Coffee v. Stolidakis

• Court: District Court, D. Nevada
• Decided: July 6, 2022
• Docket: 2:21-cv-02003
• Status: Unknown

Opinion

2 UNITED STATES DISTRICT COURT 3 DISTRICT OF NEVADA 4 TONY COFFEE, an individual, Case No.: 2:21-cv-02003-ART-EJY 5 Plaintiff, ORDER 6 v.

7 MARIOS STOLIDAKIS, an individual; DOE individuals I through X; and ROE 8 corporations and organization I through V, inclusive, 9 Defendants. 10 11 12 Before the Court is Defendant1 Marios Stolidakis’s motion to dismiss for 13 lack of subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1) and for failure to 14 state a claim under F.R.C.P. 12(b)(6) (ECF No. 7), as well as Plaintiff Tony Coffee’s 15 motion for a preliminary injunction (ECF No. 13.) 16 Based on the record and in consideration of the relevant law, the Court 17 denies Defendant’s motion to dismiss for lack of subject matter jurisdiction, 18 grants in part and denies in part Defendant’s motion to dismiss for failure to state 19 a claim and denies Plaintiff’s motion for a preliminary injunction. 20 I. FACTUAL AND PROCEDURAL BACKGROUND 21 On July 23, 2020, Plaintiff Tony Coffee and Defendant Marios Stolidakis 22 organized and formed Pinnacle Protection Group, LLC (“Pinnacle”), a private 23 security company which provides patrol and event security services. (ECF No. 1 24 (“Complaint”) ¶ 6.) Both Plaintiff and Defendant were listed as a Managing 25 Member of Pinnacle in its company filings with the Secretary of State. (ECF No. 26 1 Plaintiff included “DOE individuals I though X; and ROE corporations and organizations I 27 through V, inclusive,” in the caption of his Complaint, but did not reference any such Doe or Roe persons or entities in the Complaint. The Court will use the term “Defendant” to refer only to 28 Marios Stolidakis. 1 10-2.) At least in the beginning, Plaintiff and Defendant agreed that the 2 membership interest of Pinnacle would be split equally between them. (Complaint 3 ¶ 7.) Plaintiff applied to the Nevada Private Investigators Licensing Board for a 4 private patrolman’s license on behalf of Pinnacle and was granted a license which 5 listed Plaintiff as the Qualifying Agent for Pinnacle. (Id. ¶ 5; ECF No. 10-1.) Once 6 Pinnacle was formed, an internet domain name was purchased and email 7 accounts were set up for Pinnacle, which included, without limitation, the email 8 addresses “pinnacleprotectiongroupllc@gmail.com” and 9 “TC@pinnacleprotectiongroup2020.com.” (Complaint ¶ 8.) Bank accounts were 10 also set up for Pinnacle. (Id. ¶ 9.) 11 In the summer of 2021, the relationship between Plaintiff and Defendant 12 began to deteriorate. Plaintiff alleges that shortly after Pinnacle’s bank accounts 13 were set up, Defendant began transferring funds from Pinnacle’s bank accounts 14 to personal accounts. (Id. ¶ 10.) Plaintiff further alleges that Defendant attempted 15 to cut Plaintiff out of Pinnacle’s business by contracting with clients and hiring 16 subcontractors without Plaintiff’s knowledge or consent. (Id. ¶ 13.) Defendant 17 allegedly told clients not to contact Plaintiff and defamed Plaintiff by telling 18 employees and clients that Plaintiff was stealing from the business and that 19 Plaintiff had been diagnosed with early onset dementia. (Id. ¶¶ 14-15.) Defendant 20 then, in early August 2021, allegedly locked Plaintiff out of Plaintiff’s company 21 email account, read Plaintiff’s emails, and shared Plaintiff’s emails with third 22 parties. (Id. ¶ 16.) 23 The tension between Plaintiff and Defendant reached a boiling point in 24 August of 2021, which culminated in Plaintiff ceasing his involvement with the 25 company. Plaintiff alleges that in late August 2021, Defendant withdrew all the 26 company funds in the Pinnacle bank accounts, opened a new bank account for 27 Pinnacle at a different banking institution, and directed all subsequent client 28 payments to Pinnacle to the new bank accounts. (Id. ¶ 17). Defendant then 1 allegedly told Plaintiff that he would not return any funds to Pinnacle for 2 continued operations unless Plaintiff relinquished his membership interest in 3 Pinnacle to Defendant and allowed Defendant to continue to operate Pinnacle 4 using the private patrolman’s license which Plaintiff had obtained and which was 5 in Plaintiff’s name, and which is necessary to legally engage in the enterprise of 6 private patrol under Nevada law. (Id. ¶ 18.) When Plaintiff refused, Defendant 7 filed an Amended List of Officers for Pinnacle with the Secretary of State which 8 removed Plaintiff as a Managing Member and listed an individual named Leor 9 Rosen as a Managing Member alongside Defendant. (Id. ¶ 19.) On or around 10 October 2021, Defendant allegedly used Plaintiff’s signature on Pinnacle’s payroll 11 checks to its employees without Plaintiff’s permission. (Id. ¶ 20.) Defendant 12 denies the allegations and claims that Plaintiff’s ownership in Pinnacle was 13 “diluted” due to his failure to make capital contributions to the company and his 14 abandonment of his interest in the company. (ECF No. 7 at 3:18-21.) 