Case 3:22-cv-00269-SI Document 41 Filed 07/05/22 Page 1 of 18
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`IN THE UNITED STATES DISTRICT COURT
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`FOR THE DISTRICT OF OREGON
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`Case No. 3:22-cv-269-SI
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`OPINION AND ORDER
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`Plaintiff,
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`v.
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`EQUINE LEGAL SOLUTIONS, PC,
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`THIS OLD HORSE, INC.; NANCY
`TURNER; JOTFORM, INC.; GOOGLE,
`LLC,
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`Defendants.
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`Rachel Kosmal McCart, PRESERVE LEGAL SOLUTIONS PC, 38954 Proctor Blvd., Suite 186,
`Sandy, OR 97055. Of Attorneys for Plaintiff.
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`William G. Wardlow, WARDLOW LAW LLC, 111 NW Hawthorne Ave, Suite 7, Bend, OR 97703.
`Of Attorneys for Defendants This Old Horse, Inc. and Nancy Turner.
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`John D. Ostrander and William A. Drew, ELLIOTT, OSTANDER & PRESTON PC, 707 SW
`Washington Street, Suite 1500, Portland, OR 97205. Of Attorneys for Defendant Jotform, Inc.
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`Michael H. Simon, District Judge.
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`Equine Legal Solutions, PC (Equine) brings this lawsuit against This Old Horse, Inc.
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`(TOH), Nancy Turner (Turner), and Jotform, Inc. (Jotform).1 According to Turner and TOH,
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`1 Equine voluntarily dismissed its claims against Google, LLC.
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`PAGE 1 – OPINION AND ORDER
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`Case 3:22-cv-00269-SI Document 41 Filed 07/05/22 Page 2 of 18
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`Turner is the President of TOH, a volunteer-based 501(c)(3) nonprofit equine welfare
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`organization. This dispute arises from the use of legal forms that Equine created and copyrighted.
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`Against all defendants, Equine alleges copyright infringement. Equine also alleges against only
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`TOH and Turner breach of contract and conversion. Under Rule 12(b)(6) of the Federal Rules of
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`Civil Procedure, Turner moves to dismiss with prejudice all three claims against her, arguing that
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`she is not personally liable for the actions that she took as an officer of TOH. Turner also
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`contends that Equine’s breach of contract claim should be dismissed because Equine may not
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`pierce the corporate veil of TOH. In addition, raised for the first time in her reply brief, Turner
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`adds that Equine’s conversion claim is barred by the doctrine of independent duty.
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`After Turner’s motion to dismiss had been fully briefed but before oral argument, Equine
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`moved to amend under Rule 15(a)(2). In its proposed First Amended Complaint, Equine asserts
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`only a claim of copyright infringement against TOH, Turner, and Jotform. TOH and Turner
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`oppose Equine’s motion to amend. They argue that Equine moved to amend in bad faith, seeking
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`to avoid liability for “prevailing party” attorney fees and costs that would otherwise be available
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`to TOH and Turner under the fee-shifting provision of the alleged contract. For the reasons stated
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`below, the Court grants in part and denies in part Turner’s motion to dismiss and grants Equine’s
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`motion to amend. Equine may file a First Amended Complaint within 14 days.
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`A. Motion to Dismiss for Failure to State a Claim
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`STANDARDS
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`A motion to dismiss for failure to state a claim may be granted only when there is no
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`cognizable legal theory to support the claim or when the complaint lacks sufficient factual
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`allegations to state a facially plausible claim for relief. Shroyer v. New Cingular Wireless Servs.,
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`Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). In evaluating the sufficiency of a complaint’s factual
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`allegations, a court must accept as true all well-pleaded material facts alleged in the complaint
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`PAGE 2 – OPINION AND ORDER
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`Case 3:22-cv-00269-SI Document 41 Filed 07/05/22 Page 3 of 18
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`and construe them in the light most favorable to the non-moving party. Wilson v. Hewlett-
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`Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012); Daniels-Hall v. Nat’l Educ. Ass’n, 629
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`F.3d 992, 998 (9th Cir. 2010). To be entitled to a presumption of truth, allegations in a complaint
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`“may not simply recite the elements of a cause of action but must contain sufficient allegations
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`of underlying facts to give fair notice and to enable the opposing party to defend itself
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`effectively.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). The court must draw all
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`reasonable inferences from the factual allegations in favor of the plaintiff. Newcal Indus. v. Ikon
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`Off. Sol., 513 F.3d 1038, 1043 n.2 (9th Cir. 2008). The court need not, however, credit a
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`plaintiff’s legal conclusions that are couched as factual allegations. Ashcroft v. Iqbal, 556
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`U.S. 662, 678-79 (2009).
