United States District Court, E.D. Michigan, Southern Division
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANTS' MOTION FOR JUDGMENT ON THE PLEADINGS (DOC.
HONORABLE VICTORIA A. ROBERTS UNITED STATES DISTRICT JUDGE.
INTRODUCTION & BACKGROUND
Konica Minolta and Defendant Applied Imaging are printing
companies and direct competitors who provide similar goods
and services in Michigan. Konica alleges the individual
defendants breached employment agreements
("Agreement(s)") with it, and then conspired with
Applied Imaging to misappropriate its trade secrets, convert
its confidential business information, and tortiously
interfere with its relationships and business expectancies
with its customers and prospective customers.
Agreements are identical, and contain confidentiality and
non-compete provisions. Konica alleges an Agreement with only
six of the seven individual defendants: Jon Livingston, Matt
Aron, Rob Bell, Linda Boyle, Randy Magner, and Anna Stewart
(the "Contract Defendants"). It does not allege an
agreement with Steve Hurt.
Amended Complaint states six claims: Count I - breach of
contract against all individual defendants; Count II
-Tortious Interference with Contractual Relations against
Applied Imaging, Hurt and Livingston; Count III -Tortious
Interference with Business Expectancy; Count IV -Violation of
Michigan Uniform Trade Secrets Act ("MUTSA"); Count
V - Civil Conspiracy; and Count VI - Statutory Conversion.
Counts III-VI are against all defendants.
matter is before the Court on Defendants' motion for
judgment on the pleadings. The motion is fully briefed, and
the Court held a hearing on November 16, 2016.
Defendants' motion is GRANTED IN PART and DENIED IN PART.
The Court DISMISSES the breach of contract claim against Hurt
and the statutory conversion claim in its entirety. All other
claims are plausible on their face and may proceed.
STANDARD OF REVIEW
motion for judgment on the pleadings under Federal Rule of
Civil Procedure 12(c) tests the legal sufficiency of a
plaintiff's complaint. The Court reviews such a motion
under the same standard as a motion to dismiss under Rule
12(b)(6). Sensations, Inc. v. City of Grand Rapids,
526 F.3d, 291, 295-96 (6th Cir. 2008). As such, it must
accept as true all well-pled material allegations in the
complaint and "determine whether they plausibly give
rise to an entitlement to relief." Ashcroft v.
Iqbal, 556 U.S. 662, 679 (2009). The Court may grant a
motion for judgment on the pleadings only where the movants
clearly establish that no material issue of fact remains
unresolved and that they are entitled to judgment as a matter
of law. Poplar Creek Dev. Co. v. Chesapeake Appalachia,
LLC, 636 F.3d 235, 240 (6th Cir. 2011); Drew v.
Kemp-Brooks, 802 F.Supp.2d 889, 892 (E.D. Mich. 2011).
To withstand a Rule 12(c) motion, "a complaint must
contain direct or inferential allegations respecting all the
material elements under some viable legal theory."
Commercial Money Ctr., Inc. v. Illinois Union Ins.
Co., 508 F.3d 327, 336 (6th Cir. 2007).
Count I - Breach of Contract
Minolta alleges a breach of contract claim against all
individual defendants. At the hearing, Konica conceded that
no agreement with Hurt exists, and stipulated to dismissing
this claim against him. Thus, Count I is dismissed against
underlying Agreements contain a choice of law clause stating
that they "shall be interpreted in accordance with the
laws of the State of New York." Based on that provision,
the parties agree that New York law governs the breach of
Defendants say this claim should also be dismissed against
them; specifically, they argue that the Agreements are too
vague and indefinite to enforce as a matter of law, because
the amended complaint says the Agreements attached to it are
true and correct copies, "but the Definitions
called for and referenced as attached [to the Agreements] are
not attached to those copies." In support, they cite
Swan Media Grp., Inc. v. Staub, 841 F.Supp.2d 804,
808 (S.D.N.Y. 2012), which held that "if the terms of
[an] agreement are so vague and indefinite that there is no
basis or standard for deciding whether the agreement had been
kept or broken, or to fashion a remedy, and no means by which
such terms may be made certain, then there is no enforceable
contract." Defendants' argument fails for multiple
regardless of whether a separate definitions section exists,
Contract Defendants fail to demonstrate that the Agreements,
as is, are so vague or indefinite that it is impossible to
determine if a breach occurred. Based on this alone, Contract
Defendants fail to show that the Agreements are unenforceable
as a matter of law under Staub.
as Konica points out, there is no evidence that a
"definitions" attachment actually exists. Notably,
certain terms are defined throughout the document (e.g.,
"Confidential Information" is defined on page one
of the Agreements). Even if a separate definitions attachment
exists, Contract Defendants would not be entitled to judgment
as a matter of law due to Konica not attaching it, especially
where it is clear the parties entered into an agreement. The
Court will not just throw the claim out.
breach of contract claim survives against Contract Defendants
and is governed by New York law.
Choice of Law ...