15 Plaintiff’s Complaint contains nine claims for relief: (1) conversion; (2) 16 declaratory relief under NRS 30.040; (3) fraudulent misrepresentation; (4) 17 defamation per se; (5) intentional interference with prospective economic 18 advantage; (6) violation of NRS 205.477; (7) violation of the Stored 19 Communications Act, 18 U.S.C § 2701; (8) unjust enrichment; and (9) injunctive 20 relief. Plaintiff also pled a claim for injunctive relief and seeks a preliminary 21 injunction to enjoin Defendant from: (1) personally possessing or otherwise 22 diverting funds belonging to Pinnacle to outside accounts; (2) making false and 23 defamatory statements about Plaintiff to third parties; (3) logging into and 24 otherwise accessing Plaintiff’s email account(s); and (4) forging Plaintiff’s 25 signature in any manner. (ECF No. 13.) 26 Defendant moved to dismiss for lack of subject matter jurisdiction and for 27 failure to state a claim. In addition, the parties dispute whether the submission 28 of certain exhibits and declarations converts the Rule 12(b)(6) motion to dismiss 1 into a motion for summary judgment, as well as whether Plaintiff may properly 2 submit an amended response to Defendant’s motion to dismiss. 3 II. MOTION TO DISMISS FOR LACK OF SUBJECT MATTER 4 JURISDICTION 5 Plaintiff’s sole federal claim is that Defendant violated the Stored 6 Communications Act, 18 U.S.C. § 2701 et seq. Because this Court has 7 jurisdiction over this claim, it rejects Defendant’s motion to dismiss this action 8 under Fed R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction.2 9 Federal courts are courts of limited jurisdiction. See Owen Equip. & 10 Erection Co. v. Kroger, 437 U.S. 365, 374 (1978). “A federal court is presumed to 11 lack jurisdiction in a particular case unless the contrary affirmatively appears.” 12 Stock West, Inc. v. Confederated Tribes of the Colville Reservation, 873 F.2d 1221, 13 1225 (9th Cir. 1989). Although the defendant is the moving party in a Rule 14 12(b)(1) motion to dismiss, the plaintiff is the party invoking the court's 15 jurisdiction and therefore bears the burden of proving that the case is properly 16 in federal court. McCauley v. Ford Motor Co., 264 F.3d 952, 957 (9th Cir. 2001) 17 (citing McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, (1936)). 18 Dismissal for lack of subject-matter jurisdiction because of the inadequacy 19 of the federal claim is proper only when the claim is “so insubstantial, 20 implausible, foreclosed by prior decisions of this Court, or otherwise completely 21 devoid of merit as not to involve a federal controversy.” Steel Co. v. Citizens for a 22 Better Env't, 523 U.S. 83, 89 (1998) (internal citations omitted). When the 23 question of jurisdiction and the merits of an action are “intertwined” such that 24 “the question of jurisdiction is dependent on the resolution of factual issues going 25 to the merits of an action[,]” dismissal for lack of subject matter jurisdiction is 26 2 Defendant attached a Declaration from Marios Stolidakis (ECF No. 7-1) in support of its Rule 27 12(b)(1) motion to dismiss. As Defendant points out, a district court may hear evidence regarding jurisdiction without converting a Rule 12(b)(1) motion into a motion for summary judgment. 28 Robinson v. United States, 586 F.3d 683, 685 (9th Cir. 2009). 1 improper. Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). 2 Plaintiff claims that Defendant violated the Stored Communications Act, 3 18 U.S.C. § 2701 et seq., when Defendant changed the settings on Plaintiff’s 4 Pinnacle email account to deny Plaintiff access to the email account. A person 5 violates the Stored Communications Act if they “intentionally access[] without 6 authorization” or “intentionally exceed[] an authorization to access” a facility 7 through which an electronic communication service is provided. 18. U.S.C. § 8 2701(a)(1)-(2). Section 2707 grants a civil cause of action to enforce violations of 9 the Act. 18 U.S.C. § 2707. 10 Defendant’s jurisdictional argument boils down to a factual dispute about 11 whether its actions fall within one of the exceptions to liability under § 2701(c), 12 which provides, “this section does not apply with respect to conduct authorized 13 ... by the person or entity providing a wire or electronic communications 14 service[.]” 