McCart-Pollak v. On Demand Direct Response LLC

Opinion

1 UNITED STATES DISTRICT COURT

2 DISTRICT OF NEVADA

3 SHANA LEE McCART-POLLAK, ) 4 ) Plaintiff, ) Case No.: 2:20-cv-01624-GMN-VCF 5 vs. ) ) ORDER DENYING MOTION TO 6 ON DEMAND DIRECT RESPONSE LLC, et ) DISMISS 7 al., ) ) 8 Defendants. ) 9 Pending before the Court is the Motion to Dismiss, (ECF No. 216),1 filed by Defendants 10 Craig Shandler and Brett Saevitzon.2 Plaintiff Shana Lee McCart-Pollak filed a Response, 11 (ECF No. 219),3 to which Defendants filed a Reply, (ECF No. 221). 12 Also pending before the Court is Plaintiff’s Motion for the District Court Judge to 13 Reverse the Magistrate Judge’s Order Staying Discovery, (ECF No. 228). 14 For the reasons discussed below, Defendants’ Motion to Dismiss is DENIED and the 15 Motion for the District Court Judge to Reverse the Magistrate Judge’s Order Staying Discovery 16 is DENIED as moot.4 17 /// 18 /// 19 20 21 1 Defendants filed a Notice of Errata to correct an error in which Defendants stated they move to dismiss the Third Amended Complaint instead of the Fifth Amended Complaint. (Not. Errata 2:1–8, ECF No. 217). 22 2 Defendants Craig Shandler and Brett Saevitzon are the only remaining Defendants in this case. 3 In light of Plaintiff’s status as a pro se litigant, the Court has liberally construed her filings, holding her to 23 standards less stringent than formal pleadings drafted by attorneys. See Erickson v. Pardus, 551 U.S. 89, 94 (2007). 24 4 The Magistrate Judge stayed discovery in this case “pending resolution of [Defendants’] motion to dismiss.” (Order Denying Mot. Lift Stay Disc. 2:19–20, ECF No. 227). Plaintiff then filed her Motion, which the Court 25 construes as an objection, requesting the Court reverse the Magistrate Judge’s order and lift the stay of discovery. (See generally Mot. Dist. Ct. J. Reverse, ECF No. 228). Because the Court denies Defendants’ Motion to Dismiss, Plaintiff’s objection is moot. 1 I. BACKGROUND 2 This case stems from an earlier case in this District, 2:15-cv-01576-MMD-EJY (the 3 “Trademark Suit”). (Fifth Am. Compl. 1:20–21, ECF No. 213). In that case, On Demand 4 Direct Response, LLC, and On Demand Direct Response III, LLC (the “On Demand parties”),5 5 sued Plaintiff to prevent her from “engaging in an Internet and social media campaign targeting 6 their product—the CloudPets stuffed animal—and its related mark.” (Order Denying Mot. 7 Dismiss 2:1–6, ECF No. 191 in Trademark Suit, No. 2:15-cv-01576-MMD-EJY). Plaintiff 8 asserted counterclaims and third-party claims, alleging that “several parties stole her idea for 9 Bluetooth Low Energy-enabled stuffed animals that would allow family members to exchange 10 messages with children.” (Order Granting Mot. Summ. J. 1:15–17, ECF No. 406 in Trademark 11 Suit, No. 2:15-cv-01576-MMD-EJY). 12 The Trademark Suit court entered default judgment in favor of Plaintiff on her 13 counterclaims against the On Demand parties on June 20, 2018. (Order Entering Default J. 14 2:16–19, ECF No. 362 in Trademark Suit, No. 2:15-cv-01576-MMD-EJY). The default 15 judgment was later amended on August 29, 2019, to reflect the damages Plaintiff was entitled 16 to under her default judgment. (Am. Default J., ECF No. 466 in Trademark Suit, No. 2:15-cv- 17 01576-MMD-EJY).

18 Plaintiff initiated this lawsuit on August 28, 2020, alleging malicious prosecution and 19 abuse of process relating to the Trademark Suit. (Compl., ECF No. 1). Her complaint has gone 20 through many iterations. Her Original Complaint included two causes of action: (1) Malicious 21 Prosecution and (2) Abuse of Process. (Id.). In her First Amended Complaint, she added a third 22 claim for Intentional Infliction of Emotional Distress (“IIED”). (First Am. Compl., ECF No. 6). 23 Her Second Amended Complaint was stricken because it materially differed from the proposed 24

