Cook v. McGraw Davisson Stewart, LLC

• Decision Date: 05 April 2021
• Docket Number: Case No. 119,216
• Citation: Cook v. McGraw Davisson Stewart, LLC, 496 P.3d 1006 (Okla. Civ. App. 2021)
• Parties: Warren COOK, Plaintiff/Appellant, v. MCGRAW DAVISSON STEWART, LLC, an Oklahoma limited liability company, and Jean Lewis, an individual, Defendants/Appellees.
• Court: United States State Court of Appeals of Oklahoma. Court of Civil Appeals of Oklahoma

496 P.3d 1006

Warren COOK, Plaintiff/Appellant,

v.MCGRAW DAVISSON STEWART, LLC, an Oklahoma limited liability company, and Jean Lewis, an individual, Defendants/Appellees.

Case No. 119,216

Court of Civil Appeals of Oklahoma, Division No. 4.

FILED APRIL 5, 2021

Mandate Issued: July 21, 2021

Jean Walpole Coulter, WALPOLE COULTER & ASSOCIATES, INC., Tulsa, Oklahoma, for Plaintiff/Appellant

Gentner F. Drummond, Gary M. Gaskins, II, Logan L. James, DRUMMOND LAW, PLLC, Tulsa, Oklahoma, for Defendants/AppelleesMcGraw Davisson Stewart, LLC and Jean Lewis

OPINION BY STACIE L. HIXON, PRESIDING JUDGE:

¶1Warren Cook appeals summary judgment granted in favor of McGraw Davisson Stewart, LLC("McGraw") and Jean Lewis(Lewis, or collectively "Defendants"), on his negligence claim, and denial of Cook's Combined Motion to Reconsider and Vacate Order, which we treat as a Motion for New Trial.¹The appeal was assigned to the accelerated docket pursuant to Oklahoma Supreme Court Rule 1.36, 12 O.S. Supp. 2019, ch.15, app.1, without further briefing.

¶2 Cook received an email purporting to be from his real estate broker, Lewis, with directions for a wire transfer of funds to close on a purchase of property.Cook complied and fraudsters allegedly absconded with his funds.Cook alleged Lewis' account was hacked, that Defendants failed to maintain proper security on McGraw's email, and sued for damages.²The trial court granted summary judgment to Defendants, finding Cook failed to present competent evidence through expert testimony of the standard of care on which to base Cook's negligence claim, and entered judgment on August 21, 2020.Thereafter, the trial court denied Cook's Motion to Reconsider.

¶3 On review of the facts and the applicable law, we affirm the trial court's Journal Entry of Judgment of August 21, 2020 and its Order of October, 23, 2020, denying Plaintiff's Combined Motion to Reconsider and Vacate Order.

¶4 Cook appeals.

BACKGROUND

¶5 Cook retained Lewis to broker a purchase of real property in July 2016.On July 19, 2016, Cook received and complied with an email which appeared to come from Lewis' McGraw email address instructing him to wire $53,884.60 to a Bank of America account.³The email was not from Lewis.

¶6 Cook brought suit against the sender of the email, "John Doe," and against Lewis and McGraw on February 22, 2018 for negligence.He claimed that Defendants' email had been hacked, and that Defendants breached a duty to protect his personal and financial information, and were responsible for his loss of funds.

¶7Defendants moved for summary judgment on February 15, 2019, arguing, among other reasons, that Cook could not establish that McGraw's email security measures were negligent.In support, Defendants presented the following material facts, which Cook did not dispute:

– Lewis' email was administered through Google/Gmail, password protected with a two-step verification process;⁴

– Cook did no investigation to confirm whether Defendants' email system was hacked, or his own;

– Cook has no specialized knowledge, education or training related to computer, internet and/or email security systems; and did not retain an expert to evaluate the source of the hacking or whether Defendants' security measures in July 2016 met industry standards;

– Cook did not know whether the hacking incident could have been prevented if Defendants had employed a different email system or whether the Google mail system met industry standards for security in July 2016;

– The hacking incident in July 2016 was the first hacking incident involving a real estate transaction with McGraw; and McGraw and Lewis had not heard of such hacking incidents pertaining to real estate companies in the Tulsa area prior to July 19, 2016.

– Cook had no evidence that Defendants were aware of any deficiency in their security system as of July 2016, or should have been aware of such deficiency at that time.

¶8 Cook's response to Defendants' Motion for Summary Judgment proposed additional "undisputed facts," raising irrelevant issues of Defendants' insurance coverage and subsequent remedial measures, and attempted to establish a lack of training or knowledge of a McGraw email administrator concerning email security.⁵Cook provided no evidence that Lewis' email account had been hacked.His response, and subsequent arguments in the case, relied on an article from the National Association of Realtors(NAR) dated December 15, 2015, warning the reader to be on high alert for email and online fraudsters attempting to dupe parties into wire transfers.Though it was undisputed that Lewis had not seen the article, Cook argued it was evidence that an email hack was foreseeable and precluded summary judgment.The article was the subject of a motion to strike and various evidentiary motions not on appeal.

