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Eric E. Hoyle v. Frederick Dimond

March 14, 2013

ERIC E. HOYLE, PLAINTIFF,
v.
FREDERICK DIMOND, ROBERT DIMOND, AND MOST HOLY FAMILY MONASTERY, A NEW YORK NOT-FOR-PROFIT CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: John T. Curtin United States District Judge

INTRODUCTION

Plaintiff commenced this action seeking damages and restitution from defendants Frederick and Robert Dimond, who operate the defendant not-for-profit corporation Most Holy Family Monastery ("MHFM") in Fillmore, New York. Specifically, plaintiff sought to recover monies he donated to MHFM allegedly in reliance on the defendants' representations regarding their affiliation with the Order of St. Benedict ("O.S.B."). In a Decision and Order dated June 22, 2012, the court granted the defendants' motion for summary judgment in part and dismissed the plaintiff's complaint, but held in abeyance that aspect of the defendants' motion in which they sought judgment on their counterclaims (Item 106). As the parties have been unsuccessful in their attempts to resolve the case through mediation, the court will now address the remainder of the defendants' motion for summary judgment (Item 89).

BACKGROUND

Plaintiff filed his original complaint on May 9, 2008 (Item 1). In it, he alleged that he learned of MHFM in 2005. Id., ¶ 15. Plaintiff investigated the monastery through its website, which stated that MHFM was a Benedictine monastery supervised by Brother Michael Dimond, O.S.B., a Benedictine monk.*fn1 Id., ¶ 16. Allegedly in reliance on this and other representations, plaintiff made contributions to MHFM of approximately $65,700 in cash and stocks worth $1.2 million, and took up residence at MHFM on September 27, 2005 . Id., ¶¶ 21, 26, 28. Plaintiff further alleged that he executed a document, at the request of defendant Frederick Dimond, specifying that he was to receive $750,000 upon his departure from MHFM. Id., ¶¶ 29, 30. Plaintiff alleged that he later learned that Frederick Dimond was not a member of the Order of St. Benedict and that MHFM was neither founded nor operated in accordance with the requirements of the Order of St. Benedict. Id., ¶ 31. Plaintiff left MHFM on December 31, 2007. Id., ¶ 33. The defendants have refused plaintiff's demand for the return of previously transferred funds. Id., ¶ 34.

Plaintiff filed an amended complaint on March 10, 2009, asserting 10 causes of action - fraud, constructive fraud/negligent misrepresentation, unjust enrichment/constructive trust, mandatory accounting, money had and received, violations of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1962(c) and (d) ("RICO"), deceptive trade practices pursuant to New York General Business Law § 349, false advertising, and vicarious liability of MHFM (Item 42). Defendants filed an answer to the amended complaint on March 20, 2009 and interposed seven counterclaims for defamation/injurious falsehood, violation of the Lanham Act, 28 U.S.C. § 1125 et seq., interference with prospective advantage/tortious interference with contract, conversion, breach of fiduciary duty, misappropriation of trade secrets, and violation of the Electronic Communications Privacy Act, 18 U.S.C. § 2510 et seq. ("ECPA") (Item 43). Plaintiff filed his reply to the counterclaims on April 9, 2009 (Item 44).

On January 6, 2012, defendants filed this motion for summary judgment, seeking dismissal of the complaint and judgment on their counterclaims (Item 89). Plaintiff's response to the motion was filed February 24, 2012 (Item 97) and defendants' reply was filed March 16, 2012 (Item 105). As stated above, the court granted the defendants' motion for summary judgment in part and dismissed the plaintiff's complaint, but held in abeyance that aspect of the defendants' motion in which they sought judgment on their counterclaims (Item 106). As the parties were unable to resolve the remainder of the case through mediation, the court will now address the motion for summary judgment on the defendants' counterclaims. For the reasons that follow, the remainder of defendants' motion for summary judgment is denied in part. Additionally, the court grants summary judgment to plaintiff, sua sponte, on defendants counterclaims under the Lanham Act and the ECPA.

FACTS*fn2

The court will assume some familiarity with the facts of this case. Briefly, in 2005, plaintiff was introduced to MHFM and visited the monastery's website (Item 89, Exh. B, hereafter "Hoyle Dep.," p. 104). At that time, plaintiff professed to follow "the Roman Catholic religion as it has been practiced throughout the centuries" and rejected what he called "the Vatican II Church" (Hoyle Dep., pp. 19-21).*fn3

In 2005, plaintiff believed it was very important to spread the MHFM message and wanted to make a monetary donation to that end (Hoyle Dep., p. 144). In e-mail correspondence to his financial advisor, plaintiff wrote that his money had become "an undesired burden" and that he fully intended to "give away the vast majority of my money to good Catholic persons and organizations" (Dimond Decl., Exh. B; Hoyle Dep., pp. 163-64). Plaintiff told his financial advisor that he wanted to make a $300,000 donation to MHFM, a group he felt deserved "some serious money" (Hoyle Dep., p. 165). Plaintiff also stated that his "financial plan for the future is quite literally to give my money away." Id., p. 166. The financial advisor convinced plaintiff to reduce the amount of the donation. Id., p. 170. Plaintiff then donated $700 to MHFM which was acknowledged by defendants in a letter (Dimond Decl., Exh. A). In June 2005, plaintiff donated $65,000 to MHFM, a contribution which was also acknowledged in writing by defendants. Id., Exh. B.

