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Wichansky v. Zowine

United States District Court, D. Arizona

June 15, 2015

Marc A. Wichansky, Plaintiff,
David T. Zowine, et al., Defendants.


DAVID G. CAMPBELL, District Judge.

Defendants have brought a motion for partial summary judgment. Doc. 106. The matter is fully briefed and neither party has requested oral argument. The Court will grant the motion in part and deny it in part as explained below.

I. Background.

The parties' relationship in this case is long and contentious, and a more detailed statement of facts is set forth in the Court's order on Defendants' motion to dismiss. See Doc. 82 at 1-4. For several years, Plaintiff Marc Wichansky and Defendant David Zowine co-owned Defendant Zoel Holding Company ("Zoel"). Doc. 107, ¶¶ 1, 2. In 2010, a heated dispute arose, and in January 2011, Zowine established an office on 24th Street in Phoenix (the main office was located on 44th Street). Id., ¶¶ 3, 5. On January 31, 2011, Zowine instructed several employees, who are named Defendants in this action, to remove several desktop computers from the 44th Street office and move them to the 24th Street office. Id., ¶ 6. On February 2, 2011, the same employees unsuccessfully attempted to image Zoel's servers at the 44th Street office and instead physically removed them to the 24th Street office. Id., ¶ 7.

On February 4, 2011, Plaintiff filed a complaint seeking a temporary restraining order in Maricopa County Superior Court against Zowine for return of the equipment, alleging that the servers were a "core component" of Zoel's operations and were necessary for Zoel to "perform its essential functions." Id., ¶ 8. That same day, the parties entered into an agreement pursuant to Arizona Rule of Civil Procedure 80(d) that each office would continue to operate and that all parties would have full access to all company information at both locations. Id., ¶ 12. According to Plaintiff, Zowine refused to allow access to the computers and servers for several months. Doc. 117, ¶¶ 20, 22. Eventually, Plaintiff hired The Intelligence Group to image the servers, which occurred in July 2011. Doc. 108, ¶¶ 27, 31.

On March 31, 2011, Plaintiff sought judicial dissolution of Zoel and applied for a receiver to be appointed to manage the company's assets. Doc. 107, ¶¶ 3, 24. Ted Burr was appointed receiver in April 2011. Id., ¶ 25. On June 10, 2011, Zowine filed an election to purchase Plaintiff's shares in lieu of dissolution. Id., ¶ 33. The Superior Court held a five-day valuation hearing in March 2012 to establish the terms of Zowine's purchase of the shares. Id. Shortly thereafter, Zowine made the initial payment and the Superior Court granted him full control of Zoel's property and assets. Id., ¶¶ 34, 35.

On June 14, 2013, Plaintiff filed suit against Zoel, MGA Home Healthcare, LLC, Zowine, and several individuals. Doc. 1. Plaintiff filed a first amended complaint in February 2014 alleging twenty causes of action. Doc. 54. Defendants now move for summary judgment on counts two through five, which allege violations of the Computer Fraud and Abuse Act ("CFAA"), 18 U.S.C. § 1030. Doc. 106.

II. Analysis.

"The CFAA prohibits a number of different computer crimes, the majority of which involve accessing computers without authorization or in excess of authorization, and then taking specified forbidden actions, ranging from obtaining information to damaging a computer or computer data." LVRC Holdings LLC v. Brekka, 581 F.3d 1127, 1131 (9th Cir. 2009). Plaintiff brings four claims: (1) violation of § 1030(a)(2)(C), which prohibits "intentionally access[ing] a computer without authorization or exceed[ing] authorized access, and thereby obtain[ing] information from any protected computer"; (2) violation of § 1030(a)(4), which prohibits unauthorized access or exceeding authorized access of a computer with intent to defraud; (3) violation of § 1030(a)(5)(C), which prohibits "intentionally access[ing] a protected computer without authorization, and as a result of such conduct, caus[ing] damage and loss"; and (4) violation of § 1030(b), which prohibits conspiracy to violate any of the above-referenced sections.

A. Statute of Limitations.

The CFAA provides that "[n]o action may be brought under this subsection unless such action is begun within 2 years of the date of the act complained of or the date of the discovery of the damage." 18 U.S.C. § 1030(g). "[D]amage' means any impairment to the integrity or availability of the data, a program, a system, or information[.]" Id., § 1030(e)(8). Thus, there are two possible kinds of damage: damage resulting from impairment to the integrity of the data, and damage resulting from impairment to the availability of the data.

"[I]n general, the discovery rule applies to statutes of limitations in federal litigation[.]" Mangum v. Action Collection Serv., Inc., 575 F.3d 935, 940 (9th Cir. 2009); see also Aloe Vera of Am., Inc. v. United States, 699 F.3d 1153, 1159 (9th Cir. 2012) (noting that the Ninth Circuit has "long applied this general rule in many different statutory contexts"). Indeed, the discovery rule appears to be incorporated into § 1030(g) of the CFAA (referring to "the date of discovery of the damage"). Therefore, the "limitations period begins to run when the plaintiff knows or has reason to know of the injury which is the basis of the action." Aloe Vera of Am., 699 F.3d at 1159 (internal quotation marks omitted); see also Ashcroft v. Randel, 391 F.Supp.2d 1214, 1224 (N.D.Ga. 2005) (applying discovery rule to CFAA claim).

"Ordinarily, we leave the question of whether a plaintiff knew or should have become aware of a fraud to the jury." Gen. Bedding Corp. v. Echevarria, 947 F.2d 1395, 1397 (9th Cir. 1991). But where the facts are undisputed as to when the statute of limitations began to run, the court may decide the issue at the summary judgment stage. See id. Summary judgment on a defense is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). Once the movant makes this showing, the burden shifts to the opposing party to identify, with supporting evidence, "specific facts showing there is a genuine issue for trial." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

Much of Plaintiff's amended complaint focuses on Defendants' seizure of computers and servers in late January and early February of 2011. To the extent Plaintiff's CFAA claims are based on any lack of availability of data resulting from this seizure, they clearly are time-barred. The seizure occurred more than two years before the CFAA claims were asserted on June 14, 2013. Doc. 1. Moreover, to the extent Plaintiff's CFAA claims are based on a lack of ...

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