EnTech, LTD. v. Speece, et al.

Filing 67

Memorandum Opinion and Order that Defendant Marcia Speece's motion for summary judgment (Doc. 51 ) is GRANTED. Defendant Marcia Speece's substantive motions for sanction (Doc. 50 ) is GRANTED. Marcia Speece's second motion for sanctions (Doc. 64 ) is DENIED IN AS MOOT. Judge John R. Adams on 11/15/19. (K,C)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
EnTech, LTD.,
Plaintiff,
v.
Marcia Speece,
Defendant.

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CASE NO. 5:16CV1541
JUDGE JOHN R. ADAMS

MEMORANDUM OF OPINION
(Resolves Docs. 50, 51, & 64)

Pending before the Court is for summary judgment (Doc. 51) and two separate motions for
sanctions filed by Defendant Marcia Speece. Plaintiff EnTech, Ltd. has opposed all three
motions.1 Upon review, Speece’s motion for summary judgment is GRANTED. The motions for
sanctions are GRANTED IN PART AND DENIED IN PART.
I. Facts & Procedure
There is can be no dispute that this litigation is little more than an extension of the divorce
proceedings of Marcia Speece and Bryan Speece. Bryan Speece was the founder and president of
EnTech. For nearly seven years, Marcia Speece was the bookkeeper for the company. On May
29, 2015, Marcia Speece filed for divorce, and on the following day, she moved out of the home
with the parties’ children. It is the alleged activities of the following day, May 30, 2015, that give
rise to this litigation.

1

The parties disagree over whether EnTech’s opposition to summary judgment is also a crossmotion for summary judgment. Regardless of how the pleading is characterized, the Court will
resolve the arguments contained therein.

According to the EnTech’s complaint, Marcia Speece removed a company computer from
Bryan Speece’s home office in the basement of the marital home. EnTech claims to have
demanded the return of the computer on June 30, 2015. Upon that demand, EnTech was informed
that the computer was in the possession of the Marcia Speece’s divorce attorney. Arrangements
were made to secure the computer, and Bryan Speece retrieved it on July 9, 2015. EnTech claims
that Bryan Speece immediately recognized that the hard drive in the computer had been “wiped
clean.”

EnTech alleged that Bryan Speece was forced to recreate the lost information.

Conveniently for EnTech, Bryan Speece was able to hire his father to assist in recreating the data.
EnTech alleged that the cost of hiring the father was $30,000 and that Bryan Speece had also
agreed to pay his father an additional $15,000 for renting space in his home. EnTech also asserts
that Marcia Speece and her counsel “made representations and filed motions that contain
information that would not be known to Defendant Marcia Speece or her attorneys had the contents
of the Computer not been accessed.” Doc. 1 at 4.
Based upon the above, EnTech raised four claims against Marcia Speece. Specifically,
EnTech asserted a claim under the Computer Fraud and Abuse Act and state law claims for
replevin, conversion, and civil conspiracy. Marcia Speece has moved for summary judgment on
all four claims. The Court first resolves the parties’ arguments related to summary judgment.
II. Legal Standard
Summary judgment is appropriate only when there is no genuine issue of material fact and
the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); Celotex Corp. v.
Catrett, 477 U.S. 317 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986); Matsushita
Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986). The moving party must demonstrate
to the court through reference to pleadings and discovery responses the absence of a genuine issue

