietary information related to
CoesterVMS. Coester also wanted to learn to what extent Skapinetz sought to harm
CoesterVMS, and the nature of his Skapinetz’ connection, if any, to Scheer. ECF No. 100-4 at 3.
Coester successfully logged into the wiwapp@gmail.com account using the same
password and searched the emails. ECF No. 100-3 at 8; ECF No. 100-1 at 4.2 Coester also
printed four of Skapinetz’ emails. ECF No. 100-3 at 10. Like the mappraiser14@gmail.com
account, Skapinetz never gave Coester permission to access this account. ECF No. 100-1 at 4.
Skapinetz received a security alert that his mappraiser14@gmail.com account had been
accessed from an unrecognized device in Maryland. ECF No. 100-2 at 3; ECF No. 1-1 at 1.
Skapinetz—who lives in Georgia—deleted the entire Gmail account because of security
concerns and did not preserve any content in the account prior to deleting it. ECF No. 1-2 at 1;
ECF No. 100-2 at 3. Skapinetz, however, continued to use his wiwapp@gmail.com account. Id.
at 2. Both email accounts were hosted on web-based email platforms run by Google and used
Google’s servers. ECF No. 100-2 at 2.
On April 20, 2017, Skapinetz filed suit against Coester and CoesterVMS, alleging
violations of the Stored Communications Act (“SCA”), 18 U.S.C. § 2701, et seq., and common
law claims for trespass to chattels, trespass to land, conversion, fraud, and invasion of privacy.
ECF No. 1. After the Court dismissed the trespass to land and fraud claims (ECF Nos. 16 & 17),
2
Elsewhere, Coester denies remembering running any searches. ECF No. 100-3 at 11.
3
Coester and CoesterVMS filed counterclaims against Skapinetz for tortious interference with
contract and economic relations. ECF No. 40. After a protracted discovery process, Skapinetz
now seeks summary judgment in his favor on his claims as well as Defendants’ counterclaims.
B.
Standard of Review
Summary judgment is appropriate when the Court, construing all evidence and drawing
all reasonable inferences in the light most favorable to the non-moving party, finds no genuine
dispute exists as to any material fact, thereby entitling the movant to judgment as a matter of law.
Fed. R. Civ. P. 56(a); see In re Family Dollar FLSA Litig., 637 F.3d 508, 512 (4th Cir. 2011).
Summary judgment must be granted “against a party who fails to make a showing sufficient to
establish the existence of an element essential to that party’s case, and on which that party will
bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
“In responding to a proper motion for summary judgment,” the opposing party “must
present evidence of specific facts from which the finder of fact could reasonably find for him or
her.” Venugopal v. Shire Labs., 334 F. Supp. 2d 835, 840 (D. Md. 2004), aff’d sub nom.
Venugopal v. Shire Labs., Inc., 134 F. App’x 627 (4th Cir. 2005) (citing Anderson v. Liberty
Lobby, 477 U.S. 242, 252 (1986); Celotex, 477 U.S. at 322–23)). Genuine disputes of material
fact are not created “through mere speculation or the building of one inference upon another.”
Othentec Ltd. v. Phelan, 526 F.3d 135, 140 (4th Cir. 2008) (quoting Beale v. Hardy, 769 F.2d
213, 214 (4th Cir. 1985)). Where a party’s statement of a fact is “blatantly contradicted by the
record, so that no reasonable jury could believe it,” the Court credits the record. Scott v. Harris,
550 U.S. 372, 380 (2007).
4
C.
Analysis
1.
Stored Communications Act
Skapinetz argues that Coester and CoesterVMS violated the Stored Communications Act
(“SCA”) when Coester accessed his email accounts. The SCA provides a right of action against
anyone who “intentionally accesses without authorization a facility through which an electronic
communication is provided . . . and thereby obtains, alters, or prevents authorized access to a
wire or electronic communication while it is in electronic storage in such system . . . .” 18
U.S.C. §§ 2701(a), 2707(a). To prevail under the SCA, Skapinetz must prove that Defendants
(1) accessed a system through which electronic communication service is provided without
authorization; (2) obtained a wire or electronic communication from the electronic storage
system; and (3) acted intentionally. Hately v. Torrenzano, No. 1116CV01143GBLMSN, 2017
WL 2274326, at *6 (E.D. Va. May 23, 2017).