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`A complaint must contain sufficient factual allegations to “plausibly suggest an
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`entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the
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`expense of discovery and continued litigation.” Starr, 652 F.3d at 1216. “A claim has facial
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`plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable
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`inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citing
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`Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)). “The plausibility standard is not akin to a
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`probability requirement, but it asks for more than a sheer possibility that a defendant has acted
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`unlawfully.” Mashiri v. Epsten Grinnell & Howell, 845 F.3d 984, 988 (9th Cir. 2017) (quotation
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`marks omitted).
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`B. Motion to Amend
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`Rule 15(a)(2) of the Federal Rules of Civil Procedure provides that the “court should
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`freely give leave [to amend a pleading] when justice so requires.” A district court should apply
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`Rule 15’s “policy of favoring amendments with extreme liberality.” Price v. Kramer, 200 F.3d
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`1237, 1250 (9th Cir. 2000) (cleaned up). The purpose of the rule “is ‘to facilitate decision on the
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`PAGE 3 – OPINION AND ORDER
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`Case 3:22-cv-00269-SI Document 41 Filed 07/05/22 Page 4 of 18
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`merits, rather than on the pleadings or technicalities.’” Novak v. United States, 795 F.3d 1012,
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`1020 (9th Cir. 2015) (quoting Chudacoff v. Univ. Med. Ctr., 649 F.3d 1143, 1152 (9th
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`Cir. 2011)). A district court, however, may, within its discretion, deny a motion to amend “due to
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`‘undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure
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`deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue
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`of allowance of the amendment, [and] futility of the amendment.’” Zucco Partners, LLC v.
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`Digimarc Corp., 552 F.3d 981, 1007 (9th Cir. 2009) (alteration in original) (quoting Leadsinger,
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`Inc. v. BMG Music Publ’g, 512 F.3d 522, 532 (9th Cir. 2008)). “Not all of the factors merit equal
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`weight. As this circuit and others have held, it is the consideration of prejudice to the opposing
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`party that carries the greatest weight.” Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048,
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`1052 (9th Cir. 2003). Futility of amendment, however, “can, by itself, justify the denial of a
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`motion for leave to amend.” Bonin v. Calderon, 59 F.3d 815, 845 (9th Cir. 1995). Generally,
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`however, “[a]bsent prejudice, or a strong showing of any of the remaining [four] factors, there
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`exists a presumption under Rule 15(a) in favor of granting leave to amend.” Eminence
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`Capital, 316 F.3d at 1052 (alterations added, emphasis in original). When weighing the factors,
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`all inferences should be made in favor of granting the motion to amend. Griggs v. Pace Am.
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`Grp., Inc., 170 F.3d 877, 880 (9th Cir. 1999).
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`BACKGROUND
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`Equine alleges that it provides equine-related legal services to individuals in Oregon,
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`California, Washington, and New York. Compl. (ECF 1) at ¶ 5. As a part of this business,
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`Equine developed a series of copyrighted legal forms for equine-related transactions. Id. at ¶ 10.