of material fact. Celotex Corp. v. Catrett, 477 U.S. at 323. This is so that summary judgment can
be used to dispose of claims and defenses which are factually unsupported. Id. at 324. The burden
on the nonmoving party is to show, through the use of evidentiary materials, the existence of a
material fact which must be tried. Id. The court’s inquiry at the summary judgment stage is “the
threshold inquiry of determining whether there is the need for a trial - whether, in other words,
there are any genuine factual issues that properly can be resolved only by a finder of fact because
they may reasonably be resolved in favor of either party.” Anderson v. Liberty Lobby, Inc., 477
U.S. at 250.
The court’s treatment of facts and inferences in a light favorable to the nonmoving party
does not relieve that party of its obligation “to go beyond the pleadings” to oppose an otherwise
properly supported motion for summary judgment under Rule 56(e). See Celotex Corp. v. Catrett,
477 U.S. at 324. The nonmoving party must oppose a proper summary judgment motion “by any
kinds of evidentiary material listed in Rule 56(c), except the mere pleadings themselves ...” Id.
Rule 56(c) states, “... [t]he judgment sought shall be rendered forthwith if the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,
show that there is no genuine issue of material fact and that the moving party is entitled to a
judgment as a matter of law.” A scintilla of evidence in favor of the nonmoving party is not
sufficient.
III. Law and Analysis
1. Summary Judgment
All four of EnTech’s claims hinge on the same core allegation. Namely, that Marcia
Speece or her agent unlawfully accessed the EnTech computer and obtained confidential

information from it. However, despite exhaustive discovery and now extensive briefing, EnTech
has not been able to put forth any admissible evidence to support its claims.
EnTech relies heavily on the affidavit of Bryan Speece’s mother, Janet Speece. Janet
Speece asserted as follows about a conversation she had with her grandson, Iain:
I followed Iain from the room and told him that his father was particularly
concerned about the EL computer and monitor that had been taken from his office;
I asked Iain if he had taken that equipment from his father’s office; Iain said his
mother wanted it and had told him to take it; he also said that they had loaded it
into the car the day they left; I told Iain what they took was not just any computer
system, it was very important equipment, and that his father needed it to complete
work he had started for EL. I then made it very clear to Iain that his father wanted
that equipment returned immediately; Iain said it wasn’t up to him, that his mother
was the one who had that equipment, and if his father wanted to try and get any of
it back he’d have to talk to his mother about it[.]
Doc. 54-4 at 4. EnTech, to date, has offered no argument that would suggest that the above hearsay
would be admissible. EnTech has also made no attempt to explain how it is that Iain Speece’s
alleged statements to his grandmother are in direct conflict with his own sworn testimony. During
his deposition, Iain Speece admitted to removing his own computer from a different portion of the
family home’s basement. Iain was then asked:
Q. Did any other computers leave with you and your mother that day … other than
the one that you put in the car?
A. No, not that I’m aware of.
Doc. 54-3 at 22. Thus, EnTech has not produced any competent evidence with respect to how or
by whom the EnTech computer was removed from the home.
There is no dispute that at some point in time the EnTech computer came into the
possession of Marcia Speece and eventually her counsel. Marcia Speece admitted to such
possession when Bryan Speece demanded return of the equipment. Moreover, Bryan Speece
produced circumstantial evidence that suggested that Marcia Speece or her counsel was aware of

some of the information on the computer. Bryan Speece swore in his affidavit that Marcia
Speece’s counsel made reference to “‘comprehensive spreadsheets tracking every pre-production
and production level display by model #, SL and units shipped,’ as being one of the tables that
existed on the EnTech Computer that I referenced when testing. It contained confidential
information of 3rd-parties and had been provided to EnTech under layers of NDAs.” Doc. 54-1.
Bryan Speece also suggested that Marcia Speece learned the named of certain Asian companies
through the computer.2 At its core, EnTech’s argument suggests that Marcia Speece could not
have learned any of the above information without committing the torts contained in the complaint.
EnTech, however, has not produced a scintilla of evidence in support of its conclusion.
Even if the Court accepted Bryan Speece’s assertions as true, EnTech has wholly failed to offer
any evidence that Marcia Speece or her counsel actually accessed the computer at issue. On the
record before this Court, it appears far more plausible the couple’s son, Iain, accessed the
computer. In fact, Iain admitted during his deposition to swapping out the graphic cards in the
EnTech computer with his own, lesser-quality graphics card. In any event, no competent evidence
has been produced that Marcia Speece accessed the computer or currently possesses information
that was taken from the computer. The complete lack of evidentiary support for the claim that
Marcia Speece accessed the computer is fatal to all of EnTech’s claims.3
2.

