Micor Industries, Inc. et al v. C2JS Holdings, LLC, et al

Filing 26

MEMORANDUM OPINION AND ORDER that the motions to dismiss are DENIED as more fully set out in order. Signed by Judge C Lynwood Smith, Jr on 11/26/2012. (AHI)

FILED
2012 Nov-26 AM 09:45
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
NORTHEASTERN DIVISION
MICOR INDUSTRIES, INC., et
al.,
Plaintiffs,
vs.
C2JS HOLDINGS, INC., et al.,
Defendants.

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Civil Action No. 12-S-02654-NE

MEMORANDUM OPINION AND ORDER
Plaintiffs, Micor Industries, Inc., Micor Defense, Inc., and Charles St. George,
seek a declaratory judgment that they hold the sole and exclusive rights to a .50caliber bull pup sniper rifle developed by St. George.1 In turn, defendants, C2JS
Holdings, Inc. and Christopher G. L. Jones, have asserted counterclaims arising from
St. George’s breach of an alleged partnership agreement with defendants.2 This case
is before the court on a motion by Micor Industries, Inc. and Micor Defense, Inc. to
dismiss the counterclaims for inducement of breach of contract and unjust
enrichment,3 and on a motion by St. George to dismiss the counterclaims for fraud,
1

Doc. no. 1 (Complaint) ¶¶ 50-53.

2

Doc. no. 10 (Answer and Counterclaim). Defendants assert a total of eleven counterclaims.
The five counts against Micor Industries, Inc. and Micor Defense, Inc. are: inducement of breach
of contract, tortious interference with contract, tortious and intentional interference with business
relations, conversion, and unjust enrichment. Id. ¶¶ 34-74. The five counts against St. George are:
breach of contract, breach of fiduciary duties, fraud, fraudulent misrepresentation, fraud in the
inducement, conversion, and unjust enrichment. Id. ¶¶ 75-106. The final count is a request for an
accounting. Id. ¶¶ 107-110.
3

Doc. no. 14 (Motion to Dismiss by Micor Industries, Inc. and Micor Defense, Inc.), at 1.

fraudulent misrepresentation, fraud in the inducement, and unjust enrichment.4 Upon
consideration, this court will deny the motions.
I. STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(b) permits a party to move to dismiss a
complaint for, among other reasons, “failure to state a claim upon which relief can be
granted.” Fed. R. Civ. P. 12(b)(6). That rule must be read together with Rule 8(a),
which requires that a pleading contain only a “short and plain statement of the claim
showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). While that
pleading standard does not require “detailed factual allegations,” Bell Atlantic Corp.
v. Twombly, 544 U.S. 544, 550 (2007), it does demand “more than an unadorned, thedefendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (citations omitted).
To survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to “state a claim to relief that
is plausible on its face.” [Bell Atlantic Corp., 550 U.S.] at 570. A claim
has facial plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged. Id., at 556. The plausibility standard
is not akin to a “probability requirement,” but it asks for more than a
sheer possibility that a defendant has acted unlawfully. Ibid. Where a
complaint pleads facts that are “merely consistent with” a defendant’s
liability, it “stops short of the line between possibility and plausibility of
‘entitlement to relief.’” Id., at 557 (brackets omitted).
Iqbal, 556 U.S. at 678 (alteration supplied).
4

Doc. no. 17 (Motion to Dismiss by Charles St. George), at 1, 4.
2

II. FACTS AS ALLEGED
As always is the case in the context of ruling upon a motion to dismiss, the
district court is required to assume that
the facts set forth in the plaintiff’s complaint are true. See Anza [v. Ideal
Steel Supply Corp.], 547 U.S. 451, [453,] 126 S. Ct. [1991,] 1994
[(2006)] (stating that on a motion to dismiss, the court must “accept as
true the factual allegations in the amended complaint”); Marsh v. Butler
County, 268 F.3d 1014, 1023 (11th Cir. 2001) (en banc) (setting forth
the facts in the case by “[a]ccepting all well-pleaded factual allegations
(with reasonable inferences drawn favorably to Plaintiffs) in the
complaint as true”). Because we must accept the allegations of
plaintiff’s complaint as true, what we set out in this opinion as “the
facts” for Rule 12(b)(6) purposes may not be the actual facts.
Williams v. Mohawk Industries, Inc., 465 F.3d 1277, 1281 n.1 (11th Cir. 2006)
(alterations supplied).
A.

