Walker v. Intelli-heart Services Inc.

• Court: District Court, D. Nevada
• Decided: March 4, 2020
• Docket: 3:18-cv-00132
• Status: Unknown

Opinion

3 UNITED STATES DISTRICT COURT

4 DISTRICT OF NEVADA

5 * * *

6 TERRANCE WALKER, Case No. 33::1188--ccvv--0000113322--MMMMDD--CCBLBC

7 Plaintiff, ORDER v. 8 INTELLI-HEART SERVICES, INC., et al., 9 Defendants. 10 11 I. SUMMARY 12 Pro Se Plaintiff Terrance Walker primarily alleges that Defendants Intelli-heart 13 Services, Inc. (“IHS”), Danny Weisburg, Vanessa Parsons, and Daniel Germain tortiously 14 interfered with his contract with non-party James Winters. (ECF No. 136.) Before the 15 Court are Defendants’ special motions to dismiss Plaintiff’s claims against them under 16 Nevada’s anti-SLAPP statute and, alternatively, Federal Rule of Civil Procedure 12(b)(6) 17 (ECF Nos. 159, 169),1 and two of Plaintiff’s motions for partial summary judgment (ECF 18 Nos. 158, 171).2 As further explained below, because the Court agrees with Defendants 19 that Plaintiff’s claims must be dismissed under Nevada’s anti-SLAPP statute, the Court 20 will grant those motions, decline to address Defendants’ 12(b)(6) arguments, and deny 21 Plaintiff’s motions for partial summary judgment as moot. 22 II. BACKGROUND 23 Defendant IHS is a California corporation that provides outpatient, remote heart 24 monitoring services to hospitals and other medical institutions, so they can monitor their 25 26 1Plaintiff filed a response to both motions (ECF No. 197), and Defendants filed 27 replies (ECF Nos. 201, 202).

28 2Defendants filed responses (ECF Nos. 198, 200), and Plaintiff filed replies (ECF Nos. 203, 204). 2 Vanessa Parsons is the Chief Executive Officer of IHS, and Defendant Danny Weisberg 3 is the President of IHS.” (ECF No. 169 at 2.) Defendant Daniel Germain represented IHS 4 as its attorney as relevant to this case. (ECF No. 159 at 2.) 5 Plaintiff runs his own business based in Reno, Nevada. (ECF No. 136 at 3.) He 6 “provides a variety of professional services such as consulting, market research, 7 registering companies to qualify for federal contracts, finding relevant solicitations, 8 reviewing federal solicitations, preparing bids, compliance advising, advising on 9 procurement regulations, and contract dispute resolution for U.S. government 10 procurements.” (Id.) 11 IHS entered into a contract with non-party James Winters in which Winters would 12 act as a regional sales distributor for IHS. (ECF No. 169 at 2; see also ECF No. 169-1 13 (“Distributor Agreement”).) In pertinent part, the Distributor Agreement prohibited Winters 14 in entering into any contracts on IHS’s behalf: 15 Distributor’s Inability to Contract for IHS: In spite of anything contained in this Agreement to the contrary, Distributor shall not have the right to make 16 any contracts or commitments for or on behalf of IHS without first obtaining the express written consent of IHS. 17 18 (ECF No. 169-1 at 8 (the “No Contracting Clause”); see also ECF No. 136 at 36 (same).) 19 The Distributor Agreement further gave IHS the right to terminate the Distributor 20 Agreement for cause, on 30 days’ notice, if Winters violated certain terms of the 21 agreement including the No Contracting Clause. (ECF No. 169-1 at 9.) 22 Despite the No Contracting Clause, Winters entered into a second contract with 23 Plaintiff where Plaintiff basically agreed to help Winters win government contracts for IHS 24 if Winters paid him 50% of the commission Winters made on any contracts Winters won 25 with Plaintiff’s help. (ECF No. 136 at 8; see also id. at 25-28.) According to Plaintiff, 26 Plaintiff helped Winters win “about a dozen” contracts for remote heart-monitoring 27 services for IHS from U.S. Department of Veterans Affairs (“VA”) hospitals. (Id. at 8.) 28 Plaintiff defines the VA as a “federal Cabinet-level agency that provides near- 2 outpatient clinics located throughout the country.” (Id. at 4.) 3 Plaintiff alleges that IHS was paying Winters the commissions he earned from 4 contracts with VA hospitals too slowly. (Id. at 8.) Plaintiff complained to Winters about 5 these allegedly late payments, and Plaintiff was under the impression that Winters was, 6 in turn, complaining to IHS. (Id.) In the fall of 2017, Plaintiff complained to Defendant 7 Parsons by email that the payments to Winters—and therefore to him—were too slow. 8 (Id. at 9.) In December 2017 and January 2018, Plaintiff says he threatened all 9 Defendants by email with legal action if they did not pay Winters more quickly. (Id.) 10 Around this time, Plaintiff also began contacting employees at the VA, alleging that 11 IHS was violating federal regulations by not paying Winters quickly enough. (Id. at 9-10.) 12 This prompted IHS to terminate its agreement with Winters on February 8, 2018. (ECF 13 No. 169 at 3.) In the termination letter sent to Winters by Defendant Parsons on behalf of 14 IHS, she wrote in part: 15 Most egregiously, without the knowledge or consent of IHS, you engaged a subcontractor to work on your accounts in direct violation of the terms of the 16 Distributor Agreement. In that regard, recently, an individual named [Plaintiff] Terrance Walker, contacted both IHS and then various Veteran 17 Administration officials claiming that he is a “2nd subcontractor under James Winter (a 1st tiered small business subcontractor)” and demanding 18 payment for his purported services under the Distributor Agreement. When [Defendant] Mr. Weisberg confronted you about this breach, you admitted 19 that you had employed Mr. Walker as a subcontractor.

