Preview:

STATE OF MICHIGAN COURT OF APPEALS

H. SCOTT DALLEY, Plaintiff-Appellant, v DYKEMA GOSSETT P.L.L.C., JOHN FERROLI, GUIDANCE SOFTWARE, INC., LINCOLN NATIONAL LIFE INSURANCE COMPANY, and LINCOLN FINANCIAL ADVISORS CORPORATION, Defendants-Appellees.

FOR PUBLICATION February 11, 2010 9:00 a.m. No. 289046 Kent Circuit Court LC No. 07-003979-NZ

Advance Sheets Version

Before: STEPHENS, P.J., and GLEICHER and M.J. KELLY, JJ. GLEICHER, J. In this action alleging several intentional torts, plaintiff, H. Scott Dalley, appeals as of right a circuit court order granting defendants summary disposition pursuant to MCR 2.116(C)(8). We affirm in part, reverse in part, and remand for further proceedings. I. FACTS AND UNDERLYING PROCEEDINGS A. THE FEDERAL CASE This case finds its genesis in a dispute between an insurance company and its agent. On April 13, 2004, defendants Lincoln National Life Insurance Company and Lincoln Financial Advisors Corporation (collectively Lincoln) sued Rodney Ellis, a Lincoln agent, and Lucasse, Ellis, Inc. (Lucasse), a company partially owned by Ellis, in the United States District Court for the Western District of Michigan. Lincoln's federal court complaint alleged fraud, breach of fiduciary duty, conversion, breach of contract, and tortious interference with business expectancies or relations. Defendants Dykema Gossett P.L.L.C. (Dykema) and John Ferroli, a Dykema member, represented Lincoln in the federal court action. On April 15, 2004, a federal judge entered a temporary restraining order (TRO) prohibiting Ellis, Lucasse, and instant plaintiff Dalley from "deleting, erasing, destroying, shredding, secreting, removing, modifying, overwriting, replacing, or `wiping'" any computer data or files containing information related to Lincoln's customers and financial records. The

-1-

paragraphs of the TRO directly relevant to plaintiff's present intentional tort action provide as follows: 9. Rodney D. Ellis and Lucasse, Ellis, Inc., all officers, owners, employees, principals, and agents of either of them who receive actual notice of this Order by personal service or otherwise, including but not limited to H. Scott Dalley, and all persons or entities acting in concert with any of them, are hereby ordered immediately upon service of this order to make available to a computer/data consultant retained by Plaintiffs all hard drives and other magnetic, optical or electronic media in the possession, custody, or control of any of them, including those hard drives and other magnetic, optical, or electronic media that they have the effective power to obtain, which contain any Lincoln Customer Records, for prompt non-destructive copying at Plaintiffs' expense. Plaintiffs shall minimize disruption to the producing person's business to the extent practicable. Plaintiffs shall return all hard drives and other magnetic, optical, or electronic media supplied pursuant to this Order within 24 hours, or such longer time as may be stipulated to or ordered by this Court. Plaintiffs' computer consultant shall maintain the copied data in a secure, locked location, and shall not review or inspect the data copied, or show it to Plaintiffs or their attorneys, until further order of this Court. 10. Rodney D. Ellis and Lucasse, Ellis, Inc., all officers, owners, employees, principals, and agents of either of them, including, but not limited to, H. Scott Dalley, and all persons or entities acting in concert with any of them who receive actual notice of this Order by personal service or otherwise, are hereby ordered immediately upon service of this order to provide for prompt copying of, at Plaintiffs' expense, (i) any and all "notes" data, files or records of present or former customers of any Lincoln affiliate, and (ii) any and all "Alice Reports," "A-Roll" lists, and any other documents relating to any contemplated or processed change-in-employment status for any employees of the Henry Ford Health System with an account at any Lincoln affiliate.[1] On April 19, 2004, Lincoln's agents served plaintiff with the TRO in his Kentwood apartment, and with the assistance of personnel employed by defendant Guidance Software, Inc. (Guidance Software), copied all the data from all of plaintiff's computers. The events surrounding defendants' entry into plaintiff's apartment and the copying of his computer data form the basis of the instant lawsuit.

Despite that this case involves a summary disposition motion brought under MCR 2.116(C)(8), we consider the TRO because defendants rely, in part, on the language of the TRO, which is a matter of public record, see MCR 2.113(F)(1)(a), and plaintiff's complaint references the TRO.