Sanctions

Marcia Speece has sought sanctions under Fed.R. Civ.P. 11. Fed. R. Civ. P. 11(b) states:

2

Given Marcia Speece’s role as the bookkeeper for EnTech, both of these items are less-thancompelling evidence. It is hardly surprising that Marcia Speece would know customer names
and/or their correct spelling and have a general idea of how her husband tracked the work he was
conducting.
3
In her deposition, Marcia Speece unequivocally denied accessing any EnTech information on the
computer, copying any information from the computer, or printing any information from the
computer. Doc. 50-3 at 28. 

(b) Representations to Court. By presenting to the court (whether by signing, filing,
submitting, or later advocating) a pleading, written motion, or other paper, an
attorney or unrepresented party is certifying that to the best of the person's
knowledge, information, and belief, formed after an inquiry reasonable under the
circumstances,—
(1) it is not being presented for any improper purpose, such as to harass or to cause
unnecessary delay or needless increase in the cost of litigation;
(2) the claims, defenses, and other legal contentions therein are warranted by
existing law or by a nonfrivolous argument for the extension, modification, or
reversal of existing law or the establishment of new law;
(3) the allegations and other factual contentions have evidentiary support or, if
specifically so identified, are likely to have evidentiary support after a
reasonable opportunity for further investigation or discovery; and
(4) the denials of factual contentions are warranted on the evidence or, if
specifically so identified, are reasonably based on a lack of information or
belief.
Rule 11 permits sanctions under section (c) which holds:
(c) Sanctions. If, after notice and a reasonable opportunity to respond, the court
determines that subdivision (b) has been violated, the court may, subject to the
conditions stated below, impose an appropriate sanction upon the attorneys, law
firms, or parties that have violated subdivision (b) or are responsible for the
violation.
In determining whether sanctions may be imposed under Rule 11, the Sixth Circuit has
stated the appropriate test is “whether the individual’s conduct was reasonable under the
circumstances.” International Union, United Auto., Aerospace and Agr. Implement Workers of
Am. v. Aguirre, 410 F.3d 297, 304 (6th Cir. 2005). A good faith belief in the merits of a case is
insufficient to avoid sanctions. Rather, counsel must “meet an objective standard of
reasonableness.” Mann v. G & G Mfg., Inc., 900 F.2d 953, 958 (6th Cir. 1990).
As amply demonstrated by Marcia Speece’s motion and reply briefs, EnTech’s theory of
the case has dramatically changed during the course of the litigation. However, even with this
ever-changing theory of liability, EnTech has wholly failed to produce any admissible evidence

that would support its claims. It is undisputed that the EnTech computer was removed from the
marital home. However, as detailed above, Bryan Speece was able to offer minimal, at best,
circumstantial evidence that information on the computer had been accessed by someone. Bryan
Speece effectively asserted some general knowledge of his business products and customers could
only have been obtained by accessing the computer. As detailed above, the information alleged to
have been learned could have easily been learned through Marcia Speece’s role as a bookkeeper
for EnTech or even through inadvertent observation of a computer screen.
More importantly, even if the Court were to assume that the alleged confidential
information had been accessed improperly through use of the computer, it would not aid EnTech’s
position. The record contains no admissible evidence regarding who accessed the computer.
EnTech seeks to have this Court infer that Marcia Speece accessed the computer because it was
ultimately placed into the possession of her counsel. However, Marcia Speece’s sworn testimony
contradicts any such inference. Moreover, the circumstantial evidence detailed above strongly
suggests that any access of the computer was performed by the parties’ son, Iain. Bryan Speece
presented specific evidence that the graphics card in the computer had been replaced with a
graphics card that was formerly in Iain’s computer. Iain, however, is not a party to this litigation.
Accordingly, his possible actions with respect to the computer do not aid EnTech’s causes of
action.
It appears that the sole evidence EnTech could muster in support of its claims against
Marcia Speece was inadmissible hearsay offered by Bryan Speece’s mother, Janet Speece. Janet
Speece asserted that Iain told her that the computer was removed at Marcia Speece’s direct request.
Iain never admitted to making such a comment during this litigation. Moreover, the Court takes
judicial notice of the findings made by the domestic relations judge that had the opportunity to