The Alleged Partnership
For many years, defendant Christopher G. L. Jones and plaintiff Charles St.

George had a partnership for the purpose of researching and developing weapons
technology to be manufactured and sold for their joint financial benefit.5 Defendant
Jones provided the sole source of funding, while plaintiff St. George performed the

5

Doc. no. 10 (Answer and Counterclaim) ¶ 8. Defendants describe the relationship between
Jones and St. George as a “partnership,” see id., while St. George disputes that designation as a mere
“legal conclusion which a court is not required to take as true.” See doc. no. 18 (Brief in Support
of Motion to Dismiss by Charles St. George), at 11. For the purpose of this summary of facts as
alleged, the court will refer to the relationship between Jones and St. George as a “partnership,”
without expressing an opinion on whether the relationship was, in fact, a partnership within the legal
meaning of the word.
3

required research.6
At some point, Jones and St. George agreed to develop a .50-caliber bull pup
sniper rifle.7 Jones then purchased the parts and paid St. George several hundred
thousand dollars to refine the design.8 The parties also created and organized
defendant C2JS Holdings, Inc. (“C2JS”) to license and market the weapon, and
engaged in various marketing activities.9
B.

The Patent Applications
In an electronic mail (“e-mail”) message dated October 21, 2009, St. George

urged Jones to “move ASAP” with the filing of provisional patent applications for the
new sniper rifle.10 With St. George’s agreement, Jones engaged Harrington & Smith,
P.C. (“Harrington & Smith”) for the purpose of prosecuting patent applications, and
The Intellectual Property Center LLC (“Intellectual Property Center”) for the purpose
of prosecuting trademark applications.11 Jones paid the legal fees of both firms.12
Harrington & Smith filed three patent applications on February 2, 2010.13 The
first was a provisional application bearing Serial No. 61/337,358 (“the Provisional
6

Doc. no. 10 (Answer and Counterclaim) ¶ 8.

7

Id. ¶ 10.

8

Id.

9

Id.

10

Id. ¶ 11; doc. no. 10-2 (E-Mail Dated October 21, 2009).

11

Id. ¶ 12; doc. no. 10-1 (Engagement Letter with Harrington & Smith).

12

Doc. no. 10 (Answer and Counterclaim) ¶ 12.

13

Id. ¶¶ 13-14.
4

Application”).14 The second was a patent application bearing Serial No. 13/019,539
(“the ‘539 Application”).15 The third was a patent application with the United States
Patent and Trademark Office, in its capacity as a Patent Cooperation Treaty (“PCT”)
Receiving Office, bearing Serial No. PCT/US2011/023446 (“the PCT ‘446
Application”).16
C.

The Licensing Negotiations between the Micor Plaintiffs and Defendants
With St. George’s approval, defendants began negotiating a potential license

agreement for the manufacture and sale of the sniper rifle with Micor Industries, Inc.
and Micor Defense, Inc. (collectively, “the Micor plaintiffs”) in early 2011.17 Prior
to beginning the negotiations, the Micor plaintiffs were allegedly advised “of the
business relationship between Jones and St. George, and of the pendency of the ‘539
Application and the PCT ‘446 Application in furtherance of that relationship.”18
Simultaneously with the beginning of the negotiations, counsel for C2JS
prepared a document that allegedly memorialized an oral agreement for St. George to
assign to C2JS “equitable title to the [sniper rifle] and all future improvements thereof

14

Doc. no. 10-3 (Provisional Application).

15

Doc. no. 10-4 (‘539 Application).

16

Doc. no. 10-5 (PCT ‘446 Application).

17

Doc. no. 10 (Answer and Counterclaim) ¶ 17.

18

¶ 15. Defendants do not specify who advised the Micor plaintiffs of the relationship
between defendants and St. George, and of the pendency of the patent applications in furtherance
of that relationship.
5

. . . in furtherance of the agreed-upon goals of the partnership.”19 When St. George
was presented with the document, he did not execute it, but allegedly reaffirmed his
obligation to do so.20
During the negotiations, St. George advised Jones that he (St. George) had
learned of an opportunity to obtain orders for the sniper rifle through an “RFP”
(presumably, a Request for Proposal) issued by a branch of the United States
military.21 The Micor representatives were also informed of the opportunity, as well
as of a potential second opportunity with a different military program.22 All the
parties to the negotiations investigated the two marketing opportunities.23
C2JS and the Micor plaintiffs appeared to reach an agreement for the domestic
production and sale of the sniper rifle in July of 2011.24 Counsel for C2JS forwarded
copies of the proposed license agreement to counsel for the Micor plaintiffs by e-mail
on July 26, and again on July 28, 2011, with copies to Jones, St. George, and Mike
Heath, President of both Micor Industries, Inc. and Micor Defense, Inc.25 In the emails, counsel for C2JS stated that “[w]e had a productive telephone conference with
19

Id. ¶ 16 (alteration supplied).