With respect to Coester, the uncontroverted evidence compels summary judgment in
Skapinetz’ favor. On the first element, Coester admits that he accessed Skapinetz’ email
accounts without authorization. ECF No. 100-1 at 4. No evidence has been generated to the
contrary. Equally uncontroverted, Coester obtained the email communication while it was in
electronic storage through Google. ECF No. No. 100-2 at 2. Because Gmail provides users with
the ability to send and receive emails, Gmail qualifies as a “facility through which an electronic
communication is provided.” See 18 U.S.C. § 2510(12) (defining “electronic communication” as
“any transfer of signs, signals, writing, images, sounds, data, or intelligence of any nature
transmitted in whole or in part by a wire, radio, electromagnetic, photoelectronic or photooptical
system that affects interstate or foreign commerce”); 18 U.S.C. § 2711(1); see also Vista Mktg.,
LLC v. Burkett, 812 F.3d 954, 963–64 (11th Cir. 2016).
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Coester obtained electronic communications while the communications were in
electronic storage in such system. Electronic storage encompasses both “storage incidental to
transmission” and “backup storage.” Hately v. Watts, 917 F.3d 770, 784 (4th Cir. 2019) (quoting
H.R. Rep. No. 99-647, at 68) (internal quotation marks omitted); see also 18 U.S.C. §§ 2510(17),
2711(1). Unopened emails stored on a server are being stored incidental to their transmission.
See In re DoubleClick Inc. Privacy Litigation, 154 F. Supp. 2d 497, 512 (S.D.N.Y. 2001) (noting
that incidental storage includes “when an email service stores a message until the addressee
downloads it”). The same is true for emails previously delivered and opened; they too are
“stored for purposes of backup protection.” Watts, 917 F.3d at 797.
Coester viewed numerous delivered emails in both accounts, and he printed four emails,
including three delivered emails and one sent email. ECF No. 100-3 at 8, 10; ECF Nos. 100-7–
10. All of these emails constitute electronic communications stored in such system. Coester’s
actions, viewed most favorably to Defendants, thus satisfy the second element of the SCA. See
Cardinal Health 414, Inc. v. Adams, 582 F. Supp. 2d 967, 976 (M.D. Tenn. 2008) (stating that a
violation of the SCA occurs where a person “review[s]” the materials in an email account).
Finally, the unrebutted evidence viewed most favorably to Defendants demonstrates that
Coester acted intentionally. Although the SCA does not define “intentionally,” the legislative
history demonstrates that Congress intended the meaning to be “‘narrower than the dictionary
definition.’” Butera & Andres v. Int’l Bus. Machines Corp., 456 F. Supp. 2d 104, 109 (D.D.C.
2006) (quoting S.Rep. No. 99-541, at 23 (1986), reprinted in 1986 U.S.C.C.A.N. 3555, 3577)).
Thus, under the SCA, a defendant acts intentionally if his conduct or its result is a product of his
conscious objective; inadvertent access will not suffice. Freedman v. Am. Online, Inc., 325 F.
Supp. 2d 638, 645 n.11 (E.D. Va. 2004); see also In re Pharmatrak, Inc., 329 F.3d 9, 23 (1st Cir.
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2003).
Coester admits to taking several deliberative steps with the singular purpose of obtaining
and reading Skapinetz’ email without authorization and to further Coester’s own personal and
business objectives. Coester confessed that he searched his company’s database for Skapinetz’
email and password; used them with the purpose of getting into the emails; succeeded in
accessing the emails, then searched, read and printed the emails because he wanted to learn more
about Skapinetz’ knowledge of CoesterVMS’ business as well as his relationship with Scheer.
ECF No. 100-4 at 3. Nothing about Coester’s self-admitted conduct reflects accident,
carelessness or mistake. Rather, it is sufficiently purposeful to satisfy the third element of the
claim. See Chadha v. Chopra, No. 12 C 4204, 2012 WL 6044701, at *2 (N.D. Ill. Dec. 5, 2012)
(“[T]he Court cannot conceive of[] any possible way that Chopra might have unintentionally (1)
obtained the username and password for Puja’s Hotmail Account; (2) used that information to
log into the account; and (3) accessed emails in the account’s inbox to obtain email addresses.”).
