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Wada v. Aloha King, LLC

United States District Court, D. Hawaii

December 23, 2015

MAHO WADA; MASAHIRO WADA, Plaintiffs,
v.
ALOHA KING, LLC; TOTAL STORAGE SOLUTIONS; TNT SELF STORAGE MANAGEMENT, INC.; ABSO; STERLINGBACKCHECK; DOE DEFENDANTS 1-20, Defendants. ALOHA KING, LLC, Cross-Claimant,
v.
TNT SELF STORAGE MANAGEMENT, INC.; TOTAL STORAGE SOLUTIONS; ABSO; STERLINGBACKCHECK, Cross-Defendants. TOTAL STORAGE SOLUTIONS, Cross-Claimant,
v.
ALOHA KING, LLC; ABSO; STERLINGBACKCHECK, Cross-Defendants. TNT SELF STORAGE MANAGEMENT, INC., Cross-Claimant,
v.
ALOHA KING, LLC; ABSO; STERLINGBACKCHECK, Cross-Defendants.

ORDER GRANTING DEFENDANTS ABSO AND STERLINGBACKCHECK’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT FILED JULY 21, 2015 (ECF No. 99) WITH LEAVE TO AMEND and GRANTING, IN PART, AND DENYING, IN PART, CROSS-DEFENDANTS ABSO AND STERLINGBACKCHECK’S MOTION TO DISMISS TOTAL STORAGE SOLUTIONS’ CROSSCLAIMS FILED ON AUGUST 7, 2015 (ECF No. 100) WITH LEAVE TO AMEND and DENYING CROSS-DEFENDANTS ABSO AND STERLINGBACKCHECK’S MOTION TO DISMISS TNT SELF STORAGE MANAGEMENT, INC.’S CROSSCLAIMS FILED ON AUGUST 10, 2015 (ECF No. 101) and DENYING CROSS-DEFENDANTS ABSO AND STERLINGBACKCHECK’S MOTION TO DISMISS ALOHA KING, LLC’S CROSSCLAIMS FILED ON SEPTEMBER 16, 2015 (ECF No. 120)

Plaintiff Masahiro Wada claims that in 2009 he rented a storage unit at a Honolulu storage facility owned by Defendant Aloha King, LLC. Plaintiff Masahiro Wada alleges that his fifteen year-old daughter, Plaintiff Maho Wada, was sexually assaulted by Dale McShane, the manager of Defendant Aloha King, LLC’s storage facility.

Plaintiffs assert that Defendant TNT Self Storage Management, Inc. managed the storage facility for Defendant Aloha King, LLC, and contracted with Defendant Total Storage Solutions for the facility’s personnel and staffing matters.

Plaintiffs assert that Defendant Total Storage Solutions contracted for Defendant Abso to conduct a background check on Dale McShane, but Defendant Abso did not disclose that McShane had a criminal record and was a registered sex offender.

PLAINTIFFS’ FIRST AMENDED COMPLAINT

On July 21, 2015, the Plaintiffs filed a First Amended Complaint (ECF No. 73), naming the following Defendants:

(1) Defendant Aloha King, LLC, as the owner of the storage facility, (“Aloha King”);
(2) Defendant TNT Self-Storage Management, Inc., as the manager/operator of the storage facility, (“TNT Management”);
(3) Defendant Total Storage Solutions, as the personnel and staffing agent for the storage facility, (“TSS Staffing Agent”);
(4) Defendant Abso, as acquired by Defendant SterlingBackcheck, as the contractor who performed the background check on Dale McShane, (“Abso” or “Abso/SterlingBackcheck”).

CROSSCLAIMS AGAINST DEFENDANTS ABSO/STERLINGBACKCHECK

There are three separate Crossclaims filed against Cross-Defendants Abso/SterlingBackcheck.

1. TSS Staffing Agent’s Crossclaim (ECF No. 87)

Cross-Claimant TSS Staffing Agent filed a Crossclaim against Cross-Defendants Abso/SterlingBackcheck with the following causes of action:

Count I: Breach of Contract against Defendant Abso
Count II: Negligence against Defendant Abso
Count III: Indemnification and Contribution against Defendant Abso
Count IV: Indemnification and Contribution against Defendant Sterling Backcheck

(Cross-Claimant TSS Staffing Agent’s Crossclaim, ECF No. 87).