18 U.S.C. § 2701(c)(1). Defendant argues that because the email 15 accounts he allegedly accessed and blocked were company email accounts, his 16 access was authorized and falls within the § 2701(c)(1) exception for conduct 17 authorized by the person or entity providing a wire or electronic communications 18 service. (ECF No. 7 at 6:14-7:12.) Whether Defendant’s conduct falls within a 19 liability exception is not a jurisdictional argument, but instead one intertwined 20 with the merits of the claim. Defendant has not cited a single case suggesting 21 that this Court lacks jurisdiction and his citation to Fraser v. Nationwide Mutual 22 Ins. Co., 352 F.3d 107 (3d Cir. 2004) (holding that the company, a large insurance 23 company that provided the email service, was authorized to access the plaintiff’s 24 work email), underscores the fact that federal courts have jurisdiction to interpret 25 the scope of the SCA and its exceptions. Federal courts have held that the emails 26 are “wire or electronic communications” under the Act and that emails held on 27 the servers of email providers are in “electronic storage.” See, e.g., Theofel v. 28 Farey-Jones, 359 F.3d 1066, 1077 (9th Cir. 2004) (holding that emails stored on 1 the servers of the internet service provider which provided email services to the 2 plaintiff company were in “electronic storage” both before and after delivery); 3 Hately v. Watts, 917 F.3d 770, 787 (4th Cir. 2019) (“[P]reviously delivered and 4 opened emails stored on a web-based email client are in ‘electronic storage[.]’”). 5 Defendant has failed to show that Plaintiff’s claim is so “implausible, foreclosed 6 by prior decisions, ... or otherwise completely devoid of merit as to not involve a 7 federal controversy.” Steel Co., 523 U.S. at 89. Accordingly, Defendant’s motion 8 to dismiss for lack of subject matter jurisdiction is denied. 9 III. MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM 10 A court may dismiss a plaintiff’s complaint for “failure to state a claim upon 11 which relief can be granted.” Fed. R. Civ. P. 12(b)(6). A properly pleaded complaint 12 must provide “a short and plain statement of the claim showing that the pleader 13 is entitled to relief.” Fed. R. Civ. P. 8(a)(2); Bell Atlantic Corp. v. Twombly, 550 U.S. 14 544, 555 (2007). While Rule 8 does not require detailed factual allegations, it 15 demands more than “labels and conclusions” or a “formulaic recitation of the 16 elements of a cause of action.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing 17 Twombly, 550 U.S. at 555). “Factual allegations must be enough to rise above the 18 speculative level.” Twombly, 550 U.S. at 555. Thus, to survive a motion to 19 dismiss, a complaint must contain sufficient factual matter to “state a claim to 20 relief that is plausible on its face.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 21 U.S. at 570). The Court will consider each claim in turn.3

22 3 The parties raise several procedural issues regarding exhibits. Plaintiff attached three exhibits to Plaintiff’s response to Defendant’s motion: a copy of the private patrolman’s license from the 23 Private Investigators Licensing Board (ECF No. 10-1), a copy of Pinnacle’s filings for a business license with the Secretary of State (ECF No. 10-2), and an image of a check bearing Plaintiff’s 24 signature (ECF No. 10-3). These exhibits may be properly considered under Fed. R. Civ P. 10(c) without converting the Rule 12(b)(6) motion into a motion for summary judgment. United States 25 v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). However, the remaining declarations and exhibits in the pleadings, namely Defendant’s second declaration (ECF No. 15-1), Plaintiff’s declaration 26 (ECF No. 16-1), Plaintiff’s FOIA (ECF No. 16-2), and Plaintiff’s copy of the Private Investigators Licensing Board meeting transcript (ECF No. 32-1) may be properly considered in evaluating the 27 motion for a preliminary injunction, but not in the 12(b)(6) motion to dismiss, without converting the motion into a motion for summary judgment. Id. In evaluating the 12(b)(6) motion to dismiss. 28 1 1. NRS 205.477 2 NRS 205.477 is similar to the federal Stored Communications Act, 18 3 U.S.C. § 2701, discussed above, and also enforceable by civil action, NRS 4 205.511. Like the Stored Communications Act, NRS 205.477 makes it a crime for 5 a person to “knowingly, willfully, maliciously and without authorization interfere[] 6 with, den[y] or cause[] the denial of access to or use of a computer, system or 7 network to a person who has the duty and right to use it.” NRS 205.477. The 8 statute provides an affirmative defense for a defendant who “reasonably believed” 9 that they were “authorized to use or access” the computer, system, network, 10 device, or service at issue and that the defendant’s use or access was within the 11 “scope of that authorization” or consent granted by the owner or user. 12 Defendant’s argument regarding NRS 205.477 is fundamentally the same 13 as his argument regarding the Stored Communications Act: Defendant argues 14 that he cannot be liable for interfering with Plaintiff’s access to Plaintiff’s Pinnacle 15 email account because Defendant was authorized to access the Pinnacle email 16 accounts. Here, however, Defendant’s argument is presented under Rule 12(b)(6), 17 not 12(b)(1).4 18 Assuming all of the facts in Plaintiff’s Complaint as true, Defendant 19 exceeded the scope of Defendant’s authority to access Plaintiff’s Pinnacle email 20 account and to deny Plaintiff access to the same, and thus Plaintiff properly 21 states a claim under NRS 205.477. The parties do not dispute that Plaintiff and 22 Defendant were coequal partners in Pinnacle when it was first formed. Under the

