STATIC CONTROL COMPONENTS, INC. v. SUMMIX, INC.
Filing
74
MEMORANDUM OPINION AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE signed by MAG/JUDGE L. PATRICK AULD on 04/20/2012. IT IS THEREFORE RECOMMENDED that Defendant's Motion for Summary Judgment (Docket Entry 63 ) be granted in part and denie d in part in that the Court should enter summary judgment for Defendant on Plaintiff's claim for "Violation of the North Carolina Trade Secrets Protection Act N.C.G.S. 66-153" (Docket Entry 51 , 22-31) but not on Plaintiff's clai ms for "Breach of Contract and Warranty of Merchantability - Developer Rollers" (id. 16-21) and "Breach of Contract and Warranty of Merchantability - PCRs" (id. 10-15) or on Defendant's counterclaim for breach of contract.(Taylor, Abby)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
STATIC CONTROL COMPONENTS,
INC.,
Plaintiff,
v.
SUMMIX, INC.,
Defendant.
)
)
)
)
)
)
)
)
)
)
1:08CV928
MEMORANDUM OPINION AND RECOMMENDATION
OF UNITED STATES MAGISTRATE JUDGE
The instant matter comes before the undersigned United States
Magistrate Judge for a recommended ruling on Defendant’s Motion for
Summary Judgment (Docket Entry 63).
(See Docket Entries dated
Dec. 23, 2008, Oct. 26, 2011, and Jan. 12, 2012 (designating case
as subject to handling pursuant to this Court’s Amended Standing
Order No. 30, assigning case to undersigned Magistrate Judge, and
referring instant Motion to same, respectively).)1 For the reasons
that follow, the instant Motion should be granted in part and
denied in part.
Background
Plaintiff’s
First
Amended
Complaint
(“FAC”)
identifies
Plaintiff as a company that provided materials to toner cartridge
1
Under said Standing Order, “[t]he magistrate judge to whom
the case is assigned will rule or make recommendations upon all
motions, both non-dispositive and dispositive.” M.D.N.C. Amended
Standing Order No. 30, ¶ 2; see also M.D.N.C. LR72.2 (“Duties and
cases may be assigned or referred to a Magistrate Judge . . . by
the clerk in compliance with standing orders . . . .”).
“remanufacturers,” enterprises that “take used toner cartridges,
clean them, replace worn out components, add new toner and sell the
resulting remanufactured cartridge at a discount to the price of a
new cartridge.”
(Docket Entry 51, ¶ 8.)
According to the FAC,
Defendant (a Japanese corporation) sold two types of components to
Plaintiff: 1) Primary Charging Rollers (“PCRs”); and 2) Developer
Rollers.
(Id. ¶ 7; see also id. ¶ 2.)
The purchase of these
products allegedly occurred via Plaintiff’s Purchase Order Terms
and Conditions (which included a warranty of merchantability), and
the products “were manufactured by [Defendant] and shipped to
[Plaintiff]
and
received
business . . . .”
Plaintiff
at
[Plaintiff’s]
principal
place
of
(Id. ¶ 9; see also id. ¶¶ 11, 17.)
complains
that
Defendant
did
not
maintain
a
consistent level of quality with respect to these products, and, as
a result, Plaintiff received from Defendant a number of PCRs and
Developer Rollers that Plaintiff could not sell to its customers.
(See id. ¶¶ 10-21.)
fall
of
Developer
2007,
Specifically, the FAC contends that in the
Plaintiff
Rollers
supplied
detected
by
“numerous
Defendant,
defects”
rendering
in
them
the
“not
merchantable” (see id. ¶ 19), and likewise, in the fall of 2008,
Plaintiff detected “numerous defects” in the PCRs it received from
Defendant, which similarly rendered those PCRs “not merchantable”
(id. ¶ 13). According to the FAC, each of these events constitutes
a breach of the warranty of merchantability and, accordingly, a
breach of contract.
(See id. ¶¶ 13, 19.)
-2-
The
FAC
also
asserts
a
claim
against
Defendant
for
misappropriation of Plaintiff’s trade secrets through Plaintiff’s
(See id. ¶¶ 22-31.)
former employee, Harry Morikawa.