20 IHS hereby demands that you (and your agents—including Mr. Walker) immediately discontinue all communications with IHS customers or 21 prospective customers. . . . 22 (ECF No. 169-2 at 2.) 23 Around the time IHS terminated Winters’s Distributor Agreement, and for some 24 time thereafter, Plaintiff sent emails to the VA employees assigned to the contracts he 25 expected to be paid on, alleging that IHS’s slow payments to Winters violated federal 26 regulations. (ECF No. 136 at 10-13.) Plaintiff also filed related formal protests with the 27 U.S. Government Accountability Office (“GAO”). (Id. at 16; see also ECF Nos. 169 at 4; 28 ECF Nos. 169-3, 169-4 (formal protests).) Defendants Parsons, Weisburg, and Germain 2 allegations to the effect that: (1) Plaintiff never worked for, or represented, IHS in any 3 capacity; (2) nobody at IHS had heard of Plaintiff until he began complaining about IHS’s 4 slow payments; and (3) IHS terminated its contract with Winters once IHS learned Winters 5 had subcontracted with Plaintiff. (ECF Nos. 159 at 3-4, 169 at 3-7.) 6 These communications, and IHS’s termination of its contract with Winters, form the 7 basis of Plaintiff’s primary claim for tortious interference in his operative Second Amended 8 Complaint (“SAC”). (ECF No. 136 at 16; see also id. at 16-19.) Plaintiff’s theory appears 9 to be that Defendants interfered with Plaintiff’s contract with Winters by terminating the 10 Distributor Agreement once Defendants learned Winters had entered into the 11 impermissible side contract with Plaintiff. Plaintiff includes other claims, also for tortious 12 interference, but against Defendants Weisburg, Parsons, and Germain in their personal 13 capacities. (Id. at 19-21.) Plaintiff also includes a claim for unjust enrichment against 14 Defendants IHS and Parsons. (Id. at 21.) 15 III. LEGAL STANDARD 16 The Nevada anti-SLAPP statute (“the Statute”) permits defendants to gain early 17 dismissal of civil claims through a special motion to dismiss. See NRS § 41.660. A party3 18 engaging in communication, as defined by the Statute, “is immun[ized] from any civil 19 action for claims based upon the communication.” NRS § 41.650. Anti-SLAPP statutes 20 are available to litigants in federal court. Compare U.S. ex rel. Newsham v. Lockheed 21 Missiles & Space Co., Inc., 190 F.3d 963, 972-73 (9th Cir. 1999) (noting, as a matter of 22 first impression, that California’s anti-SLAPP statute may be applied in federal diversity 23 suits as the statute would not result in a direct collision with the Federal Rules, despite 24 commonality of purpose in weeding out unmeritorious claims) with Hilton v. Hallmark 25 Cards, 599 F.3d 894, 901 (9th Cir. 2010) (stating “a federal court can only entertain anti- 26 3The Statute specifically states “a person.” See NRS § 41.650. However, a 27 business entity may likewise file a special motion under the Statute. See Bear Omnimedia LLC v. Mania Media LLC, Case No. 2:17-cv-01478-MMD-CWH, 2018 WL 2323463, at *2 28 n.5 (D. Nev. May 22, 2018), appeal dismissed, Case No. 18-16079, 2018 WL 6575177 (9th Cir. Oct. 12, 2018). 2 doubt the Court can entertain Defendants’ anti-SLAPP motions because Plaintiff only 3 asserts state law claims. (ECF No. 136.) 4 “A strategic lawsuit against public participation, SLAPP for short, is a meritless 5 lawsuit that a plaintiff initiates to chill a defendant’s freedom of speech and right to petition 6 under the First Amendment.” Pope v. Fellhauer, 437 P.3d 171 (Table), 2019 WL 1313365, 7 at *2 (Nev. 2019). “The purpose of a special motion to dismiss a SLAPP lawsuit . . . is to 8 filter out unmeritorious claims in an effort to protect citizens from costly retaliatory lawsuits 9 arising from their right to free speech under both the Nevada and Federal Constitutions.” 10 Haack v. City of Carson City, Case No. 3:11-cv-00353-RAM, 2012 WL 3638767, at *3 (D. 11 Nev. Aug. 22, 2012) (internal quotation marks and citation omitted). Though called 12 “motion[s] to dismiss,” federal courts treat anti-SLAPP motions as a species of motion for 13 summary judgment. See, e.g., id., at *3-*5; Las Vegas Sands Corp. v. First Cagayan 14 Leisure & Resort Corp., Case No. 2:14-cv-424-JCM-NJK, 2016 WL 4134523, at *3 (D. 15 Nev. Aug. 2, 2016). 16 Evaluating a Nevada anti-SLAPP motion is a two-step process. The moving party 17 bears the burden on the first step, and the non-moving party bears the burden on the 18 second. See Pope, 2019 WL 1313365, at *2. The Statute provides: 19 [T]he court shall: (a) [d]etermine whether the moving party has established, by preponderance of the evidence, that the claim is based upon a good faith 20 communication in furtherance of the right to petition or the right to free speech in direct connection with an issue of public concern; (b) [i]f the court 21 determines that the moving party has met the burden pursuant to paragraph (a), determine whether the plaintiff has demonstrated with prima facie 22 evidence a probability of prevailing on the claim[] . . .