23 the Court will not consider those documents or the exhibits that were submitted for the hearing 24 on the preliminary injunction (ECF No.’s 36-42.) Finally, the Court will construe Plaintiff’s motion to amend Plaintiff’s opposition (ECF No. 32) as a request to supplement. The Court agrees with Plaintiff that supplementation is warranted given that the Transcript of Proceedings from the 25 Private Investigators Licensing Board’s March 8, 2022 meeting is relevant to this case and occurred after Plaintiff’s first opposition was filed. See L.R. 7-2(g). As explained above, this 26 transcript will be considered with respect to the motion for preliminary injunction only. 4 It does not appear that Defendant has moved to dismiss Plaintiff’s Stored Communications Act 27 claim under Rule 12(b)(6) for failure to state a claim. (ECF No. 7.) The Court notes, however, that Plaintiff’s Stored Communications Act claim would likely survive a 12(b)(6) challenge for the 28 reasons set forth in this section. 1 Nevada Limited Liability Company statutes, without a majority of the LLC 2 members by equity interest consenting to Defendant’s actions, Pinnacle would 3 not have authorized Defendant’s actions. See NRS 86.291 (“Except as otherwise 4 provided ... in the articles of organization or operating agreement, management 5 of a limited-liability company is vested in its members proportionally in interest 6 thereof.”). Defendant thus cannot have taken unilateral action without Plaintiff’s 7 consent and claim to have been authorized by Pinnacle. Even assuming, 8 arguendo, that Defendant may have been authorized by Pinnacle to access 9 Plaintiff’s Pinnacle email accounts, Defendant allegedly exceeded the scope of 10 that the authorization when he changed the settings on Plaintiff’s Pinnacle email 11 accounts to deny access to Plaintiff. See Theofel v. Farey-Jones, 359 F.3d 1066, 12 1073 (9th Cir. 2004) (holding that common law notions of scope of consent govern 13 the authorization inquiry under the Stored Communications Act). 14 The case cited by Defendant, Brodsky v. Apple Inc., 445 F. Supp. 3d 110, 15 132 (N.D. Cal. 2020) is distinguishable because it did not involve a dispute 16 regarding unauthorized email access. In Brodsky, the plaintiffs had given Apple 17 authorization to access their Apple ID login information but claimed violations of 18 both the federal Computer Fraud and Abuse Act and California’s Cal. Penal Code 19 § 502 when Apple initiated two-factor authentication on their devices after a 20 software update. The District Court dismissed both claims because the plaintiffs 21 did not rebut the assertion that Apple was authorized to install the software 22 updates and generally to access their Apple ID login information. Id. at 129-32. 23 Here, Plaintiff disputes Defendant’s authority to access his Pinnacle email 24 account and change the password to deny him access. See id. at 129 (“In 25 situations where a plaintiff clearly revokes access to a party and not simply the 26 means, manner, or method for such access, that party may be liable under the 27 CFAA.”). Defendant’s motion to dismiss Plaintiff's civil action for violation of NRS 28 205.477 is denied. 1 2. CONVERSION 2 Plaintiff’s conversion claim asserts that Defendant is liable for exerting 3 wrongful dominion over Plaintiff’s membership interest in Pinnacle. (Complaint 4 ¶¶ 22-23.) Conversion is “a distinct act of dominion wrongfully exerted over 5 another's personal property in denial of, or inconsistent with his title or rights 6 therein or in derogation, exclusion, or defiance of such title or rights.” Wantz v. 7 Redfield, 74 Nev. 196, 326 P.2d 413, 414 (1958). “[C]onversion is an act of general 8 intent, which does not require wrongful intent and is not excused by care, good 9 faith, or lack of knowledge. Whether a conversion has occurred is generally a 10 question of fact for the jury.” Evans v. Dean Witter Reynolds, Inc., 116 Nev. 598, 11 5 P.3d 1043, 1048 (2000). Though courts have been reluctant to recognize a claim 12 for conversion of intangible property, see, e.g., Custom Teleconnect, Inc. v. Int'l 13 Tele-Servs., Inc., 254 F. Supp. 2d 1173, 1182 (D. Nev. 2003) (“Plaintiff has not 14 pointed to any Nevada case that allows for a conversion claim based on the 15 misappropriation of confidential information.”), a claim for conversion may lie for 16 intangible property interests which are reflected in something tangible that can 17 be physically taken. See Thrifty-Tel, Inc. v. Bezenek, 46 Cal. App. 4th 1559, 1565, 18 54 Cal. Rptr. 2d 468, 472 (1996). (“[T]he value of a stock certificate is not the cost 19 of the paper, but the intangible interest it represents. When the certificate is 20 stolen or placed in another's name without the owner's permission, the value of 21 the loss is not the cost of the paper—a tangible—but the worth of the stock—an 22 intangible.”) (emphasis added). 