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Haglund v. Sawant

United States District Court, W.D. Washington, Seattle

May 15, 2018

CARL HAGLUND, Plaintiff,
v.
KSHAMA SAWANT and the CITY OF SEATTLE, Defendants.

          ORDER GRANTING DEFENDANT'S MOTION FOR PARTIAL JUDGMENT ON THE PLEADINGS

         THIS MATTER comes before the Court on Defendant's Motion for Judgment on the Pleadings. (Dkt. No. 25.) Having considered the Motion, the Response (Dkt. No. 29), the Reply (Dkt. No. 31), and all related papers, the Court GRANTS the Motion. The Court declines to hear oral argument on the matter.

         Background

         Plaintiff Carl Haglund is a real estate developer and landlord who owns residential properties throughout Seattle, Washington. (Dkt. No. 23 at ¶ 1.5.) Defendants are the City of Seattle (the “City”) and Seattle City Councilmember Kshama Sawant (“Councilmember Sawant”). (Id. at ¶ 1.2.)

         In July 2015, Plaintiff purchased the Charles Street Apartments. (Id. at ¶¶ 1.6, 1.8.) Though the apartments were in disrepair, they passed the City's initial inspection with no violations. (Id. at ¶ 1.7.) In October 2015, apparently at Councilmember Sawant's urging, the City sent inspectors to perform a second inspection. (Id. at ¶ 1.8.) These inspectors identified 225 violations, the majority of which Plaintiff claims were “extremely minor in nature” or “were caused by the tenants themselves, who neglected to take care of their units or who were living with too many people crowded into a unit.” (Id.) Thereafter, Plaintiff claims Councilmember Sawant “gleefully publicized” the violations and began publicly referring to Plaintiff as a “slumlord” and a “notorious slumlord.” (Id. at ¶¶ 1.10-11.) In particular, Plaintiff claims that (1) Councilmember Sawant and other members of the City Council publicly referred to a proposed rent-control ordinance, eventually adopted as Ordinance 124054, as the “Carl Haglund Law”; (2) Councilmember Sawant led a protest against the “notorious slumlord Carl Haglund” and advertised the protest using municipal funding; and (3) Councilmember Sawant repeatedly solicited contributions for her re-election campaign using Plaintiff's name. (Id. at ¶¶ 1.8, 1.10-1.14, Ex. C.) One of these solicitations featured a picture of a rat wearing a name tag reading “Carl Haglund” and captioned with the label “Slumlord!” while another announced “225 housing violations at Slumlord Haglund's building.” (Id. at ¶ 1.10, Ex. A.)

         Plaintiff contends that he “did not achieve widespread public notoriety as a ‘slumlord' until Councilmember Sawant and the City named a law after him and began paying to advertise protest rallies calling [him] the ‘notorious slumlord.'” (Id. at ¶ 1.12.) As a result, Plaintiff contends he “has had his name, identity and reputation misappropriated and sullied, ” and has been “forced to suffer public ridicule and ostracization, in both his personal life and his business endeavors.” (Id. at ¶ 1.16.)

         On July 12, 2017, Plaintiff served the City with a Notice of Tort Claim and Request for Timely Correction. (Id. at ¶ 1.17, Ex. B.) After Defendants refused to correct the allegedly defamatory statements, Plaintiff filed this action.[1] (Id.) Plaintiff alleges causes of action for (1) outrage and intentional infliction of emotional distress; (2) tortious interference with a business expectancy; (3) misappropriation of his name and identity; (4) false light; (5) defamation; (6) defamation per se; (7) negligent infliction of emotional distress; (8) violation of equal protection; and (9) violation of due process. (Id. at ¶¶ 2.1-10.7.)

         Defendants now move for judgment on the pleadings as to Plaintiff's claims for tortious interference, misappropriation, and violation of equal protection and due process. (See Dkt. No. 25.)

         Discussion

         I. Legal Standard

         On a motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c), the Court “must accept all factual allegations in the complaint as true and construe them in the light most favorable to the non-moving party.” Fleming v. Pickard, 581 F.3d 922, 925 (9th Cir. 2009) (citations omitted). The standard of review is identical to that of a motion for dismissal under Rule 12(b)(6). See McGlinchy v. Shell Chem. Co., 845 F.2d 802, 810 (9th Cir. 1988). Thus, the complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (1955)).

         II. Tortious Interference

         Plaintiff contends that by naming Ordinance No. 125054 the “Carl Haglund Law” and referring to him as a “slumlord, ” Defendants interfered with his “business expectancy” in “conduct[ing] business in the City of Seattle as a landlord, as well as a developer and redeveloper of property, ” including at the Charles Street Apartments. (Dkt. No. 23 at ¶ 3.2.) In particular, Plaintiff claims that Defendants solicited tenants of the Charles Street Apartments to “speak out against him” and that their interference caused Plaintiff to “back off on the rent increases” he had planned. (Id. at ¶ 3.5.)

         A claim for tortious interference has five elements: (1) the existence of a valid contractual relationship or business expectancy; (2) the defendant's knowledge of that relationship or expectancy; (3) the intentional interference inducing or causing a breach or termination of the relationship or expectancy; (4) the interference was for an improper purpose or used improper means; and (5) resultant damage. Hudson v. City of Wenatchee, 94 Wn.App. 990, 998 (1999). Importantly, “a claim for tortious interference with a business expectancy requires a threshold showing of resulting pecuniary damages.” Tamosaitis v. Bechtel Nat'l, Inc., 182 Wn.App. 241, 249 (2014).

         The Court finds that Plaintiff has not plead sufficient facts to support his tortious interference claim. First, Plaintiff has not identified any lost profits, increased costs, or lost financing; has not identified a single investor or lender who declined to enter into a real estate venture or extend him a loan; and has not identified a single tenant who refused to pay rent, comply with existing lease terms, or enter into a prospective lease. Second, Plaintiff has not identified any mandatory action that Defendants took to force any lease concessions. Indeed, Plaintiff concedes that he “back[ed] off on rent increases” himself, instead of “letting the code enforcement process play out” on the violations. (Dkt. No. 23 at ¶ 3.5; Dkt. No. 29 at 12.) Plaintiff's claim for tortious interference fails, as liability cannot be imposed based on his “voluntary business decisions” nor premised on his ...


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