Vista Mktg., LLC v. Burkett

• Decision Date: 04 February 2016
• Docket Number: No. 14–14068.,14–14068.
• Citation: 812 F.3d 954
• Parties: VISTA MARKETING, LLC, Plaintiff–Appellant Cross–Appellee, v. Terri A. BURKETT, Defendant–Appellee Cross–Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

812 F.3d 954

VISTA MARKETING, LLC, Plaintiff–Appellant Cross–Appellee,

v.Terri A. BURKETT, Defendant–Appellee Cross–Appellant.

No. 14–14068.

United States Court of Appeals, Eleventh Circuit.

Feb. 4, 2016.

Dorothy Easley, Easley Appellate Practice, PLLC, Miami, FL, Richard C. Alvarez, Alvarez Garcia, Tampa, FL, for Plaintiff–Appellant Cross–Appellee.

Jeffrey W. Gibson, Macfarlane Ferguson & McMullen, PA, Tampa, FL, Joshua Magidson, Macfarlane Ferguson & McMullen, PA, Clearwater, FL, for Defendant–Appellee Cross–Appellant.

Before ROSENBAUM and FAY, Circuit Judges, and MIDDLEBROOKS,^* District Judge.

ROSENBAUM, Circuit Judge:

The Founders of our country had great faith in the jury system. See U.S. Const. amend. VII. So did the Congress that enacted the Stored Communications Act, 18 U.S.C. §§ 2701 –2712 (the "SCA" or "Act"), choosing to leave the award of damages under the Act's civil provisions almost entirely to the jury.

In this SCA case, the jury concluded that Defendant–Appellee–Cross–Appellant Terri Burkett violated the Act when, in accordance with her lawyer's advice, she viewed her ex-husband Plaintiff–Appellant–Cross–Appellee Franklin Burkett's emails in an effort to prove to the divorce court that Franklin¹ was lying about and hiding assets. But, under the circumstances, the jury decided not to award Franklin any damages at all—neither actual nor punitive damages.

Dissatisfied with the jury's verdict, Franklin appealed to the district judge to award him hundreds of thousands of dollars in statutory damages. The district judge declined, awarded a more modest amount, and refused to award Franklin attorney's fees.

Now Franklin asks us to give him punitive damages, increase his award of statutory damages to at least $450,000, and award him attorney's fees. But the jury and Congress have spoken. And we have no authority to award actual or punitive damages when the jury has rejected the entry of such an award. Nor, under the SCA, do we (or the district court) have authority to award statutory damages in the absence of actual damages. For these reasons, we affirm the determination of the district court not to award punitive damages, and we vacate the district court's judgment to the extent that the court awarded statutory damages in the absence of actual damages. Finally, we find no abuse of discretion in the district court's denial of attorney's fees, so we affirm that ruling.

I.

A.

Franklin and Terri Burkett were married on January 21, 1995. The Burketts had their share of turmoil during their marriage, although they were able to stay together for as long as they did with the assistance of counseling. According to Terri, as part of the counseling, the Burketts' counselor recommended that the couple share everything, including passwords to email accounts in an effort to make their marriage an "open book." So Franklin gave Terri his password to his Vista web mail account and authorized her to access it.

Time passed, and a few years later, after discovering that Franklin allegedly had an extramarital affair, Terri filed for divorce on February 17, 2010. The divorce proceedings were extremely contentious, lasting over three years, with great animosity between the Burketts. As Franklin explained in his own words, "I will stay the course, fight for every penny I can get at all costs...." Franklin threatened to leave his wife "penniless" even though the couple had three children together,² including one with special needs. He also promised to "accuse [Terri] of doing all kinds of stuff and [to do] anything [Franklin could] do to make [Terri] uncomfortable."

B.

During the divorce proceedings, the valuation of Vista became a primary issue. Previously, in 2007, the Burketts had established Vista, a telemarketing company. Franklin was the managing member of Vista. As for Terri, while she described herself as an owner of Vista, she was not a managing member, director, or employee of the company. Nevertheless, Terri assisted in the formation of Vista by helping to find a location for the business, contributing to furnishing the office space, and writing scripts for the telemarketers to use during business calls.

In late September of 2011, Franklin filed a financial affidavit in which he asserted that Vista was likely going to close due to a continued downturn in its sales and losses and invoked this alleged circumstance as a reason to reduce his support obligations. In response, the divorce court held a hearing on October 4, 2011, during which Franklin testified that Vista had closed. This testimony came as a complete surprise to Terri and her divorce attorney, Joseph Park, because they both claimed to know of Vista's ongoing business success.

