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Chris M. Mason – 019891

cmason@jsslaw.com

JENNINGS, STROUSS & SALMON, P.L.C.

A Professional Limited Liability Company

One East Washington Street, Suite 1900

Phoenix, AZ 85004-2554

Telephone: (602) 262-5911

Michael L. Schwartz – 028365

Schwartz@schwartzlawfirmaz.com

MICHAEL L. SCHWARTZ, PLLC

7702 East Doubletree Ranch Road, Suite 300

Scottsdale, AZ 85258

Telephone: (480) 902-3055

Attorneys for Defendants/Counterclaimants

 

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

JOANNE ZUNIGA, an individual, and 

DAVID M. REAVES, Chapter 7 

Bankruptcy Trustee, 

Plaintiffs,

vs.

FIESTA PEDIATRIC THERAPY, 

INC., an Arizona corporation; BETH 

WILLIAMSON, an individual, and 

RANDY WILLIAMSON, her husband,

Defendants.

No. CV-15-1978-PHX-DKD

DEFENDANTS’/ 

COUNTERCLAIMANTS’ 

MOTION FOR SUMMARY 

JUDGMENT

FIESTA PEDIATRIC THERAPY, 

INC., an Arizona corporation; BETH 

WILLIAMSON, an individual, and 

RANDY WILLIAMSON, her husband,

Counterclaimants,

vs.

JOANNE ZUNIGA, an individual, and 

David Mr. Reaves, Chapter 7 

Bankruptcy Trustee,

Counterdefendants.

Pursuant to Rule 56 of the Federal Rules of Civil Procedure, Defendants / 

Counterclaimants request the Court to enter summary judgment in their favor. 

Plaintiff’s claim under the Fair Labor Standards Act (“FLSA”) fails as a matter of 

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law because Plaintiff was properly compensated commensurate with the Fluctuating 

Work Week Method (“FWW Method”) of compensation. As for Defendants / 

Counterclaimants affirmative claims, summary judgment should be entered in their 

favor given that Plaintiff has admitted under oath at deposition that she pilfered 

company records, including accessing Fiesta computer systems, and patient files. 

This Motion is supported by the following Memorandum of Points and Authorities 

and the Separate Statement of Facts (“SOF”) submitted contemporaneously herewith.

MEMORANDUM OF POINTS AND AUTHORITIES

I. FACTUAL BACKGROUND

Fiesta provides specialized therapeutic services for disabled children with any 

of a variety of conditions, including autism, downs syndrome, and cerebral palsy, to 

name just a few. [SOF ¶ 1.] It was started nearly 30 years ago. [SOF ¶ 1.] It 

provides a fun and innovative environment catering to the therapeutic needs of 

children, many of whom are indigent and receive Fiesta’s therapy services not 

available elsewhere through a variety of social service programs. [SOF ¶ 1.]

The Plaintiff, Ms. Zuniga, began working for Fiesta in August of 2009. [SOF 

¶ 27.] In 2011, she was made a salaried employee and her pay rate was increased, as 

implemented by her sister, Maria Singh, who managed the Fiesta operations. [SOF 

¶¶ 34, 42.] Beginning at that time, Fiesta paid Ms. Zuniga an overtime rate 

equivalent to her base FLSA hourly rate. [SOF ¶ 34.] She was paid for all of her 

hours worked, including overtime hours. [SOF ¶ 34.] All of her overtime hours were 

compensated at the base rate of between $18.79 and $19 per hour during the relevant 

time period, which reflected gradual pay rate increases between 2011 and her final 

date of employment in December 2014. [SOF ¶¶ 34, 42.] Ms. Zuniga was paid at 

this overtime rate (equivalent to her base rate) for over three consecutive years. 

[SOF ¶ 42.]

In December of 2014, Ms. Zuniga decided to surreptitiously copy and take 

Fiesta patient records, including treatment and billing records. [SOF ¶¶ 103-111.] 

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Her purpose was to use the records to support allegations of purported billing 

irregularities to state agencies. [SOF ¶ 104.] The patient records included records 

copied from hard files, and records that she printed from Fiesta’s computer systems.

[SOF ¶ 107.]

Ms. Zuniga was terminated that month. [SOF ¶¶ 98, 101.] She first filed a 

legal claim against Fiesta roughly eight months after her separation from Fiesta in 

December 2014. [SOF ¶ 117.] Although her claim purports to seek recovery for

years preceding the filing of her Complaint (which she filed August 12, 2015), she 

had previously filed bankruptcy on October 15, 2014. She had not disclosed her 

claimed right to unpaid overtime in her bankruptcy filings. [SOF ¶¶ 112-117.] 