23 Plaintiff alleges that he had a 50% interest5 in Pinnacle when it was formed 24 and appeared on Pinnacle’s original business filings with the Secretary of State 25 as a member of the LLC before Defendant filed an amended list of officers with

26 5 Defendant points out that Plaintiff’s Complaint alternates between describing Plaintiff’s membership interest as a 50% interest and as a 51% interest. The Court notes that for the 27 purposes of the claims involved in this case, the fact that Plaintiff has pled an ownership interest of at least 50% is sufficient. The parties do not dispute that Plaintiff was a coequal member of 28 Pinnacle when it was first formed. 1 the Secretary of State in August 2021 which did not include Plaintiff. Like 2 changing the name on a stock certificate, this act is an act of physical dominion 3 over an intangible property interest and can thus give rise to a claim for 4 conversion. Defendant’s overall course of action has been to deny Plaintiff access 5 to the company. This claim has been pled with particularity. Defendant’s motion 6 to dismiss Plaintiff's claim for conversion is therefore denied. 7 3. DECLARATORY AND INJUNCTIVE RELIEF 8 Plaintiff claims that “[p]ursuant to NRS 30.040, Plaintiff is entitled to a 9 declaration of his statutory and contractual rights to his fifty-one percent 10 membership interest in Pinnacle.” (Complaint ¶ 27.) Defendant argues that 11 declaratory judgments are only a form of relief, not a remedy. Under the Uniform 12 Declaratory Judgments Act as adopted in Nevada, a person “interested under a 13 … contract, or whose rights, status or other legal relations are affected by a 14 statute … may have determined any question of construction or validity arising 15 under the … statute [or] contract[.]” NRS 30.040(1). The conditions which must 16 exist for declaratory relief to be granted are: (1) a justiciable controversy; (2) 17 between persons whose interests are adverse; (3) by a person with a legally 18 protectable interest in the controversy; and (4) the issue is ripe for judicial 19 determination. MB Am., Inc. v. Alaska Pac. Leasing, 132 Nev. 78, 86, 367 P.3d 20 1286, 1291 (2016) (citing Kress v. Corey, 65 Nev. 1, 26, 189 P.2d 352, 364 (1948)). 21 Because an independent cause of action is not required to seek a declaratory 22 judgment under NRS 30.040, a declaratory judgment is properly considered a 23 cause of action, not just a form of relief and here Plaintiff’ meets the four 24 requirements for a claim for declaratory relief under NRS 30.040. Therefore, 25 Defendant’s motion to dismiss Plaintiff’s claim for a declaratory judgment under 26 NRS 30.040 is denied. 27 Defendant correctly argues that injunctive relief is a remedy, not a claim 28 as there is no equivalent to NRS 30.040 for injunctive relief. Without prejudice to 1 Plaintiff’s claim for injunctive relief as a remedy, Defendant’s motion to dismiss 2 Plaintiff’s claim for injunctive relief is granted. 3 4. FRAUD 4 Plaintiff’s claim for fraud stems from Plaintiff’s assertion that “Defendant 5 falsely represented to Plaintiff that he agreed that ownership interest in Pinnacle 6 would be split equally between them, i.e., a ‘50/50’ split ownership interest, when 7 in fact, at all times relevant herein, Defendant intended to slowly take over 8 Pinnacle’s operations and cut Plaintiff out of the company completely[.]” 9 (Complaint ¶ 29.) A claim for fraudulent misrepresentation in Nevada requires: 10 (1) a false representation made by the defendant; (2) defendant's knowledge or 11 belief that its representation was false or that defendant has an insufficient basis 12 of information for making the representation; (3) defendant intended to induce 13 plaintiff to act or refrain from acting upon the misrepresentation; and (4) damage 14 to the plaintiff as a result of relying on the misrepresentation. Barmettler v. Reno 15 Air, Inc., 114 Nev. 441, 447, 956 P.2d 1382, 1386 (1998). Under Fed. R. Civ. P. 16 9(b), a party must state with particularity the circumstances constituting fraud. 