Russell v. Maman

Background

Stephen Russell sued security consultants and associated parties after hiring them following a break-in at his San Francisco home and concerns about possible surveillance and threats. The consultants included Nir Maman, George Akkelquist, and Ryan Micheletti. Russell alleged that they exaggerated their qualifications, the threats to him, and the work they performed. He also challenged an invoice that referred to an additional $2 million payment.

Russell asserted 10 claims, including claims involving racketeering, fraud, breach of contract, unfair business practices, and negligence. Maman filed claims against Ronen Shlomo, his subcontractor, and against Russell. Shlomo filed claims against Russell for unpaid fees and indemnification. The order addressed only the claims involved in DFW’s and Shlomo’s summary-judgment motions.

Legal standard

Under Federal Rule of Civil Procedure 56, summary judgment is proper when there is no genuine dispute about a fact that could affect the result and the moving party is entitled to judgment under the law. The court must view the evidence and reasonable inferences in favor of the party opposing the motion, but that party must offer enough evidence for a reasonable jury to rule in its favor.

DFW’s motion

Russell asserted all 10 of his claims against DFW Metroplex Training Academy. The court granted DFW’s motion on all of them.

The court found that DFW’s owner, Mary Bull, had only limited and indirect involvement with Russell-related activities. Bull did not communicate with Russell, and Russell’s counsel acknowledged at oral argument that there was no evidence Bull intended to defraud him. The court therefore granted judgment on Russell’s fraud-based claims, intentional infliction of emotional distress claim, and racketeering claim.

The court also granted judgment on Russell’s breach-of-contract, unjust-enrichment, and common-count claims. Russell acknowledged there was no agreement between him and DFW. The court further found that Russell had not conferred a benefit on DFW in a way that would make it unjust for DFW to retain money it received for bookkeeping, and that the common-count claim failed for the same reasons.

The court separately considered Russell’s unfair-competition and professional-negligence claims. It assumed that DFW’s website biographies for Akkelquist and Maman might have been misleading, but found that DFW had advertised them as instructors rather than advertising the security services Russell purchased. Russell also could not remember whether he had viewed DFW’s website before hiring them. The court concluded that he could not show that DFW’s advertising harmed him.

For professional negligence, the court held that Russell could not establish that DFW owed him a duty. The court applied the general rule against recovering purely economic losses from negligence absent a special relationship and found no such relationship here. It also held that DFW’s conduct was not the proximate cause of Russell’s damages because the alleged conduct by other defendants was an unforeseeable intervening cause.

Maman’s claims against Shlomo

Shlomo sought summary judgment on Maman’s third-party claims for breach of oral contract, interference with contract, indemnity, and fraud. Maman did not oppose the motion and had not responded to requests for admission. The court granted Shlomo’s motion on all of Maman’s claims against him.

The court found that Maman had not shown that Shlomo breached an oral contract by failing to provide reports, because the evidence indicated that the agreement required close physical protection services and did not require reports. The court also found no evidence that Shlomo caused Russell to fire Maman. Russell testified that he fired Maman because he believed Maman had conned him and specifically said the firing was unrelated to Shlomo.

The court rejected Maman’s fraud claim based on evidence that Russell did not care about licensing, that Shlomo prepared a more detailed background report, that Maman was paid for it, and that Russell did not fire Maman because of the duplicate report.

Shlomo’s claims against Russell

Shlomo sought judgment against Russell to enforce a written agreement for security services and indemnification. The agreement provided for $87,500 in services, unpaid bills, monthly interest on unpaid amounts, and indemnification for costs arising from lawsuits such as Maman’s suit.

Russell did not oppose the motion except to dispute the interest amount, and he did not respond to Shlomo’s requests for admission. The court found that Russell’s payments to Maman did not cover the separate agreement he later signed with Shlomo. It granted Shlomo’s motion and held that the contractual damages and interest were owed.

Disposition

The court granted DFW’s summary-judgment motion and granted Shlomo’s two summary-judgment motions. The order did not resolve every claim in the case; it addressed the claims included in those motions.