Skapinetz is entitled to summary judgment on his SCA claim against Coester.
As for the SCA claim against CoesterVMS, the SCA recognizes derivative liability based
on a theory of respondeat superior. See Thacker v. Cuyahoga Heights Bd. of Educ., No. 1:16-CV
2706, 2017 WL 2271433, at *4 (N.D. Ohio May 23, 2017); see also Butera, 456 F. Supp. 2d at
112. Although a split of authority exists as to whether the Court adopts state law or general
common law in assessing liability, compare Murphy v. Spring, 58 F. Supp. 3d 1241, 1266 n.17
(N.D. Okla. 2014), with Larson v. Hyperion Int’l Techs., LLC, 494 F. App’x 493, 495 (5th Cir.
2012), summary judgment is warranted against CoesterVMS under either standard.3
3
See also Chin v. Wilhelm, 291 F. Supp. 2d 400, 403 (D. Md. 2003) (applying the law of respondeat
superior in the state where the alleged tort occurred for the Federal Tort Claims Act); Williams v. Cloverland Farms
Dairy, Inc., 78 F. Supp. 2d 479, 485 (D. Md. 1999) (applying the general common law of respondeat superior for 42
U.S.C. § 1981).
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With regard to state common law, the Court has previously applied Georgia law to the
claims and will do so here. ECF No. 16 at 11; see also Erie Ins. Exch. v. Heffernan, 399 Md.
598, 620 (2007); Withers v. Riggs Nat’l Bank, No. 87-2530, 829 F.2d 37 (Table), 1987 WL
44689, at *1 (4th Cir. Sept. 2, 1987). Under Georgia law, an employer is liable for the acts of an
employee which are in furtherance of and within the scope of the employer’s business. Piedmont
Hops., Inc. v. Palladino, 276 Ga. 612, 613 (2003); Boyd v. United States, No. 1:12-CV-2537WSD, 2012 WL 6728994, at *2 (N.D. Ga. Dec. 27, 2012). General common law principles
impose liability on the acts of employees taken within the scope of employment, which is
conduct of the kind the employee is employed to perform, occurs substantially within authorized
time and space limits, and is actuated, at least in part, by a purpose to serve the employer. See
Meyer v. Holley, 537 U.S. 280, 285 (2003); Restatement (Second) of Agency § 228.
When viewing the evidence most favorably to CoesterVMS, Coester acted within the
scope of his employment when accessing Skapinetz’ emails. As the CEO and sole owner of
CoesterVMS, Coester is CoesterVMS for practical purposes. ECF No. 100-3 at 4–5. In fact,
Coester admits that he is ultimately responsible for “everything at the company.” Id. at 5.
As CEO and owner, Coester maintained full access to the CoesterVMS database,
including users’ passwords, access which he used to obtain Skapinetz’ emails. ECF Nos. 100-5,
100-3 at 14. Coester also used a CoesterVMS contractor to help him investigate the identity of
the author. Id. at 6. Finally, Coester accessed the emails to discover the identity of the person
who characterized CoesterVMS as “criminal and fraudulent” to another CoesterVMS client.
ECF No. 10-2 at 2. Coester thus acted, at least in part, to further the interests of CoesterVMS.
ECF No. 100-4 at 3. That Coester may have violated his own company policy in using
Skapinetz’ email password does not put his conduct outside the scope of his employment. See
8
U.S. Tobacco Cooperative Inc. v. Big S. Wholesale of Va., LLC, 899 F.3d 236, 260 (4th Cir.
2018); Barfield v. Royal Ins. Co. of Am., 228 Ga. App. 841, 844 (1997). Conduct which supports
civil liability will often violate company policy, but if the same conduct also furthers the
business interests of the employer, it falls within the scope of his employment. The record
evidence, viewed most favorably to CoesterVMS, establishes its vicarious liability under the
SCA.