17 Plaintiff has not met the burden of pleading fraud with particularity under 18 Rule 9. Plaintiff did not include any details regarding specific conversations or 19 communications in which a false statement was knowingly made to Plaintiff by 20 Defendant. It is not clear that there ever was a false statement, for it is possible 21 that Defendant intended to share ownership of Pinnacle equally during the initial 22 stages, but then had other ideas. The parties do not dispute that Plaintiff was a 23 coequal member of Pinnacle when Pinnacle was first formed. (ECF No. 10-2.) 24 Defendant’s motion to dismiss Plaintiff’s claim for fraudulent misrepresentation 25 is granted with leave to amend. 26 5. DEFAMATION PER SE 27 Plaintiff claims that Defendant knowingly made false and defamatory 28 statements about Plaintiff to third parties, namely that Plaintiff was stealing from 1 Pinnacle and that Plaintiff had been diagnosed with early onset dementia. 2 (Complaint ¶ 34.) An action for defamation in Nevada requires: (1) a false and 3 defamatory statement; (2) an unprivileged publication to a third person; (3) fault, 4 amounting to at least negligence; and (4) actual or presumed damages. Clark 5 Cnty. Sch. Dist. v. Virtual Educ. Software, Inc., 125 Nev. 374, 385, 213 P.3d 496, 6 503 (2009). If the defamatory communication imputes a person's lack of fitness 7 for trade, business, or profession, or tends to injure the plaintiff in his or her 8 business, it is deemed defamation per se and damages are presumed. Id. 9 Plaintiff has provided enough information to survive a motion to dismiss by 10 alleging the contents of the allegedly defamatory statements and to whom they 11 were made. Plaintiff’s Complaint states that “[i]n support of his efforts to 12 undermine any of [Plaintiff’s] control over and/or involvement in Pinnacle’s 13 business operations, [Defendant] defamed [Plaintiff] in front of employees and 14 clients[.] Notably, [Defendant] falsely claimed that Pinnacle was unable to make 15 payroll because [Plaintiff] was stealing from the business, and that [Plaintiff] was 16 diagnosed with and suffering from early onset dementia.” (Complaint ¶¶ 14-15.) 17 These allegations put Defendant on notice of the contents of the statement and 18 the persons to whom they were made, and the approximate date of the statements 19 can be inferred from the context of the Complaint. 20 Defendant also argues that “[o]pinions are protected.” (ECF No. 7 at 10:16.) 21 Generally, only assertions of fact, not opinion, can be defamatory. Wynn v. Smith, 22 117 Nev. 6, 16 P.3d 424, 431 (2001). But expressions of opinion may suggest that 23 the speaker knows certain facts to be true or may imply that facts exist that will 24 be sufficient to render the message defamatory if false. Id. The determination of 25 whether a statement is capable of a defamatory construction is a question of law. 26 Branda v. Sanford, 97 Nev. 643, 637 P.2d 1223, 1225–26 (1981). 27 While it is not clear which statements Defendant claims are opinions, the 28 Court finds that the statements that Plaintiff was stealing from the business and 1 suffering from early onset dementia are assertions of fact that may be defamatory. 2 Whether or not Plaintiff took a certain action (stealing from the company) or was 3 diagnosed with a certain medical condition (early onset dementia) are falsifiable 4 factual claims. Notably, Defendant does not argue that the statements are true. 5 Defendant’s motion to dismiss Plaintiff’s claim for defamation per se is denied. 6 6. INTENTIONAL INTERFERENCE WITH PROSPECTIVE 7 ECONOMIC ADVANTAGE 8 Plaintiff claims that Defendant interfered with his “prospective economic 9 advantage with prospective customers in the private security and patrol 10 business,” which Defendant “intentionally harmed” by “falsely stating to 11 customers of Pinnacle that Plaintiff was stealing from Pinnacle, and that Plaintiff 12 was suffering from early onset dementia." (Complaint ¶¶ 39-40.) In order to 13 establish a claim for interference with prospective economic advantage in Nevada, 14 a plaintiff must establish the following elements: (1) a prospective contractual 15 relationship between the plaintiff and a third party; (2) the defendant's knowledge 16 of this prospective relationship; (3) the intent to harm the plaintiff by preventing 17 this relationship; (4) the absence of privilege or justification by the defendant; 18 and (5) actual harm to the plaintiff as a result. See Leavitt v. Leisure Sports Inc., 19 103 Nev. 81, 734 P.2d 1221, 1225 (1987). 20 Plaintiff has not identified a specific customer of Pinnacle who 21 contemplated entering into a business relationship with Plaintiff. Defendant’s 22 motion to dismiss Plaintiff's claim for intentional interference with prospective 23 economic advantage is granted with leave to amend. 