Privratsky v. Liberty Mutual Fire Insurance Company

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAI‘I
SHAWN D. PRIVRATSKY,
Plaintiff,
vs.
LIBERTY MUTUAL FIRE
INSURANCE COMPANY,
Defendant.
Case No. 21-cv-00390-DKW-KJM
ORDER (1) GRANTING
PLAINTIFF’S MOTION FOR
PARTIAL SUMMARY JUDGMENT,
AND (2) DENYING DEFENDANT’S
COUNTER-MOTION FOR
PARTIAL SUMMARY JUDGMENT
INTRODUCTION
This case involves an insurance dispute over damage to Plaintiff Shawn D.
Privratsky’s home and personal property caused by what Plaintiff believes was a
lightning strike. 	The alleged cost of the repair work for this damage, at least at
one point, was “as much as $325,000.” 	Such costs, however, are not the subject
of the instant motion and counter-motion for partial summary judgment. 	Instead,
these motions quarrel over what has been described as an “extensively damaged”
or “inoperable” gate operator that Privratsky contends has been wrongfully
retained or converted by Defendant Liberty Mutual Fire Insurance Company. 	In
other words, the lawyers in this action have elected to expend their own and their
clients’ presumably finite resources on what can best be described as a piece of
burned out metal with likely little to no economic value.
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Incredulous that they would do so, the Court inquired of counsel at the
hearing on the pending cross-motions. 	Surely, the incentive beyond economic
value must be driving the bus. 	Liberty’s counsel, however, offered no
explanation, armed only with the hollow excuse that counsel had just replaced
Liberty’s prior counsel days before the hearing. 	Privratsky’s counsel fared little
better, offering answers of no import. 	For instance, the supposed current
evidentiary value of the gate operator, one offered explanation, is contradicted by
the fact that both sides have now had nearly three years to examine the gate
operator1 and counsel confirmed that Privratsky’s expert can already opine that the
operator was not damaged in the manner offered by Liberty. 	As interesting,
success with his pending motion will not return the operator to Privratsky’s
possession, even if further evidentiary review was needed. 	Additionally,
Privratsky does not need to succeed on his claim for conversion, the subject of the
pending motions and a second offered explanation, in order to establish any part of
his bad faith claim, as counsel suggests.
Whatever the reason for the instant motions, having reviewed the briefing
and evidence on the same, and as more fully discussed below, the Court agrees that
1 The “lightning strike” or whatever it was responsible for Plaintiff’s damage allegedly occurred
on December 26, 2019.
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Liberty has wrongfully converted Privratsky’s gate operator and, thus, Privratsky is
entitled to summary judgment with respect to his claim of conversion.2 	As a
result, Privratsky’s motion for partial summary judgment, Dkt. No. 55, is
GRANTED, and Liberty’s counter-motion for partial summary judgment, Dkt. No.
65, is DENIED.
STANDARD OF REVIEW
Pursuant to Federal Rule of Civil Procedure 56(a), a party is entitled to
summary judgment “if the movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law.” 	The
moving party is entitled to judgment as a matter of law when the non-moving party
fails to make a sufficient showing on an essential element of a claim in the case on
which the non-moving party has the burden of proof. 	Celotex Corp. v. Catrett,
477 U.S. 317, 323 (1986). 	In contrast, when the moving party bears the burden of
proof, “it must come forward with evidence which would entitle it to a directed
verdict if the evidence went uncontroverted….” 	Houghton v. South, 965 F.2d
1532, 1536 (9th Cir. 1992). 	This means that the movant “must establish beyond
2 The Court eagerly awaits the damages proof related to this conversion claim, particularly as the
parties appear to agree that a gate operator, in new condition, is worth something like $1,500, and
Liberty Mutual paid for the installation of a replacement operator long ago. 	Dkt. No. 72 at 3.
The sense of continuing to expend client resources on an item of such value remains a mystery.