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`Parties can access these forms on Equine’s website and download them for a fee after agreeing to
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`a “License Agreement” (Agreement). Id. The Agreement “specifically prohibits Plaintiff’s
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`customers from editing Plaintiff’s forms or otherwise creating derivative works from Plaintiff’s
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`PAGE 4 – OPINION AND ORDER
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`Case 3:22-cv-00269-SI Document 41 Filed 07/05/22 Page 5 of 18
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`forms.” Id. at 11. Equine’s Agreement also prohibits Equine’s customers from reselling Equine’s
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`forms or posting them to the internet. Id.
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`According to Turner and TOH, Turner is the President of TOH, a 501(c)(3) nonprofit
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`organization. Equine alleges that Turner “at all relevant times . . . acted as an employee or agent
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`of Defendant TOH.” Id. ¶ 13. On June 18, 2013, Turner visited Equine’s website, purchased
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`three items—the “Equine Boarding Forms Package,” the “Riding Instruction Agreement
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`Package,” and the “Equine Donation Agreement (EDA),”—and downloaded these documents.
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`Id. ¶ 14.
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`After downloading the documents, Turner and TOH allegedly used the “Equine Boarding
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`Agreement” (EBA) to create a derivative document (Doc 1), which contained “multiple
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`paragraphs nearly identical to sections of Plaintiff’s Equine Boarding Agreement.” Id. ¶ 15.
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`Equine also alleges that Turner and TOH visited Jotform’s website, which includes a “full-
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`featured online form builder that makes it easy to create robust forms and collect important
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`data.” Id. ¶ 16. Turner and TOH purchased a subscription to Jotform’s service and created an
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`online, fillable form from Doc. 1 (Doc. 2). Id. ¶ 16. Turner and TOH also allegedly used the
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`EDA to create a document “nearly identical” to the EDA (Doc 3). Id. ¶ 17. They then allegedly
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`used Jotform’s service to create an online fillable form from Doc. 3 (Doc. 4). Id. ¶ 18.
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`Equine contends that after Turner and TOH created Doc. 2 and Doc. 4, these documents
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`became available to the public on Jotform’s website. Id. ¶ 21. Equine further alleges that Turner
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`and TOH used the allegedly infringing documents “in the business operations” and that Turner
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`and TOH distributed these documents to “an unknown number of additional parties.” Id. ¶ 28.
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`Equine contends that because of the actions of Turner and TOH, unknown other parties have
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`PAGE 5 – OPINION AND ORDER
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`Case 3:22-cv-00269-SI Document 41 Filed 07/05/22 Page 6 of 18
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`gained possession of Doc. 2 and Doc. 4 from Jotform’s website, have made further derivative
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`works from them, and have profited from the use of those other derivative works. Id.
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`Equine maintains that it holds valid copyrights in both the EBA and the EDA and is the
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`sole owner of all relevant exclusive rights. Equine contends that Turner and TOH infringed on
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`Equine’s exclusive rights in violation of 17 U.S.C. § 106. Equine alleges that it has not
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`authorized Defendants to copy, reproduce, display, distribute, or sell copies of the allegedly
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`infringing documents “except for personal and non-commercial use pursuant to the License
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`Agreement.” Compl. at ¶ 37. Equine seeks copyright infringement damages under 17 U.S.C.
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`§ 504(c), attorney fees and costs under 17 U.S.C. § 505, and injunctive relief prohibiting further
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`infringement under 17 U.S.C. § 502.
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`Equine further asserts that Turner and TOH breached the Agreement when they created
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`the allegedly infringing documents, which Equine alleges are derivative of the EBA and the
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`EDA. Equine seeks contract damages resulting from the alleged breach of the Agreement as well
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`as attorney fees and costs under the Agreement. Finally, Equine alleges that Turner and TOH
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`intentionally converted the EBA and the EDA for “commercial use.”
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`TURNER’S MOTION TO DISMISS
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`TOH and Jotform have answered the complaint. Turner, however, has moved to dismiss
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`all three claims asserted against her, arguing that, among other things, she is immune from
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`liability because at all relevant times she “acted as an employee or agent of Defendant TOH.” Id.