1

-2-

B. THE STATE COURT COMPLAINT Plaintiff commenced this action on April 18, 2007, by filing in the Kent Circuit Court a complaint against Dykema, Ferroli, Lincoln, and Guidance Software.2 Plaintiff subsequently filed a substantially similar first amended complaint, which describes in detail the circumstances surrounding defendants' conduct in serving the TRO and copying plaintiff's computer data. Because the allegations within the amended complaint supply the facts necessary to our resolution of this case, we turn to an examination of that pleading. The amended complaint avers that in April 2004, plaintiff worked out of his apartment as an independent computer consultant for several small businesses, including Lucasse. The computers in his apartment provided the means to generate his livelihood and held confidential information concerning all his clients, such as their user identifications and passwords. Plaintiff, who suffers from AIDS, also stored on his computers highly personal information, medical records, photographs, and tax returns. On April 19, 2004, plaintiff's doorbell rang and someone requested that plaintiff permit entry into his apartment building. Because plaintiff was not expecting visitors, he did not respond. At approximately 11:00 a.m., loud pounding on his door "jolted" plaintiff awake and he "realized that the men outside had managed to slip through the security system downstairs." Plaintiff saw papers slid under his door, and he read them after the men had departed. The papers included the TRO, which "completely blindsided" plaintiff. Soon thereafter, plaintiff's telephone rang, but he did not answer it. The caller, Ferroli, left a message declaring that a federal court subpoena allowed him and others to enter plaintiff's apartment "to either take his computers and hard drives or copy what was on them." Plaintiff "reasonably believed that he could not let Ferroli simply walk out the door with the computers," and that "he had no choice and would go to jail" if he refused Ferroli access to his computers. Plaintiff thus "returned Ferroli's call and agreed to" allow Ferroli "to copy the information on his computers." Ferroli and several Guidance Software employees arrived, and plaintiff "led the group to the master bedroom where he kept two computers and four hard drives and, having seen from the subpoena that the case had something to do with Lincoln and Ellis, pointed them to the one and only hard drive that would contain Lincoln data." But "[t]he intruders . . . demanded everything." The Guidance Software personnel connected laptop computers to plaintiff's machines and transferred "every bit of information on all [plaintiff's] computers and hard drives." Only a "small percentage" of the information copied by the Guidance Software personnel related to Ellis, Lucasse, or Lincoln. The data transfer and copying process consumed

2

On June 13, 2007, defendants removed this action to federal court, averring that "the allegations of Plaintiff's Complaint raise substantial disputed issues concerning the scope and interpretation of a Temporary Restraining Order entered by the United States District Court for the Western District of Michigan . . . ." However, a federal judge later granted plaintiff's motion to remand, finding that "the TRO is not a complex document and did not specifically retain jurisdiction in a federal court for the purpose of interpreting and enforcing it."

-3-

11 hours, during which period Ferroli "wandered in and out." In frail health and underweight, plaintiff "did not sleep for several days thereafter." Four days after Ferroli and the Guidance Software technicians entered plaintiff's home, a Dykema attorney took plaintiff's deposition, urging him "to state on the record that he was suffering from AIDS[.]" As a result of illness, plaintiff had to complete the deposition later, by telephone from his bed. On July 1, 2004, Lincoln's attorneys informed the federal judge in the Ellis case that plaintiff had violated the TRO. Despite this claim and similar allegations in Lincoln's federal court complaint, defendants never uncovered or presented any evidence of wrongdoing by plaintiff or Ellis. Defendants' actions "traumatized [plaintiff], devastated his best customer, and thereby destroyed [plaintiff's] business." According to the amended complaint, Lincoln bore vicarious liability for the conduct of Dykema, Ferroli, and Guidance Software, because these defendants "were Lincoln's agents and were acting within the scope of their agency." The amended complaint sets forth five intentional tort claims: invasion of privacy in the form of intrusion on seclusion or into private affairs; trespass; intentional or reckless infliction of emotional distress; abuse of process; and tortious interference with business relationships or expectancies. All defendants sought summary disposition of plaintiff's claims pursuant to MCR 2.116(C)(8). Dykema, Ferroli and Guidance Software filed a separate motion seeking summary disposition under MCR 2.116(C)(10). In a written opinion and order entered on September 9, 2008, the circuit court granted defendants' motions under (C)(8) and dismissed the entirety of plaintiff's complaint. II. SUMMARY DISPOSITION ANALYSIS A. STANDARD OF REVIEW Plaintiff challenges the circuit court's grant of summary disposition in favor of defendants regarding all five counts of his complaint. This Court reviews de novo a circuit court's summary disposition ruling. Walsh v Taylor, 263 Mich App 618, 621; 689 NW2d 506 (2004). A court may grant summary disposition under MCR 2.116(C)(8) if "[t]he opposing party has failed to state a claim on which relief can be granted." A motion brought under subrule (C)(8) tests the legal sufficiency of the complaint solely on the basis of the pleadings. Corley v Detroit Bd of Ed, 470 Mich 274, 277; 681 NW2d 342 (2004).3 When deciding a motion under (C)(8), this Court accepts all well-pleaded factual allegations as true and construes them in the light most favorable to the nonmoving party. Maiden v Rozwood, 461 Mich 109, 119; 597 NW2d 817 (1999). A party may not support a motion under subrule (C)(8) with documentary evidence such as affidavits, depositions, or admissions. Patterson v Kleiman, 447 Mich 429, 432; 526 NW2d 879 (1994). Summary disposition on the basis of subrule (C)(8) should be granted only when the claim "is so clearly unenforceable as a matter of law that no factual