It was plaintiff's understanding that to enter MHFM, he would be required to relinquish his assets to the monastery. Plaintiff admitted that Frederick Dimond did not require that he donate all his money to MHFM (Hoyle Dep., p. 181). Defendant Frederick Dimond told plaintiff that he should chose an amount that would revert to him if he left the monastery. Id. In e-mail correspondence to Frederick Dimond dated August 30, 2005, plaintiff stated that he needed to keep money in reserve to pay capital gains taxes. He also stated that he planned "to give the vast majority of my holdings as an outright gift" to MHFM and that he wished to receive "around $30,000" if he departed MHFM (Dimond Decl., Exh. C). In his Declaration, Defendant Frederick Dimond stated that plaintiff ultimately decided to make all of his assets an outright gift to MHFM, as well as his future inheritance assets. Id., ¶ 26. Plaintiff recommended to defendants that MHFM hold his donation in a stock account so that they would have easier access to it (Hoyle Dep., p. 182). In the August 2005 e-mail to Frederick Dimond, plaintiff did not suggest that any portion of his gift be reserved to revert back to plaintiff upon his departure. Id., p. 183.

Plaintiff visited MHFM twice during the summer of 2005 and entered the monastery in September 2005 (Hoyle Dep., pp. 50-51). While at MHFM, plaintiff assisted the defendants in updating and maintaining their website. Id., p. 53. He was involved in production work associated with radio discussions and debates about Catholicism. Id. Plaintiff answered the telephone at MHFM and discussed religious issues with callers. Id., p. 57. He managed MHFM's online store, handled all telephone, internet, and mail-generated orders and managed MHFM's database of customers, clients, supporters, and benefactors (Dimond Decl., ¶ 49).

In November 2005, plaintiff made a donation to MHFM of stock worth $1,233,100 which was acknowledged in writing on March 27, 2006 (Item 89, Dimond Decl. Exh. D). In e-mail correspondence from his tax preparer dated January 91, 2006, plaintiff was advised that the tax preparer treated plaintiff's stock donation "as gifts to qualifying 501(c)(3) organizations" and that he needed a receipt from MHFM before his 2005 taxes could be filed (Item 89, Dimond Decl., Exh. E). At the time of this transfer of stock to MHFM, plaintiff reserved several hundred thousand dollars of additional assets in his own name (Hoyle Dep., p. 223). There was no written agreement regarding an amount of that transfer to MHFM that would be reserved and returned to plaintiff upon his departure. Id.

In April 2006, plaintiff intended to make another million dollar donation to MHFM when he received the assets of a trust fund. At that time, plaintiff prepared a second document that acknowledged a gift to MHFM of $750,00.00. Frederick Dimond testified that this second receipt was prepared based on the expectation of an additional million dollar gift and that, should it receive another million dollars from plaintiff, MHFM would have "the flexibility to possibly give him $438,000 back" if he left the monastery (Item 97, Dimond Dep., p. 65).*fn4 Defendant Dimond stated that there was never any agreement, either written or verbal, or any "guarantee that [plaintiff] would receive money back" if he left MHFM Id., pp. 64-65. Plaintiff's mother and grandmother blocked the transfer of the additional million dollars to plaintiff until he reached age 35 (Hoyle Dep., pp. 78-79). On October 1, 2007, defendants acknowledged plaintiff's additional gift of stock worth $307,989 (Item 89, Dimond Decl., Exh. F). Plaintiff's tax filings for 2005 indicate that plaintiff made a charitable donation to MHFM of $750,000. Id., p. 233.*fn5 Plaintiff's 2006 tax return indicated a charitable donation to MHFM of $307,989. Id., p. 234.*fn6

In December 2007, defendant Frederick Dimond decided to move MHFM's stocks and investments from M&T Securities to a Scottrade account and to give plaintiff the authority to transfer funds (Dimond Decl., ¶ 50; Hoyle Dep., p. 62-63). Plaintiff testified that on December 30, 2007, he read an article on mass attendance by a former member of MHFM and decided that defendants' position on this issue was wrong (Hoyle Dep., pp. 50, 60). He did not discuss his disagreement with the defendants, but abruptly decided to leave MHFM. Id., p. 60. On the morning of December 31, 2007, plaintiff attempted to transfer funds online from MHFM's Scottrade account into his personal bank account, but was unable to do so because the transaction required a second signature. Id., p. 66. Later that day, after he left MHFM, plaintiff telephoned the Scottrade office in Rochester, New York, but the representative would not discuss the account with him. Id., p. 68.

When he left MHFM, plaintiff took business records with him, including MHFM's bank and investment account records and customer and donor information (Dimond Decl. ¶ 55). Plaintiff stated that he left MHFM hurriedly and did not have the opportunity to separate MHFM property from his personal property (Item 97, ¶ 40). He also explained that he promptly offered to return MHFM property to the defendants. Id., ¶ 41. Plaintiff took the laptop computer that housed much of MHFM's business information and stated that defendants did not immediately assert ownership of the computer. Id., ¶ 44. After leaving MHFM, plaintiff telephoned the New York State Police and reported that the defendants had stolen approximately $460,000 or $470,000 from him (Hoyle Dep., pp. 210-11). State Trooper LaRose asked plaintiff if he had a written agreement regarding the return of funds, and plaintiff could not recall if there was such a document. Id., p. 212.

At his deposition, plaintiff testified that he believed he was entitled to the return of money in an amount agreed upon in a conversation he had with Frederick Dimond in approximately April 2006 (Hoyle Dep., p. 71). Plaintiff further testified that he prepared a handwritten document in which he stated that he was to receive $750,000 if he were to leave MHFM. Id., p. 74. Plaintiff does not have the document and does not know whether it was ever signed. Id., p. 75.

Following his departure from MHFM, plaintiff set up his own website that condemned MHFM as heretical (Item 55, ΒΆ 59, Exhs. J, K). Plaintiff admitted that he contacted MHFM supporters, but denied that he used ...


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