Becquer v. Mirantis, Inc. et al
Filing
28
ORDER denying 18 Motion to Dismiss Counterclaims. (Written Opinion) Signed by Senior Judge David S. Doty on 9/27/2018. (DLO)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil No.: 18-1072(DSD/HB)
Pedro J. Becquer,
Plaintiff,
v.
ORDER
Mirantis, Inc. and Marque Teegardin,
Defendants.
Jeffrey S. Storms, Esq. and Newmark Storms Dworak, LLC, 100
South Fifth Street, Suite 2100, Minneapolis, MN 55402, counsel
for plaintiff.
Richard Greiffenstein, Esq., Michael J. Moberg, Esq. and
Jackson Lewis, P.C., 225 South Sixth Street, Suite 3850,
Minneapolis, MN 55402, counsel for defendants.
This matter is before the court upon the motion to dismiss
counterclaims by plaintiff (and counterclaim defendant) Pedro J.
Becquer.
Based on a review of the file, record, and proceedings
herein, and for the following reasons, the court denies the motion.
BACKGROUND
This employment dispute arises out of Becquer’s brief tenure
as an employee of defendant (and counterclaim plaintiff) Mirantis,
Inc.
In July 2015, Becquer accepted a job as an account executive
with Mirantis.
Am. Countercl. ¶¶ 6-8.
employed by NICE Systems, Inc.
At the time, Becquer was
Id. ¶ 15.
Becquer began working
for Mirantis on August 10, 2015, even though he had not yet
resigned from NICE.1
On
August
17,
Id. ¶ 8.
2015,
Becquer
signed
Mirantis’s
Employee
Proprietary Information and Invention Assignment Agreement (PIIAA),
under which he agreed to certain “restrictions and obligations ...
on [his] use and development of certain information, technology,
ideas, inventions and other materials....”
Id. Ex. A at 1.
Among
other things, Becquer specifically represented that he had “no
other agreements or relationships with or commitments to any other
person or entity that conflict with [his] obligations to [Mirantis]
or under this Agreement, and that [his] performance under the terms
of this Agreement will not require [him] to violate any obligation
or confidence with another.”
Id. ¶ 7.
He further agreed not to
“enter into any oral or written agreement in conflict” with the
PIIAA.
Id.
When
Becquer
accepted
the
offer
of
employment,
he
told
Mirantis that he was still employed by NICE, but that he would
resign after he received commissions earned from past work with
NICE.
Id. ¶ 15.
According to Mirantis, Becquer explained that he
would only remain a “de facto” employee of NICE pending receipt of
his final commission payments. Id. Mirantis apparently understood
this to mean that Becquer would devote his full time efforts to
Mirantis while only formally remaining an employee of NICE.
1
Mirantis does not allege that it competes with NICE.
2
Becquer told his supervisor at Mirantis, Ed Hartman, that his
last day at NICE would be September 30, 2018, but he continued to
work for NICE thereafter.
Id. ¶¶ 16, 17.
When Hartman learned
that Becquer remained a NICE employee after September 30, he told
Becquer that his continued dual employment was unacceptable.
¶ 18.
Id.
Becquer responded that he would resign from NICE effective
October 15, 2018, but he apparently did not do so.
Id. ¶¶ 18, 19,
22.
On January 11, 2016, Becquer resigned from Mirantis after
being promoted within NICE.
Id. ¶ 21.
At that point Mirantis
learned that Becquer had remained a NICE employee throughout his
tenure with Mirantis.
Id. ¶¶ 22, 24.
Mirantis alleges that it
would have terminated Becquer had it been aware of that fact.
Id.
¶ 23.
NICE was apparently completely unaware that Becquer was also
working at Mirantis.
Compl. ¶ 20; Am. Countercl. ¶ 24.
According
to Becquer, defendant Marque Teegardin, a Mirantis employee who had
recruited him, was “extremely angry” that Becquer resigned his
position with Mirantis.
Compl. ¶¶ 17, 31, 32.
Becquer alleges
that Teegardin sabotaged his employment with NICE by disclosing his
dual employment and encouraging NICE to terminate his employment.
Id. ¶¶ 41-43.
Thereafter, NICE fired Becquer and filed suit
against him alleging breach of contract, breach of duty of loyalty,
3
and fraud.2
On April 23, 2018, Becquer filed this suit against Mirantis
and Teegardin alleging tortious interference.
answer
and
counterclaim
on
July
2,
and
Mirantis filed an
later
filed
amended
counterclaims alleging breach of contract, breach of duty of
loyalty,
and
fraud.