2. TNT Management’s Crossclaim (ECF No. 89-1)

Cross-Claimant TNT Management filed a Crossclaim against Cross-Defendants Abso/SterlingBackcheck for contribution and indemnification. (Defendant TNT Management’s Crossclaim, ECF No. 89-1).

3. Aloha King’s Crossclaim (ECF No. 109-1)

Cross-Claimant Aloha King has also filed a Crossclaim against Cross-Defendants Abso/SterlingBackcheck for contribution and indemnification. (Defendant Aloha King’s Crossclaim, ECF No. 109-1).

FOUR MOTIONS BEFORE THE COURT

Defendants/Cross-Defendants Abso/SterlingBackcheck have filed the following four Motions before the Court:

1. Defendants Abso/SterlingBackcheck’s Motion to Dismiss the Plaintiffs’ First Amended Complaint (ECF No. 99)

Defendants Abso/SterlingBackcheck have filed a Motion to Dismiss the First Amended Complaint filed by Plaintiffs. Defendants Abso/SterlingBackcheck assert in their Motion to Dismiss that Plaintiffs’ claims are preempted by the Fair Credit Reporting Act. Defendants Abso/SterlingBackcheck argue that Plaintiffs have failed to state a claim under the Fair Credit Reporting Act.

Defendants Abso/SterlingBackcheck argue that, even if the claims are not preempted, Plaintiffs’ claims are barred by the applicable statutes of limitations and Plaintiffs have not otherwise stated a claim upon which relief may be granted.

Defendants Abso/SterlingBackcheck’s Motion to Dismiss the Plaintiffs’ First Amended Complaint (ECF No. 99) is GRANTED WITH LEAVE TO AMEND.

2. Cross-Defendants Abso/SterlingBackcheck’s Motion to Dismiss TSS Staffing Agent’s Crossclaim (ECF No. 100)

Cross-Defendants Abso/SterlingBackcheck assert in their Motion that Cross-Claimant TSS Staffing Agent’s claims for breach of contract, negligence, indemnification, and contribution are preempted by the Fair Credit Reporting Act. Cross-Defendants Abso/SterlingBackcheck assert that the allegations in TSS Staffing Agent’s Crossclaim do not state a claim pursuant to the Fair Credit Reporting Act.

Cross-Defendants Abso/SterlingBackcheck argue that, even if the claims are not preempted, TSS Staffing Agent has not provided sufficient allegations to state a claim upon which relief can be granted. Cross-Defendants Abso/SterlingBackcheck also assert that TSS Staffing Agent’s claims are barred by the applicable statutes of limitations.

Cross-Defendants Abso/SterlingBackcheck also argue that TSS Staffing Agent’s tort claims are barred by the economic loss doctrine.

Cross-Defendants Abso/SterlingBackcheck’s Motion to Dismiss the Crossclaims filed by Cross-Claimant TSS Staffing Agent (ECF No. 100) is GRANTED, IN PART, AND DENIED, IN PART, WITH LEAVE TO AMEND.

3. Cross-Defendants Abso/SterlingBackcheck’s Motion to Dismiss the Crossclaim filed by TNT Management (ECF No. 101)

Cross-Defendants Abso/SterlingBackcheck filed a Motion to Dismiss TNT Management’s Crossclaim for indemnification and contribution. Cross-Defendants argue that TNT Management’s Crossclaim does not contain sufficient facts to state a claim. They also argue that TNT Management’s claims are barred by the economic loss rule.

Cross-Defendants Abso/SterlingBackcheck’s Motion to Dismiss the Crossclaims filed by Cross-Claimants TNT Management (ECF No. 101) is DENIED.

4. Cross-Defendants Abso/SterlingBackcheck’s Motion to Dismiss the Crossclaims filed by Aloha King (ECF No. 120)

Cross-Defendants Abso/SterlingBackcheck filed a Motion to Dismiss Aloha King’s Crossclaim for indemnification and contribution. Cross-Defendants argue there are insufficient allegations in the Crossclaim to state a claim for either indemnification or contribution.

Cross-Defendants Abso/SterlingBackcheck’s Motion to Dismiss Crossclaim filed by Aloha King (ECF No. 120) is DENIED.

PROCEDURAL HISTORY

On June 17, 2014, Plaintiffs Maho and Masahiro Wada filed a Complaint against Defendants Aloha King, LLC (“Aloha King”); Aloha Island-King, LLC; Total Storage Solutions (“TSS Staffing Agent”); TNT Self Storage Management, Inc. (“TNT Management”), and Doe Defendants 1-20. (ECF No. 1).

