Seidl v. Greentree Mortg. Co., CIV. A. 97-WY-2087-A.
| Decision Date | 18 October 1998 |
| Docket Number | No. CIV. A. 97-WY-2087-A.,CIV. A. 97-WY-2087-A. |
| Citation | 30 F.Supp.2d 1292 |
| Parties | Matthew L. SEIDL, Plaintiff and Counterclaim Defendant, v. GREENTREE MORTGAGE COMPANY, Defendant and Counterclaim Plaintiff, v. Shirley Sostre, Counterclaim Defendant, and Mark Van Keuren, individually and d/b/a Modern Computing Concepts, Third Party Defendant. |
| Court | U.S. District Court — District of Colorado |
Philip L. Dubois, Philip L. Dubois, Shirley Sostre-Oquendo, Sostre Law Office, Boulder, CO, for Matthew L. Seidl.
Rebecca L. Fischer, Chrisman, Bynum & Johnson, P.C., Boulder, CO, Patti Elaine Evans, Isaacs & Evans, PC, New York, NY, for Greentree Mortgage Company.
ORDER CONSTRUING COUNTERCLAIM DEFENDANT SHIRLEY SOSTRE'S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM AS MOTION FOR SUMMARY JUDGMENT AND GRANTING MOTION FOR SUMMARY JUDGMENT, GRANTING IN PART SEIDL'S MOTION FOR SUMMARY JUDGMENT AND GRANTING DEFENDANT GREENTREE'S MOTION FOR SUMMARY JUDGMENT
This matter came before the court on counterclaim defendant Shirley Sostre's Motion to Dismiss and the cross-motions for summary judgment filed by plaintiff/counterclaim defendant, Matthew Seidl and defendant/counterclaim plaintiff Greentree Mortgage. In addition, to the extent that her motion to dismiss does not resolve the counterclaim filed against her, counterclaim defendant Shirley Sostre has also filed a motion for summary judgment on Greentree's counterclaim against her.
Most of the facts are undisputed, although the significance of those facts is disputed. The following facts are undisputed except where noted. Defendant Greentree Mortgage Company (Greentree), is in the mortgage business. In December of 1996, it hired Mr. Mark Van Keuren, a sole proprietor conducting business under the name Modern Computing, on a one-time basis to advertise its mortgages by means of a bulk e-mail advertising campaign.
Greentree provided Van Keuren the body of the advertisement, which contains Greentree's 800 telephone number and its e-mail address "MFGTM@AOL.COM." The body of the advertisement provided by Greentree does not contain the disputed "localhost" address.
Other than this one-time hiring, Greentree has no connection with Mr. Van Keuren. It paid him a flat fee to send the advertisement to a set number of E-mail users — during December of 1996 or January 1997. The time and manner of sending the e-mail as well as the choice of recipients, was up to Mr. Van Keuren who used his own equipment and his own mailing list.
When Mr. Van Keuren prepared Greentree's advertisement for e-mail, he placed the address "nobody@localhost.com" in both the "From" and "Reply to," or return, path fields. These path fields are identifiers for the computer system from which e-mail is delivered. It is undisputed that it was Mr. Van Keuren who chose the name for the "from" and the "reply to" path fields and who configured the e-mail headers to include them.
In January of 1997, Mr. Van Keuren sent out Greentree's advertisement soliciting business to thousands of e-mail addresses. All e-mails sent to inaccurate addresses "bouncedback, like return mail, to the localhost address Mr. Van Keuren had placed on the advertisement." Similarly, all recipients who clicked on the reply button automatically sent replies to the nobody@localhost address.
Plaintiff, Matthew Seidl, is a graduate student in computer science at a Colorado university. In 1995, Mr. Seidl registered "nobody@localhost.com," as a domain name for something named Wraith Interprises (Wraith). In his deposition, Mr. Seidl testified that Wraith is a d/b/a he developed, but hasn't used.
Domain names are registered with Network Solutions, Inc. (NSI), an entity authorized by the federal government to keep track of all Internet addresses. The parties dispute the effect of such registration. Greentree says registration grants no exclusive rights to use a name. Mr. Seidl says it does.
Greentree has submitted evidence that the "nobody@localhost.com" name Mr. Seidl registered is a generic name, like John Doe, conventionally not assigned to any real person and used as an addressing convention for e-mail or other network traffic for special purposes such as to loop back data. Smallberg Aff. ¶ 5. Often, mail software is configured to discard messages addressed to nobody. Id. Mr. Seidl testified in his deposition he registered the "nobody@localhost" name as gag or to keep a telemarketer from getting the name. Very early after registering it he began to receive misdirected replies.