23 NRS § 41.660(3)(a), (b) (emphasis added). As noted above, the Court is required to 24 consider evidence in making a determination under these paragraphs. See NRS § 25 41.660(3)(d). A moving party may carry its burden by establishing that its communication 26 falls within one of four specific categories of protected speech. See NRS § 41.637. Among 27 the four categories, and as relevant here, is a “[c]ommunication that is aimed at procuring 28 2 without knowledge of its falsehood.” NRS § 41.637(1). 3 IV. DISCUSSION 4 The Court will analyze Defendants’ special motions to dismiss together because 5 Defendants’ anti-SLAPP arguments significantly overlap. In addition, for purposes of this 6 analysis, Defendant Germain is similarly situated to the other Defendants who filed their 7 own motion to dismiss. The Court first addresses whether Defendants have satisfied their 8 initial burden to show that Plaintiff’s Complaint is based entirely on Defendants’ good faith 9 communications in furtherance of their right to petition or free speech in connection with 10 an issue of public concern (the “protected activity” prong), and then addresses Plaintiff’s 11 probability of prevailing on his tortious interference and unjust enrichment claims. See 12 Century Sur. Co. v. Prince, 265 F. Supp. 3d 1182, 1188-96 (D. Nev. 2017), aff’d, 782 F. 13 App’x 553 (9th Cir. 2019) (taking the same two-step approach to the analysis). 14 A. Protected Activity 15 All Defendants argue that their communications with the VA in response to 16 Plaintiff’s allegations that IHS was violating federal regulations qualify as a protected 17 activity under the Statute because they were aimed at procuring a governmental result or 18 outcome. (ECF Nos. 159 at 7, 169 at 9-10.) They also argue the statements they made 19 were either true or made without knowledge of their falsity (ECF Nos. 159 at 7, 169 at 10- 20 12), and in the public interest because they were made in connection with a matter of 21 reasonable concern to a government agency (ECF Nos. 159 at 7, 169 at 12-14). Plaintiff 22 counters that Defendants were not engaged in protected activity, but does not clearly 23 explain why. (ECF No. 197.)4 The Court agrees with Defendants. 24 Defendants have met their initial burden under the Statute to show they were 25 engaged in protected activity when they corresponded with various VA employees and 26 officials regarding Plaintiff’s allegations against them. See NRS § 41.660(3)(a). First, even 27