Indeed, she first formally asserted a claim for the unpaid overtime just days after her 

bankruptcy was discharged. [SOF ¶¶ 114, 115.] Her attorneys only first brought the 

claim to the attention of the bankruptcy Trustee after undersigned counsel discovered 

the bankruptcy and notified Ms. Zuniga’s counsel of the failure to disclose the claim.

[SOF ¶ 122.]

II. LEGAL DISCUSSION

A. Summary Judgment Standard

Summary judgment should be granted where “there is no genuine issue as to 

any material fact and the moving party is entitled to judgment as a matter of law.” 

Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 

91 L. Ed. 2d 265 (1986); Magnetar Techs. Corp. v. Intamin, Ltd., 801 F.3d 1150, 

1155 (9th Cir. 2015). “Disputes over irrelevant or unnecessary facts will not preclude 

a grant of summary judgment.” T.W. Elec. Servs., Inc. v. Pac. Elec. Contractors 

Ass’n., 809 F.2d 626, 630 (9th Cir. 1987).

B. Ms. Zuniga’s FLSA Claim Should be Dismissed Because she was 

Properly Paid Under the Fluctuating Workweek Method of Pay.

Despite some misperception, the FLSA does not create a single, static method 

of pay. In fact, there are countless pay methodologies employers may use in full 

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compliance with the FLSA, including salaries, piece-rates, commissions, Belo plans, 

and many others. According to data compiled by the United States Department of 

Labor Statistics, only 58.5 percent of American workers are even paid by the hour, 

meaning that the remaining 41.5 percent are compensated through alternative means.1 

(Exhibit A hereto.) The FLSA merely creates a floor below which an employer may 

not drop, not a rigid pay formula mandated for all employees.

One permissible pay methodology is the FWW Method. The FWW Method is 

permissible when: (1) the employee’s work hours fluctuate from week to week; (2) 

the employee receives a fixed salary regardless of hours worked; (3) the fixed salary 

is sufficient to provide compensation every week at a regular rate that was at least 

equal to the minimum wage; (4) the employer and the employee share a “clear and 

mutual understanding” that the employer would pay the fixed salary regardless of 

hours worked; and (5) the employee receives overtime compensation at no less than 

one-half the rate of pay for hours worked in excess of forty in a workweek. See

Flood v. New Hanover County, 125 F.3d 249, 252 (4th Cir. 1997); Overnight Motor 

Transp. Co. v. Missel, 316 U.S. 572 (1942) (first approving the fluctuating workweek

methodology of overtime pay).

“[The FWW Method] is not an ‘exception’ to the FLSA. It merely provides 

an alternative means by which an employer can determine its employees’ regular and 

overtime rate of pay.” Flood v. New Hanover County, 125 F.3d 249, 252 (4th Cir. 

1997); accord Samson v. Apollo Res., Inc., 242 F.3d 629, 636 (5th Cir. 2001). Thus, 

“the employee bears the burden of proving that the employer failed to properly 

administer the FWW Method” because “generally, a plaintiff suing under the FLSA 

carries the burden of proving all elements of his or her claim.” Samson v. Apollo 

 

1

This data is published annually every April. The most recently-available 

data is data for calendar year 2015. The data for calendar year 2016 is not yet 

available as of the filing of this Motion. Nonetheless, the changes in percentages are 

minor when measured from one year to the next.

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Resources, Inc., 242 F.3d 629, 636 (5th Cir. 2001); accord Lamonica v. Safe 

Hurricane Shutters, Inc., 711 F.3d 1299, 1311 (11th Cir. 2013) (“[T]he fluctuating 

workweek method is not an affirmative defense; rather, the employee bears the 

burden of proving that the employer failed to properly administer [it].” (internal 

quotations omitted)); Caraballo v. City of Chicago, 969 F. Supp. 2d 1008, 1020 

(N.D. Ill. 2013) (“An employee bears the burden of proving that the employer failed 

to administer the FWW method correctly.”).

