Miletak v. Acuity Mutual Insurance Company

Background

Nick Miletak, proceeding without a lawyer, sued Acuity Mutual Insurance Company for defamation, intentional infliction of emotional distress, and intentional interference with economic advantage. Miletak alleged that Darcel Lang, an Acuity employee, falsely reported him to his employer concerning alleged improper conduct related to an insurance claim made by Miletak’s goddaughter. He alleged that the report caused humiliation and led him to resign.

Miletak filed the case in Santa Clara County Superior Court on November 10, 2021. Acuity answered, and Lang filed a defamation cross-claim against Miletak. The defendants later removed the case to federal court. The court considered four motions: Miletak’s motion to remand, motion to dismiss Lang’s cross-claim, and motion to strike that cross-claim under California’s anti-SLAPP law; and the defendants’ motion to declare Miletak a vexatious litigant, meaning a litigant subject to restrictions on future filings.

Motion to Remand

The court denied Miletak’s motion to remand. It found that federal diversity jurisdiction existed because the parties were citizens of different states and the amount in controversy exceeded $75,000.

The court found complete diversity based on Miletak’s alleged California citizenship, Acuity’s alleged citizenship, and Lang’s alleged Nevada citizenship. It also found that the amount-in-controversy requirement was met because Miletak had made an earlier settlement demand for more than $75,000, including an initial demand of $247,000. The court concluded that reducing the demand later did not avoid federal jurisdiction.

The court also denied the defendants’ cursory request for sanctions against Miletak under Federal Rule of Civil Procedure 37 for filing the remand motion.

Motion to Dismiss Lang’s Cross-Claim

The court granted Miletak’s motion to dismiss Lang’s defamation cross-claim with leave to amend. A motion under Rule 12(b)(6) tests whether a pleading states a legally sufficient claim, assuming well-pleaded factual allegations are true.

The court first found that Miletak’s motion was filed two days late but granted him a one-time two-day extension because he was representing himself. The court then rejected Miletak’s argument that Lang had not identified the allegedly defamatory statements with enough detail. It found that Lang had identified three sources and the substance of the alleged statements: Miletak’s lawsuit, a complaint to the Nevada Department of Insurance, and a letter to Acuity representatives concerning alleged misuse of Acuity resources.

The court nevertheless found that the cross-claim, as currently pleaded, challenged communications protected by California’s litigation privilege. The court explained that this privilege generally protects communications made in or related to judicial or quasi-judicial proceedings, as well as certain good-faith communications made before litigation. It concluded that the lawsuit, the complaint to the Nevada Department of Insurance, and the letter to Acuity representatives containing the factual basis for Miletak’s claims and a settlement demand were protected communications.

Because the court found that the cross-claim was subject to dismissal, it granted the motion to dismiss with leave to amend. If Lang amended the cross-claim, she would have to plead how the statements fell outside the litigation privilege. The court stated that amendment was not clearly futile, but advised Lang to consider carefully whether she could amend adequately.

Anti-SLAPP Motion

The court denied Miletak’s motion to strike Lang’s cross-claim under California’s anti-SLAPP statute without prejudice to renewing the motion against an amended cross-claim. The court deferred consideration because it had found that the current cross-claim was inadequately pleaded.

The court explained that an anti-SLAPP motion generally involves a two-step analysis: first, whether the claim arises from protected speech or petitioning activity; and second, whether the claim is legally sufficient and supported by evidence showing a probability of prevailing. The court stated that Lang could amend the cross-claim, if she chose to do so, and that the anti-SLAPP motion could then be considered against the amended pleading. The court also observed that the allegations appeared to involve protected activity and that Lang would need summary-judgment-style evidence of a probability of prevailing at the second step.

Vexatious-Litigant Motion

The court denied the defendants’ motion to declare Miletak a vexatious litigant. The defendants sought to extend a previous filing restriction involving certain claims against AT&T, Pacific Bell, or their subsidiaries or employees to this case and these defendants.

The court explained that before imposing a pre-filing restriction, it must consider whether the litigant received notice and an opportunity to respond, whether there was an adequate record, whether the claims were frivolous or harassing, and whether any restriction was narrowly tailored. The court found that it could not evaluate whether Miletak’s claims in this relatively new case were frivolous or meant to harass. The defendants had answered the complaint, and the case was still in its early stages. Miletak’s previous litigation history and earlier restrictions did not establish that these claims were frivolous or harassing.

Order and Effect

The court ordered that Miletak’s motion to dismiss Lang’s cross-claim was granted with leave to amend; Miletak’s motion to strike was denied without prejudice to renewal against an amended cross-claim; and the defendants’ motion to declare Miletak a vexatious litigant was denied. Lang was required to file an amended cross-claim within 30 days if she chose to amend. The court stated that failing to file a timely amended cross-claim or address the identified deficiencies would result in dismissal of the cross-claim with prejudice.

Judge Beth Labson Freeman also warned the parties that personal attacks and unwillingness to cooperate in basic litigation procedures could result in sanctions.