28 4Plaintiff’s 43 page response violates the 24 page limit that applies to responses to motions to dismiss. See LR 7-3(b). 2 Second, Plaintiff also alleges that Defendants’ communications were intended to 3 convince the VA to continue paying IHS under its contracts with the VA despite Plaintiff’s 4 allegations of IHS’ noncompliance with federal regulations. (Id. at 14-15.) Thus, 5 Defendants easily clear their burden to show by a preponderance of the evidence that 6 they were engaged in protected activity by merely pointing at Plaintiff’s own allegations. 7 (ECF Nos. 159 at 7, 169 at 9-10.) These allegations sufficiently establish that Defendants’ 8 communications relevant to this case were aimed at procuring a governmental outcome 9 within the meaning of NRS § 41.637(1). 10 Moreover, the Court finds that Defendants’ communications were at least made 11 without knowledge they contained any false statements. Plaintiff primarily attacks 12 Defendants’ statements to the effect that Plaintiff was not a subcontractor of IHS in his 13 SAC. (ECF No. 136 at 11-13; see also ECF No. 197 at 8, 19, 33-35.) But the evidence 14 before the Court shows that statements to this effect were true. Plaintiff is not IHS’s 15 subcontractor. There is no dispute that Plaintiff never entered into a contract with IHS. 16 Instead, Plaintiff merely alleges that he entered into a contract with Winters (ECF No. 136 17 at 8), but Winters’s contract with IHS forbade Winters from entering into any contracts on 18 IHS’s behalf absent IHS’s written consent (ECF No. 169-1 at 8). Plaintiff has proffered no 19 evidence of such written consent. Thus, there is no contractual evidence supporting 20 Plaintiff’s view that he was IHS’s subcontractor. That means that Defendants’ statements 21 to this effect were either true, or there is at least no evidence that Defendants made any 22 false statements. See Century Sur. Co. v. Prince, 782 F. App’x 553, 556 (9th Cir. 2019) 23 (affirming the district court’s granting of a special motion to dismiss and finding that the 24 defendants met their initial burden to show they made statements without knowledge of 25 their falsehood where the plaintiff had “not provided any evidence that the 26 communications were untruthful or made with knowledge of falsehood.”). 27 Finally, the Court also agrees with Defendants that their communications were 28 made in connection with an issue of public concern—whether IHS was violating federal 2 at 12-14.) Plaintiff does not really dispute that Defendants have satisfied this portion of 3 the protected activity prong either. (ECF No. 197 at 42 (“Holding on to federal 4 subcontractor payments, and lying about it to the government, as [Plaintiff has alleged of 5 Defendants, can constitute criminal and tortious conduct.”).) In sum, the Court finds 6 Defendants have met their initial burden to show they engaged in protected activity when 7 they communicated with VA employees and officials regarding Plaintiff’s allegations of 8 misconduct. The Court therefore moves on to the second prong of the analysis—Plaintiff’s 9 probability of prevailing on his claims. See Century Sur. Co., 265 F. Supp. 3d at 1188-96 10 (taking this two-step approach). 