Here, Fiesta properly paid Ms. Zuniga consistent with the FWW Method. Her 

work hours fluctuated dramatically from week to week. [SOF ¶ 97.] She received a 

fixed salary regardless of hours worked. [SOF ¶ 55.] Her fixed salary compensated 

her more than the minimum wage for hours worked. [SOF ¶ 55.] She and Fiesta had 

a clear and mutual understanding that she would always get her base salary 

regardless of hours worked. [SOF ¶¶ 34, 35, 42-52.] And she received overtime 

compensation at no less than one-half the rate of pay for her hours worked in excess 

of forty in a workweek. [SOF ¶ 42.] Ms. Zuniga’s various arguments, as addressed 

below, cannot overcome these simple facts.

1) Ms. Zuniga received a fixed salary despite her post-hoc

attempts to label her pay as “hourly.”

Ms. Zuniga spars with reality and common sense in arguing that she was an 

hourly employee, despite her prior candid written acknowledgements and company 

records proving she was salaried. [SOF ¶¶ 45-52.] But her argument is misdirection. 

The requirement that an employee receive a fixed salary does not turn on labels or 

euphemisms. It merely demands that an employee receive a set minimum amount of 

pay from week to week sufficient to satisfy minimum wage requirements regardless 

of actual hours worked. This is all that is meant and intended by the salary 

requirement.

Courts evaluating whether an employee is paid a “salary” in compliance with 

FLSA salary requirements have recognized that accounting systems and labels 

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notwithstanding, the question turns on whether an employer made reductions from 

minimum base pay for work absences. For instance, in McGuire v. City of Portland, 

the Ninth Circuit recognized that an employer’s use of an hourly accounting system 

and the employees’ claim that they were hourly was beside the point. The Ninth 

Circuit ruled that the employer met the salary requirement because the employees’ 

minimum base pay was not ordinarily reduced for absences from work. 159 F.3d 

460, 464 (9th Cir. 1998). Numerous other courts have recognized the same principle. 

See, e.g., B.N. Spradling v. City of Tulsa, 95 F.3d 1492, 1500 (10th Cir. 1996) (ruling 

that the fact that pay stubs included the number of hours did not preclude a finding 

that the employees were paid on a salary basis); Wight v. Aargo Sec. Servs., Inc., 

2001 WL 91705 at *7 (S.D.N.Y. 2001) (“The label an employer or a time record 

furnishes an employee for internal purposes is not determinative of the employee’s 

status under the FLSA. The employer’s subjective intent is not the litmus test.”) 

(“Thus, the pivotal issue is generally whether or not an employee’s salary is subject 

to reduction for absences of less than a day.”); Palazzolo-Robinson v. Sharis Mgmt. 

Corp., 68 F. Supp. 2d 1186, 1192 (W.D. Wash. 1999) (“[A] payroll accounting 

system which calculates an exempt employees [sic] pay on an hourly basis does not 

indicate that the employee was not salaried and, thus, is not subject to the FLSA’s 

minimum wage or overtime requirements.”); Cf. Cash v. Conn Appliances, Inc., 2 F. 

Supp. 2d 884, 904 (E.D. Tex. 1997) (holding that for purposes of the FWW method 

the notion of “salary” means “a fixed sum paid at regular intervals of time that serves 

as the foundation of employee non-overtime pay.”).

Ms. Zuniga’s base pay was never reduced for absences or any other reason. 

[SOF ¶ 55.] She always received pay for a minimum of 86.67 hours, even during 

entire weeks while she was out. [SOF ¶ 55.] She has not met, and cannot meet, her 

burden of proving improper deductions. She was therefore paid on a salary basis.

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2) Ms. Zuniga’s admission that she chose to keep working 

under the pay arrangement to get as many overtime hours as 

possible satisfies the “clear and mutual understanding” 

element.

No signed consent or other affirmative acknowledgement by the employee is 

required to apply the FWW Rate. See, e.g., 29 C.F.R. § 778.114 (“Where there is a 

clear mutual understanding of the parties that the fixed salary is compensation (apart 

from overtime premiums) for the hours worked each workweek . . .”); Samson, 242 

F.3d at 637; Griffin v. Wake County, 142 F.3d 712, 717 (4th Cir. 1998) (providing that 

use of the FWW Rate does not require an “employer [to] hold an employee’s hand 

and specifically tell him or her precisely how the payroll system works”). “An 

agreement or understanding need not be in writing in order to validate the application 

of the fluctuating workweek method of paying overtime. Where an employee 

continues to work and accept payment of a salary for all hours of work, her 

acceptance of payment of the salary will validate the fluctuating workweek method 

of compensation as her employment.” DOL Wage & Hour Division Opinion Letter –

FLSA-772 (Feb. 26, 1973).