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`¶ 13. Turner adds that Equine cannot pierce TOH’s corporate veil to hold Turner personally
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`liable on Equine’s breach of contract claim. Turner also contends the Copyright Act preempts
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`Equine’s conversion claim. Finally, Turner contends that the independent duty doctrine limits
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`Equine to contract remedies, thereby precluding its claim of conversion.
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`PAGE 6 – OPINION AND ORDER
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`Case 3:22-cv-00269-SI Document 41 Filed 07/05/22 Page 7 of 18
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`A. Copyright Infringement
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`1. Facial Plausibility
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`“To establish a prima facie case of direct infringement, a plaintiff ‘must show ownership
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`of the allegedly infringed material’ and ‘demonstrate that the alleged infringers violated at least
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`one exclusive right granted to copyright holders under 17 U.S.C. § 106.’” Perfect 10 v.
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`Giganews, Inc., 847 F.3d 657, 666 (9th Cir. 2017) (quoting A&M Records, Inc., v. Napster Inc.,
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`239 F.3d 1004, 1013 (9th Cir. 2001). “In addition, direct infringement requires the plaintiff to
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`show causation (also referred to as ‘volitional conduct’) by the defendant.” Id. The “volitional
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`conduct” prong stands in for the traditional notion of proximate cause, requiring the plaintiff to
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`show the defendant’s conduct was a direct cause of the infringement. Id. “Pursuant to the
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`Copyright Act, the holder of a copyright has the exclusive right ‘to do and to authorize’ the
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`reproduction and distribution of a protected work, among other things.” Herer v. Ah Ha Pub.,
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`LLC, 927 F. Supp. 2d 1080, 1090 (D. Or. 2013) (quoting 17 U.S.C. § 106). Included in a
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`copyright holder’s exclusive rights are the right “to prepare derivative works based upon the
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`copyrighted work” and the right “to distribute copies…of the copyrighted work to the public by
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`sale or other transfer of ownership, or by rental, lease, or lending.” 17 U.S.C. § 106(2), (3).
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`Turner argues that Equine failed to state facts sufficient to show a violation of any of
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`Equine’s exclusive rights. Equine, however, states enough facts to assert its copyright
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`infringement claim as derivative works and in violation of Equine’s distribution rights. Equine
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`alleges that it owns copyrights not only for the EBA and the EDA, but for all the forms Turner
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`and TOH allegedly purchased and downloaded. Equine located several of the allegedly
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`infringing documents (Doc. 2 and Doc. 4) by conducting an internet search using unique text
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`found in its forms. The search was successful because these documents contain “nearly identical”
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`language to the EBA and the EDA. Along with the assertion that Turner and TOH had visited
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`PAGE 7 – OPINION AND ORDER
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`Equine’s website and purchased the EBA and the EDA, Equine alleges facts that allow for the
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`reasonable inference that the allegedly infringing documents are derivative of the EBA or the
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`EDA. Turner did not receive a license from Equine that allowed Turner to use Equine’s work in
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`the allegedly infringing manner. Instead, the Agreement reasserted Equine’s ’s exclusive right to
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`control the creation of derivative works. The facts alleged sufficiently state a claim that Turner
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`and TOH directly infringed on Equine’s exclusive right to create derivative forms of its
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`copyrighted materials.
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`Equine also retained the right to control the distribution of copies of the EBA and the
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`EDA. Under that right, Equine operates a website where its copyrighted documents, including
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`the EBA and the EDA, are sold and licensed. Equine alleges that Turner and TOH violated
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`Equine’s distribution rights by making available a version of Equine’s copyrighted works on
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`Jotform’s website because the availability of free versions of the forms online undermines
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`Equine’s “sale and license” distribution scheme. Equine has alleged enough facts to permit the
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`reasonable inference that Turner and TOH’s actions directly harmed Equine’s ability to control
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`the distribution of its copyrighted works because Equine was no longer the exclusive distributor
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`of the EBA and the EDA.
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`In summary, Equine has alleged enough facts to claim ownership of validly copyrighted
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`material and “volitional” actions by Turner and TOH that directly violated Equine’s exclusive
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`rights in the copyrighted material. These facts state a claim for copyright infringement.