On September 17, 2014, Plaintiffs filed a Notice of Dismissal Without Prejudice as to Defendant Aloha-Island King, LLC. (ECF No. 16).

On March 17, 2015, Defendant TNT Management filed a Motion for Leave to File a Third-Party Complaint. (ECF No. 49).

On May 12, 2015, the Magistrate Judge issued an Order Granting Defendant TNT Management’s Motion for Leave to File Third-Party Complaint. (ECF No. 55).

On May 26, 2015, TNT Management, as a Third-Party Plaintiff, filed a Third-Party Complaint against Defendants Abso/SterlingBackcheck (“Abso” or “Abso/SterlingBackcheck”). (ECF No. 56).

On July 6, 2015, the Magistrate Judge approved a Stipulation among Plaintiffs and Defendants to permit Plaintiffs to file an Amended Complaint. (ECF No. 62).

On July 21, 2015, Plaintiffs filed a FIRST AMENDED COMPLAINT, adding Abso/SterlingBackcheck as Defendants. (ECF No. 73).

On August 7, 2015, Cross-Claimant TSS Staffing Agent filed a Crossclaim against Cross-Defendants Abso/SterlingBackcheck. (ECF No. 87).

On August 10, 2015, Cross-Claimant TNT Management filed a Crossclaim against Cross-Defendants Aloha King and Abso/SterlingBackcheck. (ECF No. 89).

On September 4, 2015, Third-Party Plaintiff TNT Management filed a Notice of Dismissal Without Prejudice of its Third-Party Complaint against Third-Party Defendants Abso/SterlingBackcheck. (ECF No. 98).

On September 8, 2015, Defendants Abso/SterlingBackcheck filed a Motion to Dismiss Plaintiffs’ First Amended Complaint. (ECF No. 99).

On the same date, Abso/SterlingBackcheck, as Cross-Defendants, filed a Motion to Dismiss Cross-Claimant TSS Staffing Agent’s Crossclaims Filed August 7, 2015. (ECF No. 100).

They also filed Cross-Defendants Abso/SterlingBackcheck’s Motion to Dismiss Cross-Claimant TNT Management’s Crossclaims Filed August 10, 2015. (ECF No. 101).

On September 16, 2015, Cross-Claimant Aloha King filed Crossclaims against Defendants Abso/SterlingBackcheck, Cross-Defendant TNT Management, and Cross-Defendant TSS Staffing Agent. (ECF No. 109).

On September 23, 2015, Plaintiffs filed their Memorandum in Opposition to Defendants Abso/SterlingBackcheck’s Motion to Dismiss their First Amended Complaint. (ECF No. 112).

On the same date, Cross-Claimant TNT Management filed its Memorandum in Opposition to Cross-Defendants Abso/SterlingBackcheck’s Motion to Dismiss its Crossclaim. (ECF No. 113).

Also on September 23, 2015, Cross-Claimant TSS Staffing Agent filed its Memorandum in Opposition to Cross-Defendants Abso/SterlingBackcheck’s Motion to Dismiss its Crossclaim. (ECF No. 114).

On October 7, 2015, Cross-Defendants Abso/SterlingBackcheck filed their Reply in Support of their Motion to Dismiss Plaintiffs’ First Amended Complaint. (ECF No. 117). Cross-Defendants Abso/SterlingBackcheck also filed their Reply in Support of their Motion to Dismiss Cross-Claimant TNT Management’s Crossclaim (ECF No. 118) and their Reply in Support of their Motion to Dismiss Cross-Claimant TSS Staffing Agent’s Crossclaim. (ECF No. 119).

On the same date, Cross-Defendants Abso/SterlingBackcheck filed a Motion to Dismiss Cross-Claimant Aloha King’s Crossclaim. (ECF No. 120).

On October 15, 2015, Defendants/Cross-Defendants Abso/SterlingBackcheck sent a letter requesting that the hearing on their four Motions set for November 16, 2015, be continued. (ECF No. 124).

On October 16, 2015, the Court granted the request and set the hearing for November 20, 2015. (ECF No. 125).

On October 27, 2015, Cross-Claimant Aloha King filed an Ex Parte Motion for Extension of Time to File its Memorandum in Opposition to Cross-Defendants Abso/SterlingBackcheck’s Motion to Dismiss its Crossclaim. (ECF No. 126).

On October 28, 2015, Cross-Defendants Abso/SterlingBackcheck filed a Statement of Position Regarding Aloha King’s Ex Parte Motion. (ECF No. 127).