20

Id.

21

Id. ¶ 18.

22

Id. It is not clear whether the Micor representatives were informed of the marketing
opportunities by St. George, Jones, or an unspecified third party.
23

Id.

24

Doc. no. 10 (Answer and Counterclaim) ¶ 19.

25

Id.; doc. no. 10-6 (E-Mails from Counsel for C2JS).
6

Mike Heath last Thursday which, subject to your review, resolved open business
issues.”26
Heath did not dispute the statement that all “open business issues” had been
resolved.27 In fact, Heath e-mailed counsel for C2JS and counsel for the Micor
plaintiffs on August 3, 2011, stating: “Checking on how things are progressing with
agreement??? Please update me!”28 Nevertheless, the preparation of an execution
draft of the license agreement stalled, allegedly due to the Micor plaintiffs’ attempt
to renegotiate certain terms.29
For example, Heath e-mailed Jones, St. George, and counsel for C2JS on
August 11, 2011, stating: “Fella’s, after much thought and dissecting the financial #’s
I am requesting the 25% license fee be adjusted to 20%. . . .”30 Heath also demanded
that the license be extended to include the manufacture and sale of the rifle outside of
the United States.31 C2JS and the Micor plaintiffs continued to negotiate through late
fall of 2011 without ultimately executing a license agreement.32
Meanwhile, Jones, St. George, and C2JS continued to monitor the status of the

26

Id.

27

Doc. no. 10 (Answer and Counterclaim) ¶ 20.

28

Id.; doc. no. 10-7 (E-Mails from Mike Heath).

29

Doc. no. 10 (Answer and Counterclaim) ¶ 21.

30

Id. ¶ 22; doc. no. 10-8 (E-Mails from Mike Heath).

31

Doc. no. 10 (Answer and Counterclaim) ¶ 23.

32

Id. ¶ 24.
7

pending patent applications for the new sniper rifle.33 For example, counsel for C2JS
e-mailed Harrington & Smith on August 26, 2011, inquiring as to the status of the
applications, with copies to Jones and St. George.34 The e-mail also advised that
counsel for C2JS had prepared an assignment of the patent from St. George to C2JS,
with the intent to register it with the United States Patent and Trademark Office.35
D.

The License Agreement between the Micor Plaintiffs and St. George
During the breakdown of negotiations between the Micor Plaintiffs, Jones, and

C2JS at the end of 2011 and the early part of January 2012, defendants allege that the
Micor Plaintiffs and St. George engaged in clandestine communications that resulted
in the execution their own license agreement for the sniper rifle in or around January
of 2012.36 While defendants do not know the content of the alleged agreement, they
were advised that St. George licensed certain rights to manufacture and market
technology described in the pending patent applications.37 Later, defendants were
advised that St. George had become an employee of one of the Micor plaintiffs.38
On or around January 27, 2012, after the execution of the license agreement,
33

Id. ¶ 25.

34

Id.; doc. no. 10-9 (E-Mails from Counsel for C2JS).

35

Id.

36

Doc. no. 10 (Answer and Counterclaim) ¶¶ 27-28. Plaintiffs allegedly failed to comply
with defendants’ requests for a copy of the license agreement. Id. ¶ 28. Defendants do not specify
how they learned of the existence of the agreement, or who advised them of its content.
37

Id. ¶¶ 28-29.

38

Id. ¶ 29. Defendants do not specify who advised them of St. George’s new employment

status.
8

and without the authorization of defendants, Harrington & Smith requested permission
from the United States Patent and Trademark Office (“USPTO”) to withdraw as
counsel of record for the ‘539 Application.39 The USPTO granted the request in
March of 2012.40 Thereafter, in April of 2012, and again without the authorization of
defendants, St. George filed a letter of express abandonment with the USPTO for the
‘539 and PCT ‘446 Applications.41

The USPTO issued a Notice of Express

Abandonment for the ‘539 Application, but has not issued such a notice for the PCT
‘446 Application.42
III. DISCUSSION
A.