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controversy every essential element” of its claim. 	See S. Cal. Gas Co. v. City of
Santa Ana, 336 F.3d 885, 888 (9th Cir. 2003) (quotation omitted). 	In assessing a
motion for summary judgment, all facts are construed in the light most favorable to
the non-moving party. 	Genzler v. Longanbach, 410 F.3d 630, 636 (9th Cir. 2005).
RELEVANT PROCEDURAL BACKGROUND
Privratsky initiated this lawsuit with the filing of a Complaint against
Liberty on September 16, 2021. 	Dkt. No. 1. 	Therein, Privratsky alleges that, on
December 26, 2019, his home was struck by lightning that caused an electrical
surge, resulting in “significant” damage to the home and personal property. 	Id. at
¶ 12. 	He further alleges that, after submitting an insurance claim to Liberty and
Liberty “initially” agreeing to reimburse him, Liberty did not reimburse him for
“most” of the damage. 	Id. at ¶¶ 15-16. 	The Complaint brings three causes of
action for: (1) declaratory judgment that Privratsky’s losses were covered by the
insurance policy issued to him by Liberty; (2) bad faith; and (3) conversion of
Privratsky’s personal property, namely, his damaged gate operator.
On September 2, 2022, Privratsky filed a motion for partial summary
judgment limited to his claim of conversion (“motion”). 	Dkt. No. 55. 	Privratsky
argues that he is entitled to judgment on this claim because Liberty has refused to
return his gate operator despite multiple demands from him to do so. 	Id. at 7. 	On
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September 23, 2022, Liberty filed a joint counter-motion for partial summary
judgment (“counter-motion”) with respect to the conversion claim and a response
to the motion. 	Dkt. No. 65. 	Liberty argues that it is entitled to judgment on the
conversion claim because Privratsky consented to Liberty’s possession of the gate
operator, Liberty was warranted in assuming ownership of the operator, Liberty did
not illegally use or abuse the operator, and Liberty did not wrongfully detain the
operator. 	Id. at 7-11. 	On September 30, 2022, Privratsky filed a joint response to
the counter-motion and reply in support of the motion. 	Dkt. No. 71. 	On October
7, 2022, Liberty filed a reply in support of the counter-motion. 	Dkt. No. 77. 	The
parties have also filed concise statements of fact. 	Dkt. Nos. 56, 66, 72.
This Order now follows.
DISCUSSION
I. 	Motions for Partial Summary Judgment
The motion and counter-motion present two distinct, but interconnected
questions: one legal and one factual. 	First, legally, the parties dispute the standard
for a conversion claim under Hawai‘i law. 	Second, factually, the parties disagree
with respect to whom the undisputed facts support summary judgment on the
claim. 	Because the legal question will guide the factual outcome, the Court
begins with the former.
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The parties’ legal dispute concerns the nature of a conversion claim in
Hawai‘i. 	The State courts of Hawai‘i have stated the following with respect to
conversion: “Conversion encompasses the following acts: ‘(1) [a] taking from the
owner without his consent; (2) an unwarranted assumption of ownership; (3) an
illegal use or abuse of the chattel; and (4) a wrongful detention after demand.’”
Freddy Nobriga Enters., Inc. v. Dep’t of Haw. Home Lands, 295 P.3d 993, 999
(Haw. Ct. App. 2013) (quoting Tsuru v. Bayer, 25 Haw. 693, 696 (1920)).
The parties disagree over whether the above-mentioned acts must each be
proven to establish conversion−Liberty’s position−or whether any one, if proven,
will suffice− Privratsky’s position. 	Having reviewed the parties’ arguments and
the cases to which they cite, the Court agrees with Privratsky that, in Hawai‘i, any
one of the four acts, if proven, will establish a claim for conversion. 	The principal
reason is that decisions from Hawai‘i’s State courts clearly reveal that proving
each of the acts is simply unnecessary.
For example, in Nobriga, the trial court awarded summary judgment to the
defendant because the plaintiff “failed to meet the essential elements” of
conversion. 	295 P.3d at 999. 	The Intermediate Court of Appeals reversed,
concluding that the “evidence presented established a prima facie case that [the
defendant] committed acts (1) and (2) of this definition by rounding up and selling
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[plaintiff’s] cattle without his consent.” 	Id. 	In other words, because the evidence
established the first two acts of conversion, summary judgment in favor of the
defendant was inappropriate. 	It would have been legally impossible for the
Intermediate Court of Appeals to reach this determination if the plaintiff had been
required to establish acts (3) and (4) as well−the position Liberty espouses here.