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`2. Individual Liability
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`Turner argues she cannot be held personally liable for copyright infringement because
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`Equine alleges, and thus admits, that Turner “at all relevant times” acted as an agent or an
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`employee of TOH. This fact of agency, however, is not preclusive of Turner’s individual liability
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`under the copyright law because directors and officers of corporations do not enjoy immunity
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`PAGE 8 – OPINION AND ORDER
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`from tort liability. “A corporate officer or director is, in general, personally liable for all torts
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`which he authorizes or directs or in which he participates, notwithstanding that he acted as an
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`agent of the corporation and not on his own behalf.” Transgo Inc. v. Ajac Transmission Parts
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`Corp., 768 F.2d 1001, 1021 (9th Cir. 1985) (quoting Murphy Tugboat Co., v. Shipowners &
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`Merchants Towboat Co., 467 F. Supp. 841, 852 (N.D. Cal 1979), aff’d sub nom. Murphy
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`Tugboat Co. v. Crowley, 658 F.2d 1256 (9th Cir. 1981), cert. denied 455 U.S. 1018); See
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`Ballantine, On Corporations, § 119 (1930) (“It is thoroughly well settled that a man is personally
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`liable for all torts committed by him . . . [a]nd this is true to the full extent of the torts committed
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`by the officers or agents of a corporation in the management of its affairs.”).
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`Citing Murphy, Turner argues that she should not be held personally liable for her alleged
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`copyright infringement because her actions were not “inherently wrongful.” 467 F. Supp. at 852
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`(“Such approval or ratification [of tortious actions] must…be of acts or conduct that is inherently
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`unlawful.”). Turner’s argument fails because it does not distinguish between actions themselves
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`and the “approval or ratification” of actions. In Murphy, the plaintiff sought to attach liability to
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`an individual corporate officer for his involvement in an anticompetitive corporate policy that,
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`the plaintiff alleged, violated the Sherman Act. Id. at 852-53. The court refused to hold the
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`defendant individually liable because “[h]is direct participation was limited to the purchase of
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`the Murphy Pacific tugs” so “[w]hile he must be assumed, as [CEO], knowingly to have
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`approved or ratified the policy of refusing to work vessels with competitors, that policy also
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`cannot be said to be inherently wrongful.” Id. at 853.
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`The relevant conduct in Murphy was the approval of an anticompetitive policy. Also,
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`because the conduct fell under the Sherman Act, the court needed to balance “the often-uncertain
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`line between proper and improper conduct, and the social interest in not deterring economically
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`PAGE 9 – OPINION AND ORDER
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`useful conduct” typical of a competitive market. Id. Here, the alleged wrongful conduct was not
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`the approval of a policy or the approval of an action by another, but instead it was the taking of
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`the challenged action itself. Moreover, the balance of interests found in applying the Sherman
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`Act are not present in the Copyright Act. See Blue Mako, Inc., v. Minidis, 2008 WL 11334205, at
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`*13 (C.D. Cal June 23, 2008) (rejecting the applicability of the “inherently wrongful” standard to
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`a case involving trademark infringement because “[i]n Murphy, the court made clear…that it
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`based the limitation on personal liability specifically on the policies and case law of the Sherman
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`Act”).
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`Courts in the Ninth Circuit have applied individual liability to corporate officers for
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`copyright infringement and related intellectual property offenses without regard for the inherent
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`wrongfulness of their actions. See Comm. for Idaho’s High Desert v. Yost, 92 F.3d 814, 823 (9th
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`Cir. 1996) (adopting the Transgo rule for trademark infringement); DISH Network, LLC v. Jadoo
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`TV, Inc., 2020 WL 5816579, at *4 (N.D. Cal, Sept. 30. 2020) (“There are no compelling reasons
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`why the Yost rule would apply to federal trademark claims but not copyright claims.”). Indeed,
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`courts have applied liability to individual corporate officers in copyright infringement cases more
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`broadly than in the Murphy context. Even absent direct action, inherently wrongful conduct is
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`unnecessary for corporate officers and directors to be held personally liable for copyright
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`infringement. See Foreverendeavor Music, Inc., v. S.M.B., Inc., 701 F.Supp, 791, 793-94 (W.D.