Counterclaims for Unjust Enrichment Against All Plaintiffs
All plaintiffs urge this court to dismiss the counterclaims for unjust enrichment,

arguing that such claims are limited to parties who or which seek monetary relief, but
have no adequate remedy at law.43 In response, defendants correctly argue that unjust
enrichment can include claims for money and property, and that a court can remedy
unjust enrichment that involves a breach of fiduciary or quasi-fiduciary duties by
39

Id. ¶ 30.

40

Id. ¶ 31.

41

Id. ¶ 32.

42

Doc. no. 10 (Answer and Counterclaim) ¶ 32. As of the date of the answer, the PCT ‘446
Application remained pending. Id.
43

Doc. nos. 14 (Motion to Dismiss by Micor Industries, Inc. and Micor Defense, Inc.), at 2;
17 (Motion to Dismiss by Charles St. George), at 4 (asking this court to “apply the arguments and
rationales” from the brief filed by the Micor plaintiffs to the counterclaim for unjust enrichment
against St. George).
9

imposing a constructive trust, regardless of whether the remedy at law is adequate.44
“‘Unjust enrichment’ is generally defined as the unjust retention of a benefit to
the loss of another or the retention of money or property of another against the
fundamental principles of justice or equity and good conscience.” Ally Windsor
Howell, Tilley’s Alabama Equity § 19.1 (2012) (emphasis supplied).
Under the doctrine of quasi-contract, the law implies a contract,
based upon the principles of equity, to prevent the unjust enrichment of
one who knowingly accepts and retains a benefit provided at the
detriment of another, who has a reasonable expectation of compensation.
Utah Foam Prods., Inc. v. Polytec, Inc., 584 So. 2d 1345 (Ala. 1991);
Opelika Prod. Credit Ass’n v. Lamb, 361 So. 2d 95 (Ala. 1978); Hendrix,
Mohr & Yardley, Inc. v. City of Daphne, 359 So. 2d 792 (Ala. 1978).
The benefit conferred need not be strictly monetary:
“A person may be considered to have conferred a
benefit upon another if he has given him possession of, or
an interest in, land, chattels, or choses in action, or if he
performs some service which is beneficial to or at the
request of the other person, or if he satisfies a duty [or] a
debt of the other. Whenever one person adds to the other’s
advantage in any form, whether by increasing his holdings
or saving him from expense or loss, he has conferred a
benefit upon the other.”
American Family Care v. Fox, 642 So. 2d 486, 488 (Ala. Civ. App. 1994) (quoting
Opelika, 359 So. 2d at 99) (alteration in original, emphasis supplied).
In American Family Care v. Irwin, 571 So. 2d 1053 (Ala. 1990), the Alabama
Supreme Court explicitly addressed the following question: “Will equity specifically
44

Doc. no. 23 (Response to Motion to Dismiss by Micor Industries, Inc. and Micor Defense,
Inc.), at 7-8.
10

enforce the duty of the constructive trustee to convey the property held in constructive
trust if there is an adequate remedy at law?” Id. at 1060. Upon noting that the “Titans
of Trust” did not agree, and after “reviewing many cases and treatises” on the subject,
the Irwin court was persuaded
that the conclusion reached in “Must the Remedy at Law Be Inadequate
Before a Constructive Trust Will Be Impressed?”, which appeared in the
Notes and Comment section of 25 St. John’s L. Rev. 283, 295 (1951),
succinctly summarizes the authorities and is the better rule of law:
“Express trusts are enforceable in equity at the suit of the
cestui que without regard to the adequacy of the remedy at
law. However, as to constructive trusts, while equity has
the power to act, it will not; unless a fiduciary or
quasi-fiduciary relation is involved, or unless relief at law
would be inadequate because the chattel is unique or the
defendant-wrongdoer is insolvent.”
Irwin, 571 So. 2d at 1061 (emphasis supplied).
Here, plaintiffs note that defendants cannot satisfy the insolvency exception to
the general requirement of an inadequate remedy at law because “both Micor
Industries and Micor Defense are going concerns that can pay any money judgment
entered.”45 However, plaintiffs’ argument ignores the fact that defendants need not
establish that the remedy at law is inadequate where “a fiduciary or quasi-fiduciary
relation is involved.” Irwin, 571 So. 2d at 1061 (emphasis supplied). Here,
defendants allege that St. George owed fiduciary duties to Jones and C2JS because of

45

Doc. no. 14 (Motion to Dismiss by Micor Industries, Inc. and Micor Defense, Inc.), at 2.
11

his partnership with defendants, and that St. George breached those fiduciary duties
through his dealings with the Micor plaintiffs.46 Further, defendants can show that the
remedy at law is inadequate where “the chattel is unique.” Id. Here, the chattel at
issue is an invention whose uniqueness is evident from defendants’ applications for
patent protection.47 In light of Irwin, this court will deny the motions to dismiss the
unjust enrichment counterclaims.
B.

