Nutritional Biomimetics, LLC v. Empirical Labs, Inc.
Filing
225
ORDER denying 104 Motion for Summary Judgment by Magistrate Judge Kathleen M. Tafoya on 6/27/2017. (jgonz, )
<. Defendant/Counterclaim Plaintiff Empirical Labs,
Inc. (“Empirical Labs”) filed a Response [Doc. No. 117](“Resp.”), to which Counterclaim
Defendant Barker replied. [Doc. No. 122](“Reply”).
UNDISPUTED FACTS
1. Blair began working for Empirical Labs in January 2010 as the Director of R&D &
Quality Assurance. His employment responsibilities included “developing a saleable liposomal
glutathione product.” (Empirical Labs’s Second Amended Counterclaim [Doc. No. 81] (2d Am.
CC”), Ex. 6, Blair’s Profit Sharing Agreement signed 2/22/2010 [Doc. No. 81-6] (“2/22/10
P.S.Agree.”) at 2.1 Empirical Labs paid Blair a base salary of $1,000/week beginning in January
2010 and that salary was increased incrementally to $2,000/week by January 2015. The Blair
1
The 2d Am. CC, Ex. 7, Blair’s Profit Sharing Agreement signed 8/26/2010 [Doc. No. 81-7]
(“8/26/10 P.S.Agree.”) deletes this statement and states instead, “While Emek Blair is
responsible for developing saleable liposomal products, Empirical Labs shall be solely
responsibility [sic] for the safety and efficacy and [sic] any such product.” Id. at 2.
2
and Empirical Labs’ agreements also included provisions providing Blair with a percentage of
profits related to certain products with a provision that Blair’s profit sharing would be
relinquished if he voluntarily left the employment with Empirical Labs within the first two years
of his employment. (2/22/10 P.S.Agree and 8/26 P.S.Agree, generally.)
2. Both agreements provided that Blair was an employee of Empirical Labs and was not
responsible for any actions or products released by Empirical Labs. (Id. at 2 on both
agreements.) Further, both agreements also included a provision prohibiting the communication
of Empirical Labs’ trade secrets, as well as a non-compete agreement prohibiting Blair’s
competition with Empirical Labs “in the nutraceutical liposomal field for a period no less than 18
months.” (2/22/10 P.S.Agree at 3). That agreement was modified to some extent in the second
agreement, stating “Emek Blair may not work as a wet chemistry researcher in the nutraceutical
liposomal field for a period no less than 18 months[;] i. Emek Blair may work in an R&D
capacity in any other field including but not limited to competing nutraceutical companies[.]”
(8/26/10 P.S.Agree at 4.)
3. Barker holds majority interest in and is the CEO of MitoSynergy, a nutritional
supplement company that had a customer-supplier relationship with Empirical Labs beginning in
approximately 2012. Empirical Labs manufactured liposomal products for MitoSynergy.
(Redacted Deposition Testimony of Charles Barker [Doc. No. 116-1] at 3:232; Excerpts of
Deposition Testimony of Kelly Goyen [Doc. No. 104-3] at 1-2; Article by Elizabeth Maxim
dated 2/26/14 regarding MitoSynergy (“Maxim Article”) [Doc. No. 116] at 2.)
2
Since the deposition transcripts are partial and each page contains four pages of testimony, the
court adopts the convention of denoting the court filing page number, followed by a colon and
the internal deposition transcript page(s).
3
4. Blair was one of the Empirical Labs employees who would answer any questions or
inquiries from customer, MitoSynergy. (Excerpts of Deposition Testimony of Kelly Goyen
[Doc. No. 104-2] at 2; [Doc. No. 104-3] at 1-4.)
5. Blair was never a paid employee of MitoSynergy. [Doc. No. 116-1 at 6:40.]
6. On September 25, 2013, Barker identified Blair to a third party as being in charge of
GreenTeaSynergy and MitoMelt for Barker’s company, MitoSynergy. (Email from Charles
Barker to Kris Olsen with copy to emekblair@gmail.com dated September 25, 2013 [Doc. No.
116] at 7.)