Numerous authorities affirm that an employee who continues to work 

fluctuating workweeks and receives a fixed salary regardless of hours worked has 

inherently expressed knowledge and acceptance of the relationship. See, e.g., id. 

Griffin, 142 F.3d at 717; Valerio v. Putnam Assocs., Inc., 173 F.3d 35, 39 (1st Cir. 

1999); Mayhew v. Wells, 125 F.3d 216, 219 (4th Cir. 1997); Zoltek v. Safelite Glass 

Corp., 884 F. Supp. 283 (N.D. Ill. 1995). For purposes of the FWW, all that is 

needed is for Ms. Zuniga to be aware that she would get her full base pay despite 

actual hours worked. See id. She clearly was.

Ms. Zuniga attempts to change the dialogue by arguing that she did not agree 

to the arrangement and did not have a full understanding of how a fluctuating 

workweek system works. But again, that is not the test. Courts have rejected similar 

attempts to change the meaning of the “clear and mutual understanding” element. 

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See Samson v. Apollo Res., Inc., 242 F.3d 629, 637 (5th Cir. 2001) (“Section 778.114 

is specific as to what an employee must understand before the FWW method may be 

used . . . . We decline to expand the “clear understanding requirement of section 

778.114 to include the details cited by the Plaintiffs.”); Stein v. Guardsmark LLC, 

2013 WL 3809463 (S.D.N.Y. 2013) (“This rule [Section 778.114] does not require 

an understanding of how the FWW method works or that overtime will be paid 

according to this method. Thus, many courts have deemed it irrelevant that an 

employee did not actually understand the full details of how her employer’s FWW 

program operated.”); Valerio v. Putnam Assocs., Inc., 173 F.3d 35, 39 (1st Cir. 1999); 

Zoltek v. Safelite Glass Corp., 884 F. Supp. 283 (N.D. Ill. 1995).

3) Hours need not fluctuate below 40 for the FWW to apply, 

but, in any event, Ms. Zuniga’s did.

It appears that every circuit court addressing the issue has ruled that for 

purposes of the FWW Method an employee’s hours need not fluctuate below 40 in a 

workweek. See Urnikis-Negro v. American Fam. Prop. Servs., 616 F.3d 665, 683-84 

(7th Cir. 2010); Condo v. Sysco Corp., 1 F.3d 599, 605 (7th Cir. 1993); Aiken v. 

County of Hampton, 1998 WL 957458 at *3 (4th Cir. 1998); Yadav v. Colemen 

Oldsmobile, Inc., 538 F.2d 1206, 1207-08 (5th Cir. 1976).2 Although not every 

district court has followed suit, many have. Hasan v. GPM Investments, LLC, 896 F. 

Supp. 2d 145, 150 (D. Conn. 2012); Mitchell v. Abercrombie & Fitch, Co., 428 F. 

Supp. 2d 725, 734 (S.D. Ohio 2006); Newsom v. NPC Inter., 2003 WL 23849758 at 

*4 (W.D. Tenn. 2003). There is no requirement expressed anywhere in the rule 

adopted by the Department of Labor mandating fluctuation below 40 hours in a 

workweek. 29 C.F.R. § 778.114. Certainly the Department of Labor knows how to 

 

2 While the Ninth Circuit has not expressly ruled on the issue, it has approved 

the use of the FWW Method to compute damages for employees who never worked 

less than 40 hours in a workweek and generally worked dramatically more. See Gen. 

Elec. Co. v. Porter, 208 F.2d 805, 812-13 (9th Cir. 1953).

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express a below-40 requirement in its rulemaking and chose not to do so for the 

FWW Method – we can look to its rules for application of Belo Plans to see this in 

action. Compare 29 C.F.R. § 778.406 (requiring fluctuation below 40 to apply Belo

plans) with 29 C.F.R. § 778.114 (not requiring fluctuation below 40 to apply FWW 

Method).

Regardless, Ms. Zuniga’s hours actually fluctuated below 40 at times. [SOF 

¶¶ 53-68.] Consequently, the FWW Method has been properly applied.

4) The charging of Ms. Zuniga’s PTO bank does not defeat the 

FWW Method as a matter of law and fact.