As to damages, Skapinetz requests trial where he intends to pursue statutory and punitive
damages as well as attorneys’ fees. ECF No. 100 at 1, 23. Punitive damages are available where
the SCA violations are “willful or intentional,” 18 U.S.C. § 2707(c), and whether to award such
damages remains within the Court’s discretion. Vista Mktg., 812 F.3d at 977. However, because
any SCA violation requires intentionality, the statute affords little guidance as to the nature of
conduct warranting punitive damages. See Vista Mktg., 812 F.3d at 975 n.15 (“[A]s a practical
matter, virtually all violations under § 2707(a) are subject to an award of punitive damages.”);
see also Gen. Dynamins Land Sys., Inc. v. Cline, 540 U.S. 581, 595 (2004). On the current
record, clearly Coester and CoesterVMS violated the SCA with the requisite intentionality as
well as engaged all manner of discovery violations, which together may warrant punitive
damages. Cf. N. Am. Mktg. Sols., Inc. v. Wright, No. 13-C-472, 2014 WL 2991127, at *1 (E.D.
Wis. July 1, 2014) (awarding punitive damages under the SCA where the defendant “refused to
participate in this litigation in an apparent attempt to make it more difficult . . . to obtain relief.”).
A damages trial will undoubtedly focus on the propriety of punitive damages here.
The SCA also permits relief in the form of “a reasonable attorney’s fee and other
litigation costs reasonably incurred.” 18 U.S.C. § 2707(b)(3). Such award seems appropriate in
this case. See Wright, 2014 WL 2991127, at *2. However, because the Court has previously
9
found Defendants’ discovery violations merit sanctions under Federal Rule of Civil Procedure
37, the Court intends to consolidate all fee petitions into one proceeding so as to avoid double
recovery. See Hadeed v. Abraham, 103 F. App’x 706, 708 (4th Cir. 2004) (“[T]he Abrahams
cannot recover the same costs twice . . . .”); Killette v. Pittman, 127 F.3d 1099 (Table), No. 961827, 1997 WL 657005, at *7 n.8 (4th Cir. Oct. 22, 1997). To accomplish this objective, the
Court denies Skapinetz’ attorneys’ fees requests brought by separate motion (ECF Nos. 68 & 86)
without prejudice so that the same fees may be incorporated into a single, global request for
attorneys’ fees and costs necessary to prosecute these claims.
2. Trespass to Chattels
Based on the same, uncontroverted record, the Court grants summary judgment on the
trespass to chattels claim. Georgia law defines trespass to chattels as “[a]ny unlawful abuse of or
damage done to the personal property of another.” Ga. Code § 51-10-3. The gist of a trespass to
personal property is the injury done to possession. Caldwell v. Church, 341 Ga. App. 852, 856
(2017). Interference with electronic communication networks can constitute a “digital trespass”
to chattel. See AT&T Mobility, LLC v. Does 1–4, No. 1:09-CV-00277-JOF, 2011 WL 13213864,
at *2 (N.D. Ga. May 26, 2011) (finding unsolicited calls trespassed on telephones, telephone
networks, and switching and transmission facilities).
Coester’s logging into Skapinetz’ email accounts without authorization amounts to
unlawful interference with the possession of those accounts. See Mey v. Got Warranty, Inc., 193
F. Supp. 3d 641, 646 (N.D. W. Va. 2016); Microsoft Corp. v. Does 1–18, No. 1:13CV139
LMB/TCB, 2014 WL 1338677, at *10 (E.D. Va. Apr. 2, 2014). Coester’s interference also
damaged the value of the accounts by breaching the security and privacy reasonably associated
with a password-protected email account. Indeed, Google alerted Skapinetz to the breach of his
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privacy, which prompted his immediate deletion of the account. ECF No. 100-2 at 3.
Defendants have not generated contrary evidence. Thus, taking all reasonable inferences in the
light most favorable to Defendants, Skapinetz has demonstrated that Coester committed a
trespass to chattels for which CoesterVMS is vicariously liable. See also Whatley v. Manry, 60
Ga. App. 273 (1939) (finding vicarious liability for trespass to personal property); Gloss v.
Jacobs, 86 Ga. App. 161, 166 (1952) (“Both the principal and the agents would be liable in a
proper case.”). Summary judgment is granted in Skapinetz’ favor on this claim.