7. In 2014, MitoSynergy hosted several events during the Natural Products Expo West.
The company’s press release referenced Barker as CEO, President, and co-founder, and included
the following statement: “Also on the MitoSynergy team is Emek Blair, Ph.D., is [sic] a
Biochemist and leading researcher in the development of the Cunermuspir complex, and wife
Mallory Blair, Ph.D., also a leading researcher and author of an informational paper for the
Cunermuspir complex, to be released at [a MitoSynergy hosted event].” (Maxim Article at 2.)
8. In November 2014, MitoSynergy placed an order with Empirical Labs. In fulfilling
the order, Empirical Labs used white bottles instead of the black bottles previously used for
MitoSynergy products. Barker let Empirical Labs know he was upset about the switch. [Doc.
No. 116-1 at 4:26-28.]
9. By approximately October 2014, Barker, Blair, and other individuals were discussing
building a company together which would be headed by Blair and which would directly compete
with Empirical Labs. [Doc. No. 116-1 at 10-11.]
4
10. Barker had dinner with Blair and Blair’s wife, who was an employee of Barker’s
MitoSynergy, and Blair told Barker that Empirical Labs was no longer paying Blair on his
intellectual property rights as it had in the past and that Blair was unhappy with the situation.
[Doc. No. 116-1 at 7:58-59, 9:87-88.] Barker told Blair that if he decided to start a business on
his own Barker might be interested in pursuing that with him. (Id.)
11. In connection with this discussion, Blair told Barker that he owned the intellectual
property rights to the liposomal products manufactured by Empirical Labs. [Doc. No. 116-1 at
11:105.]
12. By January 2015, Blair had created CLVM, LLC (“CLVM”).3 (Articles of
Organization filed January 15, 2015 [Doc. 81-9] at 11.)
13. Blair provided Barker with two legal opinions, dated January 12, 2015 and January
22, 2015, from two different attorneys regarding Nutritional Biomimetics’ alleged ownership of
certain intellectual property. (January 22, 2015 letter from Erik G. Fischer4 to Blair [Doc. No.
104-6] and January 12, 2015 letter from Kevin William Ward [Doc. No. 104-8].) Barker
testified that he may have received the letters but he did not read them. [Doc. No. 116-1 at 9:86.]
14. On January 19, 2015, while still employed by and receiving salary from Empirical
Labs, Blair sent Barker an email from his personal email account, stating that “having the license
to manufacture methodology is worth a lot. The ready-made business from Empirical is over a
million annual (licenses that we will not renew for Empirical) and there is about the same
3
4
In other documents, CLVM has been referenced as Custom Liposomal Vitamin Manufacturer.
Mr. Fischer represents Blair and Nutritional Biomimetic in this litigation.
5
amount of new business that I’m working on right now. I will not issue a license to Empirical
for that either.” [Doc. No. 116-15 at 12:109.]
15. Barker testified that he understood the reference to “ready made business” as
Empirical Labs’ current customers. [Doc. No. 116-1 at 12:111.]
16. On January 28, 2015, Empirical Labs terminated Blair’s employment via delivery of
a termination letter specifying his last day of employment would be February 11, 2015. [Doc.
No. 81-27.] The letter advised Blair that he should not come to Empirical Labs’ facility after
January 28, 2015.
17. Other than employees, only current or potential clients are permitted to tour
Empirical Labs’ facility which is not open to the public. No visitor, client or otherwise, is
permitted entrance into the liposome manufacturing area of the facility. (Goyen Deposition
[Doc. No. 104-14] at 4; [Doc. No. 104-18] at 1.)
18. Empirical Labs requires visitors to sign in prior to entering the facility. (See
Deposition Exhibit 22 to Charles Barker Deposition; Visitor’s Log [Doc. No. 81-22].)
19. On February 11, 2015, Barker physically presented himself at Empirical Labs with
Eric Van Handel (“Van Handel”) and Sheila Porter (“Porter”) requesting a tour of the facility.
[Doc. No. 116-1 at 17:146-147.] Blair was not at the Empirical Labs’ facility when Barker, Van
Handel and Porter visited. [Doc. No. 104-14 at 5.]