Countless authorities recognize that the docking of an employee’s PTO or 

vacation bank does not defeat the application of the FWW Method. This is because 

the FLSA governs employee pay, not the amount of PTO time they accumulate. See, 

e.g., Griffin v. Wake County, 142 F.3d 712, 717-18 (4th Cir. 1998) (“[S]ection 

778.114 does not mention leave or vacation at all – it only governs the pay that 

employees receive. . . . [S]uch deductions from leave do not constitute a violation of 

Section 778.114.”); Foucher v. Kraft Foods Global, Inc., 2009 WL 4350251 at n.3 

(E.D. Mich. 2009) (“Kraft’s method of deducting from an employee’s accrued leave 

bank when an employee misses a day of work does not violate the FWW method and 

was, and has been, permissible under the FWW method for at least 15 years.”); 

Teblum v. Eckerd Corp. of Fla, Inc., 2006 WL 288932 at *8 (M.D. Fla. 2006) (“This 

Court agrees with Defendant that an employer does not run afoul of 29 C.F.R. § 

778.114 simply by making deductions from an FWW employee’s nonproductive time 

bank [‘i.e. holiday, sick, or vacation’] for hours an employee does not actually work 

so long as the employee receives the same weekly base salary.); Aiken v. County of 

Hampton, 977 F. Supp. 390, 397 (D.S.C. 1997) (“A reduction in paid leave time does 

not affect an employee’s status as a salaried employee” for purposes of the FWW 

method of pay). The Department of Labor is in full agreement with this principle. 

See Opinion Letter of the Wage and Hour Administrator, 95-99 CCH-WH, 

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Department of Labor, 1995 WL 1032466 (Feb. 27, 1995) (ruling that the 

requirements of 778.114 are met when an employee receives his or her full salary 

regardless of deductions from vacation or sick leave banks).

This employment law principle correlates with a similar principle for purposes 

of the salary basis test for the white collar exemptions under the FLSA. The 

Department of Labor and the courts, including the Ninth Circuit, have long held that 

docking of an employees’ PTO or vacation bank does not defeat the salary basis test. 

See, e.g., 29 C.F.R. § 541.602(b)(2); Barner v. City of Novato, 17 F.3d 1256, 1261-62 

(9th Cir. 1994) (holding that the use of the words “amount” and “compensation” in 

DOL regulations refers to “cash” or “salary” not personal or vacation time for 

purposes of defeating salary basis test when there are deductions from accrued 

vacation pools).

Even were we to ignore this well-established, well-reasoned, line of 

authorities, Ms. Zuniga still had and used an unending amount of PTO, regardless of 

what she did or did not have in her PTO bank. [SOF ¶¶ 53-68.] As the records 

reflect, Ms. Zuniga exceeded her two-week annual PTO allotment on a regular basis 

without consequence. [SOF ¶¶ 53-68.] Indeed, in one particular year, she took over 

three weeks of time away from work for addiction treatment. [SOF ¶ 62.]

C. Ms. Zuniga’s FLSA Claim is Limited by the Applicable Limitations 

Period.

To the extent not dismissed on summary judgment, Ms. Zuniga’s FLSA claim 

is limited to a period of two years preceding the filing of her Complaint. 29 U.S.C. § 

255(a). She first filed her Complaint on August 12, 2015. Two years preceding that 

date is August 12, 2013. Claims for any alleged underpayments before August 12, 

2013 are time-barred and, thus, summary judgment should be granted to Defendants 

as to those elements of her claim.

3

 

3 Ms. Zuniga’s Complaint seeks recovery of alleged underpayments dating 

more than three years preceding the filing of her Complaint.

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D. Ms. Zuniga’s FLSA Claim is Estopped Because she did not Disclose 

it in her Bankruptcy Filings.

Ms. Zuniga had a duty to disclose her contingent FLSA claims for alleged 

unpaid overtime with her bankruptcy filings. [SOF ¶¶ 116, 126.] She not only failed 

to disclose them, she appeared to delay formal assertion of the claims until just after 

notice of discharge was issued. [SOF ¶¶ 112-127.] Even after filing her FLSA claim 

in court, she did not disclose it to the bankruptcy court or the Trustee of her own 

volition. Her counsel did so only after undersigned counsel raised it as an issue. 

Under the circumstances, Ms. Zuniga’s FLSA claims, to the extent they pre-date the 

filing of her bankruptcy, should be estopped. Hamilton v. State Farm Fire & Cas. 

Co., 270 F.3d 778, 783-84 (9th Cir. 2001).

