Page v. Shumaker Mallory, LLP

1

JOSEPH PAGE, Plaintiff, v. SHUMAKER MALLORY, LLP; BENNET YANKOWITZ; CLARISSE YOUNG SHUMAKER; BRETT J. WASSERMAN; LISA HIRAIDE; and ROES 1-10, Defendants.

No. 2:21-cv-02002-KJD-BNW

United States District Court, D. Nevada

June 6, 2022

ORDER GRANTING DEFENDANTS' MOTION TO DISMISS

Kent J. Dawson, United States District Judge

Before the Court are Defendants' Motions to Dismiss (ECF #5 & 6). Plaintiff responded in opposition (ECF #10 &amp 11) and Defendants replied (ECF #12 & 13). Defendants then filed a Motion for Leave to File Supplement to Motion to Dismiss (ECF #14). Plaintiff responded in opposition (ECF #20) and Defendants replied (ECF #21).

I. Factual and Procedural Background

Plaintiff Joseph Page (“Page”) brought this action against Defendants on November 4, 2011. (ECF #1). The complaint brought seven causes of action: abuse of process, malicious prosecution, three claims of negligence, defamation, and intentional infliction of emotional distress. (ECF #1). The allegations arise from a related action in which Defendants and Page are involved. Defendant Shumaker Mallory, LLP (“Shumaker Mallory”) is a law firm that represents the plaintiffs in Rocketfuel Blockchain, Inc v. Page, 2:21-cv-00103-KJD-EJY (“Related Action”). Rocketfuel Blockchain, Inc. (“RBC”) alleged that Page lied about his ownership of certain patents which he gave RBC in exchange for ownership in the company. (ECF #5, at 3). Page filed a motion for sanctions in that action, alleging that Shumaker Mallory filed an insufficient complaint, did not have evidence to support the claims in the complaint, and requested improper remedies. Id. The Court denied that motion, causing Page to appeal the denial to the Ninth Circuit Court of Appeals. Id. However, the Ninth Circuit dismissed the appeal for want of jurisdiction. Id. at 4. That action is now set for trial.

With that matter still pending, Page filed the complaint in this action, alleging that Defendants “negligently filed an abusive and malicious lawsuit.” (ECF #1, at 3). Page alleges that in the Related Action Defendants “swore in more than 54 instances” that Page misrepresented and/or omitted information regarding the patents but had in its possession exculpatory evidence that Page neither misrepresented nor omitted anything. Id. at 3-4. Page asserts that he provided the entire patent prosecution history to B4MC Gold Mines, Inc.'s (“B4MC”) attorneyso^[1] in April 2018. Id. at 4. Page argues that RBC knows that the Related Action against him is improper because they sued their law firm for malpractice when they found out that Page provided all the patent information to the law firm, who then failed to report Page's full disclosures to RBC. Id. Defendants then brought two motions to dismiss, a motion for leave to file supplement to their second motion to dismiss, and a motion for sanctions. (ECF #5, 6, 14, & 19).

II. Legal Standard

Under Rule 8, a pleading must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” FED. R. CIV. P. 8(a)(2). A complaint does not require “detailed factual allegations, ” but “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atlantic Co. v. Twombly, 550 U.S. 544, 555 (2007). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 557). All “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. While the court “must take all of the factual allegations in the complaint as true, we ‘are not bound to accept as true a legal conclusion couched as a factual allegation.'” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555). “When the claims in a complaint have not crossed the line from conceivable to plausible, the complaint must be dismissed.” Hendon v. Geico Ins. Agency, 377 F.Supp.3d 1194, 1196 (D. Nev. 2019).

III. Analysis

Defendants argue that Page's entire complaint must be dismissed. Page brought seven causes of action in his complaint. Each is analyzed individually.

A. Abuse of Process

“To support an abuse of process claim, a claimant must show ‘(1) an ulterior purpose by the [party abusing the process] other than resolving a legal dispute, and (2) a willful act in the use of the legal process not proper in the regular conduct of the proceeding.'” Land Baron Inv. v. Bonnie Springs Family LP, 356 P.3d 511, 519 (Nev. 2015) (quoting LaMantia v. Redisi, 38 P.3d 877, 880 (Nev. 2002)). The claimant “must provide facts, rather than conjecture, showing that the party intended to use the legal process to further an ulterior purpose.” Id. The tort of abuse of process “requires a willful act, and the majority of courts have held that merely filing a complaint and proceeding to properly litigate the case does not meet this requirement.” Id. at 519-20. Page's complaint does not satisfy these requirements.

