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Leventhal v. Schenberg

United States District Court, N.D. Illinois, Eastern Division

January 17, 2013

Howard LEVENTHAL, Plaintiff,
v.
Gene Byron SCHENBERG, Richard F. Huck, III,[1]Michael J. McKitrick, Danna McKitrick, PC, Patrick G. Somers,[2]NetSecure Technologies, Ltd., and Daniel McCann, Defendants.

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[Copyrighted Material Omitted]

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Howard Leventhal, pro se.

Richard Huck, Danna McKitrick, P.C., St. Louis, MO, for Defendants.

MEMORANDUM OPINION AND ORDER

JAMES F. HOLDERMAN, Chief Judge:

In his Second Amended Complaint, plaintiff Howard Leventhal (" Leventhal" ) alleges that defendants Gene Byron Schenberg (" Schenberg" ), Richard F. Huck, III (" Huck" ); Michael J. McKitrick (" McKitrick" ), and Danna McKitrick PC (" Danna McKitrick" ) are liable for malicious prosecution (First Cause of Action) and abuse of process (Second Cause of Action); that

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Schenberg is liable for copyright infringement (Third Cause of Action); that defendants NetSecure Technologies, Inc. (" NetSecure" ) and Daniel McCann (" McCann" ) are liable for contributory copyright infringement (Fourth Cause of Action) and vicarious copyright infringement (Fifth Cause of Action); and that all Defendants are liable for unfair competition (Sixth Cause of Action). (Dkt. No. 94 (" 2d Am. Compl." ).)

Now pending before the court is the " Motion to Dismiss Plaintiff's Second Amended Complaint Pursuant to Rule 12(b)(6) of Defendants Gene Byron Schenberg, Richard F. Huck, III, Michael J. McKitrick, Danna McKitrick, P.C., NetSecure Technologies, Ltd. and Daniel McCann." (Dkt. No. 97 (" Defs.' Mot" ).) For the reasons set forth below, Defendants' motion is granted.

BACKGROUND

When ruling on a motion to dismiss, the court accepts the factual allegations set forth in the complaint as true and draws all reasonable inferences in favor of the plaintiff. Fednav Int'l Ltd. v. Continental Ins. Co., 624 F.3d 834, 837 (7th Cir.2010). The following background facts are therefore set forth as alleged in Leventhal's Second Amended Complaint.

Leventhal is a former officer of two now-dissolved Illinois corporations named BitzMart, Inc. (" BitzMart" ) and Primecom Interactive, Inc. (" Primecom" ). (2d Am. Compl. ¶ 6.) Schenberg was employed at both companies, first as a contract sales and marketing service provider for Primecom and later as Chief Marketing Officer for BitzMart. ( Id. ) Both BitzMart and Primecom " created, developed, and sold software products to businesses and in retail outlets." ( Id. ) Schenberg is currently employed with defendants NetSecure and McCann. ( Id. ¶ 16.)

Schenberg resigned as BitzMart's Chief Marketing Officer in 2002. ( Id. ¶¶ 6, 14.) When he left BitzMart, Schenberg took with him, without permission, certain computer files containing " proprietary lists of customers and detailed customer information and sales information which belonged to Leventhal and were made available to BitzMart on a royalty-free basis." ( Id. ¶ 14.) From 2002 to the present, Schenberg has " repeatedly used the files [and] displayed the files for the purpose of accessing information about BitzMart's former clients ... up to and including the present day and his current employment with Defendants NetSecure and McCann." ( Id. ¶ 16.)

Leventhal and Schenberg have been engaged in extensive litigation against each other for approximately ten years, beginning in 2002 when Schenberg sued BitzMart in the Circuit Court of St. Louis County, Missouri, for $60,000 in unpaid wages (Case No. 2102CC-0016362CV (" Wages Case" )) and BitzMart filed counterclaims against Schenberg for conversion, computer tampering, violations of the Computer Fraud and Abuse Act, cyber trespass, and tortious interference. ( Id. ¶ 10; see also Dkt. No. 94-1, Pl.'s Ex. D (" Table of Litigation Cases" ),[3] Refs. 1-2.) Schenberg prevailed at trial after his attorney, Huck, intentionally scheduled the trial for a date he knew Leventhal could not attend court. ( Id. ¶ 21.) Schenberg was awarded a judgment of $284,171.69 in the Wages Case, along with a finding that BitzMart was Leventhal's " alter ego." ( Id. ¶ 22; Table of Litigation Cases, Refs. 1-2.)

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From December 2003 through July 2011, Leventhal filed at least six cases against Schenberg in various courts, in addition to the case now pending before this court, alleging claims for conspiracy, conversion, copyright infringement, tortious interference, abuse of process, fraud, collusion, unpaid wages, and involuntary servitude. (Table of Litigation Cases, Refs. 3-6, 9, 15-16.)

In April 2004, Schenberg filed a case against Leventhal for abuse of process and malicious prosecution in the Circuit Court of St. Louis County, Missouri (Case No. 04CC-1483 (" Malicious Prosecution Case" )). ( Id., Ref. 7.) Schenberg prevailed in the Malicious Prosecution Case, and was awarded a judgment of $71,895 in actual damages and $200,000 in punitive damages. ( Id. ) Schenberg was also awarded $5,000 in attorney's fees for Leventhal's improper attempt to remove the Malicious Prosecution Case to federal court. ( Id., Ref. 10 (Case No. 06-C-0749 (N.D.Ill.) (" Removal Case" ) (Kendall, J.)).)

On March 22, 2010, Leventhal and his former wife, Malgorzata J. Kubiak (" Kubiak" ), filed a petition for Chapter 7 bankruptcy in the Northern District of Illinois. (2d Am. Compl. ¶ 12; Table of Litigation Cases, Refs. 11-12 ( In re Leventhal, Case No. 10-B-12257 (Bankr.N.D.Ill.) (" Bankruptcy Case" )).) Leventhal and Kubiak received their bankruptcy discharge on June 30, 2010. (Bankruptcy Case, Dkt. No. 33.) [4] More than a year later, on July 8, 2011, Schenberg filed an adversary proceeding in the Bankruptcy Case. (2d Am. Compl. ¶ 12; Table of Litigation Cases, Ref. 13 ( Schenberg v. Leventhal, Adversary Proceeding No. 11-A-1467 (Bankr.N.D.Ill.) (" Adversary Proceeding" )); see also Pl.'s Ex. E (docket sheet).) On October 28, 2011, as part of the Adversary Proceeding, Bankruptcy Judge Carol A. Doyle dismissed Schenberg's claims for revocation of discharge as untimely, and dismissed Schenberg's remaining claim against Kubiak for failure to state a claim, leaving one claim pending against Leventhal in the Adversary Proceeding. (2d Am. Compl. ¶ 13; see also Adversary Proceeding, Dkt. No. 49.) On April 13, 2012, Bankruptcy Judge A. Benjamin Goldgar entered a judgment in favor of Schenberg on Schenberg's remaining claim against Leventhal that the judgments from the Malicious Prosecution Case and the Removal Case were not dischargeable in bankruptcy. (Adversary Proceeding, Dkt. No. 159.)

Schenberg " has been represented in every single case" by defendant Huck, who also represents all Defendants in the case now pending before this court. (2d Am. Compl. ¶ 11.) Huck's law firm, Danna McKitrick, and Huck's law ...


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