In this
regard, the FAC alleges that Plaintiff employed Mr. Morikawa to act
as an intermediary and translator and that, in this role, Mr.
Morikawa served as Plaintiff’s almost exclusive means of contact
with Defendant.
an
employee
(See id. ¶ 23.)
privy
to
The FAC further describes how, as
Plaintiff’s
confidential
information,
including pricing and customer information, Plaintiff had Mr.
Morikawa sign a confidentiality agreement restricting him from
revealing any of said information.
(See id.)
According to the FAC, during certain business meetings between
Plaintiff and Defendant, it became “apparent to [Plaintiff] that
Mr. Morikawa was representing the interests of [Defendant] rather
than the interests of [Plaintiff],” and, accordingly, Plaintiff
fired Mr. Morikawa in June 2008.
(Id. ¶ 24.)
The FAC alleges that
Mr. Morikawa thereafter began working for Defendant as a consultant
and, during that time, revealed Plaintiff’s trade secrets with
respect to Plaintiff’s customers and pricing in violation of the
confidentiality agreement.
(See id. ¶ 25.)
Based on the foregoing events, Plaintiff brings claims against
Defendant
for
1)
“Breach
of
Contract
and
Warranty
of
Merchantability - PCRs” (id. ¶¶ 10-15); 2) “Breach of Contract and
Warranty of Merchantability - Developer Rollers” (id. ¶¶ 16-21);
and 3) “Violation of the North Carolina Trade Secrets Protection
Act
N.C.G.S.
66-153”
(id.
¶¶
-3-
22-31).
Defendant
answered
Plaintiff’s claims and filed a counterclaim asserting breach of
contract on the grounds that Defendant delivered merchantable
products for which Plaintiff failed to pay.
at 4-5.)
(See Docket Entry 52
Defendant has now filed the instant Motion for Summary
Judgment.
(Docket Entry 63.)
Standard
“The [C]ourt shall grant summary judgment 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.”
P. 56(a).
Fed. R. Civ.
Such a genuine dispute exists if the evidence presented
could lead a reasonable fact-finder to return a verdict in favor of
the non-moving party.
Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 255 (1986). In making this determination, the Court must view
the evidence and any reasonable inferences therefrom in a light
most favorable to the non-moving party.
Matsushita Elec. Indus.
Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
The party moving for summary judgment may discharge its burden
by identifying an absence of evidence to support the non-moving
party’s case.
(1986).
See Celotex Corp. v. Catrett, 477 U.S. 317, 325
The non-moving party then must “set forth specific facts
showing that there is a genuine issue for trial.” Matsushita Elec.
Indus.,
475
original).
U.S.
at
586–87
(citation
omitted)
(emphasis
in
In this regard, the non-moving party must convince the
Court that evidence exists upon which a finder of fact could
properly return a verdict in favor of the non-moving party.
Anderson, 477 U.S. at 252 (citation omitted); see also Francis v.
-4-
Booz, Allen & Hamilton, Inc., 452 F.3d 299, 308 (4th Cir. 2006)
(“Mere unsupported speculation is not sufficient to defeat a
summary judgment motion if the undisputed evidence indicates that
the other party should win as a matter of law.”).
To the extent the Court must draw conclusions about matters of
North Carolina law in evaluating Defendant’s Motion for Summary
Judgment,2 “the highest court of the state is the final arbiter of
what is state law.
When it has spoken, its pronouncement is to be
accepted by federal courts as defining state law unless it has
later given clear and persuasive indication that its pronouncement
will be modified, limited or restricted.”
Tel. Co., 311 U.S. 223, 236 (1940).
West v. American Tel. &
However, “[a] state is not
without law save as its highest court has declared it.
There are
many rules of decision commonly accepted and acted upon by the bar
and inferior courts which are nevertheless laws of the state
although the highest court of the state has never passed upon
them.”
Id.
Accordingly, “it is the duty of [a federal court
facing a question of state law] to ascertain from all the available
data what the state law is and apply it . . . .”
Id. at 237.