In his Complaint, Mr. Seidl alleges the "from" and "reply to" path fields of the e-mail headers on Greentree's advertisement were intentionally "mis-configured" or "forged" to contain the nobody@localhost address or domain name so that the misdirected mail would not "bounce back" to the sender. Mr. Seidl alleges that his computer received over 7,000 bounce backs from the Greentree e-mail advertisement. Mr. Seidl claims his computer memory was fully taxed by replies that were often profane and insulting and directed to him1 and that as a result of the incoming messages he was unable to use his computer for three days. Mr. Seidl also claims his reputation among the Internet community suffered because he was identified as the sender of the e-mail advertisement (the "spam").
Shirley Sostre is a Colorado attorney. Mr. Seidl and Ms. Sostre did not meet or communicate until after he began to receive the bounce backs from Greentree's e-mail advertisements in January 1997.
Sending bulk e-mail advertising, or spam, is a controversial and much maligned practice — currently the subject of legislative action in Congress and various state legislatures.2
Plaintiff Seidl brings the following eight claims for relief against Greentree: (1) violations of the Deceptive Trade Practices Act under Colo.Rev.Stat. § 6-1-105 alleging it was deceptive to imply that Seidl, through a domain name registered to Wraith, was somehow connected with the bulk e-mail; (2) trespass to chattel (by tying up his computer for three days); (3) negligence in breaching an asserted duty not to cause the owner of the nobody@localhost.com domain name damage; (4) negligence per se for alleged violation of Colorado's Computer Crime Act, Colo. Rev.. Stat. § 18-5.5-102; (5) negligent hiring alleging that Greentree should have determined that Mr. Van Keuren would not employ "unlawful" means to send the advertisement; (6) violation of plaintiff's right of publicity by using Mr. Seidl's name (really Wraith's name) without consent; (7) false light invasion of privacy alleging that Greentree made thousands of e-mail recipients believe Mr. Seidl was somehow connected with the junk e-mail because of the use of the domain name; and, (8) violations of 47 U.S.C. § 227 — the Junk Fax law by use of "telephone facsimile machine", which plaintiff contends includes e-mail under the definition in the statute, 42 U.S.C. § 227(a)(2)(B). Plaintiff dismissed his claim for outrageous conduct.
Greentree brings seven counterclaims against Mr. Seidl and his attorney, Ms. Sostre. Greentree's first four counterclaims are brought under Title IX of the Organized Crime Control Act of 1970, the Racketeering Influenced Corrupt Organizations Act or RICO, 18 U.S.C. § 1962, alleging Ms. Sostre has conspired with her client in a scheme to extort money from innocent advertisers who use the Internet.
Greentree also brings the following counterclaims under Colorado law: libel per se alleging defamation by Mr. Seidl's and Ms. Sostre's publicity of claims against Greentree by use of press releases on the Internet); false light invasion of privacy; and, interference with prospective contractual relations alleging Greentree lost business because certain persons chose not to do business with it as a result of the publicity of it as an organization that engages in spamming.
Greentree Mortgage also filed a third-party complaint against Mark Van Keuren, individually, and d/b/a Modern Computing Concepts as third-party defendants. Mr. Van Keuren filed a pro se answer but otherwise has not participated in this case. Greentree's Third-party Complaint is not the subject of any of the motions currently before the court.
The standard for dismissal under Fed. R.Civ.P. 12(b)(6), is as follows:
In considering a motion to dismiss, a court must take the allegations of the complaint at face value and must construe them most favorably to the plaintiff. A court should not grant a motion to dismiss unless it appears beyond doubt that the plaintiff could prove no set of facts supporting the claim which would entitle the plaintiff to relief.
Huxall v. First State Bank, 842 F.2d 249, 250-251 (10th Cir.1988).
Because the parties have submitted, and the court has considered, matters outside the pleadings in connection with the Motion to Dismiss, the court will convert the motion to one for summary judgment. Because Ms. Sostre filed a separate Motion for Summary Judgment on all of the same issues covered by her Motion to Dismiss, additional notice to the parties is not required.
The standard for the grant or denial of summary judgment is well known:
[S]ummary judgment is appropriate if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. If the movant bears the burden of showing the absence of a genuine issue of material fact, the nonmovant may not rest on its pleadings but must set forth specific facts showing a genuine issue for trial as to those...
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