11 B. Plaintiff’s Probability of Prevailing on His Claims 12 Plaintiff is very unlikely to prevail on his claims because his contract with Winters 13 is invalid, and he has no contractual or equitable relationship with IHS. The Court first 14 addresses Plaintiff’s tortious interference claim, and then his unjust enrichment claim.5 15 1. Tortious Interference 16 Plaintiff must establish the following elements to state a claim for tortious 17 interference with contractual relations: “(1) a valid and existing contract; (2) the 18 defendant’s knowledge of the contract; (3) intentional acts intended or designed to disrupt 19 the contractual relationship; (4) actual disruption of the contract; and (5) damages.” Silver 20 State Broad., LLC v. Beasley FM Acquisition Corp., Case No. 2:11-cv-01789-MMD, 2012 21 WL 4049481, at *6 (D. Nev. Sept. 12, 2012) (citing Consolidated Generator–Nevada, Inc. 22 v. Cummins Engine Co., Inc., 971 P.2d 1251, 1255 (Nev. 1998)). 23 But Plaintiff is unlikely to succeed on this claim because he cannot show he 24 entered into a valid contract with Winters. The No Contracting Clause of the Distributor 25 Agreement forbade Winters from entering into a contract that would make any 26 commitments on IHS’s behalf without IHS’s written consent. (ECF No. 169-1 at 8.) 27 5The Court does not differentiate between Plaintiff’s tortious interference claims 28 against various individual Defendants because they all share the common flaw discussed infra. 2 again, Plaintiff has proffered no evidence that IHS consented to Winters’s agreement with 3 Plaintiff. Winters’s agreement with Plaintiff is therefore invalid, as Winters had no authority 4 to enter into it. As Defendants argue (ECF No. 169 at 14-15), Winters’s decision to enter 5 into an agreement with Plaintiff when he had no authority to was likely “fraudulent, 6 because circumstances known to both parties make the contract or agreement absolutely 7 void.” Edwards v. Carson Water Co., 34 P. 381, 386 (Nev. 1893). Plaintiff has no claim 8 against IHS. See id. (“It is a cardinal principle in the law of agency that the powers of the 9 agent are to be exercised for the benefit of the principal, and not for the agent or third 10 parties, and a person dealing with one whom they know to be an agent, and to be 11 exercising his authority for his own benefit, acquires no rights against the principal in the 12 transaction.”). Plaintiff’s claim for tortious interference against Defendants will thus likely 13 fail. 14 2. Unjust Enrichment 15 So too will Plaintiff’s claim for unjust enrichment. “The phrase ‘unjust enrichment’ 16 is used in law to characterize the result or effect of a failure to make restitution of, or for, 17 property or benefits received under such circumstances as to give rise to a legal or 18 equitable obligation to account therefor.” Risinger v. SOC LLC, 936 F. Supp. 2d 1235, 19 1244 (D. Nev. 2013) (citation and internal quotation marks omitted). “Unjust enrichment 20 exists when the plaintiff confers a benefit on the defendant, the defendant appreciates 21 such benefit, and there is ‘acceptance and retention by the defendant of such benefit 22 under circumstances such that it would be inequitable for him to retain the benefit without 23 payment of the value thereof.’” Certified Fire Prot. Inc. v. Precision Constr., 283 P.3d 250, 24 257 (Nev. 2012) (citation omitted). 