“Where an intermediate appellate state court rests its considered
judgment upon the rule of law which it announces, that is a datum
for ascertaining state law which is not to be disregarded by a
2
Although Defendant is a Japanese corporation, neither Party
disputes that North Carolina law governs the instant action. (See,
e.g., Docket Entry 64 at 8-9 (citing North Carolina case law);
Docket Entry 66 at 10-11 (citing Article 2 of North Carolina’s
version of the Uniform Commercial Code as governing contract
claims).)
-5-
federal court unless it is convinced by other persuasive data that
the highest court of the state would decide otherwise.”
Id.
Discussion
A.
Breach of Contract Claims
Because this dispute involves a contract for the sale of
goods, North Carolina’s version of the Uniform Commercial Code
(“UCC”) governs. See Thermal Design, Inc. v. M & M Builders, Inc.,
___ N.C. App. ___, ___ n.2, 698 S.E.2d 516, 521 n.2 (2010) (“The
transaction in issue between the parties clearly concerns the sale
of ‘goods,’ and we therefore apply the UCC to this case.”)
Under
that law, “[u]nless excluded or modified . . ., a warranty that the
goods shall be merchantable is implied in a contract for their sale
if the seller is a merchant with respect to goods of that kind.”
N.C. Gen. Stat. § 25-2-314(1).
“In order to establish a breach of the implied warranty of
merchantability, a plaintiff must prove that: (1) the product
bought
and
sold
was
subject
to
an
implied
warranty
of
merchantability; (2) the product did not comply with the warranty
because it was defective at the time of sale; (3) the plaintiff’s
injury was due to the defective nature of the product; and (4)
plaintiff suffered damages as a result.”
Evans v. Evans, 153 N.C.
App. 54, 68, 569 S.E. 2d 303, 311 (2002) (citing Dewitt v. Eveready
Battery Co., Inc., 355 N.C. 672, 682-83, 565 S.E.2d 140, 147
(2002)).3
Moreover, under the UCC, “if the goods or the tender of
3
With respect to the element of damages, Defendant’s
Memorandum of Law in Support of Defendant’s Motion for Summary
(continued...)
-6-
delivery fail in any respect to conform to the contract, the buyer
may (a) reject the whole; or (b) accept the whole; or (c) accept
any commercial unit or units and reject the rest.” N.C. Gen. Stat.
§ 25-2-601.
In
the
instant
matter,
Defendant
contends
that,
despite
Plaintiff’s claims that defects in the PCRs and Developer Rollers
rendered those goods unmerchantable, “[Plaintiff] did not reject
Developer Rollers due to quality control issues and [Plaintiff] was
able to resell the PCRs delivered by [Defendant] . . . .”
(Docket
Entry 64 at 8.) Accordingly, Defendant concludes that “any alleged
breach by [Defendant] of the contract . . . did not ‘substantially
defeat[] the purpose of the agreement’ and was not a ‘substantial
failure to perform,’” (id. (quoting Fletcher v. Fletcher, 123 N.C.
App. 744, 752, 474 S.E.2d 802, 807-08 (1996)) (alterations added)),
and is therefore not actionable.
Although Defendant’s arguments
3
(...continued)
Judgment states:
While it is quite telling that, after three years of
litigation, [Plaintiff] is unable to identify any
customer, or even sale, lost as a result of the delivery
by [Defendant] of allegedly defective products and does
not have any calculation of damages it has allegedly
suffered (See Brunton Dep., pp. 29-30, 42; Pijpers Dep.,
pp. 31-32, 53-54), [Defendant] does not move for summary
judgment on the failure to produce sufficient evidence as
to damages in recognition of case law holding that “a
failure to prove damages is not grounds for a judgment as
a matter of law on a breach of contract claim because
proof of the other elements of such a claim entitles a
plaintiff to at least nominal damages.” Pharmanetics,
Inc. v. Aventis Pharm., Inc., No. 5:03-CV-817-FL(2), 2005
WL 6000369, *17 (E.D.N.C. May 4, 2005) (citation
omitted).
(Docket Entry 64 at 8 n.14.)
-7-
are couched in terms of the substantial performance requirements of
general North Carolina contract law rather than the perfect tender
requirements of the UCC, the undersigned interprets said arguments
as contentions that Plaintiff has failed to provide sufficient
evidence
that
the
goods
delivered
were
non-conforming
or
unmerchantable.