¶9The trial court initially denied Defendants' Motion for Summary Judgment on June 27, 2019, its minute order noting "a close case."On October 25, 2019, Defendants moved the court to reconsider, arguing, among other things, that Cook produced no evidence on summary judgment that its email security measures were deficient.Before the trial court ruled, the case was reassigned to Judge LaFortune.At the hearing, the court took the prior Motion for Summary Judgment under advisement, and granted Cook thirty days to supplement his response.No transcript from that hearing is available.Defendants contended in briefing below that the court had been inclined to grant summary judgment, but that Cook had represented he could provide additional evidence to survive summary judgment.

¶10 Cook filed his amended response to Defendants' Motion for Summary Judgment on March 2, 2020.The response supplied no additional evidence, but added language to Cook's responses to Defendants' various proposed statements of undisputed fact to contend that the fraudster's emails "appeared to come from Lewis' email account."Cook provided no evidence demonstrating or suggesting that Lewis' email account or computer system had been breached, or that his personal information had been obtained through Lewis' email or computer system.He did not supply evidence to demonstrate that Defendants' email security was inadequate or fell below industry standard.

¶11 On July 31, 2020, the trial court granted Defendants' Motion for Summary Judgment, finding that Cook was required to establish the standard of care for a professional in Defendants' position through expert testimony.A Journal Entry of Judgment in Defendants' favor followed on August 21, 2020.On September 2, 2020, Cook filed his Combined Motion to Reconsider and Vacate the Order Entered Herein, which the Court denied.

¶12 Cook appeals.

STANDARD OF REVIEW

¶13 Review of a court's ruling on summary judgment is a purely legal issue, and is reviewed de novo , considering the evidence and inferences to be drawn therefrom in the light most favorable to the non-moving party.SeeSmith v. City of Stillwater , 2014 OK 42, ¶ 21, 328 P.3d 1192."A trial court's denial of motion for new trial is reviewed for abuse of discretion."Reeds , 2006 OK 43, at ¶ 9, 157 P.3d 100."Where, as here, our assessment of the trial court's exercise of discretion in denying defendants a new trial rests on the propriety of the underlying grant of summary judgment, the abuse-of-discretion question is settled by our de novo review of the summary adjudication's correctness."Id .The trial court's discretion is abused when it errs with respect to a "pure, unmixed question of law."Id .

ANALYSIS

¶14 Cook's eight propositions of error may be summarized as contending that the trial court erred by reconsidering its earlier denial of summary judgment, and arguing the trial court erred as a matter of law in granting summary judgment, for the specific reasons addressed below.

A.The trial court's reconsideration of an interlocutory order denying summary judgment.

¶15 Cook contends that Defendant's Motion to Reconsider the initial denial of its Motion for Summary Judgment was properly characterized as a motion for new trial, filed more than ten days after the initial ruling, and could not be considered.As was noted in the court's Order granting summary judgment, the denial of summary judgment is interlocutory and may be revisited and/or modified by the trial court at any time prior to judgment.SeeLCR, Inc. v. Linwood Properties , 1996 OK 73, ¶ 9, n.10, 918 P.2d 1388.Myers v. Missouri Pac. R. C. , 2002 OK 60, ¶ 39, n.72, 52 P.3d 1014.Cook's proposition of error is without merit.

B.The trial court's grant of summary judgment.

¶16 Cook asserts the trial court erred by determining expert testimony was required to establish the standard of care necessary to consider Defendants' alleged breach of duty in his case.Cook also raises additional propositions of error which, read together, seem to contend the trial court erred in granting summary judgment in light of evidence presented by Cook, particularly the NAR articlehe contends demonstrated his injury was foreseeable and gave rise to Defendants' duty to protect his personal information.

¶17 First, the trial court's ruling was not based on the foreseeability of the injury and whether it supported a duty, regardless of whether it considered the NAR article, cyber security breaches in other jurisdictions, or any other evidence Cook contends the trial court should have considered for this purpose.Even if we assume Cook's injury was foreseeable and gave rise to a duty to protect him from this type of harm, Cook's claims fail because he did not present evidence sufficient to demonstrate a question of fact on other necessary elements of a negligence claim.

¶18 Cook's negligence claim required 1) a duty owed by Defendants to Cook to protect him from injury; 2) failure to perform that duty; and 3) injuries to Cook proximately caused by Defendants' failure to meet their duty of care.Smith , 2014 OK 42, at ¶ 22, 328 P.3d 1192.Cook admitted on summary judgment...