24 7. UNJUST ENRICHMENT 25 Plaintiff alleges that “Defendant received a benefit from Plaintiff by 26 transferring nearly all of Pinnacle’s profits to separate accounts, to Plaintiff’s 27 detriment as fifty-one percent owner of Pinnacle.” (Complaint ¶ 57.) Plaintiff also 28 incorporates the other allegations of the Complaint into the unjust enrichment 1 section. (Id. ¶ 56.) Unjust enrichment exists when the plaintiff confers a benefit 2 on the defendant, the defendant appreciates such benefit, and there is 3 acceptance and retention by the defendant of such benefit such that it would be 4 inequitable for him to retain the benefit without payment of the value thereof. 5 Korte Constr. Co. v. State on Rel. of Bd. of Regents of Nevada Sys. of Higher Educ., 6 137 Nev. Adv. Op. 37, 492 P.3d 540, 543 (2021). Benefit means any form of 7 advantage, including but not limited to retention of money or property. Id. 8 It may be true, as Defendant asserts, that the funds that were transferred 9 between bank accounts were Pinnacle’s funds, which would make those transfers 10 an injury to Pinnacle, not Plaintiff, for which Plaintiff could only seek redress 11 through a derivative action. Plaintiff’s claim is that Defendant has unjustly 12 retained Plaintiff’s interest in Pinnacle and unjustly benefitted as a result. 13 Plaintiff conferred a benefit upon Defendant by founding Pinnacle with Defendant 14 and obtaining Pinnacle’s requisite licensure. Assuming all the facts in the 15 Complaint as true, it would be unjust for Defendant to retain Plaintiff’s 50% 16 membership interest in Pinnacle, which may entitle the holder of the interest to 17 certain distributions from Pinnacle, without paying for it. Defendant’s motion to 18 dismiss Plaintiff’s claim for unjust enrichment is denied. 19 IV. MOTION FOR PRELIMINARY INJUNCTION 20 Plaintiff seeks a preliminary injunction to enjoin Defendant from: (1) 21 personally possessing or otherwise diverting funds belonging to Pinnacle to 22 outside accounts; (2) making false and defamatory statements about Plaintiff to 23 third parties; (3) logging into and otherwise accessing Plaintiff’s email account(s); 24 and (4) forging Plaintiff’s signature in any manner. (ECF No. 13.) A preliminary 25 injunction is an “extraordinary” remedy that is “never awarded as of right.” Winter 26 v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 24 (2008). The Supreme Court clarified 27 in Winter that to obtain an injunction, the plaintiff must establish: (1) likelihood 28 of success on the merits; (2) likelihood of suffering irreparable injury in the 1 absence of preliminary relief; (3) the balance of equities tips in the plaintiff’s favor; 2 and (4) that an injunction is in the public interest. Id. at 20. On the irreparable 3 injury element, a plaintiff seeking preliminary injunctive relief must “demonstrate 4 that irreparable injury is likely in the absence of an injunction[,]” not merely 5 possible. Id. at 22. 6 At a videoconference hearing on June 23, 2022, the Court heard testimony 7 from Plaintiff Tony Coffee, Defendant Marios Stolidakis, and Leor Rozen, who 8 became involved with Pinnacle after Plaintiff’s departure. Having considered this 9 evidence, noting the parties’ objections, the Court finds that Plaintiff has not met 10 his burden of showing that irreparable injury is likely (as opposed to merely 11 possible) to occur in the future absent an injunction and denies the motion for 12 that reason. 13 Plaintiff testified that he and Defendant formed Pinnacle in the summer of 14 2020 and that Plaintiff stated from the beginning that he would not be able to 15 put a lot of money into the company. Plaintiff testified that their relationship 16 soured in the summer of 2021. At that time, Defendant issued Plaintiff a series 17 of “Capital Calls” and “Dilution Notices” which stated that if Plaintiff did not 18 contribute capital to Pinnacle, Plaintiff’s equity interest would be diluted. In the 19 last of these notices, Plaintiff’s equity interest was diluted to zero. Plaintiff 20 maintains that these dilutions were not lawful and that he continues to hold a 21 50% equity interest in Pinnacle. 22 Regarding Defendant’s alleged transfers of funds from Pinnacle to outside 23 bank accounts, it appears that this practice may have occurred but has since 24 ceased and is unlikely to resume. Plaintiff testified that in the spring and summer 25 of 2021, he found Defendant’s transfers of Pinnacle funds to Defendant’s 26 personal bank accounts “sketchy.” Defendant testified that these transfers were 27 made as reimbursements for company expenses such as the rent for the office, 28 which Defendant put on his personal credit card for convenience, and Defendant 1 has bank records to confirm this. Defendant and Leor Rozen testified that since 2 Plaintiff’s departure, Leor Rozen took on the role of Chief Financial Officer of 3 Pinnacle, wherein he ensures that all of Pinnacle’s financial activities are properly 4 approved and documented. The Court’s main concern regarding the bank 5 accounts would be for potential looting of the company by the Defendant which 6 would make later relief on the merits difficult to administer. The Court finds this 7 unlikely given Defendant's explanation for his prior actions and given the 8 financial controls and procedures that have been implemented. 