In support of these contentions, Defendant points to the
deposition testimony of Aaron Maule and Holly Brunton, two of
Plaintiff’s designees under Fed. R. Civ. P. 30(b)(6).
In one
excerpt referenced by Defendant, Mr. Maule confirmed that Plaintiff
“didn’t
reject
[R]ollers.”
Brunton,
any
at
[quality
control]
(Docket Entry 64-6 at 7.)
Plaintiff’s
counsel
on
the
[D]eveloper
In the deposition of Ms.
reviewed
a
chart
reflecting
Plaintiff’s average selling price, by month, of PCRs manufactured
by Defendant and sold by Plaintiff.
(See Docket Entry 64-5 at 4.)
In asking about the indication in said chart that Plaintiff
continued to sell Defendant’s product as late as 2011, Ms. Brunton
states: “I would have to confirm, but if it’s on [the chart] we
sold the product.”
Plaintiff,
Defendant’s
(Id.)
however,
summary
has
judgment
presented
theories.
evidence
With
to
respect
contest
to
the
evidence that Plaintiff’s quality control personnel failed to
reject the Developer Rollers, Plaintiff pointed out the following:
It is true that [Plaintiff’s] quality control department
did not reject these rollers, but that is because this
product had not yet developed to the place where [the]
quality control department was involved in the process.
When a new product is initially purchased, it is
[Plaintiff]’s engineering division, not its quality
-8-
control department that performs the testing of the
product to determine if it meets the specifications of
the samples that were qualified.
(Docket Entry 66 at 13.)
Plaintiff cites the 30(b)(6) deposition
testimony of Roderick Boone to support this contention.
(See id.)
In said testimony, Mr. Boone describes the testing performed on the
Developer
Rollers
and
the
alleged
Plaintiff during that testing.
deficiencies
identified
by
(See Docket Entry 66-7 at 5-6.)
Regarding Defendant’s contention that Plaintiff continued to
sell Defendant’s products despite asserting that they were “not
merchantable,” Plaintiff offers the following: “Some bad Developer
Rollers were re-sold to [Plaintiff’s] customers, but [Plaintiff]
has only sought damages for the re-sold Developer Rollers that were
returned by customers for a credit because of quality issues.”
(See Docket Entry 66 at 13.)
With respect specifically to the
PCRs, Plaintiff states:
[Defendant] in its motion assumes the [Defendantprovided] PCRs that were sold by [Plaintiff] after
October 1, 2008 were the same ones which [Plaintiff]
rejected for defects.
There is no evidence cited to
support this assumption. [Plaintiff] did re-sell certain
PCRs delivered by [Defendant], but they were previously
delivered good PCRs, not the newly delivered defective
PCRs. [Plaintiff] is not seeking damages for delivery of
good PCRs, but it is seeking damages caused by the
delivery of defective PCRs.
(Id. at 14 (internal citation omitted).)
Plaintiff has also provided an affidavit of Mr. Maule in
connection with its Response Brief, in which Mr. Maule avers:
As I testified in my deposition, the quality control
department of [Plaintiff] rejected the shipment of a
number of PCRs in the fall of 2008. I have been informed
that [Defendant] claims that [Plaintiff] later re-sold
these PCRs. This is not true. The rejected PCRs were
-9-
placed in [Plaintiff’s] warehouse in an area designated
as “QC hold”.
Products in QC hold are held pending
return to the manufacturer or resolution of the issues
which led to the product being placed in QC hold. These
products are not re-sold to customers unless they are
removed from QC hold and placed in the general warehouse.
(Docket Entry 66-15, ¶ 3.)
Mr. Maule goes on to specify in his
affidavit that “[t]he rejected PCRs at issue in this case were not
re-moved [sic] from QC hold and were not sold to customers.”
(Id.
¶ 4.)
On this record, a genuine issue of material fact exists as to
whether
the
components
at
issue
were
defective
and
whether
Plaintiff later re-sold those allegedly unmerchantable components.
Plaintiff has provided evidence, at least in the form of deposition
testimony
and
email
exchanges,
that
the
components
sold
by
Defendant were tested, were found defective, and were unsaleable.