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`Wash 1988) (“[A] corporate officer will be liable as a joint tortfeasor with the corporation in a
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`copyright infringement case where the officer was the dominant influence in the corporation, and
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`determined the policies which resulted in the infringement.” (quoting Sailor Music v. Mai Kai of
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`Concord, Inc., 640 F. Supp. 629, 633 (D.N.H. 1986))); Bell v. Moawad Grp., LLC, 326 F. Supp.
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`PAGE 10 – OPINION AND ORDER
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`3d 918, 930 (D. Ariz. 2018) (applying liability to a corporate president because he was the
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`“guiding spirit” behind the copyright violation).
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`Accepting Equine’s allegations as true and giving Equine the benefit of all reasonable
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`inferences, as the Court must do at this stage of the lawsuit, Turner can be held personally liable
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`for copyright infringement. As President of TOH, Turner is a corporate officer who allegedly
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`purchased and downloaded the EBA and the EDA, created allegedly derivative documents, and
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`uploaded the documents to Jotform’s website. The facts plausibly support the proposition that
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`Turner acted in violation of the Copyright Act by creating and distributing unlicensed derivatives
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`of copyrighted materials. She, therefore, can be held personally liable for the alleged copyright
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`violation.
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`B. Breach of Contract
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`Equine’s Complaint at paragraph 41 initially states that “[t]he License Agreement is a
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`valid contract between Defendant Turner and Plaintiff.” That paragraph continues and alleges
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`that “Defendant Turner entered into the License Agreement in her capacity as an agent of
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`Defendant TOH, and therefore Defendant TOH is bound by the terms of the License
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`Agreement.” Id. Equine’s Complaint also alleges that “at all relevant times, Defendant Turner
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`acted as an employee or agent of Defendant TOH.” Compl. ¶ 13. The Transgo rule that a
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`“corporate officer or director is, in general, personally liable for all torts which he authorizes or
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`directs or in which he participates, notwithstanding that he acted as an agent of the corporation
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`and not on his own behalf,” Transgo, 768 F.2d at 1021 (emphasis added), does not extend to
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`liability in contract. Accordingly, as currently pleaded, Equine’s Complaint does not plausibly
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`allege contractual liability on the part of Turner.
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`In response to Turner’s motion to dismiss, Equine states that it may seek to pierce the
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`corporate veil of TOH to hold Turner personally liable as an “alter ego” for any alleged breach of
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`the Agreement by TOH. Both Turner and Equine cite Amfac Foods, Inc. v. Int’l Sys. & Control
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`Corp., 294 Or. 94 (1982), as controlling Oregon law to determine when a corporate veil can be
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`pierced. In Amfac, the Oregon Supreme Court created a three-part test:
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`[T]he plaintiff must allege and prove not only that the debtor
`corporation was under the actual control of the shareholder, but
`also that the plaintiff’s inability to collect from the corporation
`resulted from some form of improper conduct on the part of the
`shareholder. . . . The shareholder’s alleged control over the
`corporation must not be only potential but must actually have been
`exercised in a manner either causing the plaintiff to enter the
`transaction with the corporation or causing the corporation’s
`default on the transaction or a resulting obligation. Likewise, the
`shareholder’s conduct must have been improper either in relation
`to the plaintiff’s entering the transaction or in preventing or
`interfering with the corporation’s performance or ability to perform
`its obligations toward the plaintiff.
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`Id. at 108-09 (emphasis added). Accordingly, a plaintiff in Oregon can pierce the corporate veil
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`in connection with an alleged breach of contract when a defendant shareholder (1) has actual
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`control of a corporation, (2) exercises that control in an “improper” manner, and (3) harms the
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`plaintiff in a manner that prevents the ability to collect from the corporation. Id. Equine,
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`however, has failed to allege the prerequisites required by Amfac.