E. Ms. Zuniga Admits to Stealing Records from Fiesta and, Thus, 

Summary Judgment Should be Entered in Favor of Fiesta for its 

Counterclaims Related to the Thefts.

Ms. Zuniga admits to stealing hard copy and electronic patient records from 

Fiesta in December of 2014, warranting an entry of summary judgment in Fiesta’s 

favor on liability for claims relating to the thefts. [SOF ¶¶ 103-109, 110, 111.] 

Fiesta has brought three claims against Ms. Zuniga related to the thefts – namely for 

breach of the duty of loyalty, misappropriation (conversion), and violation of the 

Computer Fraud and Abuse Act – and summary judgment is appropriate as to all 

three claims.

1) Ms. Zuniga breached her duty of loyalty.

First, Ms. Zuniga breached her duty of loyalty to Fiesta. “[I]n Arizona, an 

employee . . . owes his or her employer . . . a fiduciary duty,” including a duty of 

loyalty. McCallister Co. v. Kastella, 170 Ariz. 455, 457-58, 825 P.2d 980, 982-83 

(App. 1992); accord Security Title Agency, Inc. v. Pope, 219 Ariz. 480, 492, 200 

P.3d 977, 989 (App. 2008). The Restatement of Agency, which Arizona follows, 

recognizes that “an agent is subject to a duty to his principal to act solely for the 

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benefit of the principal in all matters connected with his agency.”4 Restatement 

(Third) of Agency § 8.01 (2006). That duty includes several obligations, including 

“a duty not to deal with the principal as or on behalf of an adverse party in a 

transaction connected with the agency relationship.” Restatement (Third) of Agency 

§ 8.03 (2006). An agent is further bound “not to use property of the principal for the 

agent’s own purposes or those of a third party.” Id. at § 8.05. “Even if the 

[employee] divided loyalty does not result in demonstrable harm to the principal, the 

[employee] has breached the agent’s duty of undivided loyalty.” Id. at § 8.03, cmt. b. 

Ms. Zuniga violated her duty of loyalty to Fiesta by taking its patient records. 

[SOF ¶¶ 74-75, 103-111.] The records that Ms. Zuniga took were, in fact, HIPAAprotected medical records. [SOF ¶¶ 103-111.] Under HIPAA, a health care provider 

(including Fiesta), must maintain the confidentiality of patient records. Formal 

processes must be followed to take or transmit patient, and Ms. Zuniga’s removal of 

those records put Fiesta at risk under HIPAA. Indeed, “[w]rongful disclosure of 

individually identifiable health information by a person in a HIPAA covered entity is 

a crime, punishable by a fine of up to $50,000, a prison term of up to one year, or 

both.” Patten v. State, 273 Or. App. 476, 492 (Or. 2015).

2) Ms. Zuniga misappropriated Fiesta patient records.

Second, Ms. Zuniga misappropriated Fiesta’s patient records. 

Misappropriation, also known as “conversion,” is the “‘intentional exercise of 

dominion or control over chattel which so seriously interferes with the right of 

another to control it that the actor may justly be required to pay the other the full 

value of the chattel.’” Miller v. Hehlen, 209 Ariz. 462, 472, 104 P.3d 193, 203 (App. 

2005) (quoting Restatement (Second) of Torts § 222A(1)). The intent required is 

 

4 Arizona courts follow the Restatement of Agency for guidance when 

interpreting the application of employee common-law duties and responsibilities. 

See, e.g., Fidelity & Deposit Co. v. Bondwriter Southwest, Inc., 228 Ariz. 84, 90, 263 

P.3d 633, 639 (App. 2011).

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“‘an intent to exercise a dominion or control over the goods which is in fact 

inconsistent with the plaintiff’s rights.’” Id. An employer’s right to exercise 

exclusive dominion and control over its records is protected from conversion. 

Restatement (Second) of Torts § 242.

In this matter, Ms. Zuniga intentionally and improperly copied Fiesta’s patient 

records for her own purposes, taking the copies she improperly made off of Fiesta 

property. This interfered with Fiesta’s “exclusive” right to control those records. 

Courts in other jurisdictions have found that the improper taking or retention of 

patient medical records by a staff member constitutes an improper conversion of 

those records. Comprehensive Comm. Dev. Corp. v. Lehach, 223 A.D.2d 399, 399 

(1996) (finding that former physician-employee’s retention of copies of 500 medical 

records constituted conversion). 

3) Ms. Zuniga violated the Computer Fraud and Abuse Act.