3

In contrast, a motion brought "under MCR 2.116(C)(10) tests the factual sufficiency of the complaint." Maiden v Rozwood, 461 Mich 109, 120; 597 NW2d 817 (1999) (emphasis added).

-4-

development could possibly justify a right of recovery." Kuhn v Secretary of State, 228 Mich App 319, 324; 579 NW2d 101 (1998). Because the circuit court granted defendants summary disposition solely under subrule (C)(8), we examine the pleaded allegations pertaining to each of the asserted intentional torts. Well-established principles guide our review. A complaint must contain "[a] statement of the facts, without repetition, on which the pleader relies in stating the cause of action, with the specific allegations necessary reasonably to inform the adverse party of the nature of the claims the adverse party is called on to defend . . . ." MCR 2.111(B)(1). "[T]he primary function of a pleading in Michigan is to give notice of the nature of the claim or defense sufficient to permit the opposite party to take a responsive position." Stanke v State Farm Mut Auto Ins Co, 200 Mich App 307, 317; 503 NW2d 758 (1993), citing 1 Martin, Dean & Webster, Michigan Court Rules Practice, p 186. Our Supreme Court has characterized MCR 2.111(B)(1) as consistent with a "notice pleading environment . . . ." Roberts v Mecosta Co Gen Hosp (After Remand), 470 Mich 679, 700 n 17; 684 NW2d 711 (2004). If a party fails to plead facts with sufficient detail, the court should permit "the filing of an amended complaint setting forth plaintiff's claims in more specific detail." Rose v Wertheimer, 11 Mich App 401, 407; 161 NW2d 406 (1968); see also MCR 2.116(I)(5). B. INVASION OF PRIVACY "Michigan has long recognized the common-law tort of invasion of privacy." Lewis v LeGrow, 258 Mich App 175, 193; 670 NW2d 675 (2003). Dean William Prosser has identified a Michigan case, De May v Roberts, 46 Mich 160; 9 NW 146 (1881), as among the first reported decisions allowing relief premised on an invasion of privacy theory. Prosser, Privacy, 48 Cal L R 383, 389 (1960). Today, the invasion of privacy tort has evolved into four distinct tort theories: (1) the intrusion upon another's seclusion or solitude, or into another's private affairs; (2) a public disclosure of private facts about the individual; (3) publicity that places someone in a false light in the public eye; and (4) the appropriation of another's likeness for the defendant's advantage." [Lewis, 258 Mich App at 193.] Count I of plaintiff's amended complaint invokes intrusion on seclusion, the first of these theories. There are three necessary elements to establish a prima facie case of intrusion upon seclusion: (1) the existence of a secret and private subject matter; (2) a right possessed by the plaintiff to keep that subject matter private; and (3) the obtaining of information about that subject matter through some method objectionable to a reasonable man. [Doe v Mills, 212 Mich App 73, 88; 536 NW2d 824 (1995).] The circuit court granted summary disposition in favor of defendants of plaintiff's intrusion on seclusion claim on the basis that the complaint failed to set forth facts "that show that he had a right to privacy in those areas of the apartment necessary to carry out the mandate of the TRO." Relying on this Court's opinion in Saldana v Kelsey-Hayes Co, 178 Mich App