Becquer
now
moves
to
dismiss
the
counterclaims.3
DISCUSSION
I.
Standard of Review
To survive a motion to dismiss for failure to state a claim,
“‘a complaint must contain sufficient factual matter, accepted as
true, to state a claim to relief that is plausible on its face.’”
Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 594 (8th Cir. 2009)
(quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).
“A claim
has facial plausibility when the plaintiff [has pleaded] factual
content that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.”
Iqbal, 556
U.S. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556
(2007)).
Although a complaint need not contain detailed factual
2
That case settled after the court denied Becquer’s motion
for summary judgment. See NICE Sys., Inc. v. Becquer, No. 16-1759,
2017 WL 5634606 (D. Minn. Nov. 22, 2017).
3
Teegardin has filed a motion to dismiss for lack of
jurisdiction, which will be heard separately.
4
allegations, it must raise a right to relief above the speculative
level.
Twombly, 550 U.S. at 555.
“[L]abels and conclusions or a
formulaic recitation of the elements of a cause of action” are not
sufficient to state a claim.
Iqbal, 556 U.S. at 678 (citation and
internal quotation marks omitted).
The court does not consider matters outside the pleadings
under Rule 12(b)(6).
Fed. R. Civ. P. 12(d).
The court may,
however, consider matters of public record and materials that are
“necessarily embraced by the pleadings.”
Porous Media Corp. v.
Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999) (citation and
internal quotation marks omitted).
Here, the PIIAA is properly
considered by the court.
II.
Breach of Contract
Mirantis
alleges
that
Becquer
breached
the
PIIAA
by
maintaining his employment with NICE and therefore failing to
“devote his full business time and energies to the business and
affairs” of Mirantis.4
Am. Countercl. ¶ 33.
The parties agree
that the PIIAA is governed by and construed in accordance with
California law.
Id. Ex. A ¶ 11(b).
4
Mirantis also alleges that Becquer breached the PIIAA by
misrepresenting that he had resigned from NICE and by entering into
an employment agreement with NICE. Am. Countercl. ¶ 33. The court
finds that, even if the allegations are true, Becquer’s conduct in
this regard did not violate the PIIAA because it does not address
general misrepresentations or pre-existing employment contracts.
5
Under California law, the elements for a breach of contract
action are: “(1) the existence of a contract, (2) plaintiff’s
performance or excuse for nonperformance, (3) defendant’s breach,
and (4) damages to plaintiff as a result of the breach.”
Buschman
v. Anesthesia Bus. Consultants LLC, 42 F. Supp. 3d 1244, 1250 (N.D.
Cal. 2014) (citing CDF Firefighters v. Maldonado, 70 Cal. Rptr. 3d
667 (Cal. Ct. App. 2008)).
Becquer argues that this claim must be dismissed because the
PIIAA does not prohibit dual employment and because, in any event,
Mirantis was aware of that dual employment.
As to whether the
PIIAA prohibits dual employment, the court finds that the PIIAA is
ambiguous.
Although
it
employment,
Paragraph
7
does
does
not
expressly
prohibit
other
prohibit
dual
“agreements,”
“relationships,” or “commitment[s]” to “any other person or entity”
that would conflict with obligations Becquer had to Mirantis as an
employee.
Am. Countercl. Ex. A ¶ 7.
That provision could
reasonably be read to preclude dual employment that would conflict
with Becquer’s full-time obligations to Mirantis.
The fact that
the PIIAA’s overall purpose is to protect Mirantis’s proprietary
information, id. at 1, does not undermine this conclusion given
paragraph 7’s broad language.
Although not directly addressed in the briefing, there is a
valid question as to whether Mirantis waived any claim of breach
because it was aware from the outset that Becquer would, at least
6
for a time, maintain his employment with NICE.
There are factual
disputes as to any such waiver, however, which prevent the court
from resolving the issue at this juncture.
Most notably, the
parties disagree as to what Mirantis understood about Becquer’s
remaining obligations to NICE and the nature and scope of his
ongoing work for NICE.
Becquer also argues that Mirantis has failed to state a claim
for breach of contract because it has not adequately alleged a
causal connection between the breach and any damages.
disagrees.
The court
Mirantis has, in fact, expressly alleged damages tied
to the breach, Am. Countercl. ¶¶ 33-35, which the court must accept
as true for present purposes.