20. Eric Van Handel is the son of Marge Van Handel. Eric and Marge Van Handel are
executives in their family trucking business, V&S Midwest, based in Wisconsin. Sheila Porter
5
Deposition Exhibit 14 read into the record during Barker’s Deposition.
6
works for V&S as the Controller. (Contact List for V&S Midwest Carriers Corp. [Doc. No. 8123] at 2-3.)
21. Marge Van Handel also owns 16% of MitoSynergy and is the CFO of that company.
[Doc. No. 116-1 at 3:21-22.] Eric Van Handel is not and never has been an employee of
MitoSynergy nor does he hold any ownership interest. [Doc. No. 116-1 at 18:149-150.]
22. Barker testified that Porter occasionally performed services for MitoSynergy, such
as “doing the books,” however she primarily worked for V&S Midwest as the Controller and her
doing work for MitoSynergy was a “perk.” [Doc. No. 81-23 at 3; Doc. No. 116-1 at 15:123124.]
23. On Empirical Labs’ Visitors Log, Van Handel signed in first and under the category,
“Company,” he wrote MitoSynergy. Porter signed in second and Barker signed in last, each
indicating “MitoSynergy” under Company. (Visitor Log at 2.)
24. An employee of Empirical Labs provided a tour to all three visitors after they signed
the Visitor’s Log with MitoSynergy, a company purporting to be a current customer, listed as
their affiliation. [Doc. No. 104-14 at 3-4.] Neither Barker, Van Handel nor Porter toured the
liposomal room. (Id. at 4.)
25. Barker had never been to the Empirical Labs facility before. [Doc. No. 116-1 at
19:154.]
26. Either the same day of the tour or the day after the tour of Empirical Labs, Barker,
Porter, and Van Handel met with Blair to discuss the creation and operation of a business
competing with Empirical Labs. This was the first time Van Handel and Blair had met. [Doc.
No. 116-1 at 19:156.]
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27. During the meeting, Blair said “he wanted to do a liposomal business and he needed
investment.” [Doc. No. 116-1 at 20:157.]
28. On February 17, 2015, V&S Midwest transferred $20,000.00 to CLVM and on
February 25, 2015 it transferred another $50,000.00 to CLVM. [Doc. No. 116-2.]
29. Original draft agreements between Barker, Van Handel and Blair, circulated by
Sheila Porter, indicated that Barker was to receive an 8% interest in Blair’s CLVM for
$167,500.00. Barker was to borrow the investment funds from Eric Van Handel. (See, e.g.,
Porter email dated September 9, 2015 [Doc. No. 116] at 42 and unsigned Promissory Note to
Eric Van Handel c/o V&S Midwest Carriers Corp from Charles Barker, at 45-52 and unsigned
“Operating Agreement of Custom Liposomal Vitamin Manufacturer, LLC (CLVM)” at 19.)
30. Barker, Van Handel and Blair eventually executed a Promissory Note and Equity
Option Agreement on December 15, 2015, providing that Barker and Van Handel would loan
CLVM a total of $335.000.006 in exchange for 5% interest per annum “or, in the alternative, an
option (the “Option”) to purchase a combined sixteen percent (16%) equity interest in CLVM,
LLC” with Barker and Van Handel each entitled to 8% of total shares in CLVM. [Doc. No. 8125 at 64-66.]
6
The Promissory Note and Equity Option Agreement dated December 15, 2015 is marked
“Attorney’s Eyes Only” which indicates to the court that the terms of the agreement are
confidential and not shared beyond the parties’ attorneys. However, the monetary terms were
placed on the public record in Doc. No. 117, Empirical Labs’ Response to the Motion for
Summary Judgment. Id. at 5. Therefore, even though the actual monetary terms of the
agreement are not germane or necessary to the court’s consideration of the instant motion, the
figures are obviously no longer considered confidential so will not be redacted from this Order.