3.
Conversion
Under Georgia law, conversion is “the unauthorized assumption and exercise of the right
of ownership over personal property belonging to another which is contrary to the owner's
rights.” Taylor v. Gelfand, 233 Ga. App. 835, 837 (1998) (quoting Reeves v. Edge, 225 Ga. App.
615, 619 (1997)). “Any act of dominion wrongfully asserted over another's personal property
which is in denial of his property rights, or inconsistent with them, is a conversion.” Ewaldsen v.
Atlantic Ins. Brokers, LLC, 267 Ga. App. 347, 349 (2004) (citations and quotation marks
omitted). Conversion encompasses “tangible personalty or specific intangible property.” Taylor
v. Powertel, Inc., 250 Ga. App. 356, 358-59 (2001).
To sustain this claim, a plaintiff must show “title to the property, possession by the
defendant, demand for possession, and refusal to surrender the property.” Powertel, 250 Ga.
App. at 358. However, when a plaintiff contends that a defendant came into possession of the
property unlawfully, the plaintiff need not show a demand for the property and a refusal to return
it to establish their claim. See AT&T Mobility LLC v. Does 1–4, Case No. JOF-09-277, 2012 WL
13001387, at *3 (N.D. Ga. Mar. 29, 2012) (denying a motion to dismiss where plaintiff pled that
telemarketers exercised wrongful dominion and control over their property by sending
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unauthorized telemarketing calls).
The undisputed evidence shows that Skapinetz owned the email accounts. ECF No. 1002 at 2–3. The evidence also demonstrates that Coester came into possession of the email
accounts unlawfully and printed emails for his personal use and possession. ECF No. 100-4 at
2–3. Thus, taking all reasonable inferences in the light most favorable to Defendants, Skapinetz
has proven conversion of his property. See Trotman v. Velociteach Project Mgmt., LLC, 311 Ga.
App. 208, 213 (2011); see also Microsoft Corp., 2014 WL 1338677, at *9–10. As discussed
above, CoesterVMS is vicariously liable for Coester’s conversion. See Trey Inman & Assocs.,
P.C. v. Bank of Am., N.A., 306 Ga. App. 451, 457 (2010) (“Whoever meddles with another’s
property, whether as principal or agent, does so at his peril[.]”). Summary judgment is granted in
Skapinetz’ favor on this claim.
4.
Intrusion Upon Seclusion
Georgia recognizes a tort of intrusion upon a person’s seclusion or solitude, or into his
private affairs. Yarbray v. S. Bell Tel. Co., 261 Ga. 703, 705 (1991). Such an intrusion is
actionable if the invasion “involves a prying or intrusion, which would be offensive or
objectionable to a reasonable person, into a person’s private concerns.” Anderson v.
Mergenhagen, 283 Ga. App. 546, 549 (2007). “[U]nauthorized surveillance, by means of
eavesdropping, wiretapping, or otherwise, may constitute invasion of privacy.” Yarbray, 261
Ga. at 705 n.3.
Coester accessed Skapinetz’ personal and work emails without authorization by looking
up Skapinetz’ password from a protected database. ECF No. 100-5 at 6 (describing controls that
limited access to password information on database). Skapinetz undertook this surveillance
specifically to monitor Skapinetz’ communications and relationships with third-parties. These
12
actions undoubtedly would offend a reasonable person’s expectation of privacy. See Sneed v.
SEI/Aaron’s, Inc., No. 1:13-CV-982-TWT, 2013 WL 6669276, at *2 (N.D. Ga. Dec. 18, 2013);
cf. S. Rep. 99-541, at 5 (1986), reprinted in 1986 U.S.C.C.A.N. 3555, 3559 (noting that
American citizens expect privacy in their electronic communications). Nor can Coester mount
any reasonable justification for spying on his own client’s private communications. Cf. Sitton v.
Print Direction, Inc., 312 Ga. App. 365, 370 (2011) (employer’s actions in reviewing employee
emails on work computer reasonable to learn whether employee engaged in unauthorized
competition); Bodrey v. Cape, 120 Ga. App. 859, 867 (1969) (parent); Ellenberg v. Pinkerton’s,
Inc., 130 Ga. App. 254, 257 (1973) (defendant in lawsuit at time of reasonable surveillance).