As a result, the court must deny
Becquer’s motion to dismiss this claim.
III. Breach of Duty of Loyalty
Mirantis next alleges that Becquer breached his duty of
loyalty to Mirantis by maintaining dual employment and failing to
disclose the nature and extent of his employment with NICE.
There
is some disagreement about whether California or Minnesota law
applies to this claim, but the parties agree that California and
Minnesota law are not in conflict for present purposes.
The court
will therefore defer deciding which state’s law applies.
Pointing specifically to California law, Becquer first argues
that this claim should be dismissed because there can be no breach
of the duty of loyalty absent a fiduciary relationship, which is
7
not alleged to exist here.
The court disagrees.
In E.D.C.
Technologies, Inc. v. Seidel, 216 F. Supp. 3d 1012, 1016 (N.D. Cal.
2016), the court specifically recognized that the tort of breach of
the duty of loyalty is a standalone cause of action distinct from
that of breach of fiduciary duty.
See also Blackbird Tech., Inc.
v. Joshi, No. 5:15-4272, 2015 WL 5818067, at *4 (N.D. Cal. Oct. 6,
2015) (internal quotation marks and citations omitted) (“The duty
of loyalty is breached, and the breach may give rise to a cause of
action in the employer, when the employee takes action which is
inimical to the best interests of the employer.”); Fields v. QSP,
Inc., No. 10-5772, 2011 WL 1375286, at *3 (C.D. Cal. Apr. 8, 2011)
(holding that there is a cause of action for breach of the duty of
loyalty under California law, the elements of which are “virtually
identical to those for breach of fiduciary duty”).
Becquer cites
to Mattel, Inc. v. MGA Entertainment, Inc., No. 04-9049, 2011 WL
8427611 (C.D. Cal. Mar. 28, 2011), for the contrary proposition,
but that case preceded E.D.C. and appears to have been rejected in
subsequent cases.
See Integral Dev. Corp. v. Tolat, No. 12-6575,
2013 WL 5781581, at *3 (N.D. Cal. Oct. 25, 2013); Zayo Grp. LLC v.
Hisa, No. 13-752, 2013 WL 12201401, at *7 (C.D. Cal. Sept. 17,
2013).
Minnesota likewise recognizes that employees owe their
employers a duty of loyalty.
Marn v. Fairview Pharm. Servs., LLC,
756 N.W.2d 117, 121 (Minn. Ct. App. 2008).
8
In order to state a claim for breach of duty of loyalty, a
plaintiff must plead: “(1) the existence of a relationship giving
rise to a duty of loyalty; (2) one or more breaches of that duty;
and (3) damage proximately caused by that breach.”
Supp. 3d at 1016.
E.D.C., 216 F.
Mirantis has adequately done so here.
Countercl. ¶¶ 38-41.
See Am.
As a result, the court must also deny this
aspect of Becquer’s motion.
IV.
Fraud
Mirantis alleges that Becquer engaged in fraud by falsely
reporting to Hartman that he had resigned from NICE effective
October
15,
dismissed
2015.
because
Becquer
Mirantis
argues
has
not
that
the
pleaded
specificity as required by Fed. R. Civ. P. 9(b).
claim
this
should
claim
be
with
Becquer contends
that Mirantis has failed to identify (1) exactly when he made the
statement to Hartman and (2) whether he made the statement in
person, over the phone, or via email or text. Although true, the
court
disagrees
circumstances.
with
the
that
such
details
are
required
under
the
The requirements of Rule 9(b) are read “in harmony
principles
of
notice
pleading,”
and
the
level
particularity required depends upon the nature of the
of
case.
E-Shops Corp. v. U.S. Bank Nat. Ass’n, 795 F. Supp. 2d 874, 877 (D.
Minn. 2011) (citation omitted).
9
Here, Becquer does not require added details to understand and
respond to the fraud claim.
Mirantis alleges that “shortly after”
October 15, 2015, Becquer told Hartman that he had resigned from
NICE, even though he had not done so.
Am. Countercl. ¶ 43.
It
would add little at this stage of the litigation to require
Mirantis to plead the exact date of the statement and the method by
which it was made.
As a result, the court finds that Mirantis has
adequately pleaded its fraud claim.
CONCLUSION
Accordingly, based on the above, IT IS HEREBY ORDERED that the
motion to dismiss counterclaims [ECF No. 18] is denied.
Dated: September 27, 2018
s/David S. Doty
David S. Doty, Judge
United States District Court
10
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