United States District Court, D. Alaska
SECURITY ALARM FINANCING ENTERPRISES, L.P., a California Limited Partnership, Plaintiff and Counterclaim Defendant,
v.
ALDER HOLDINGS, LLC, a Utah Limited Liability Company; ALARM PROTECTION TECHNOLOGY, LLC, a Utah Limited Liability Company; ALARM PROTECTION TECHNOLOGY ALASKA, LLC, a Utah Limited Liability Company; ALARM PROTECTION ALASKA, LLC, a Utah Limited Liability Company, Defendants and Counterclaimants.
ORDER RE COUNTERCLAIM DEFENDANT'S MOTION FOR
SUMMARY JUDGMENT
Sharon
L. Gleason UNITED STATES DISTRICT JUDGE
Before
the Court is Plaintiff and Counterclaim Defendant SAFE's
Motion for Summary Judgment at Docket 337. The motion is
fully briefed, [1] and oral argument was held on December 15,
2016.[2] Defendants'[3] motion at Docket 351 for
summary judgment on SAFE's claims has been addressed in a
separate order.[4]
BACKGROUND
This is
a dispute between two home alarm security companies. Many of
the pertinent facts are summarized in the Court's recent
order on Alarm Protection's motion, and are not repeated
here.[5] The following additional facts are drawn
from Alarm Protection's Answer to Amended Complaint and
Counterclaim.[6]
In
response to SAFE's concerns about Alarm Protection's
potential poaching of SAFE's customers, Alarm Protection
conducted its own internal investigation. Alarm Protection
maintains that as a result of that investigation, it learned
that SAFE had been calling SAFE's past customers that
were now Alarm Protection customers-presumably as part of
SAFE's investigation. According to Alarm Protection, SAFE
told at least some of these customers that Alarm Protection
was engaging in illegal activity and was defrauding its
customers.[7] These alleged statements by SAFE to Alarm
Protection's customers form the basis of Alarm
Protection's counterclaims, which are the subject of this
order. SAFE largely denied all of these allegations, and
denied that Alarm Protection was entitled to any
relief.[8]
DISCUSSION
I.
Jurisdiction
The
Court has supplemental jurisdiction over each of Alarm
Protection's counterclaims pursuant 28 U.S.C. § 1367
because each shares some “common nucleus of operative
fact” with SAFE's Lanham Act claim, over which the
court has original jurisdiction pursuant to 28 U.S.C. §
1331.[9]
II.
Standard for Summary Judgment
Federal
Rule of Civil Procedure 56(a) directs a court to “grant
summary judgment if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” The Court's recent
order on Alarm Protection's Motion for Summary Judgment
set out the controlling precedent for a trial court to apply
when considering a motion for summary judgment.[10] That
precedent is not restated here, but is again relied upon by
the Court.
III.
Analysis
Alarm
Protection has asserted the following five counterclaims: (1)
Tortious Interference with Contractual Relationship; (2)
Tortious Interference with Business Relationship; (3)
Defamation Per Se; (4) Defamation Per Quod; and (5) Violation
of Alaska's Unfair Trade Practices Act (UTPA), AS
45.50.471. SAFE moves for summary judgment on all of these
counterclaims.
SAFE's
primary argument is that Alarm Protection's claims-with
the exception of the defamation per se claim-cannot stand
because Alarm Protection has no evidence that it has suffered
any damages.[11] SAFE also argues that, for various
reasons, Alarm Protection cannot prove the essential elements
of its defamation per se claim.[12] And SAFE asserts that it
was privileged to interfere with Alarm Protection's
contracts with SAFE's former customers.[13] The Court
will address each argument in turn.
A.
Damages
In
Alaska, each of the torts of interference with contract,
interference with prospective business relationship,
defamation per quod, and the UTPA requires a plaintiff to
show actual damages to win monetary relief.[14] Here, SAFE
maintains that Alarm Protection has identified only four
statements in discovery to support its claims. One of these
statements was to an Alarm Protection employee who still
works for Alarm Protection and the other three were to Alarm
Protection customers who apparently have not cancelled their
services with Alarm Protection.[15]
Alarm
Protection responds that SAFE's contention that
“Alarm Protection cannot show damages caused by the few
statements that SAFE preserved” is “true so far
as it goes.”[16] But in Alarm Protection's view, it
does not go very far. Alarm Protection maintains that
SAFE's spoliation of its customer call
recordings[17] has prevented Alarm Protection, and the
Court, from knowing “how many other Alarm Protection
customers heard the same false statements from SAFE and
decided to cancel their contracts.”[18]The Court
agrees that the spoliation might make it difficult, perhaps
very difficult, to ascertain to whom SAFE made any improper
statements. And for this reason, the Court awarded sanctions
against SAFE, including the sanction of instructing the jury
that it may consider the fact of the spoliation in reaching
its verdict.[19]
Alarm
Protection contends that because of this spoliation and the
possibility that the jury will infer that the spoliated
material was favorable to Alarm Protection's claims, the
Court must deny summary judgment. Alarm Protection points to
the Second Circuit's decision in two cases, Byrnie v.