Despite this evidence, Defendant in essence asks this Court to find
in its favor because Plaintiff’s assertions appear unlikely in the
face of other evidence.
(See Docket Entry 69 at 4.)
However, at
the summary judgment stage, the Court must view the evidence and
any reasonable inferences therefrom in a light most favorable to
the non-moving party, Matsushita, 475 U.S. at 587, and “may not
make credibility determinations or weigh the evidence,” Reeves v.
Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000).
Any
decision to discredit the evidence on which Plaintiff relies must
come from the finder of fact.
Defendant contends in Reply that Plaintiff’s “submission of
‘evidence’ that it has not sold [Defendant-provided] PCRs it now
claims were defective to its customers in the form of an employee’s
-10-
affidavit that wholly contradicts [Plaintiff]’s sales records
should not be countenanced.”
(Docket Entry 69 at 1.)
Defendant
points to Plaintiff’s own records to show that Plaintiff sold a
substantial
number
of
PCRs
after
the
alleged
rejection
and
Defendant asserts that “[t]here is no evidence that [Plaintiff] had
such a stockpile of non-defective [Defendant-provided] PCRs.
Any
claim now of such a stock-pile is belied by the fact that: (1)
[Plaintiff] claims it had to ‘rush’ its own PCRs to market; and (2)
[Plaintiff] did not first sell non-defective [Defendant-provided]
PCRs before ‘rushing’ its own PCRs to market.”
(Id. at 4.)
Although the undersigned recognizes that the Court need not
accept as true any statements in an affidavit from an employee of
Plaintiff that contradict Plaintiff’s own prior evidence, see
generally Erwin v. United States, 591 F.3d 313, 325 n.7 (4th Cir.
2010); Hernandez v. Trawler Miss Vertie Mae, Inc., 187 F.3d 432,
438 (4th Cir. 1999); Barwick v. Celotex Corp., 736 F.2d 946, 960
(4th Cir. 1984), Mr. Maule’s affidavit, submitted in connection
with Plaintiff’s Response Brief, does not appear to contradict any
prior evidence from Plaintiff.
The sales chart and deposition
testimony cited by Defendant merely support the assertion that
Plaintiff continued to sell parts manufactured by Defendant, not
necessarily that those parts were the defective parts about which
Plaintiff now complains.
At most, the evidence identified by
Defendant calls into question the credibility of Mr. Maule’s
affidavit, a matter the fact-finder must resolve, not a matter for
the Court to decide at this stage of the proceedings.
-11-
B.
Misappropriation of Trade Secrets Claim
Under North Carolina law, “[m]isappropriation of a trade
secret
is
prima
facie
established
by
the
introduction
of
substantial evidence that the person against whom relief is sought
both: (1) Knows or should have known of the trade secret; and (2)
Has had a specific opportunity to acquire it for disclosure or use
or has acquired, disclosed, or used it without the express or
implied consent or authority of the owner.”
N.C. Gen. Stat. § 66-
155 (emphasis added). For purposes of this statute, a trade secret
is defined as:
[B]usiness or technical information including but not
limited to a formula, pattern, program, device,
compilation of information, method, technique, or process
that:
a. Derives independent actual or potential commercial
value from not being generally known or readily
ascertainable through independent development or reverse
engineering by persons who can obtain economic value from
its disclosure or use; and
b. Is the subject of efforts that are reasonable under
the circumstances to maintain its secrecy.
N.C. Gen. Stat. § 66-152.
Furthermore, misappropriation means “acquisition, disclosure,
or use of a trade secret of another without express or implied
authority or consent, unless such trade secret was arrived at by
independent development, reverse engineering, or was obtained from
another person with a right to disclose the trade secret.”
Id.
To
state a claim for misappropriation of trade secrets, a plaintiff
“must identify a trade secret with sufficient particularity so as
to enable a defendant to delineate that which he is accused of
-12-
misappropriating and a court to determine whether misappropriation
has
or
is
threatened
to
occur.”
Analog
Devices,
Inc.,
v.
Michalski, 157 N.C. App. 462, 468, 579 S.E.2d 449, 453 (2003)
(citation omitted).
Plaintiff claims that Mr. Morikawa misappropriated Plaintiff’s
pricing and customer information and used said information in order
to contact Plaintiff’s clients in an attempt to garner their
business.