9 While Defendant denies making any defamatory statements, even if he did, 10 as alleged, there does not appear to be an ongoing threat of him doing it again. 11 Plaintiff testified that Defendant made defamatory statements about him to other 12 employees in the Pinnacle office in the summer of 2021. He described that after 13 departing from Pinnacle, he had difficulty obtaining clients, employees, and 14 insurance for his new security company because the defamatory statements had 15 been spread through the private security industry in Las Vegas, which is a small 16 community. Defendant denied making the defamatory statements whatsoever. 17 Although Plaintiff proffered two affidavits from individuals who claimed to have 18 heard Defendant make defamatory statements about Plaintiff in August of 2021, 19 Plaintiff did not identify specific incidents after the summer of 2021 where 20 Defendant had made further defamatory statements. The Court finds that 21 Plaintiff has not met his burden to show a likelihood that Defendant will continue 22 to make defamatory statements regarding Plaintiff. Plaintiff testified that 23 Defendant’s defamatory statements have continued to harm him in his business 24 and personal life. Although other individuals may be repeating the defamatory 25 statements, Plaintiff has not shown that Defendant continues to make the 26 statements. 27 Defendant’s allegedly unauthorized access to Plaintiff’s Pinnacle email 28 account in August 2021 also appears unlikely to repeat due to changed 1 circumstances. Plaintiff testified that in August of 2021, he found himself unable 2 to access the email account “TC@pinnacleprotectiongroup.com,” and that he 3 called GoDaddy, which hosts the email, and found out that the password had 4 been changed. Defendant testified that this email account had been archived and 5 has therefore sat dormant since August 2021. Plaintiff admitted that he has no 6 evidence to suggest that Defendant improperly used the email to impersonate 7 Plaintiff, disseminate confidential information, or engage in any other 8 unauthorized use since that time. 9 Finally, Defendant’s allegedly unauthorized use of Plaintiff’s electronic 10 signature in 2021, which appears to have been limited to a loan application and 11 one round of payroll checks, appears unlikely to recur given the current 12 circumstances. Plaintiff stated that his signature appeared on Pinnacle payroll 13 checks without his authorization. Defendant testified that he did not know 14 Plaintiff’s signature was still appearing on the checks after Plaintiff’s departure 15 since the checks are handled by an outside payroll company. Defendant stated 16 that Pinnacle has changed to a different payroll company and that Plaintiff’s 17 signature will no longer appear on any checks. The Court finds Defendant’s 18 explanation for the payroll check signatures persuasive. Regarding the use of 19 Plaintiff’s signature to apply for a small business loan, Plaintiff and Defendant 20 testified that they were initially in conversation about obtaining a small business 21 loan for Pinnacle, but that Plaintiff ultimately did not consent to the use of his 22 information. The Court finds that there is little to suggest that there is a likelihood 23 of this occurring again, especially given Plaintiff’s lack of involvement with the 24 company for nearly ten months. 25 In sum, even assuming that the unlawful acts alleged in the Complaint and 26 supported by evidence at the hearing may have occurred in the summer of 2021, 27 those facts are not sufficient to show that they are likely to occur in the future, 28 as opposed to merely possible. The Court finds that Defendant has not met his 1 || burden of showing that irreparable harm is likely to occur in the absence of a 2 || preliminary injunction. Given that Plaintiff has not met this necessary element, 3 || the Court does not reach the likelihood of success on the merits, the balance of 4 || equities, or public interest. 5 || V. CONCLUSION 6 It is hereby ordered that Defendant’s motion to dismiss for lack of subject 7 || matter jurisdiction is DENIED. 8 It is hereby ordered that Defendant’s motion to dismiss for failure to state 9 || aclaim is GRANTED IN PART AND DENIED IN PART. 10 It is hereby ordered that Plaintiffs motion for a preliminary injunction is 11 || DENIED. 12 13 DATED THIS 6t day of July 2022. 14 oun Voseat’ 16 ANNE R. TRAUM 7 UNITED STATES DISTRICT JUDGE

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