Albanese Confectionery Grp., Inc. v. Cwik

Decision Date04 March 2021
Docket NumberCourt of Appeals Case No. 20A-CT-1436
Parties ALBANESE CONFECTIONERY GROUP, INC., Appellant-Defendant, v. Bernadette CWIK, Appellee-Plaintiff.
CourtIndiana Appellate Court

Attorneys for Appellant: Patrick P. Devine, Sam S. Zabaneh, Schererville, Indiana

Attorney for Appellee: Kevin E. Werner, Crown Point, Indiana

Tavitas, Judge.

Case Summary

[1] Bernadette Cwik's employment with Albanese Confectionery Group Inc. ("Albanese") was terminated, and Albanese remotely reset Cwik's smartphone, which Cwik had authorized when she connected her personal phone to her company email account via an end user agreement ("the Agreement"). The Agreement authorized Albanese to perform a "factory reset," restoring the phone to its default state.

[2] Cwik filed a complaint against Albanese based on allegations of lost files stored on her smartphone, and Albanese filed a counterclaim seeking attorney's fees. Albanese then filed a motion for summary judgment. Finding that the Agreement did not survive Cwik's termination, the trial court denied Albanese's motion for summary judgment. Because we find that Cwik entered into a valid, enforceable agreement permitting Albanese to reset her phone, we reverse in part and remand with instructions to enter summary judgment for Albanese on all of Cwik's claims. We affirm the trial court's denial of summary judgment with respect to Albanese's counterclaim for attorney's fees because there are genuine issues of material fact. Accordingly, we affirm in part, reverse in part, and remand.

Issues

[3] Albanese raises a series of issues related to Cwik's six claims.1 We, however, find one claim dispositive and address the following issues:

I. Whether Albanese is entitled to summary judgment based upon Cwik's acceptance of the Agreement, which allowed the factory reset of her smartphone.
II. Whether Albanese is entitled to summary judgment on its attorney's fees claim pursuant to Indiana Code Section 34-52-1-1.
Facts

[4] Cwik began working for Albanese in 2013. While working for Albanese, Cwik voluntarily connected her smartphone to Albanese's email server. Albanese employee, Sashon Karimi, set up Cwik's iPhone in early 2017.

[5] Karimi, in accordance with Albanese's standard policy, utilized an apparently built-in feature of the Apple iPhone: the Microsoft Exchange Server. In order to connect Cwik's iPhone to the server, Karimi first "pointed" the phone to the server, meaning that he inputted specific information identifying the server into the phone. Appellant's App. Vol. III p. 64. Then, Cwik was required to enter her Albanese email credentials. Upon keying her credentials, Cwik would have been presented with the Agreement.2 The Agreement always presents on-screen prior to successful implementation of Albanese email access on a device. The Agreement must be accepted for Albanese to grant email access on the device.

[6] The record reflects that the Agreement reads, in relevant part:

Server rem.albaneseconfectionery.co must be able to control some security features on your device.
Activating administrator will allow Email to perform the following operations:
Erase all data
Erase phone's data without warning, by performing factory data reset.

Appellant's App. Vol. III p. 77.

[7] On March 13, 2017, Cwik was informed that "Albanese management had lost their confidence in [her] and were terminating [the] employment relationship." Appellant's App. Vol. II pp. 153-54. An Albanese employee escorted Cwik to her former desk to collect her personal belongings and then accompanied Cwik to the front door. Once Cwik was in her vehicle, she took out her phone and noticed that it was rebooting. She immediately proceeded to a cell phone retail store where she was informed that her phone had been restored to factory default settings. As a result, any data that had been stored on Cwik's phone was erased from that phone. Cwik emailed Albanese to request that her data be restored and was informed that the only way to regain access to the data was via a cloud backup. Cwik apparently believed that she did not utilize Apple's iCloud backup services, though they are generally automatic.3

[8] In May 2017,4 Cwik filed a complaint against Albanese alleging claims of: (1) negligence; (2) criminal mischief; (3) trespass; (4) theft5 ; (5) breach of bailment; and (6) invasion of privacy. Albanese subsequently filed a counterclaim alleging that Cwik "has brought and pursued frivolous, unreasonable, and groundless claims in this action, and [Albanese] is entitled to an award of attorney's fees incurred in defending these claims." Appellant's App. Vol. II p. 57.

[9] In June 2017, the phone at issue was destroyed after Cwik left it on the tailgate of her truck and drove away. The phone fell from the tailgate and was run over by another vehicle. The incident rendered the phone "damaged beyond the point of being able to be powered on or imaged using standard forensic procedures." Appellant's App. Vol. III p. 87.