observe all of the parties testify in person. The domestic relations judge reached the following
conclusions in his decision granting the parties’ divorce:
▪ “Defendant Bryan Speece’s transfer of accounts with the assistance of his mother Defendant
Janey Speece constituted financial misconduct.” Doc. 64-9 at 5.
▪ “Plaintiff Marcia Speece is a credible witness.” Doc. 64-9 at 5.
▪ “Defendant Bryan Speece has been evasive and contradictory in his testimony.” Doc. 64-9 at 5.
▪ “Defendant Janet Speece has also been evasive and not credible.” Doc. 64-9 at 5.
▪ “The attorney’s fees statements submitted by Defendant Janet Speece for services purportedly
rendered to EnTech, Ltd., are, at best, questionable.” Doc. 64-9 at 6.
While this Court does not adopt those findings, it is exceedingly troubling that the pattern
identified by the domestic relations court has continued in this litigation. In support of damages
herein, Bryan Speece and EnTech asserted that the need to reconstruct the lost data from the
computer required him to outsource the work. Conveniently for EnTech, the work was performed
by Bryan Speece’s father at considerable cost. Moreover, the “more secure” work environment
that was obtained was space in Bryan Speece’s parents’ home, also at considerable cost. Much
like Janet Speece’s attorney fees, those costs are, at best, questionable.
Similarly. Bryan Speece has been contradictory in his statements and testimony to the
Court. From the outset of this matter, the Court attempted to ascertain the specific factual basis
that formed the basis for all of the pending claims. The essence of that claim was that the computer
was removed from the home by Marcia Speece, accessed, and wiped clean. When this issue was
discussed in the underlying domestic relations case, Bryan Speece testified as follows: “The
physical condition was okay. It was a little bit dismantled but, I mean, all the parts that counted
were there.” Doc. 60-2 at 140. Bryan Speece seems to suggest that this was his commentary after

only a cursory review of the computer. However, Bryan Speece gave this testimony on August 8,
2018, more than two years after this litigation had been filed. It defies logic to now suggest that
the returned computer was missing a vital component. If the computer and its contents were as
important as purported, there is simply no reasonable explanation for the discussion of this missing
hard drive to first arise years after the computer had been returned to Bryan Speece and EnTech.
Instead, this ever-evolving theory of liability only serves to undercut Bryan Speece’s credibility as
a witness.
In the Court’s view, it was not reasonable to continue this litigation following the
completion of the depositions of Iain and Marcia Speece. Thereafter, it should have been clear to
both the parties and counsel that EnTech could offer no admissible evidence that would prove all
the essential elements of each of its claims. Accordingly, it was unreasonable to continue the
litigation. By no later than December 13, 2019, counsel for Marcia Speece shall brief the issue of
the proper amount of sanctions based upon this order of the Court. EnTech and its counsel shall
have thirty days to respond in opposition to the brief filed by Marcia Speece.
IV. Conclusion
Defendant Marcia Speece’s motion for summary judgment (Doc. 51) is GRANTED.
Defendant Marcia Speece’s substantive motions for sanction (Doc. 50) is GRANTED. Marcia
Speece’s second motion for sanctions (Doc. 64) is DENIED IN AS MOOT4 as detailed herein.
IT IS SO ORDERED.
Date: November 15, 2019

_/s/ John R Adams_______
JOHN R. ADAMS
U.S. DISTRICT JUDGE

4

Marcia Speece’s second motion for sanctions (Doc. 64) is subsumed by the Court’s resolution
of her first motion for sanctions. Accordingly, it is denied as moot.