Page alleges that Defendants filed the Related Action for an improper purpose; to extort Page and force an early settlement. However, the claimant “must include some allegation of abusive measures taken after the filing of the complaint in order to state a claim.” Hampton v. Nustar Mgmt. Fin. Grp., No. 2:05-cv-00824-BES-GWF, 2007 WL 119146, at *3 (D. Nev. Jan. 10, 2007). Page's only allegations of abusive measures taken after filing the complaint are that RBC continued prosecuting the action after learning there was no probable cause and purposely transmitted a proposed settlement agreement not in conformance with earlier agreed terms. At the time of this writing, the Related Action is in trial. Factual questions exist regarding whether RBC's allegations against Page are true and RBC has the right to prosecute its claims through trial. Additionally, the Court does not view the failure of the parties to reach an early settlement agreement as sufficient to satisfy an abuse of process claim. If the terms that Page allegedly agreed to were different than the ones presented on the settlement documents, then Page had the right to refuse the settlement. The alleged discrepancy could have resulted from a misunderstanding or miscommunication between the parties, especially when communication between attorneys and a pro se party are involved. Because Page's allegations do not support an abuse of process claim, the claim must be dismissed.

B. Malicious Prosecution

“[T]he elements of a malicious prosecution claim are: (1) want of probable cause to initiate the prior criminal proceeding; (2) malice; (3) termination of the prior criminal proceedings; and (4) damage.” LaMantia, 38 P.3d at 889-90. “A malicious prosecution claim requires that the defendant initiated, procured the institution of, or actively participated in the continuation of a criminal proceeding against the plaintiff.” Id. at 889-90. Page cannot support a malicious prosecution claim. A malicious prosecution claim cannot stem from a civil proceeding. See id. at 880 (“We overrule Dutt to the extent that the opinion suggests that a plaintiff may claim malicious prosecution in the absence of a ‘prior criminal proceeding.'” (emphasis in original)); see also Ademiluyi v. Phillips, No. 2:14-cv-00507-MMD-CWH, 2015 WL 5146898, at *4 (D. Nev. Sep. 2, 2015) (“Defendant correctly argues that Nevada does not recognize a malicious prosecution claim absent criminal proceedings.”). Because there is no prior criminal proceeding, Page's malicious prosecution claim is dismissed.

C. Negligence

Page brought three causes of action for negligence in his complaint. Each arise from Federal Rule of Civil Procedure 11. Page argues that Defendants negligently violated Rule 11 because the Related Action was brought for an improper purpose, was not warranted by existing law or by a nonfrivolous argument, and lacked evidentiary support; each is a violation of Rule 11. A negligence claim requires that a plaintiff “establish four elements: (1) the existence of a duty of care, (2) breach of that duty, (3) legal causation, and (4) damages.” Klasch v. Walgreen Co., 246 P.3d 1155, 1158 (Nev. 2011).

Page cannot show that Defendants owed him a duty. Defendants represent the plaintiff in the Related Action. Their duty was to their own client, not to Page. The Nevada Supreme Court has made clear that it “does not follow that because an agency relationship has been recognized in the context of client liability for attorney actions that the same notion applies in the context of attorney liability to an adverse or third party from actions taken in representing a client.” Dezzani v. Kern & Associates, Ltd., 412 P.3d 56, 62 (Nev. 2018). It then held that “an attorney providing legal services to a client generally owes no duty to adverse or third parties.” Id. Defendants are the attorneys representing the plaintiff in the related action. Page's displeasure with their filings in the related action were properly brought in his motion for sanctions. They are not proper as a separate cause of action in negligence. Because Defendants did not owe a duty to Page, his negligence claims are dismissed.

D. Defamation

The complaint brings one cause of action for defamation. A defamation claim requires the plaintiff to “prove four elements: (1) a false and defamatory statement . . .; (2) an unprivileged publication to a third person; (3) fault amounting to at least negligence; and (4) actual or presumed damages.” Grand Canyon Skywalk Development, LLC v. Cieslak, No. 2:13-cv-00596-JAD-GWF, 2014 WL 2123255, at *3 (D. Nev. May 21, 2014) (internal quotations omitted). “As a general rule, only...