[10] During her deposition on February 13, 2019, Cwik testified that she did have an iCloud account, and accessed the account in October 2018; she discovered that "pictures had been backed up to the cloud." Id. at 20-21. Cwik apparently attempted to download some of the files, failed to do so, and then intentionally deleted the files. Cwik testified, however, that she believed that there were no files on the iCloud account from December of 2016 until the date of her termination.

[11] Cwik further testified that many of the files she believed to have been lost were in fact accessible to her on the iCloud account; however, approximately three months of photographs and videos could not be located on her iCloud account. Cwik declined to give an estimate of how many files were still missing. Cwik did not explain her motive for erasing the files that formed the basis for her claims of loss,6 though she concedes that she "is not the most technologically proficient person." Appellant's Br. p. 27. Cwik also conceded that the allegedly missing files have no monetary value, and no value of any kind to anyone other than to her.

[12] Cwik then claimed that, even though she had permanently deleted the files, a representative from Apple was able to recover the deleted files. Consequently, the only files that remained missing were an unknown number of photographs and videos from December 2016 until Cwik's termination in March 2017.

[13] Albanese moved for summary judgment with respect to each of Cwik's six claims. Albanese argued that: (1) summary judgment was appropriate as a sanction because of Cwik's negligent and/or intentional spoliation of key evidence; (2) Cwik consented to the factory reset of her phone when she entered into the Agreement; (3) Albanese did not owe a duty of care; (4) Cwik was not entitled to recovery under the Crime Victim's Relief Act because she had admittedly suffered no pecuniary loss; (5) Cwik had failed to establish a bailment; and (6) no physical contact or intrusion of Cwik's physical space, and, thus, no invasion of privacy. Albanese further sought summary judgment on its counterclaim for attorney's fees on the grounds that Cwik's claims were frivolous, unreasonable, and groundless under Indiana Code Section 34-52-1-1.

[14] The trial court denied the motion for summary judgment as to all counts, but, in its order, addressed only one issue: whether the Agreement remained enforceable after Cwik had been terminated. Relying on a series of federal cases, the trial court concluded that the Agreement ended when Cwik's employment was terminated. Albanese now appeals.

Analysis

[15] Summary judgment is appropriate only when the moving party shows there are no genuine issues of material fact for trial and the moving party is entitled to judgment as a matter of law. Erie Indem. Co. for Subscribers at Erie Ins. Exch. v. Estate of Harris by Harris , 99 N.E.3d 625, 629 (Ind. 2018) ; see also Ind. Trial Rule 56(C). Once that showing is made, the burden shifts to the nonmoving party to designate appropriate evidence to demonstrate the actual existence of a genuine issue of material fact. See, e.g., Schoettmer v. Wright , 992 N.E.2d 702, 705-06 (Ind. 2013).

[16] When ruling on the motion, the trial court construes all evidence and resolves all doubts in favor of the non-moving party. Id. at 706. We review the trial court's ruling on a motion for summary judgment de novo, and we take "care to ensure that no party is denied his day in court." Id. "We limit our review to the materials designated at the trial level." Gunderson v. State, Indiana Dep't of Nat. Res. , 90 N.E.3d 1171, 1175 (Ind. 2018), cert. denied. We are constrained by neither the claims and arguments presented at trial nor the rationale of the trial court ruling. See, e.g., Woodruff v. Ind. Family & Soc. Servs. Admin. , 964 N.E.2d 784, 790 (Ind. 2012) ("We will reverse if the law has been incorrectly applied to the facts. Otherwise, we will affirm a grant of summary judgment upon any theory supported by evidence in the record."); Wagner v. Yates , 912 N.E.2d 805, 811 (Ind. 2009) ("[W]e are not limited to reviewing the trial court's reasons for granting or denying summary judgment but rather we may affirm a grant of summary judgment upon any theory supported by the evidence.").

I. The Agreement

[17] Each of Cwik's claims shares a common basis—that Albanese improperly reset Cwik's phone, thereby permanently erasing some of Cwik's personal files. Albanese, however, argues that Cwik entered into the Agreement, and thereby authorized Albanese to reset Cwik's phone. "Under Indiana law, a party to a contract ‘is presumed to understand and assent to the terms of the contracts he or she signs.’ " John M. Abbott, LLC v. Lake City Bank , 14 N.E.3d 53, 58 (Ind. Ct. App. 2014) (quoting Sanford v. Castleton Health Care Ctr., LLC , 813 N.E.2d 411, 418 (Ind. Ct. App. 2004), trans. dismissed (2006)).

[18] We find that Cwik consented to the terms of the Agreement, including...

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