8
31. The Promissory Note and Equity Option Agreement dated December 15, 2015,
provides that “Eric Van Handel has tendered Three hundred thirty-five thousand dollars
($335,000.00) to CLVM, LLC, on behalf of both Lenders. . . .” (Id.)
32. Barker testified that he did not provide any of the money loaned to CLVM to either
CLVM or to Blair. During his deposition, Barker swore that he has “not given Emek any money.
I have no funding in this.” [Doc. No. 116-1 at 8:68.] Further, Barker testified, “Eric lent Emek
money. It turned into a loan instead of an investment. So I have not paid any money out of
pocket, zero, not one red penny.” (Id. at 17:145.)
33. On December 15, 2015, Sheila Porter sent an email to Marge Van Handel, Eric Van
Handel and Charlie Barker (among others) recounting “personal loans and additional funds
loaned to Mito/CLab.” [Doc. No. 116 at 58.] The email indicated that Barker owed $167,500.00
as “CLVM investment” and indicated this was “(secured with CLab stock).” Further the email
indicated, “Still to be paid -+ $5000 for legal defense related to CLVM.” (Id.) The email also
set forth totals for investment and loans related to Charles Barker and his companies with and
without “CLVM.” (Id.)
STANDARD OF REVIEW
Summary judgment is appropriate if “the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). The moving party bears the initial burden of showing an absence of evidence to support
the nonmoving party’s case. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). “Once the
moving party meets this burden, the burden shifts to the nonmoving party to demonstrate a
genuine issue for trial on a material matter.” Concrete Works, Inc. v. City & County of Denver,
9
36 F.3d 1513, 1518 (10th Cir. 1994) (citing Celotex, 477 U.S. at 325). The nonmoving party
may not rest solely on the allegations in the pleadings, but must instead designate “specific facts
showing that there is a genuine issue for trial.” Celotex, 477 U.S. at 324; see also Fed. R. Civ. P.
56(c). A disputed fact is “material” if “under the substantive law it is essential to the proper
disposition of the claim.” Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir.1998)
(citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). A dispute is “genuine” if the
evidence is such that it might lead a reasonable jury to return a verdict for the nonmoving party.
Thomas v. Metropolitan Life Ins. Co., 631 F.3d 1153, 1160 (10th Cir. 2011) (citing Anderson,
477 U.S. at 248).
When ruling on a motion for summary judgment, a court may consider only admissible
evidence. See Johnson v. Weld Cnty., Colo., 594 F.3d 1202, 1209–10 (10th Cir. 2010). The
factual record and reasonable inferences therefrom are viewed in the light most favorable to the
party opposing summary judgment. Concrete Works, 36 F.3d at 1517. At the summary
judgment stage of litigation, a plaintiff’s version of the facts must find support in the record.
Thomson v. Salt Lake Cnty., 584 F.3d 1304, 1312 (10th Cir. 2009). “When opposing parties tell
two different stories, one of which is blatantly contradicted by the record, so that no reasonable
jury could believe it, a court should not adopt that version of the facts for purposes of ruling on a
motion for summary judgment.” Scott v. Harris, 550 U.S. 372, 380 (2007); Thomson, 584 F.3d
at 1312.
10
ANALYSIS
1. Fraud (Count IX)
In its Second Amended Counterclaim, Empirical Labs asserts a fraudulent nondisclosure
claim against Barker. [Doc. No. 6-46 at 5; Doc. No. 81 at 42-45.] Empirical alleges that Barker
gained entry into the Empirical Labs’ closed facility for himself, Van Handel and Porter under
false pretenses and thereby gained information used to help Blair open a business directly
competing with Empirical Labs. There are two primary bases for Empirical Labs’ claim. First,
Empirical contends that during Barker’s visit on February 11, 2015, he failed to disclose that
Van Handel’s desire to see Empirical Labs’ facility was as a potential investor in Blair’s
competing business CLVM, not as an associate of MitoSynergy. [Doc. No. 81-22 at 2.] Had
Empirical Labs known Van Handel’s true business association and purpose, Empirical Labs
contends it would not have admitted him within its facility. [Doc. No. 104-14 at 1-4; Doc. No.