Third, Ms. Zuniga violated the Computer Fraud and Abuse Act. Among other 

things, the CFAA prohibits individuals from “intentionally access[ing] a computer 

without authorization or exceed[ing] authorized access and thereby obtain[ing] . . . 

information from any protected computer.”5 18 U.S.C. § 1030(a)(2)(C). Any person 

may maintain a civil action under the CFAA if the improper access involves one of 

the five factors set forth in the five subclauses of subsection (c)(4)(A)(i). 18 U.S.C. § 

1030(g). For purposes of this Motion, we focus on subclause (II) which provides that 

the “offense caused . . . the modification or impairment, or potential modification or 

impairment, of the medical examination, diagnosis, treatment, or care of 1 or more 

individuals.”

As the facts in this matter demonstrate, Ms. Zuniga admittedly accessed Fiesta 

 

5

The term “protected computer” includes computers “used in or affecting 

interstate or foreign commerce or communication.” 18 U.S.C. § 1030(e)(2)(B). 

Fiesta’s computers are used in “interstate commerce” as that term is used under 

established federal law. 

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computers and HIPAA-protected patient information kept on those computers, and 

printed copies of those materials. [SOF ¶¶ 103-111.] Her access was both without 

authorization and in excess of that authorization. First, the particular HIPAAprotected patient records fell outside of the normal scope of the records to which she 

was normally entitled to have access. [SOF ¶ 111.] Her normal job duties, including 

administrative support and patient scheduling, did not necessitate access to patient 

treatment notes. [SOF ¶ 111.] Thus, she accessed those records without 

authorization.

Ms. Zuniga also exceeded her authorization because her purpose in accessing 

the records – to fuel her personal claims of purported billing irregularities – was not 

an authorized purpose. [SOF ¶¶ 103-104.] This application of the CFAA raises a 

split of legal authority that must be addressed. The Ninth Circuit has previously 

ruled that an employee who accesses company systems with an improper purpose has 

not violated the CFAA. LVRC Holdings LLC v. Brekka, 581 F.3d 1127, 1132 (9th 

Cir. 2009). This is a matter of significant disagreement between the Circuits which 

will require Supreme Court decision and resolution. See, e.g., United States v. John, 

597 F.3d 263, 272 (5th Cir. 2010); United States v. Rodriguez, 628 F.3d 1258, 1263 

(11th Cir. 2010); Int’l Airport Ctrs., LLC v. Citron, 440 F.3d 418, 419-21 (7th Cir. 

2006); Guest-Tek Int. Enter., Inc. v. Pullen, 665 F. Supp. 2d 42, 45-46 (D. Mass. 

2009) (recognizing that the First Circuit takes the broader view, citing EF Cultural 

Travel BV v. Explorica, Inc., 274 F.3d 577, 582-84 (1st Cir. 2001)). Undersigned 

counsel recognizes this Court’s obligation to follow Ninth Circuit precedence on this 

matter, but raises it to preserve it for later appellate resolution.

III. CONCLUSION

For the foregoing reasons, Defendants/Counterclaimants request the entry of 

summary judgment in their favor.

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RESPECTFULLY SUBMITTED this 7

th day of March, 2017.

JENNINGS, STROUSS & SALMON, P.L.C.

By /s/ Chris M. Mason

Chris M. Mason

One East Washington St., Suite 1900

Phoenix, AZ 85004-2554

Attorneys for Defendants/Counterclaimants

MICHAEL L. SCHWARTZ, PLLC

By /s/ Michael L. Schwartz

Michael L. Schwartz

7702 East Doubletree Ranch Road.

Suite 300

Scottsdale, AZ 85258

Attorneys for Defendants/Counterclaimants

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CERTIFICATE OF SERVICE

I hereby certify that on March 7, 2017, I electronically transmitted the 

attached document to the Clerk’s Office using the CM/ECF System for filing and 

transmittal of a Notice of Electronic Filing to the following CM/ECF registrants:

 Kraig J. Marton: kjm@jaburgwilk.com

 Jeffrey A. Silence: jxs@jaburgwilk.com

 Michael L. Schwartz: Schwartz@schwartzlawfirmaz.com

I further certify that on March 7, 2017, I put in the U.S. Mail a paper courtesy 

copy of the foregoing document and the Notice of Electronic Filing to the assigned 

Judge.

/s/Kathrine A. Roberts

Kathrine A. Roberts

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