Higgins v. NMI Enterprises, Inc.

969 F. Supp. 2d 628, 2013 WL 4525635, 2013 U.S. Dist. LEXIS 121114
CourtDistrict Court, E.D. Louisiana
DecidedAugust 26, 2013
DocketCivil Action No. 09-6594
StatusPublished

This text of 969 F. Supp. 2d 628 (Higgins v. NMI Enterprises, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Higgins v. NMI Enterprises, Inc., 969 F. Supp. 2d 628, 2013 WL 4525635, 2013 U.S. Dist. LEXIS 121114 (E.D. La. 2013).

Opinion

ORDER AND REASONS

NANNETTE JOLIVETTE BROWN, District Judge.

Before the Court are the parties’ memoranda regarding the timeliness of the plaintiffs’ claims, which this Court ordered after it indicated that it was inclined to grant summary judgment independent of a motion pursuant to Federal Rule of Civil Procedure 56(f)(3).1 After considering the complaint, the amended complaint, the parties’ memoranda, the record, and the applicable law, the Court will grant summary judgment in favor of all defendants dismissing all of plaintiffs’ causes of action under Louisiana Civil Code article 2315 as prescribed, and will dismiss Plaintiff Roger Smith’s claims against all defendants under the Computer Fraud and Abuse Act and the Wire Tap Act, as their statutes of limitations have expired as relates to him; however, the Court will not grant summary judgment to dismiss the remaining plaintiffs’ causes of action under the Computer Fraud and Abuse Act and the Wire Tap Act as expired.

I. Background

A. Parties and Their Relationship

Defendant NMI Enterprises, Inc. is a Texas corporation and general partner of DROR International, L.P. (“DROR”). Defendant DROR is a limited liability company in the business of magazine publishing. Defendant Nitzan Mendelbaum (“Mendelbaum”) is the president of NMI and a limited partner of DROR.2 Defendant Laurie Felton (“Felton”) was previously an employee of Louisiana Homes & Garden Magazine, a magazine published by the plaintiffs.3 Plaintiffs Dale Higgins (“Higgins”) and Roger Smith (“Smith”) are the sole members of Thundervision, LLC (“Thundervision”), which is involved in the publication of magazines, namely Louisiana Homes & Garden Magazine.4 Plaintiff Wright Avenue Associates, LLC (“Wright Avenue”), is an original owner of Thundervision, and Higgins is Wright Avenue’s managing partner.5 Plaintiff Melanie Wallace (“Wallace”) was an employee of Louisiana Homes & Garden Magazine.,6 Hereinafter, all plaintiffs will be referred to collectively as “Plaintiffs.”

B. Prior Legal Actions

The above-captioned matter is not the first round of litigation many of these parties and entities have pursued against one another. DROR initially brought suit against Thundervision, Smith, Higgins, and Wright Avenue for the alleged non[630]*630payment of overdue invoices in the Twenty Fourth Judicial District Court, State of Louisiana.7 In response, Thundervision, Smith, Higgins and Wright Avenue filed a counterclaim alleging that two issues of Louisiana Home & Garden Magazine printed by DROR were defective.8 Before trial, Thundervision filed for bankruptcy in the United States Bankruptcy Court for the Eastern District of Louisiana. In bankruptcy court, Thundervision sought offset of any amount owed to DROR and its employees for their alleged violations of the Computer Fraud and Abuse Act9 and the Wire Tap Act,10 claiming that Felton provided Mendelbaum, in his capacity as a member of DROR, with access to Thundervision’s business email accounts. However, while Felton’s activities were at issue in the prior action, she was not a named party in the state court or federal bankruptcy suits.11

As a result of Thundervision’s filing for bankruptcy, DROR’s state court suit was automatically stayed and a temporary injunction was granted in favor of Smith, Higgins, and Wright Avenue pending trial on the merits against Thundervision in bankruptcy court, because, according to DROR and Mendelbaum, “issues in state court ... were identical to the issues before the bankruptcy court and [ ] proceeding in both courts concurrently would not be in the interest of judicial economy.”12 The case proceeded before Judge Elizabeth Magner in the United States Bankruptcy Court for the Eastern District of Louisiana.13

On a motion for partial summary judgment, the bankruptcy court found Thundervision liable on five invoices to DROR totaling $143,728.05.14 At trial, the parties contested one additional invoice and whether Thundervision was entitled to an offset based upon its multiple claims arising from the alleged unauthorized access of its email accounts and computers.15 At the conclusion of trial, judgment was entered in favor of DROR concerning the remaining disputed invoice, but that award was offset by judgments in favor of Thundervision for DROR’s violations of the Computer Fraud and Abuse Act and Louisiana Civil Code Article 2315, which provides a remedy for any behavior that causes damage to another.16 This offset was entered in favor of Thundervision for the unauthorized access of Thundervision’s computers and email accounts, which Felton facilitated.17 DROR claims that Thundervision’s other claims relating to the allegations of defective issues of a magazine were “denied for want of proof.”18

After the bankruptcy proceedings, the temporary stay against Smith, Higgins, and Wright Avenue was lifted and the state court suit resumed.19 The state court suit, however, only addressed the remaining issue of whether Smith, Hig[631]*631gins, and Wright Avenue were guarantors of the contracts entered into between DROR and Thundervision, and if they were therefore liable for their payment. The state court proceedings did not address any alleged unlawful access to email. DROR filed a motion for summary judgment on the issue of whether Smith, Higgins, and Wright Avenue were guarantors of the contracts entered into between DROR and Thundervision, which was granted. Smith, Higgins, and Wright Avenue appealed this ruling to the Louisiana Fifth Circuit Court of Appeal.20 DROR also filed a motion for dismissal in the state court proceeding on the basis of res judicata, “concerning only the personal guaranties issued by Mr. Smith, Mr. Higgins and/or Wright Avenue Associates on accounts due and payable to DROR.”21 The motion was denied.

C. Instant Lawsuit

1. Factual Allegations

The complaint in the action pending before this Court was filed on September 29, 2009, and initially named Mendelbaum, DROR, NMI, and Felton as defendants.22 This action was originally allotted to Judge Jay C. Zainey, Section “A.” Plaintiffs allege that “Felton gave Mendelbaum, acting as partner of DROR and president of its general partner, NMI, Smith’s email password and thereafter all defendants used that password to read Smith’s e-mails to and from the other plaintiffs about their business and legal matters as well as those to and from his (Smith’s) attorneys [regarding the suit against Thundervision] for alleged breach of contract by DROR and NMI.”23 Within the complaint, Plaintiffs refer to the state court proceeding that was eventually stayed until the resolution of the case pending in federal bankruptcy court.24

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Cite This Page — Counsel Stack

Bluebook (online)
969 F. Supp. 2d 628, 2013 WL 4525635, 2013 U.S. Dist. LEXIS 121114, Counsel Stack Legal Research, https://law.counselstack.com/opinion/higgins-v-nmi-enterprises-inc-laed-2013.