104-18; Doc. No. 116-1 at 19.] Second, Empirical Labs alleges that on the day of his visit,
Barker knew he was no longer going to order any further products from Empirical Labs and that
Barker concealed the real reason for his visit. [Doc. No. 116-1 at 4, 17, 18.] Rather than
intending to discuss mistakes in MitoSynergy’s previous order, Empirical Labs maintains Barker
visited Empirical Labs in order to gain confidential information, to wit: to show Van Handel and
Porter the kind of physical facility Blair would need to get CLVM up and running and to
convince Van Handel to invest and become a co-owner in CLVM. (Id.)
Under Colorado law,
[t]he elements of a claim of intentional nondisclosure [] are: (1) the defendant
concealed or failed to disclose a fact that he had a duty to disclose; (2) the fact
was material; (3) the defendant concealed or failed to disclose the fact with the
intent of creating a false impression of the actual facts in the mind of the plaintiff;
11
(4) the defendant concealed or failed to disclose the fact with the intent that the
plaintiff take a course of action he might not have taken had he known the actual
facts; (5) the plaintiff took such course of action relying on the assumption that
the concealed or undisclosed fact did not exist or was different from what it
actually was; (6) the plaintiff’s reliance was justified; and (7) this reliance caused
injuries, damages, or losses to the plaintiff.
Dury v. Ireland, Stapleton, Pryor & Pascoe, P.C., No. 08–cv–01285–LTB–MEH, 2009 WL
2139856, at *4 (D. Colo. July 14, 2009) (citing Colo. Jury Instr., Civil 19:2 (4th ed.)); see also
Ackmann v. Merchs. Mortg. & Trust Corp., 645 P.2d 7, 13–15 & n.3 (Colo. 1982) (citing with
approval CJI–Civ. 19:2 for the elements of nondisclosure, and noting “[t]he statement of the
elements of fraud by concealment in the Colorado Jury Instructions is substantially similar to the
articulation of those elements contained in our case law.”). In his Motion, Barker challenges the
first, second, and seventh elements.
With regard to the first element, Barker contends he was not under a duty to inform
Empirical Labs that he did not intend to use their services in the future, nor did he have a duty to
disclose Van Handel’s true identity as a potential investor in CLVM and not as an employee or
associate of MitoSynergy who was a current customer of Empirical Labs. (Mot. at 8-11; Reply
at 15-16.) Colorado courts apply Restatement (Second) of Torts § 551 to determine whether one
party has a duty to disclose information to another. See Mallon Oil Co. v. Bowen/Edwards
Assoc., Inc., 965 P.2d 105 (Colo. 1998) (applying Restatement (Second) of Torts § 551 (Am.
Law Inst. 1977) to analyze first element of a fraudulent nondisclosure claim).7 To establish this
element, Empirical Labs relies upon the following portion of the Restatement:
7
Mallon states that “one party to a business transaction has a duty to disclose facts basic to the
transaction when objective circumstances create a reasonable expectation of disclosure of those
facts.” Id. at 111. Empirical Labs argues that in Mallon, the court noted that a party who
trespasses onto another party’s property has a duty to disclose material information he or she
12
(2) One party to a business transaction is under a duty to exercise reasonable care
to disclose to the other before the transaction is consummated,
(e) facts basic to the transaction, if he knows that the other is about to
enter into it under a mistake as to them, and that the other, because of the
relationship between them, the customs of the trade or other objective
circumstances, would reasonably expect a disclosure of those facts.
Restatement (Second) of Torts § 551 (Am. Law Inst. 1977).
The court finds that pursuant to § 551(2)(e), and drawing all inferences from the
undisputed facts in favor of non-movant Empirical Labs, Empirical Labs has established
disputed facts relevant to whether Barker had a duty to disclose to Empirical Labs that he was
not a current customer and that Van Handel was a potential investor in CLVM rather than a
MitoSynergy employee. Barker signed in after Van Handel and thus, should have been aware
Van Handel had indicated he was affiliated with MitoSynergy. [Doc. No. 81-22 at 2.]