Similarly, in Tsuru, the Hawai‘i Supreme Court explained as follows: “the
general rule recognized by all the authorities is that where the original taking is
lawful and there has been no illegal assumption of ownership or illegal user[,] a
demand and refusal must be shown as evidence of a disposition to convert to the
holder’s own use or to divest the true owner of his property.” 	25 Haw. at 695-
696. 	In other words, when none of the first three acts have occurred, a claim for
conversion can still exist solely by the occurrence of the fourth act. 	Equally, the
Hawai‘i Supreme Court also explained that “where the taking itself is wrongful or
there is an illegal assumption of ownership or an illegal user[,] a demand and
refusal need not be provided.” 	Id. at 696 (emphasis added). 	In other words,
when the fourth act has not occurred, any one of the three other acts will suffice.
In reaching this finding, the Court acknowledges that, in this District, courts
have stated that a claim of conversion involves four elements, suggesting that all
four acts of conversion must be alleged to state such a claim. 	However, it is
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evident from those cases that none involved the court being asked to specifically
find, as is the case here, whether the claim required each of the acts to be alleged or
only one. 	Instead, as in Jass v. CherryRoad Techs., Inc., 472 F. Supp. 3d 787 (D.
Haw. 2020), a case over which the undersigned presided, the cases contain no
discussion on any such matter.3 	Therefore, the Court does not find those decisions
persuasive.
Having resolved the parties’ legal question, it is unnecessary for the Court to
resolve all of the parties’ factual disputes because, as more fully discussed below,
the undisputed facts here show that the fourth act of conversion−wrongful
detention after demand−has occurred. 	See Tsuru, 25 Haw. at 695-696.
In his concise statement of facts, Privratsky asserts the following pertinent
facts: (1) in 2017, he purchased a driveway gate operator; (2) on December 29,
2020, an individual retained by Liberty removed the gate operator from
Privratsky’s possession; (3) Privratsky requested the return of the gate operator on
at least August 14, 16, and 17, 2021, and on June 28 and 29 and July 1, 2022; (4)
Liberty refused to return the gate operator, as reflected in an email dated
August 19, 2021 and a letter in July 2022; and (5) Liberty remains in possession of
3 As it was in Jass, this may have been due to the fact that both sides argued as if each act needed
to be alleged. 	This Court was, thus, not presented with the precise dispute at issue here.
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the gate operator. 	Privratsky’s Concise Statement of Facts at ¶¶ 1, 4, 10, 14, 15-
16, 18, Dkt. No. 56. 	Liberty does not properly dispute any of these facts. 	See
Liberty’s Concise Statement of Facts at ¶¶ 1, 4, 10, 14, 15-16, 18, Dkt. No. 66.4
Privratsky argues that these facts are sufficient to prove liability on his
conversion claim because they reflect a demand for return of his property and
refusal. 	Dkt. No. 55-1 at 7. 	The Court agrees. 	Notably, as the Hawai‘i Supreme
Court explained in Tsuru, “Any act of dominion wrongfully exerted over property
in denial of the owner’s right or inconsistent with it amounts to a conversion.” 	25
Haw. at 698 (quotation omitted, emphasis added). 	Moreover, “[c]onversion may
be proved by demand and refusal of possession….” 	Id. 	That is precisely what
has occurred here: demand (on repeated occasions) and refusal (on repeated
occasions).
4 The only one of the above-stated facts that Liberty does dispute is the assertion that it refused to
return the gate operator in an email dated August 19, 2021. 	Dkt. No. 66 at ¶ 15. 	Liberty,
however, cites no evidence to support this dispute. 	See id. 	Moreover, the email to which
Privratsky cites, Dkt. No. 56-12, reflects that Liberty’s counsel was asked about the return of the
gate operator and stated that Liberty was storing the same. 	In other words, Liberty did not
return the gate operator when asked. 	Thus, the Court does not consider this fact in dispute.
