Candy maker entitled to judgment, but not fees, after woman’s employment sours

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A northern Indiana sweets shop whose relationship with an employee turned sour is entitled to summary judgment in the former employee’s lawsuit filed after her smartphone was wiped clean by the company. However, the confectionery has not demonstrated that it is entitled to attorney fees.

Bernadette Cwik began her employment with Albanese Confectionery Group Inc. in 2013. Cwik voluntarily connected her smartphone to Albanese’s email server and consented to an agreement providing, among other things, that activating the Albanese server would allow for a factory reset of the phone, erasing all data without warning.

Albanese terminated Cwik in March 2017, and as she was leaving the property she noticed her phone was rebooting. She drove to a cellphone retailer, where she learned the device had been restored to factory default settings.

Cwik sued Albanese the following May, raising claims of negligence, criminal mischief, trespass, theft, breach of bailment and invasion of privacy. The company filed a counterclaim alleging Cwik’s claims were frivolous and seeking attorney fees. Meanwhile, the phone was destroyed after it fell from a truck tailgate and was run over by another vehicle.

Later when Cwik was deposed, she admitted she was able to access many of the files she thought were lost on her iCloud account. She intentionally deleted several of those files, but a representative from Apple restored them, leaving only an unknown number of photographs from December 2016 to March 2017 missing. She also testified that none of the missing files had any monetary value.

Albanese moved for summary judgment on all of Cwik’s claims and on its claim for attorney fees, but the Lake Superior Court denied the motion as to all issues. In its order, the trial court determined the smartphone agreement ended when Cwik was terminated.

In a partial reversal, however, the Indiana Court of Appeals held that “Cwik consented to the terms of the Agreement, including permitting Albanese to perform a factory reset, and we find this issue to be dispositive of Cwik’s claims.” Further, the appellate court disagreed with the finding that the agreement ended when Cwik was terminated.

“First, there is no term in the Agreement that defines the duration of Albanese’s control over the phone, or asserts that it shall not survive Cwik’s termination,” Judge Elizabeth Tavitas wrote in a Thursday opinion. “… More importantly, the Agreement was not contingent upon the nature of Cwik’s employment relationship with Albanese.

“It was not an employment agreement,” Tavitas wrote. “Rather, the Agreement purported to protect Albanese’s proprietary data on Cwik’s smartphone.”

As to the six claims Cwik raised, the COA determined all must fail. That’s because each of the claims was based on the premise that Cwik’s phone was improperly reset, Tavitas wrote, but the appellate court held that she authorized the reset.

“As Albanese was entitled to summary judgment on each of Cwik’s claims raised in her complaint,” the COA panel held, “we reverse the trial court’s denial of summary judgment and remand with instructions to enter summary judgment in favor of Albanese on all claims raised by Cwik.”

However, the denial of summary judgment on Albanese’s claim for attorney fees was proper, the appellate panel ruled.

“Cwik’s trial counsel conceded that Cwik’s complaint intentionally took a ‘scattershot’ approach because no available theory under Indiana law provided a ‘clean fit’ for Cwik’s alleged loss,” Tavitas wrote. “… It is well-settled, however, ‘that a claim is neither groundless nor frivolous merely because a party loses on the merits.’

“… Although certain aspects of Cwik’s claims are concerning, we cannot say no genuine issues of material fact exist, and that Albanese was entitled to judgment as a matter of law on its counterclaim for attorney’s fees. We, therefore, affirm the trial court’s denial of Albanese’s motion for summary judgment with respect to its counterclaim and remand for further proceedings consistent with this opinion.”

The case is Albanese Confectionery Group, Inc. v. Bernadette Cwik, 20A-CT-1436.

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