On the same date, the Court granted Cross-Claimant Aloha King’s Motion for Extension of Time and provided Cross- Defendants Abso/SterlingBackcheck with additional time to file their Reply. (ECF No. 128).

On October 30, 2015, Cross-Claimant Aloha King filed its Memorandum in Opposition to Cross-Defendants Abso/SterlingBackcheck’s Motion to Dismiss its Crossclaim. (ECF No. 129).

On November 12, 2015, Cross-Defendants Abso/SterlingBackcheck filed their Reply Memorandum in Support of their Motion to Dismiss Cross-Claimant Aloha King’s Crossclaim. (ECF No. 132).

On November 20, 2015, the Court held a hearing on Defendants/Cross-Defendants Abso/SterlingBackcheck’s four Motions to Dismiss (ECF Nos. 99, 100, 101, and 120).

BACKGROUND

PLAINTIFFS’ FIRST AMENDED COMPLAINT (ECF No. 73)

The central claim in the First Amended Complaint involves allegations that in 2009, Plaintiff Masahiro Wada’s fifteen year-old daughter, Plaintiff Maho Wada, was sexually assaulted by Dale McShane, the manager of a storage facility located in Honolulu.

Plaintiffs’ First Amended Complaint asserts negligence claims against the numerous entities that owned, managed, and contracted with the storage facility, claiming that they knew or should have known about Dale McShane’s prior criminal history and registration as a sex offender.

Allegations Regarding Dale McShane’s Prior Criminal History

The First Amended Complaint states that on January 14, 1985, McShane was convicted of attempted rape in the third degree and burglary in the first degree. (First Amended Complaint at ¶ 12, ECF No. 73).

Plaintiffs assert McShane is and has been a registered sex offender. (Id. at ¶ 22).

Defendants’ Relationship to the Storage Facility and the Employment of Dale McShane:

The First Amended Complaint alleges the following:

The storage facility at issue, Aloha Island Self Storage, is owned by Defendant Aloha King, LLC (“Aloha King”). (First Amended Complaint at ¶ 7, ECF No. 73).

In February 2006, Defendant Aloha King contracted with Defendant TNT Self Storage Management, Inc. (“TNT Management”) to manage the storage facility. (Id. at ¶ 13, ECF No. 73).

Defendant TNT Management contracted with Defendant Total Storage Solutions (“TSS Staffing Agent”), for its personnel and staffing matters related to its operation of the storage facility. (Id. at ¶¶ 7, 13). Defendant TNT Management is owned by the same individual that owns Defendant TSS Staffing Agent. (Id. at ¶ 13).

In June 2008, Defendant TSS Staffing Agent entered into a contract with Defendant Abso (“Abso” or “Abso/SterlingBackcheck”) to perform employment and background screening services for the employees of the storage facility. (Id. at ¶ 14).

In November 2008, TNT Management hired Dale McShane as manager for the storage facility. (Id. at ¶¶ 7, 15). Defendant TSS Staffing Agent requested a background report on McShane from Defendant Abso. (Id. at ¶ 15). Defendant Abso provided a background report for McShane, dated February 5, 2009, and the report stated that “McShane had a clear County Criminal record and National Sex Offender record.” (Id.)

Defendant SterlingBackcheck acquired Abso in 2010 and is a successor to Defendant Abso’s liabilities. (Id. at ¶ 10).

The First Amended Complaint’s Sexual Assault Allegations

In May 2009, Plaintiff Masahiro Wada rented a storage unit at the storage facility. (First Amended Complaint at ¶¶ 7, 16, ECF No. 73). Plaintiff Masahiro Wada frequented the storage facility and respected and trusted the storage facility’s manager, Dale McShane. (Id. at ¶ 17). Plaintiff Masahiro Wada brought his fifteen year-old daughter, Plaintiff Maho Wada, to the storage facility in August 2009, and when he was out of sight, Plaintiff Maho Wada was kissed by McShane. (Id. at ¶ 20).

On September 11, 2009, McShane drove Plaintiff Maho Wada from the storage facility to her home. (Id. at ¶ 21). While McShane was driving Plaintiff Maho Wada home, he pulled the car over, kissed Maho Wada, stuck his tongue in her mouth, and touched her arms and inner thigh. (Id.)

Plaintiffs’ First Amended Complaint names the following Defendants:

(1) Defendant Aloha King, LLC, as the owner of the storage facility, ...

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