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`To pierce a corporate veil generally requires some amount of “moral culpability,” which
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`“narrows the range of illegal or tortious conduct.” State ex rel. Neidig v. Superior Nat. Ins.
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`Co., 343 Or. 434, 460 (2007). In this context, improper conduct needed to pierce a corporate veil
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`must in some way seek to manipulate the corporate form to the detriment of the corporation’s
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`creditors. See id. at 460 (“[C]onduct that can be considered ‘improper’” includes “oppressive or
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`manipulative conduct that uses a corporate form to harm a creditor or evade regulation.”);
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`Schlecht v. Equitable Builders, 272 Or. 92, 97 (1975) (“[T]he corporate veil may be lifted to
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`protect persons whose rights have been jeopardized by the corporate device.”) (quoting Abbot v.
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`Bob’s U-Drive, et al., 222 Or. 147, 161-62 (1960)).
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`As currently pleaded, Equine has not alleged that Turner abused the corporate form of
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`TOH to avoid liability in its breach of contract claim. Nor has Equine alleged that such improper
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`conduct, were it to exist, impeded Equine’s ability to collect from TOH. Accordingly, Equine
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`fails to allege sufficient facts to pierce the corporate veil of TOH.
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`C. Conversion
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`Turner provides three arguments for why she cannot be held personally liable for
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`conversion. First, Turner reiterates the point that individuals are not personally liable for torts
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`committed while acting as an agent or employee of a corporation. Second, Turner contends that
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`the independent duty doctrine precludes Equine’s conversion claim, a point that Turner makes
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`for the first time in her reply brief.2 Third, Turner contends the Copyright Act preempts Equine’s
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`conversion claim.
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`1. Facial Plausibility
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`“To state a claim for conversion, a party must establish the intentional exercise of
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`dominion or control over a chattel that so seriously interferes with the right of another to control
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`it that the actor may justly be required to pay the other the full value of the chattel.” Emmert v.
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`No Problem Harry, Inc., 222 Or.App. 151, 159-60 (2008) (citing Mustola v. Toddy, 253 Or. 658,
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`663 (1969)). “The gravamen of the tort is the defendant’s intent to exercise control over the
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`chattel inconsistently with the plaintiff’s rights.” Naas v. Lucas, 86 Or.App. 406, 409 (1987).
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`2 The Court generally disregards arguments raised for the first time in a reply brief. See
`Graves v. Arpaio, 623 F.3d 1043, 1048 (9th Cir. 2010) (“arguments raised for the first time in a
`reply brief are waived”); Zamani v. Carnes, 491 F.3d 990, 997 (9th Cir. 2007) (“The district
`court need not consider arguments raised for the first time in a reply brief.”). Given the Court’s
`disposition of that argument, however, the Court will address it in the interest of judicial
`efficiency moving forward.
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`PAGE 13 – OPINION AND ORDER
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`Case 3:22-cv-00269-SI Document 41 Filed 07/05/22 Page 14 of 18
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`For the same reasons that Equine adequately stated a claim against Turner for copyright
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`infringement, so too does it state a claim against her for conversion. Although Equine’s
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`allegation that Turner’s production of a derivative form may not rise to the level of a “serious
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`interference” with Equine’s right to control the EBA or EDA, the Court can reasonably infer that
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`Turner converted the EBA and EDA when the derivative forms were uploaded to Jotform.
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`Equine located the derivative forms by searching for language specific to the documents.
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`Presumably, individuals who wished to use Equine’s documents without paying the required fee
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`could also search for the text of the document and find Turner’s “nearly identical” derivatives.
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`Turner’s use of the EBA and EDA could be “inconsistent” with Equine’s right to control the
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`distribution of the EBA and EDA through sale and licensing because the availability of free
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`versions online undermines Equine’s “sale and licensing” distribution scheme. Equine has
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`alleged enough facts to permit the reasonable inference that Turner’s conduct seriously interfered
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`with Equine’s right to control the reproduction and distribution of the EBA and the EDA.