Cromwell[20] and Kronisch v. United States,
[21]
to support this position. In Byrnie, the Second
Circuit, citing Kronisch, explained that “a
party seeking an adverse inference may rely on circumstantial
evidence to suggest the contents of destroyed evidence”
and that once this is done, “[i]t then becomes a matter
for the jury to decide, based on the strength of the evidence
presented, whether the documents likely had such
content.”[22]
The
lost recordings might have been highly probative in proving
that SAFE made defamatory statements about Alarm Protection,
or attempted to interfere in Alarm Protection's contracts
or business relationships, or engaged in some sort of
deceptive practice. Because SAFE failed to preserve those
recordings even in the face of an obligation to do so, the
jury might infer that the recordings were favorable to Alarm
Protection.[23] Thus, Alarm Protection is correct that
the mere fact that the three customers for whom it has
recordings have not left Alarm Protection does not preclude
Alarm Protection from showing damages related to other
customers, because “a reasonable jury [could] conclude
that the destroyed recordings would contain more of the same:
defamatory statements by SAFE . . . .”[24]
But the
spoliation, and any inference that may be drawn from it, gets
Alarm Protection only so far. Alarm Protection bears the
burden at trial of proving both SAFE's conduct and Alarm
Protection's damages. The potential inference allows
Alarm Protection to avoid summary judgment as to SAFE's
conduct-the jury could infer that there was additional
conduct for which there is not direct evidence. But the
recordings that were spoliated would not contain evidence
about Alarm Protection's damages.[25]That evidence
would have to come from some other source-such as Alarm
Protection's own records. Indeed, as the Court of Appeals
explained in Bynrie, “[t]he burden falls on
the ‘prejudiced party' to produce ‘some
evidence suggesting that a document or documents relevant to
substantiating his claim would have been included among the
destroyed files.'”[26] Alarm Protection gives no
reason to believe that there would be any evidence of its
damages on the spoliated recordings. No reasonable jury could
infer that the phone recordings contained evidence of Alarm
Protection's damages, and so Alarm Protection cannot rely
on the spoliation to escape its burden to produce evidence of
such damages.[27]
Because
Alarm Protection concedes that it has no actual evidence that
it incurred any damages as a result of SAFE's conduct,
the Court will grant SAFE's motion for summary judgment
with regard to Alarm Protection's claims for interference
with contract, interference with prospective business
relationship, defamation per quod, and violations of the
UTPA, each of which requires a showing of
damages.[28]
B.
Defamation per se
Defamation
per se requires proof of four elements: (1) a false and
defamatory statement; (2) an unprivileged publication to a
third party; (3) fault amounting at least to negligence; and
(4) the existence of per se actionability.[29] SAFE asserts
that none of the four statements for which Alarm Protection
has a recording can satisfy these four elements. Alarm
Protection counters that for the three statements SAFE made
to customers, such elements are disputed. Alarm Protection
also maintains that it can base its defamation per se claim
on other statements for which the recordings were spoliated.
At oral argument, Alarm Protection acknowledged that the
statements SAFE made to Alarm Protection's representative
cannot support a claim of defamation per se because those
statements were not a “publication to a third
party.”[30] Accordingly, the Court will not address
the statements to Mr. Jesclard. SAFE raises several points on
which it seeks summary judgment on Alarm Protection's
claim. The Court will address each in turn.
1.
The Smith Call
SAFE
contends that the statements made to Philip
Smith[31] are not defamatory because they are not
clearly about Alarm Protection.[32] It is true that
SAFE's representative did not mention Alarm Protection by
name, but the reference to “aggressive door-to-door
salesmen” closely followed Mr. Smith's statement
that Alarm Protection salesmen had been by his
house.[33] There is at the very least a genuine
dispute as to whether this statement was about Alarm
Protection; the Court will not grant summary judgment on this
basis.
2.
The Esquiro Call
A
statement of opinion or belief cannot be the basis of a
defamation action because such statements cannot be
“false.”[34] SAFE contends that the statements made
to Ms. Esquiro are statements of opinion, not statements of
fact, and thus cannot support a defamation
claim.[35] In SAFE's view, because the SAFE
representative's statements were conditional, they are
opinion. But as the Alaska Supreme Court explained in
Alaskaland.com, “[e]ven if a statement is an
opinion, it may give rise to a defamation claim if its
‘expression contains an implied assertion of false fact
and is sufficiently derogatory as to cause harm to the
subject's reputation.'”[36]
One
portion of the conversation between the SAFE representative
and Ms. Esquiro is particularly relevant to this inquiry:
Ms. Esquiro: “But it's not like a, this isn't a
fraud thing?”
SAFE: “Well, that's a good question, and it lends
itself to be.”
Ms. Esquiro: “Because they're misrepresenting you
guys?”
SAFE: “Correct.”[37]
Although
the Court may determine whether a statement was defamatory as
a matter of law, [38] Alaska courts also recognize that
whether a statement is one of opinion or fact is sometimes an
appropriate question for the jury.[39] The Court finds that a
rational jury could conclude that the statements to Ms.
Esquiro “contain an implied assertion” of
fact-for example, that Alarm Protection was
“misrepresenting” SAFE, and was thus not to be
trusted. The Court will not grant summary judgment on this
basis.[40]
3.
Vagueness ...