-5-

230; 443 NW2d 382 (1989), the circuit court added that the TRO deprived plaintiff of a right to privacy in his computers and hard drives: With respect to the plaintiff's personal information on the computers, the complaint further alleges that plaintiff pointed the Dykema defendants to the "one and only hard drive that would contain Lincoln data" but that the employees of defendant Guidance copied all of the information contained on all of plaintiff's computers and hard drives. Pursuant to the TRO, the Dykema defendants had a right to copy hard drives that were potential sources of Lincoln information. Thus, even when viewed in plaintiff's favor, the complaint does not allege facts that show he had a right to privacy in his hard drives for purposes of carrying out the TRO. [Citation omitted.] Plaintiff asserts that the circuit court misconstrued both Saldana and the TRO, insisting that the TRO neither invested defendants with a right to violate plaintiff's privacy nor deprived plaintiff of his common-law privacy rights. The plaintiff in Saldana, a supervisor in one of the defendant's facilities, fell from a bicycle in the course of his employment. Id. at 232. The defendant suspected the plaintiff of malingering and hired a private investigation firm to "investigate plaintiff and to attempt to determine the extent of plaintiff's injuries." Id. The investigators employed a variety of surveillance techniques, including observing the plaintiff through an open window with a 1,200millimeter camera lens and posing as a process server "for the purpose of looking around plaintiff's home[.]" Id. at 233. The plaintiff brought an invasion of privacy action asserting an intrusion on his seclusion. Id. This Court first determined that the plaintiff "can show an intrusion," because "agents of defendants entered plaintiff's home under false pretenses" and "the use of a powerful lens to observe the interior of a home or of a subterfuge to enter a home could be found objectionable to a reasonable person." Id. at 234. However, because the defendants' surveillance of the plaintiff "involved matters which defendants had a legitimate right to investigate," this Court concluded that the plaintiff failed to allege facts that showed the intrusions "were into matters which plaintiff had a right to keep private." Id. This Court explained that the "duty to refrain from intrusion into another's private affairs is not absolute in nature, but rather is limited by those rights which arise from social conditions, including the business relationship of the parties." Id. (emphasis in original). The Court concluded that the plaintiff's privacy interest in his home "was subject to the legitimate interest of his employer in investigating suspicions that plaintiff's workrelated disability was a pretext." Id. at 235. We find Saldana readily distinguishable from this case. In Saldana, the nature of the parties' relationship limited the plaintiff's right to privacy concerning the matter the defendant investigated: whether the plaintiff suffered from work-related disabilities. Here, defendants and plaintiff shared no special relationship, business or otherwise, and defendants possessed no legitimate interest in viewing plaintiff's apartment or copying computer data unrelated to

-6-

Lincoln. Furthermore, we reject the circuit court's conclusion that the TRO divested plaintiff of his right to privacy in his apartment and computer hard drives. The TRO afforded defendants no right whatsoever to enter or search plaintiff's apartment.4 Regarding plaintiff's computers, the TRO entitled Lincoln's agent to copy hard drives and other electronic media "which contain any Lincoln Customer Records . . . ." But no provision in the TRO authorized defendants to copy personal computer data unrelated to Lincoln.5 Moreover, we find no support for the circuit court's determination that defendants "had a right to copy hard drives that were potential sources of Lincoln information." (Emphasis added.) The TRO neither mentions "potential" sources of information nor in any manner expands the reach of defendants' copying authority beyond matters directly related to Lincoln. Plaintiff's amended complaint avers that he "had a right to privacy in his own home and a right to keep private the private information on his computers and hard drives," and that defendants invaded plaintiff's privacy "by intruding upon his seclusion or solitude and into his private affairs, and obtained access to [plaintiff's] home and information about his private affairs by methods objectionable to a reasonable person." This averment adequately sets forth a claim of invasion of privacy by intrusion on seclusion. The plain language of the TRO in no way renders unenforceable plaintiff's intrusion on seclusion claim. Defendants alternatively maintain that plaintiff expressly or impliedly consented to the intrusion on his seclusion by allowing Ferroli and the Guidance Software personnel into his apartment and permitting them to copy his computer data. We resolve this contention by

The common law reflects "reverence . . . for the individual's right of privacy in his house." Miller v United States, 357 US 301, 313; 78 S Ct 1190; 2 L Ed 2d 1332 (1958). Nothing in the language of the TRO supports a construction of that document as the equivalent of a warrant permitting entry into plaintiff's apartment or authorizing a search and seizure therein.
5

4

Defendants offer a patently unreasonable suggested interpretation of

Download H SCOTT DALLEY V DYKEMA GOSSETT PLLC.pdf

Michigan Law