Taking all inferences in the light most favorable to Defendants, Coester’s surveillance of
Skapinetz’ emails amounted to an unreasonable intrusion into Skapinetz’ privacy for which he
and CoesterVMS are liable. See McDaniel v. Atlanta Coca-Cola Bottling Co., 60 Ga. App. 92
(1939) (holding surveillance of a private conversation was an intrusion upon seclusion
attributable to principal). Summary judgment is granted in Skapinetz’ favor for this claim.
5. The Counterclaims
The Defendants have brought counterclaims for tortious interference based on Skapinetz’
sending the November 2016 email to a CoesterVMS’ client. ECF No. 40. Tortious interference
with contracts protects the performance of a contract, while tortious interference with economic
relations protects against interference where no contract is involved. Macklin v. Robert Logan
Assocs., 334 Md. 287, 298 (1994).4 To succeed on either claim, the Defendants (as CounterPlaintiffs) must prove Skapinetz engaged in “‘(1) intentional and wilful [sic] acts; (2) calculated
to cause damage to [Counter-Plaintiffs] in their lawful business; (3) done with the unlawful
4
Because the alleged injury to CoesterVMS occurred in Maryland, the Court applies Maryland law.
13
purpose to cause such damages and loss, without right or justifiable cause on the part of
[Counter-Defendant] (which constitutes malice); and (4) actual damage and loss resulting.’”
Blondell v. Littlepage, 413 Md. 96, 125 (2010) (quoting Kaser v. Fin. Protection Mktg., Inc., 376
Md. 621, 628–29 (2003)).
Skapinetz contends principally that the tortious interference with economic relations
claim fails as a matter of law because no record evidence demonstrates actual damage or loss
resulting from the email. Skapinetz is correct. Coester and CoesterVMS cannot show any lost
business revenue or other tangible harm arising from a single email sent to a single client on a
single occasion. Summary judgment in Skapinetz’ favor is granted as to this counterclaim. See
Pandora Jewelry, LLC v. Chamilia, LLC, No. CCB-06-3041, 2008 WL 4533902, at *4 (D. Md.
Sept. 30, 2008).
As to the tortious interference with contracts claim, the record evidence, at best, shows
that shortly after Skapinetz sent the email, two clients, Finance of America and LoanDepot,
parted company with CoesterVMS. See ECF No. 98-2 at 5; ECF No. 40 ¶ 15. However, no
record evidence supports that CoesterVMS lost these clients because of Skapinetz’ email.
Critically, for the claim to survive, the nonmovant must generate some evidence proving that the
tortious conduct proximately caused business loss. Lyon v. Campbell, 120 Md. App. 412, 431
(1998) (stating that evidence must show that “more likely than not, the defendant’s wrongful
conduct caused the injury alleged.”). If evidence points to two or more equally possible causes
for the business loss, and the defendant is responsible for only one, the claim fails as a matter of
law. See 121 Assocs. Ltd. P’ship v. Tower Oaks Boulevard, LLC, No. 0906 Sept. Term 2014,
2015 WL 7076013, at *10 (Md. Ct. Spec. App. Nov. 12, 2015). “[C]ausation evidence that is
wholly speculative is not sufficient.” Lyon, 120 Md. App. at 437.
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CoesterVMS has demonstrated that its monthly revenues from Finance of America
declined around the time of the email, but have generated no evidence that Skapinetz’ email
caused this loss. See ECF No. 70-4 at 1. In fact, the record supports the opposite. The recipient
of the email, Finance of America’s appraiser, attested that he put no faith in Skapinetz’ email,
calling it “crap,” and affirmed to Coester at the time that he “like[d]” and “respect[ed]” Coester.
ECF No. 10-2 at 1. Viewed most favorably to Coester and CoesterVMS, no evidence
demonstrates that Skapinetz’ email caused the proffered decline in revenues. See Nat’l Bd. for
Certification in Occupational Therapy, Inc. v. Am. occupational Therapy Ass’n, 24 F. Supp. 2d
494, 506 (D. Md. 1998) (noting that lost revenue may be caused by numerous factors, including
personal reasons unrelated to the conduct at issue).