Further, it is non-sensical for Liberty to claim otherwise. 	If Liberty was willing to return the
gate operator at any time up to the date of this order, Privratsky’s conversion claim and related
motion might well be moot or, at least, mitigated in value. 	Indeed, defense counsel could have
indicated that willingness even during oral argument and did not. 	Obviously, Liberty is and has
been refusing to return the gate operator, regardless of its willingness to concede the point.
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Liberty briefly contends otherwise, emphasizing that conversion requires a
wrongful detention and, here, there is no such thing because it was “understood and
agreed upon by the parties that the gate operator was being retained [by Liberty]
for safekeeping and the preservation of evidence.” 	Dkt. No. 65-1 at 10. 	Even if
true, though, the foregoing relates to the first act of conversion: whether the gate
operator was originally taken with or without consent. 	Further, Liberty’s
purportedly altruistic intent in preserving a piece of evidence, to the extent that is
what Liberty believes has been its purpose, is irrelevant. 	See Nobriga, 295 P.3d at
1000 (“The defendant’s knowledge, intent, motive, mistake, and good faith are
generally irrelevant.”) (quotation omitted). 	Put another way, under Liberty’s
construction of conversion, it would be fine for Person A to take possession of an
item for Person B for safekeeping while Person B is traveling and then, when
Person B returns and asks for the item back, for Person A to refuse to return it
because he believes that the item will be safer in his possession. 	Neither the law
nor common sense work that way, and the fact that the item in this case may have
some usefulness in an insurance dispute makes no difference.
Therefore, in light of the undisputed evidence the Court GRANTS
Privratsky’s motion for partial summary judgment, Dkt. No. 55, and DENIES
Liberty’s counter-motion for partial summary judgment, Dkt. No. 65.
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II. 	Emails from Counsel to the Court
Finally, the Court is compelled to address a concerning and unique, at least
to the undersigned, situation that has occurred in this case since the hearing on the
motions for partial summary judgment. 	At that hearing, the Court concluded by
encouraging the parties to resolve their differences over the subject matter of the
motions without the need for a ruling from the Court. 	That is because the
expenditure of further resources on the part of everyone over an item of
questionable and no obvious value appeared to make little sense. 	The Minutes of
the hearing then stated: “By October 21, 2022, counsel is directed to notify the
Court whether issues have been resolved or ruling on the motions is necessary.”
Dkt. No. 79.
In untold number of both civil and criminal cases, the Court has issued
similar instructions: to notify the Court of the status of the case. 	Never in any of
these cases, until this one, has any counsel emailed the undersigned’s personal
work email account in order to convey the status of the case. 	Counsel in this case,
broke that streak, emailing the undersigned’s personal work email address not once
or twice, but three times with increasingly long and tortuous accounts of their
versions of events. 	See Dkt. Nos. 82, 84, 86.
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Email correspondence with the Court is unacceptable. 	Not just for the
obvious distraction it poses, but, more importantly, for the silence it leaves on the
public docket as to the status of the case. 	Put simply, in a counseled case such as
this one, it is not the undersigned’s responsibility to take emails sent by counsel
and present them to the Clerk’s Office for docketing on the public record, as the
undersigned has done. 	Id. 	Instead, the parties, whether jointly or individually,
should be filing brief status updates on the docket of this case to convey
information related to such things as those discussed at the October 21, 2022
hearing. 	They should never email the undersigned’s personal work email address
with regard to pending litigation.5
CONCLUSION
For the reasons set forth herein, the Court (1) GRANTS Privratsky’s motion
for partial summary judgment, Dkt. No. 55, and (2) DENIES Liberty’s counter-
motion for partial summary judgment.
IT IS SO ORDERED.
DATED: October 27, 2022 at Honolulu, Hawai‘i.
5 In addition, the parties should only email the Court’s orders inbox when specifically instructed
to do so or when submitting orders and/or stipulations for approval.
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