Additionally, Barker admits that on the date he toured the facility he was not going to order from
Empirical Labs in the future and that he was pursuing a business opportunity with Blair which
involved Blair taking existing customers, including Barker’s and Marge VanHandel’s
MitoSynergy, away from Empirical Labs. (See Undisputed Fact 15.) Barker also knew at the
time of the tour that Barker would need to acquire the funds necessary to pursue the business
opportunity with Blair from Van Handel and that CLVM would need to establish its own facility
to begin manufacturing. [Doc. No. 116-1 at 4, 17, 18.] In light of Empirical Labs’ policy of
only permitting current customers into its facility, Barker knew that Empirical Labs would only
learned by virtue of the trespass and that Barker’s actions in touring its facility was akin to a
trespass. (Resp. at 16.) Mallon, however, addressed nondisclosure of information learned by
virtue of the trespass. In this case, the nondisclosure alleged is information which facilitated the
act of trespassing, not information learned as a result of the trespass. Mallon, 965 P.2d at 11012. Therefore, Mallon is not directly on point with this case.
13
allow them into the facility if it was under the mistaken assumption they were current customers.
[Doc. No. 104-14 at 1-4; Doc. No. 104-18 at 1-2; Doc. No. 116-1 at 19.] Further, a reasonable
inference can be drawn that Empirical Labs would not have allowed persons to enter its facility
for the purpose of providing guidance or calculating expenses associated with establishing a
competing business. Finally, since Van Handel and Porter were principals and/or officers of
V&S – a company in no way affiliated or doing business with Empirical Labs – a reasonable
inference could also be drawn that there was no legitimate business reason for them to be touring
Empirical Labs facility.
Barker also challenges the second element of fraudulent nondisclosure arguing that
MitoSynergy, Van Handel and Porter’s true lack of status as current customers of Empirical
Labs, and the fact that Barker, Van Handel and Porter’s real interest was in creating and
investing in a company in direct competition with Empirical Labs, even if true, were not material
facts. (Mot. at 11-12.)
Undisclosed facts are “material” if the consumer’s decision might have been
different had the truth been disclosed. . . . A plaintiff does not have the burden of
proving that his or her decisions necessarily would have been different had the
truth been disclosed. Ackmann v. Merchs. Mortgage & Trust Corp., 645 P.2d 7,
14 (Colo. 1982). As stated in Ackmann, “[t]he test, therefore, of material
inducement is not whether the plaintiff’s action would, but whether it might, have
been different if the misrepresentation had not been made.” Id. (quoting William
Williamson Kerr, Kerr on Fraud and Mistake 43–44 (4th ed.)).
Briggs v. Am. Nat’l Prop. & Cas. Co., 209 P.3d 1181, 1186 (Colo. App. 2009). The record
establishes, as noted supra, a genuine issue of fact as to whether Empirical Labs’ decision to
allow Van Handel, Porter and Barker to tour its facility might have been different had it known
the three were not current customers, but rather potential investors in fired employee Blair’s
14
competing business, CLVM. [Doc. No. 104-14 at 1-4; Doc. No. 104-18 at 1-2; Doc. No. 116-1
at 19.]
Finally, Barker argues Empirical Labs has not met the seventh element of Empirical
Labs’ fraudulent nondisclosure claim in that no damages arise as a result of the ill-gotten tour of
Empirical Labs’ facility. (Mot. at 12-13; Reply at 16-17.) The undisputed facts show Barker
and Blair were contemplating opening a business which would compete with Empirical Labs at
some point before Barker, Van Handel, and Porter showed up for the tour. (See Undisputed
Facts 9, 10, 12, 13 and 19.) The factual record and reasonable inferences therefrom are viewed
in the light most favorable to Empirical Labs at this summary judgment stage. A reasonable
inference can be drawn that the tour of the Empirical Labs facility provided information about
what a facility of this sort of business should look like, what equipment and space requirements
were needed and how much it might reasonably cost to develop and equip a facility such as
Empirical Labs. It is also reasonably inferred that information such as this would likely be
required before an investor would commit hundreds of thousands of dollars to any venture.