Counterclaim for Inducement of Breach of Contract Against the Micor
Plaintiffs
The Micor plaintiffs move to dismiss the counterclaim for inducement of breach

of contract because that claim is not recognized under the law of this state.48 In
support, the Micor plaintiffs rely on Erswell v. Ford, 208 Ala. 101 (1922), a ninetyyear-old case in which the Alabama Supreme Court held that “‘[a]n action cannot in
general be maintained for inducing a third person to break his contract with the
plaintiff; the consequence after all being only a broken contract for which the party
to the contract may have his remedy by suing upon it.’” Id. at 103 (quoting Sleeper
v. Baker, 22 N.D. 386, 394 (1911) (alteration supplied)).
Defendants correctly note that the Micor plaintiffs’ “understanding of Alabama

46

Doc. no. 10 (Answer and Counterclaim) ¶¶ 8-10, 27-29, 32-33, 87-93.

47

Id. ¶¶ 10-14; doc. nos. 10-3 (Provisional Application); 10-4 (‘539 Application); 10-5 (PCT
‘446 Application).
48

Doc. no. 14 (Motion to Dismiss by Micor Industries, Inc. and Micor Defense, Inc.), at 1.
12

law is more than twenty-six years out of date.”49 Indeed, in Gross v. Lowder Realty
Better Homes & Gardens, 494 So. 2d 590 (Ala. 1986), the Alabama Supreme Court
painstakingly summarized the Alabama cases decided since Erswell, and concluded
that “we are left with what we perceive to be an outdated and inconsistent body of law
pertaining to intentional interference with business and contractual relationships.” Id.
at 596. In a decision that explicitly overruled the Erswell holding, the Gross court
determined that
Alabama’s limited recognition of the tort of interference with contractual
relations is clearly a minority position; the vast majority of jurisdictions
recognize a broad application of the cause of action. The authority relied
upon by this Court in earlier years to fashion the Alabama rule
represented what was then the minority view, a view which has since that
early time been largely repudiated.
The general rule firmly meshed into the law of most jurisdictions
today is that one who, without justification to do so, induces a third
person not to perform a contract with another, is liable to the other for
the harm caused thereby. See 45 Am. Jur. 2d Interference § 39 (1969);
Annot., 26 A.L.R. 4th 9 (1981). This rule has been brought about by the
recognition that rights of a party to a contract or business relation are of
paramount importance in the business community and should be
protected from unjustified interference by third persons.
Furthermore, many jurisdictions have established a cause of action
broad enough to include not only interference with contractual relations,
but also interference with business relations not necessarily involving a
contract. See 45 Am. Jur. 2d Interference §§ 49-50 (1969); Annot., 5
A.L.R. 4th 9 (1981). Adoption of this broad scope of the cause of action
has been recognized as the better approach in those jurisdictions, such as
49

Doc. no. 23 (Response to Motion to Dismiss by Micor Industries, Inc. and Micor Defense,
Inc.), at 2.
13

ours, in which an action for interference with business relations is
allowed. We see no reason to continue the distinction between the two
causes of action and are of the opinion that a single set of elements,
broadly defined, so as to include both causes of action, would simplify
and clarify the law in this area.
Therefore, we announce a new rule in this state broad enough to
encompass both interference with business relations and interference
with contractual relations, and which also expands the cause of action
for interference with contractual relations so as to incorporate the
majority rule. We hold that this tort of intentional interference with
business or contractual relations, to be actionable, requires:
(1) The existence of a contract or business relation;
(2) Defendant’s knowledge of the contract or business relation;
(3) Intentional interference by the defendant with the contract or business
relation;
(4) Absence of justification for the defendant’s interference; and
(5) Damage to the plaintiff as a result of defendant’s interference.
Gross, 494 So. at 596-97 (footnotes omitted, emphasis supplied). Other recent cases
have reaffirmed the existence of a claim for intentional interference with business or
contractual relations under Alabama law, while continuing to refine the elements of
such a claim. See, e.g., White Sands Group, L.L.C. v. PRS II, LLC, 32 So. 3d 5, 11-14
(Ala. 2009); Booth v. Newport TV, LLC, Case No. 2100413, 2011 Ala. Civ. App.
LEXIS 358, 22-23 (Dec. 16, 2011). Accordingly, this court will deny the motion to
dismiss the counterclaim for inducement of breach of contract against the Micor

14

plaintiffs.50
C.