25 But Plaintiff not only had no contract with IHS, the evidence before the Court 26 suggests that IHS did not even know about Plaintiff and his arrangement with Winters 27 until Plaintiff began complaining about slow payments—prompting IHS to quickly move 28 to terminate Winters. (See, e.g., ECF Nos. 160, 169-2.) Thus, Defendants did not, and 2 Prot. Inc., 283 P.3d at 257 (explaining this is an element of an unjust enrichment claim). 3 Moreover, IHS has no equitable obligation to Plaintiff under a contract it was not a party 4 to, was unaware of, and purported to impose obligations upon IHS. Plaintiff’s unjust 5 enrichment claim is therefore also unlikely to succeed. 6 In sum, Plaintiff’s SLAPP complaint is barred by the Statute. Both special motions 7 to dismiss satisfy the two-prong statutory test because Plaintiff’s SAC is based on 8 Defendants’ protected communications aimed at procuring a governmental outcome— 9 preventing the VA from cancelling Defendant IHS’s VA contracts, or otherwise penalizing 10 IHS in the face of Plaintiff’s allegations of IHS’s improper non-payment. Further, Plaintiff 11 is unlikely to prevail on his tortious interference and unjust enrichment claims.6 The Court 12 will therefore grant both special motions to dismiss, and dismiss this case in its entirety. 13 The dismissal is with prejudice because it “operates as an adjudication upon the merits,” 14 NRS § 41.660(5), and any amendment would be futile (see, e.g., Carvalho v. Equifax Info. 15 Servs., LLC, 629 F.3d 876, 893 (9th Cir. 2010) (affirming district court’s denial of a motion 16 for leave to amend because amendment would be futile, noting that futility is a proper 17 basis for denying leave to amend)).7 The Court will thus also deny Plaintiff’s motions for 18 partial summary judgment (ECF Nos. 158, 171) as moot. 19 V. CONCLUSION 20 The Court notes that the parties made several arguments and cited to several 21 cases not discussed above. The Court has reviewed these arguments and cases and 22 determines that they do not warrant discussion as they do not affect the outcome of the 23 motions before the Court. 24 /// 25

26 6Especially considering Plaintiff bears the burden at this second step of the analysis. See Pope, 2019 WL 1313365, at *2. 27 7Defendants seek an award of their attorneys’ fees and costs, but their request is 28 premature, and denied without prejudice for noncompliance with LR 54-14. (ECF No. 169 at 24.) 1 It is therefore ordered that Defendant Daniel Germain’s special motion to dismiss 2 || (ECF No. 159) is granted. 3 It is further ordered that Defendants Intelli-heart Services Inc., Vannessa Parsons, 4 || and Danny Weisburg’s special motion to dismiss (ECF No. 169) is granted. 5 It is further ordered that Plaintiff's first motion for partial summary judgment (ECF 6 || No. 158) is denied as moot. 7 It is further ordered that Plaintiff's second motion for partial summary judgment 8 || (ECF No. 171) is denied as moot. 9 It is further ordered that this case is dismissed with prejudice. 10 The Clerk of Court is directed to enter judgment accordingly, in Defendants’ favor, 11 || and close this case. 12 DATED THIS 4" day of March 2020.

14 MIRANDA M. DU 15 CHIEF UNITED STATES DISTRICT JUDGE 16 17 18 19 20 21 22 23 24 25 26 27 28 11