It is undisputed Barker and Van Handel contributed $335,000.00 to CLVM and that this
contribution was by far the largest contribution made by any person or entity to CLVM.
(Undisputed Facts 28, 29, 30 and 33; Response, Ex. 4, CLVM’s response to Goyen’s
Interrogatory No. 5.) Therefore, a reasonable inference can be drawn that a tour of Empirical
Labs to show Van Handel the size and equipment necessary for a facility like what was being
contemplated as an investment by Barker and Van Handel in CLVM may have been critical to
Barker and Van Handel’s decision to go forward with funding the competing company. As
controller of V&S and the Van Handel business strategy, Porter’s assessment of what it would
15
take to create a facility for CLVM was also important to the decision to move forward in the
undertaking with Blair. Therefore there remains a disputed issue for trial about whether the tour
of Empirical Labs played a significant role in Barker’s and his funding partners’ investment
decision to lend $335,000.00 to Blair, without which Blair would have been unable to establish a
company with a facility to actually compete with Empirical Labs. [Doc. No. 117-4 at 2-3.] The
court finds this is sufficient to establish a genuine disputed issue as to whether Empirical Labs’
reliance on Barker’s nondisclosures resulted in damages.
2. Conspiracy (Count V)
Empirical Labs asserts a civil conspiracy claim against Barker alleging he conspired to
“steal Empirical Labs’ trade secrets and confidential information, and to use them to start and
operate a directly competing business in Colorado . . . .” [Doc. No. 81 at 39.] To establish a
claim for civil conspiracy, a plaintiff must show by a preponderance of the evidence that there
exists: (1) an object to be accomplished; (2) an agreement by two or more persons on a course of
action to accomplish that object; (3) in furtherance of that course of action, one or more unlawful
acts which were performed to accomplish a lawful or unlawful goal, or one or more lawful acts
which were performed to accomplish an unlawful goal; and (4) damages to the plaintiff as a
proximate result. Double Oak Constr. v. Cornerstone Dev. Int’l, 97 P.3d 140, 146 (Colo. App.
2003). Barker’s challenge to this claim is limited to the second and third elements, arguing the
record does not support the finding of an agreement on his part to accomplish an unlawful goal.
(Mot. at 13-16.)
Initially, Barker relies on the legal opinions Blair provided to him in January 2015 in
which two attorneys expressed their opinions that Nutritional Biomimetics, rather than Empirical
16
Labs, owned the intellectual property rights related to liposomal manufacturing. (Id. at 13-14.)
However, Barker specifically testified that he did not read either letter and did not rely on either
opinion. [Doc. No. 116-1 at 9.] Barker cannot rely upon the content of letters he adamantly
states he never read as evidence of personal knowledge, belief, or understanding.
The record establishes Barker was aware Blair intended to obtain Empirical Labs’ clients
as CLVM clients. [Doc. No. 116-1 at 12.] Further, after litigation ensued in this case and it was
clear the ownership interests of the liposome manufacturing process was in dispute and that
Empirical Labs claimed its client list was a trade secret, Barker and Van Handel nevertheless
executed the final promissory note and option agreement, loaning $335,000.00 to CLVM in
return for, inter alia, interest income, as well as for options to purchase ownership interests in
CLVM. [Doc. No. 81-25 at 64-66; Doc. No. 116-1 at 7-8, 11, 13, 56-57.] Further the group tour
of Empirical Labs and the almost immediate meeting with Blair by Barker, Van Handel and
Porter, give rise to reasonable inferences that at least Blair, Barker, Van Handel and Porter were
colluding with respect to Blair’s development of a business which, at the very least, was
blatantly going to try to steal Empirical Labs’ customers. Accordingly, based on the record, the
court finds there remain significate disputed issues, including credibility determinations
regarding Barker’s testimony, which bear on whether Barker participated in an agreement to
accomplish an unlawful goal.
17
Accordingly, it is
ORDERED that Counterclaim Defendant “Charles Barker’s Motion for Summary
Judgment” [Doc. No. 104] is DENIED.
Dated this 27th day of June, 2017.
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