Counterclaims for Fraud, Fraudulent Misrepresentation, and Fraud in the
Inducement Against St. George
St. George moves to dismiss the counterclaims for fraud, fraudulent

misrepresentation, and fraud in the inducement because those claims are not pled with
sufficient specificity to satisfy the heightened standard of Federal Rules of Civil
Procedure 9(b) and (f).51 Rule 9(b) provides that, “[i]n alleging fraud or mistake, a
party must state with particularity the circumstances constituting fraud or mistake.
Malice, intent, knowledge, and other conditions of a person’s mind may be alleged
generally.” Fed. R. Civ. P. 9(b) (alteration supplied). Under Rule 9(f), “[a]n
allegation of time or place is material when testing the sufficiency of a pleading.”
Fed. R. Civ. P. 9(f) (alteration supplied).
St. George first argues that defendants insufficiently allege the existence of a
partnership between Jones and St. George.52 The existence of a partnership can,
however, be inferred from the allegations, e.g., that Jones and St. George agreed to
develop a .50-caliber bull pup sniper rifle,53 that Jones purchased the parts and paid

50

The motion to dismiss the counterclaim for inducement of breach of contract only
discusses the grounds for dismissal under Alabama law. Accordingly, this court need not address
defendants’ argument that the claim is also sufficiently pled under Tennessee law. See doc. no. 23
(Response to Motion to Dismiss by Micor Industries, Inc. and Micor Defense, Inc.), at 4-5.
51

Doc. no. 17 (Motion to Dismiss by Charles St. George), at 2-4.

52

Doc. no. 18 (Brief in Support of Motion to Dismiss by Charles St. George), at 11.

53

Doc. no. 10 (Answer and Counterclaim) ¶ 10.
15

St. George several hundred thousand dollars to refine the design,54 that Jones and St.
George created and organized C2JS to license and market the weapon,55 that Jones and
St. George engaged in various marketing activities,56 and that Jones paid counsel to
patent and trademark the weapon.57 Indeed, St. George admitted that he and Jones had
a “business relationship.”58
St. George further argues that defendants do not state which of St. George’s acts
defrauded defendants, or specify the dates those acts took place.59 By way of
example, however, defendants clearly allege that St. George sent Jones an e-mail
dated October 21, 2009, in which St. George requested that Jones “move ASAP” with
the filing of provisional patent applications for the new sniper rifle.60 At St. George’s
urging, and with St. George’s approval, Jones engaged counsel to patent and
trademark the weapon, and paid both firms’ legal fees.61 St. George then secretly
licensed the sniper rifle to the Micor plaintiffs in January of 2012,62 and filed a letter
expressly abandoning the pending patent applications for the rifle in April of 2012.63
54

Id.

55

Id.

56

Id.

57

Id. ¶ 12; doc. no. 10-1 (Engagement Letter with Harrington & Smith).

58

Doc. no. 19 (Answer to Counterclaim) ¶¶ 8, 15, 35, 45, 55, 66, and 76.

59

Doc. no. 18 (Brief in Support of Motion to Dismiss by Charles St. George), at 12-13.

60

Doc. nos. 10 (Answer and Counterclaim) ¶ 11; 10-2 (E-Mail Dated October 21, 2009).

61

Doc. no. 10 (Answer and Counterclaim) ¶ 12.

62

Id. ¶¶ 27-28.

63

Id. ¶ 32.
16

If those allegations are true, then St. George first induced Jones to finance efforts to
patent the sniper rifle, and later undertook acts depriving Jones of the fruits of his
investment. Accordingly, this court will deny the motion to dismiss the counterclaims
for fraud, fraudulent misrepresentation, and fraud in the inducement against St.
George.
IV. CONCLUSION AND ORDER
For the reasons explained above, the motions to dismiss are DENIED.
DONE and ORDERED this 26th day of November, 2012.

______________________________
United States District Judge

17