Likewise, Coester and CoesterVMS have failed to demonstrate any connection between
Skapinetz’ email and the loss of LoanDepot as a CoesterVMS client. First, no evidence supports
that LoanDepot even received the email. See ECF No. 10-2 at 2 (email sent only to Finance of
America). In this respect, Coester’s self-serving contention that LoanDepot terminated the
relationship because of “too much noise regarding the Skapinetz and the Scheer matter” does not
suffice, especially when considering that Coester and Scheer had been engaged in their own legal
feud which had nothing to do with Skapinetz. ECF No. 98-2 at 5. Nor can Coester point to any
temporal proximity between a single email sent to another client, Finance of America, and the
decline of LoanDepot’s relationship with CoesterVMS. Rather, CoesterVMS revenues from
LoanDepot took a turn for the worse beginning September 2017, nearly a year after Skapinetz
sent the email and five months after this lawsuit commenced. ECF No. 98-2 at 5; ECF No. 70-4
at 1–2 (corroborating revenue drop-off in September 2017 and complete end to revenues in June
2018). Taking all reasonable inferences in the light most favorable to the Coester and
15
CoesterVMS, no evidence links the email to LoanDepot parting ways with CoesterVMS. See
Campbell v. Lyon, 26 F. App’x 183, 186 (4th Cir. 2001). Summary judgment is granted in
Skapinetz’ favor on this claim.
II.
Reconsideration of Previous Orders
CoesterVMS seeks reconsideration of the Court’s prior orders for sanctions against
Defendants, denial of leave to file a third-amended answer and counterclaim, and other
discovery-related decisions. ECF No. 87. Courts may reconsider interlocutory orders “at any
time prior to the entry of a final judgment.” Fayetteville Inv’rs v. Commercial Builders, Inc.,
936 F.2d 1462, 1469 (4th Cir. 1991); Fed. R. Civ. P. 54; see also Taylor v. Brown, No. 91-6642,
952 F.2d 397 (Table), 1991 WL 274856, at *1 (4th Cir. Dec. 27, 1991) (“An order denying leave
to amend a complaint is interlocutory . . . .”). Reconsideration is warranted to address: (1) a
change in controlling law; (2) additional evidence that was not previously available; or (3) a
showing that that the prior decision was clearly erroneous or manifestly unjust. See Boyd v.
Coventry Health Care Inc., 828 F. Supp. 2d 809, 814 (D. Md. 2011); Paulone v. City of
Frederick, No. CIV. WDQ-09-2007, 2010 WL 3000989, at *2 (D. Md. July 26, 2010). Federal
courts are obligated to reach the correct judgment under law; however, a mere request “to
reconsider a legal issue or to ‘change its mind’” does not authorize relief. Pritchard v. Wal Mart
Stores, Inc., 3 F. App’x 52, 53 (4th Cir. 2001) (quoting United States v. Williams, 674 F.2d 310,
312 (4th Cir. 1982)).
Acting under Federal Rule of Civil Procedure 37, the Court imposed sanctions on
CoesterVMS to limit its use of evidence after repeated discovery violations. ECF No. 85.
CoesterVMS had not responded to the motion for sanctions, in apparent reliance on Local Rule
105.8, which states that “a party need not respond to any motion filed under Fed. R. Civ. P. 11 or
16
28 U.S.C. § 1927.” The Rule further prohibits the Court from granting any motion “without
requesting a response.” Loc. R. 105.8.
CoesterVMS argues that the Court violated this Rule by imposing sanctions without
requesting a response. However, Rule 105.8 governs only sanctions under Federal Rule of Civil
Procedure 11 (requiring, inter alia, attorneys to verify that papers are not filed for an improper
purpose) and 28 U.S.C. § 1927 (prohibiting unreasonable and vexatious multiplication of
proceedings). Rule 105.8 makes no mention of Rule 37, which governs discovery. Because
Rule 105.8 does not prohibit the Court from granting Rule 37 discovery motions without a
response from the sanctioned party, the Court did not err when it granted the motion.5
CoesterVMS’ other arguments are not new legally or factually. All issues that
CoesterVMS raises now could have been brought in the original round of papers. A motion to
reconsider “may not be used to relitigate old matters, or to raise arguments or present evidence
that could have been raised prior to the entry of” the order. Pac. Ins. Co. v. Am. Nat’l Fire Ins.