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`2. Individual Liability
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`Turner argues she cannot be held personally liable for conversion because “ordinary
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`rules” of vicarious liability apply. The argument is without merit. Oregon “ordinarily” allows for
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`directors and officers to be found personally liable for any torts they personally commit. Pelton
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`v. Gold Hill Canal Co., 72 Or. 353, 358 (1914) (“[A]lthough directors are not liable for negligent
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`torts of subordinate agents in which they have not participated, they are clearly liable ex delicto
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`for any tort in which they participate.”); Lewis v. Devils Lake Rock Crushing Co., 274 Or. 293,
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`298 (1976) (“An officer’s personal liability [for conversion] is based upon his participation,
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`knowledge amounting to acquiescence or the breach of some duty he owes to the owner of the
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`property.” (quoting William Meade Fletcher, FLETCHER CYCLOPEDIA OF THE LAW OF
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`CORPORATIONS § 1140 (Perm. ed. 1975))). The Court rejects Turner’s argument she cannot be
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`PAGE 14 – OPINION AND ORDER
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`Case 3:22-cv-00269-SI Document 41 Filed 07/05/22 Page 15 of 18
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`held personally liable for the conversion that she allegedly committed, even if she acted as an
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`authorized agent of TOH.
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`3. Independent Duty Doctrine
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`Turner contends Equine’s conversion claim is barred by the independent duty doctrine.
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`Turner cites Puget Soundkeeper All. v. APM Terminals Tacoma, LLC., 545 F. Supp. 3d 893
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`(W.D. Wash 2021), as defining the independent duty doctrine. But Puget Soundkeeper was based
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`on Washington law, not Oregon law. In Oregon, an independent tort duty must arise out of a
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`“special relationship” between the parties. See Conway v. Pacific Univ., 324 Or. 231, 237 (1996)
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`(finding a “special relationship” necessary for a duty to avoid negligent misrepresentation to
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`arise); Abraham v. T. Henry Const. Inc., 230 Or.App. 564, 568 (2009) (finding that the
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`independent standard of care must derive either from a “special relationship” between the parties
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`or from a statute). The Oregon Supreme Court derived the “special relationship” rule from a
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`review of previous cases outlining whether a contract or tort remedy would be appropriate:
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`When the relationship involved is between contracting parties, and
`the gravamen of the complaint is that one party caused damage to
`the other by negligently performing its obligations under the
`contract, then, and even though the relationship between the parties
`arises out of the contract, the injured party may bring a claim for
`negligence if the other party is subject to a standard of care
`independent of the terms of the contract. If the plaintiff’s claim is
`based solely on a breach of a provision in the contract, which itself
`spells out the party’s obligation, then the remedy will be only in
`contract[.]
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`Georgetown Realty v. The Home Ins. Co., 313 Or. 97, 106 (1992) (emphasis added). The rule
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`established in Georgetown Realty is not so much an independent duty as a heightened duty based
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`on a “special relationship” between the plaintiff and the defendant. Tort liability fills the gap
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`between the contractual obligations and the relational heightened duty.
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`PAGE 15 – OPINION AND ORDER
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`Case 3:22-cv-00269-SI Document 41 Filed 07/05/22 Page 16 of 18
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`Further, an inquiry into the nature of the relationship between Turner and Equine is
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`unnecessary because Oregon courts have rejected extending the Georgetown rule to intentional
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`torts. Murphy v. Allstate Ins. Co., 251 Or. App. 316, 328 (2012); McNeff v. Emmert, 260 Or.
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`App. 239, 249-50 (2013). Relatedly, other federal courts in the District of Oregon have accepted
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`the Murphy rule as barring Georgetown from applying to intentional torts. See, e.g., Anderson v.
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`Bank of Am., N.A., 2014 WL 4631222 (D. Or. Sept. 12, 2014). Because conversion is an
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`intentional tort, Georgetown and its progeny do not apply here.