Terri suspected that her estranged husband was lying about the financial status of Vista and sought to obtain information to prove that Vista was a thriving business. She recalled the Vista web mail account and decided to begin accessing her husband's Vista email account, frank@vistamktg.net. According to Terri, she had had the password since 2007, when the business first opened, and had accessed the email previously during their marriage.

Terri began regularly accessing the Vista web mail account to read her husband's emails from October 2011 until May 2012. As Terri explained her practice in reviewing the emails, she "may have" looked at emails before Franklin opened them, "but most of the time" she did not read them until after he had opened them first.

After viewing the emails, Terri concluded that Franklin had been lying about Vista's financial health. As Terri described the emails, they showed that Franklin had signed new contracts, and they evidenced discussions between Franklin and his brother about switching salaries, taking business offshore, and opening new offices.

Terri informed her divorce attorney, Park, that she had been accessing her husband's work emails through Franklin's email password. When Park asked Terri for how long she had had access to the emails, Terri responded, "Since 2007." After a discussion, Park advised Terri that she could legally continue to access the email account as long as she did not read any communications between Franklin and his divorce attorney. Park also instructed Terri to print all relevant emails and place them in a notebook organized by subject and date.

Terri followed Park's instructions and later gave the emails to Park, who then provided them to an expert to value the marital assets, including assessing the financial health of Vista. Contrary to Franklin's contentions that Vista was virtually worthless, Terri's expert in the divorce proceedings valued the business at approximately $3 million, after reviewing the emails and other materials.

During Terri's May 8, 2012, deposition, Park provided Franklin's counsel with a binder containing copies of all of the Vista emails that Franklin had accessed.

Following the production of the emails, Franklin's divorce lawyer sought for Terri to produce the computer on which she had accessed Franklin's emails. Terri was unable to produce the hard drive since her stepfather Robert Fischer had disposed of it. She had asked her stepfather to take her personal computer to a computer business to have it "cleaned" on the day of her May 10, 2012, deposition. Id. Fischer took the computer to Safety Harbor Computers to obtain a new hard drive, and he disposed of the old hard drive by throwing it out in a dumpster. No backup copy existed. Id. Terri stated that she neither instructed nor intended for her stepfather to dispose of the old hard drive. Rather, she sought to "clean" the computer of certain materials that her husband had placed on it so that her children would be able to use the computer. She further indicated that she thought that the old hard drive had been "backed up."

C.

On June 28, 2013, the divorce court entered a final judgment of dissolution of marriage. In its judgment, the divorce court found that both Burketts owned Vista. The divorce court valued the business at $2,850,000, and, in its distribution of the marital assets, it awarded the couple's 75% interest in Vista to Franklin.

Elsewhere in the Judgment, the divorce court noted that it had examined the emails and text messages. Based on its review and the evidence adduced at trial, the divorce court concluded that Franklin had "[l]ied and misled the [divorce court] by testifying that [Vista] had ‘closed’ even though there was evidence that it continued to operate" and that Franklin had "swor[n] that his income had significantly decreased when in fact there was written evidence that his income remained the same throughout the applicable time period." The divorce court further found that during the time when he claimed Vista would be closing and his income was diminishing, Franklin was actually shopping for homes valued between $800,000 and $975,000; traveling extensively, including to Monaco and the French Riviera; and seeking to buy an engagement ring valued at more than $100,000 for his girlfriend. In addition, the divorce court determined that Franklin had "[m]anipulated witness testimony during his brother, Tom Burkett's, deposition by text messaging him the desired answers from another room" and had engaged in other deceitful behavior during the course of the divorce proceedings. Finally, the divorce court found that Franklin had "[c]onspired to secrete and dissipate assets by moving them to offshore accounts."³

Franklin appealed the Judgment of the divorce court, and Florida's Second District Court of Appeal later affirmed.

D.

About a month after the divorce court entered its final judgment, on July 23, 2012, Vista sued Terri, alleging that she violated the Stored Communications Act, 18 U.S.C. §§ 2701 –2712, when she accessed Vista's web mail account and Franklin's Vista email account during the divorce proceedings.⁴

The case proceeded to a three-day jury trial. Prior to trial, however, Terri filed a motion in limine seeking to prevent Vista from...