Co., 148 F.3d 396, 403 (4th Cir. 1998) (quoting 11 Wright, et al., Fed. Prac. & Proc. § 2810.1, at
127–28 (2d ed. 1995)); see also Humane Soc’y of U.S. v. Nat’l Union Fire Ins. Co. of Pittsburg,
PA, No. DKC 13-1822, 2017 WL 1426007, at *3 (D. Md. Apr. 21, 2017) (noting that the
standards for reconsideration under Rules 59 and 60 provide guidance for reconsideration of
interlocutory orders). Asserting that the Court “misunderstood” CoesterVMS’s initial arguments
does not bestow on the movant legitimate grounds for reconsideration. See Hutchinson v. Staton,
994 F.2d 1077, 1082 (4th Cir. 1993). Nor has CoesterVMS demonstrated any change in law, or
how manifest injustice will result if the prior rulings stand. Accordingly, the motion for
5
The Court further notes that Defendants were given ample warning and opportunity to either comply with
discovery or defend its lack of compliance as justified. The Court held no fewer than five discovery-related status
conferences in an attempt to resolve issues of Defendants’ making. It blinks at reality to suggest that Defendants
were not afforded ample process to address their protracted discovery violations.
17
reconsideration is denied.
III.
Withdrawal of CoesterVMS’ counsel
At the close of discovery, counsel for CoesterVMS moved to withdraw from
representation, citing difficulties in the attorney-client relationship and CoesterVMS’ inability to
afford representation. ECF No. 90. Whether to allow withdrawal is committed to the discretion
of the Court. Abbott v. Gordon, No. DKC-09-0372, 2010 WL 4183334, at *1 (D. Md. Oct. 25,
2010). In determining the propriety of withdrawal, courts consider whether according the relief
conforms to the Maryland Rules of Professional Conduct and whether it would potentially
prejudice either party or disrupt the orderly administration of justice. Al-Sabah v. Agbodjogbe,
No. ELH-17-730, 2019 WL 1472585, at *2 (D. Md. Apr. 3, 2019). Courts routinely permit
withdrawal due to the client’s inability to afford continued civil representation or deterioration of
the attorney-client relationship. Wright Sols., Inc. v. Wright, No. CBD-12-0178, 2014 WL
981141, at *2 (D. Md. Mar. 12, 2014); In re Schley, No. 09-34182-DOT, 2012 WL 1616817, at
*2 (Bankr. E.D. Va. May 9, 2012).
Counsel’s description of failed attempts to communicate with CoesterVMS demonstrate a
breakdown in the attorney-client relationship. See ECF No. 90 at 3. The Court accepts that the
relationship is fractured, as reflected by CoesterVMS’ “refusal” to allow counsel to respond to
the summary judgment motions.6 Accordingly, the Court grants counsel’s motion to withdraw.
However, because corporations must be represented, see Loc. R. 101.1.a, the Court stays the
effect of the grant for 30 days so that CoesterVMS may obtain new counsel. Failure to do so,
however, will result in this Court proceeding to the damages phase without the benefit of
CoesterVMS’ participation. See Allied Colloids, Inc. v. Jadair, Inc., No. 96-2078, 139 F.3d 887
6
Although the Court notes that, oddly, CoesterVMS did not have new counsel enter an appearance,
suggesting its direction not to respond to motions was driven by financial rather than attorney-client concerns.
18
(Table), 1998 WL 112719, at *1 (4th Cir. Mar. 16, 1998) (affirming grant of default judgment
against pro se corporation).
IV.
Conclusion
For the foregoing reasons, the Court grants the motions for summary judgment (ECF
Nos. 98 & 100), denies the motion for reconsideration (ECF No. 87), grants the motion to
withdraw (ECF No. 90), and denies without prejudice the requests for attorneys’ fees. ECF Nos.
68 & 86. A separate Order follows.
6/24/2019
Date
/S/
Paula Xinis
United States District Judge
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