25 5 The On Demand parties were originally named as defendants in this action but have since been terminated. (Clerk’s Entry of Default, ECF No. 22). 1 amended complaint she attached to her motion for leave to amend. (Min. Proceedings, ECF No. 2 116). After receiving leave to amend again, Plaintiff filed a Third Amended Complaint, which 3 replaced her IIED claim with a Negligent Infliction of Emotional Distress (“NIED”) claim. 4 (Third Am. Compl., ECF No. 137).6 Plaintiff then filed an improper Fourth Amended 5 Complaint, which was stricken by the Court. (MJ Order, ECF No. 175); (see also Order 6 Adopting MJ’s Ruling, ECF No. 183). After that, the Magistrate Judge granted Plaintiff leave 7 to file a Fifth Amended Complaint. (Min. Proceedings, ECF No. 212). 8 The Fifth Amended Complaint alleges three causes of action: (1) Alter Ego/Piercing the 9 Veil; (2) Abuse of Process; and (3) IIED. That is, the Fifth Amended Complaint dropped one 10 cause of action, added a new one, and revived an IIED claim that had been dropped from the 11 previous most recent version of the complaint. Defendants now move to dismiss all three 12 claims. 13 II. LEGAL STANDARD 14 Dismissal is appropriate under Rule 12(b)(6) where a pleader fails to state a claim upon 15 which relief can be granted. Fed. R. Civ. P. 12(b)(6). A pleading must give fair notice of a 16 legally cognizable claim and the grounds on which it rests, and although a court must take all 17 factual allegations as true, legal conclusions couched as factual allegations are insufficient. Bell

18 Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Accordingly, Rule 12(b)(6) requires “more 19 than labels and conclusions, and a formulaic recitation of the elements of a cause of action will 20 not do.” Id. “To survive a motion to dismiss, a complaint must contain sufficient factual 21 matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. 22 Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). “A claim has facial 23 plausibility when the plaintiff pleads factual content that allows the court to draw the 24

25 6 The Court denied Defendants’ untimely Motion to Dismiss the Third Amended Complaint. (Order, ECF No. 163). 1 reasonable inference that the defendant is liable for the misconduct alleged.” Id. This standard 2 “asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. 3 “Generally, a district court may not consider any material beyond the pleadings in ruling 4 on a Rule 12(b)(6) motion.” Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 5 1555 n.19 (9th Cir. 1989). “However, material which is properly submitted as part of the 6 complaint may be considered.” Id. Similarly, “documents whose contents are alleged in a 7 complaint and whose authenticity no party questions, but which are not physically attached to 8 the pleading, may be considered in ruling on a Rule 12(b)(6) motion to dismiss.” Branch v. 9 Tunnell, 14 F.3d 449, 454 (9th Cir. 1994) (overruled on other grounds by Galbraith v. Cnty. of 10 Santa Clara, 307 F.3d 1119 (9th Cir. 2002)). On a motion to dismiss, a court may also take 11 judicial notice of “matters of public record.” Harris v. Cnty. of Orange, 682 F.3d 1126, 1132 12 (9th Cir. 2012). Otherwise, if a court considers materials outside of the pleadings, the motion 13 to dismiss is converted into a motion for summary judgment. Fed. R. Civ. P. 12(d). 14 III. DISCUSSION 15 Defendants move to dismiss all three claims in Plaintiff’s Fifth Amended Complaint: 16 (1) Alter Ego/Piercing the Veil, (2) Abuse of Process, and (3) IIED. The Court discusses each 17 claim in turn.

18 A. Alter Ego/Piercing the Veil 19 Defendants argue that Plaintiff’s claim for Alter Ego/Piercing the Veil is time barred. 20 (Mot. Dismiss 9:13–10:27). The parties dispute which statute of limitations applies. 21 Defendants argue that this claim is subject to a four-year statute of limitations pursuant to NRS 22 11.220, which governs causes of action without a statute of limitations. (Id. 9:21–10:1). 23 Plaintiff responds that the claim is subject to a six-year statute of limitations pursuant to 24 /// 25 /// 1 NRS 11.190, which governs periods of limitation for causes of action not relevant here.7 (Resp. 2 5:3–28, ECF No. 219). Defendants are correct that the NRS does not contain a specific statute 3 of limitations for alter ego claims. And so, as a preliminary matter, the Court agrees with 4 Defendants that a four-year statute of limitations applies. 5 But Defendants do not demonstrate that Plaintiff’s Alter Ego/Piercing the Veil claim is 6 time-barred under a four-year statute of limitations. Defendants rely on an allegation in 7 Plaintiff’s Third Amended Complaint to argue that Plaintiff “had knowledge of the 8 involvement of Defendants with the Judgment Debtor [in the Trademark Suit] prior to entry of 9 Judgment in that matter on June 20, 2018.” (Mot. Dismiss 9:26–10:1). Because Plaintiff did 10 not make her Alter Ego claim until October 20, 2022, more than four years after the entry of 11 Judgment, Defendants argue the claim is time barred.8 Although factual assertions in pleadings 12 are generally considered “judicial admissions conclusively binding on the party who made 13 them,” this rule does not apply to amended pleadings. Am. Title Ins. Co. v. Lacelaw Corp., 861 14 F.2d 224, 226 (9th Cir. 1988). That is, the Court cannot consider Plaintiff’s allegation in the 15 Third Amendment Complaint for purposes of this Motion to Dismiss the Fifth Amended 16 Complaint. 17 Nor does this Court’s prior Order adopting the Magistrate Judge’s ruling demonstrate

18 that Plaintiff’s Alter Ego claim is time barred. Defendants argue that the Court’s analysis in its 19 prior Order affirming the Magistrate Judge’s denial of leave to amend applies here. (Mot. 20 Dismiss 10:15–27). In the Court’s prior Order, the Court stated, “Plaintiff has presented no 21 explanation for her failure to allege her alter ego claim in the previous iterations of her 22

23 7 Plaintiff appears to confuse her Alter Ego claim with an action to enforce her judgment from the Trademark 24 Suit. 8 The parties dispute whether the relevant date for statute of limitations purposes is the date of the original 25 default judgment, entered on June 20, 2018, or the amended default judgment, entered on August 29, 2019. (Resp. 5:20–28). Because Defendants have not demonstrated that Plaintiff’s Alter Ego claim is time barred under either date, this dispute is not relevant to the Court’s disposition. 1 complaint, which further weighs against granting her leave to amend.” (Order Adopting MJ 2 Ruling 5:20–22, ECF No. 183). Plaintiff, however, has since received leave to file the Fifth 3 Amended Complaint. (Min. Proceedings, ECF No. 212). The Court’s prior ruling on unrelated 4 motions to amend is irrelevant to whether a claim in the operative complaint is time-barred. 5 The Court DENIES Defendants’ Motion to Dismiss the Alter Ego claim. If Defendants 6 later obtain evidence that Plaintiff’s claim accrued more than four years before she filed the 7 Fifth Amended Complaint, they may renew their statute of limitations argument in a motion for 8 summary judgment. 9 B. Abuse of Process 10 To prevail on an abuse of process claim, a plaintiff must demonstrate “(1) an ulterior 11 purpose by the defendants other than resolving a legal dispute, and (2) a willful act in the use of 12 the legal process not proper in the regular conduct of the proceeding.” LaMantia v. Redisi, 38 13 P.3d 877, 879 (Nev. 2002) (quoting Posadas v. City of Reno, 851 P.2d 438, 445 (Nev. 1993)). 14 Defendants argue that Plaintiff has made judicial admissions negating the first element of an 15 Abuse of Process claim. 16 Defendants point to statements made in Plaintiff’s Original Complaint, First Amended 17 Complaint, Second Amended Complaint, and Third Amended Complaint. (Mot. Dismiss

18 11:27–12:4). Notably, Defendants do not point to any statements made in the operative Fifth 19 Amended Complaint. Indeed, Defendants acknowledge that the allegation in question was 20 made in each of her “prior versions of the Complaint.” (Reply 5:18–23, ECF No. 221) 21 (emphasis added). As stated above, allegations made in pleadings that have since been 22 amended cannot be considered judicial admissions. Am. Title Ins. Co., 861 F.2d at 226. For 23 that reason, the Court will not consider Plaintiff’s allegations in prior iterations of her 24 complaint. And because Defendants do not present any other argument for dismissing 25 Plaintiff’s Abuse of Process claim, the Court DENIES the Motion as to this claim. 1 C. Intentional Infliction of Emotional Distress (“IIED”) 2 The elements of an IIED claim are “(1) extreme and outrageous conduct with either the 3 intention of, or reckless disregard for, causing emotional distress, (2) the plaintiff’s having 4 suffered severe or extreme emotional distress and (3) actual or proximate causation.” Star v. 5 Rabello, 625 P.2d 90, 92 (Nev. 1981). Defendants argue that Plaintiff’s IIED claim should be 6 dismissed because (1) Plaintiff waived her IIED claim when she dropped it from her Second 7 Amended Complaint; (2) the statute of limitations bars her IIED claim; and (3) Plaintiff failed 8 to allege extreme and outrageous conduct. (Mot. Dismiss 12:9–13:7). 9 Defendants’ waiver argument relies on an inaccurate and incomplete representation of 10 the law. Defendants cite Marx v. Loral Corp. for the proposition that “[a]ll causes of action 11 alleged in an original complaint which are not alleged in an amended complaint are waived.” 12 (Reply 6:9–11 (citing Marx v. Loral Corp., 87 F.3d 1049, 1055 (9th Cir. 1996), overruled by 13 Lacey v. Maricopa Cnty., 693 F.3d 896 (9th Cir. 2012))). Marx, however, was expressly 14 overruled by Lacey v. Maricopa County, which held that plaintiffs do not need to replead 15 claims dismissed with prejudice in a subsequent amended complaint to preserve them for 16 appeal. Lacey, 693 F.3d at 928. 17 The Lacey court nonetheless specified that any claims voluntarily dismissed will be

18 considered waived if not repled. Id. But even if Defendants relied on Lacey instead of Marx, 19 their waiver argument would still fail because neither Lacey nor Marx has any bearing on 20 whether Plaintiff’s IIED claim should be dismissed. Lacey and Marx both concerned whether 21 the plaintiffs had preserved an issue for appeal. At least as of 2010, the Ninth Circuit has not 22 held “that a plaintiff who omits previously dismissed claims from an amended complaint 23 waives his right to reallege these claims in further amendments at the district court level.” New 24 York City Employees’ Ret. Sys. v. Jobs, 593 F.3d 1018, 1025 (9th Cir. 2010), overruled on 25 other grounds by Lacey, 693 F.3d 896. Defendants have not cited any cases suggesting that the 1 Ninth Circuit has held so in more recent years, nor is the Court aware of any such cases. Thus, 2 Plaintiff has not waived her IIED claim even though she dropped it in an earlier version of her 3 complaint. 4 The Court next turns to Defendants’ statute of limitations argument. Personal injury 5 claims, including IIED claims, are subject to a two-year statute of limitations. NRS 11.190. 6 Defendants seemingly contend that Plaintiff’s IIED claim is time barred because Plaintiff filed 7 this claim three years after initially filing a claim for IIED. (Mot. Dismiss 12:21–27). That is, 8 Defendants’ statute of limitations argument relies on the time elapsed between the Original 9 Complaint and the Fifth Amended Complaint. But an “amendment to a pleading relates back to 10 the date of the original pleading when[] . . . the amendment asserts a claim or defense that arose 11 out of the conduct, transaction, or occurrence set out—or attempted to be set out—in the 12 original pleading.” Fed. R. Civ. P. 15(c)(1)(B). Plaintiff argues that, even though Plaintiff did 13 not raise an IIED claim in her Original Complaint, she did allege that Defendants’ “malicious 14 prosecution and [] abuse of processes inflicted mental anguish on her and her family resulting 15 in years of counseling.” (Resp. 20:13–15 (citing Original Compl. ¶ 108)). That is, her IIED 16 claim arises out of the same conduct, transaction, or occurrence she attempted to set out in her 17 Original Complaint. Because Plaintiff’s IIED claim likely relates back to the date of the

18 Original Complaint, it is not time barred.9 19 Lastly, Defendants argue that Plaintiff failed to state a claim for IIED. Defendants 20 provide a conclusory, two-sentence analysis: “Here, the gravamen of Plaintiff’s complaint is 21 that she suffered emotional distress because she was sued. That cannot form the basis for a 22 claim for [IIED] and the claim fails as a matter of law.” (Mot. Dismiss 13:4–7). Defendants 23 offer no case law or explanation, and the Court can deny their Motion on this basis alone. See 24 ///

25 9 Defendants do not address Plaintiff’s compelling relation-back argument in their Reply. 1 D. Nev. L.R. 7-2 (noting that the “failure of a moving party to file points and authorities in 2 support of the motion constitutes a consent to the denial of the motion”). 3 Moreover, Plaintiff’s claim is not based solely on the fact that she was sued. The Fifth 4 Amended Complaint alleges that Defendants took and profited off Plaintiff’s intellectual 5 property, initiated a lawsuit against her with the ulterior purpose to intimidate, bully, harass, 6 and silence her, and disparaged her intellectual property, among other allegations. (Fifth Am. 7 Compl. ¶ 184). The Court need not decide whether Plaintiff stated a claim for IIED 8 considering all these allegations because it is not the Court’s role to create and develop 9 arguments for the parties. See Greenwood v. F.A.A., 28 F.3d 971, 977 (9th Cir. 1994) 10 (“[Courts] will not manufacture arguments for a[ ] [party] . . . .”); Blankenship v. Cox, No. 11 3:05-CV-00357-RAM, 2007 WL 844891 at 12 (D. Nev. Mar. 19, 2007) (“It is not the court’s 12 duty to do Defendants’ legal research.”). The Court DENIES Defendants’ Motion to Dismiss 13 Plaintiff’s IIED claim. 14 V. CONCLUSION 15 IT IS HEREBY ORDERED that Defendants’ Motion to Dismiss, (ECF No. 216), is 16 DENIED. 17 IT IS FURTHER ORDERED that Plaintiff’s Motion for the District Court Judge to

18 Reverse the Magistrate Judge’s Order Staying Discovery is DENIED as moot. 19 DATED this ___6__ day of December, 2023. 20 21 ___________________________________ Gloria M. Navarro, District Judge 22 UNITED STATES DISTRICT COURT 23 24 25