Plaintiff,
(See
the
Docket
fact
Entry
that
51,
Defendant
¶¶
22-31.)
began
According
shipping
to
defective
component parts to Plaintiff just prior to the date when Plaintiff
planned to introduce its own manufactured versions of those same
components to the market constitutes circumstantial evidence that
Mr. Morikawa shared Plaintiff’s intended timeline for that release
with Defendant.
(See Docket Entry 66 at 16-17.)
Specifically,
Plaintiff notes that, although Defendant knew Plaintiff planned to
release its own components in the future, Defendant did not know
when Plaintiff intended to bring those parts to market.
n.3.)
(Id. at 6
Plaintiff further reasons that Defendant’s shipment of
defective
components
caused
Plaintiff
to
release
their
own
components into the market more quickly than planned, resulting in
Plaintiff selling inferior components that caused a corresponding
loss of business.
(Id. at 16-17.)
In its instant Motion for Summary Judgment, Defendant points
out
that
Plaintiff’s
primary
evidence
that
Mr.
Morikawa
misappropriated pricing and customer information - an email in
which Mr. Morikawa introduced Defendant to one of Plaintiff’s
-13-
customers - demonstrates that Mr. Morikawa “may arguably have
violated a non-competition agreement with [Plaintiff], [but] it is
not
tantamount
[Defendant].”
takes
issue
evidence
to
misappropriation
of
(See Docket Entry 64 at 7.)
with
Plaintiff’s
demonstrates
that
contention
Mr.
Morikawa
trade
secrets
by
Moreover, Defendant
that
circumstantial
must
have
provided
information to Defendant regarding Plaintiff’s planned release of
its own PCRs:
[Plaintiff]’s
assertion
that
there
is
“circumstantial evidence” (sufficient to withstand a
summary judgment motion) that [Mr.] Morikawa necessarily
provided
[Defendant]
with
[Plaintiff]’s
pricing
information where [Plaintiff] has presented evidence that
[Defendant] knew that [Plaintiff] was going to begin
selling its own PCRs and began shipping defective PCRs to
[Plaintiff] is inane. In essence, [Plaintiff] is asking
this Court to infer from these two facts that [Defendant]
purposefully forfeited hundreds of thousands of dollars
in payment from [Plaintiff] by intentionally shipping
defective goods to [Plaintiff] (instead of filling
[Plaintiff]’s orders with non-defective goods) so that
[Plaintiff] would have to “rush” its own PCRs to market
(meaning, presumably, that it would be forced to
introduce an inferior product) such that [Defendant]
could then capitalize on the bind it placed [Plaintiff]
in by luring away [Plaintiff]’s customers through
competitive pricing (learned via [Mr.] Morikawa’s
knowledge of [Plaintiff]’s pricing) all without it ever
occurring to [Defendant] that its reputation with these
very customers would be ruined as a result of shipping
“defective” product to [Plaintiff] in the first place!
(Docket Entry 69 at 3.)
The undersigned finds merit in Defendant’s arguments on these
points.
Plaintiff relies on two pieces of evidence to support its
claim that Defendant misappropriated Plaintiff’s trade secrets:
1) an email sent by Mr. Morikawa to a customer of Plaintiff
attaching Defendant’s products list and offering to send samples;
-14-
and 2) Defendant’s shipment to Plaintiff of defective components.
These two items do not amount to the substantial evidence required
under N.C. Gen. Stat. § 66-155.
For example, this evidence fails to show that Defendant
underbid
any
of
Plaintiff’s
pricing.
Furthermore,
although
Plaintiff states that Defendant “offered to sell its PCRs to
[Plaintiff’s] customers on terms that suggested, at least to
[Plaintiff]’s
distributor,
that
[Defendant]
had
access
to
[Plaintiff’s] pricing information” (Docket Entry 66 at 17), the
evidence cited by Plaintiff to support said contention does not
appear
in
any
Defendant’s
way
Motion
speculation.”
to
support
cannot
be
it
Docket
(see
defeated
by
Booz, Allen, 452 F.3d at 308.
Entry
“mere
67-8).
unsupported
On these facts, the
Court should find that Plaintiff has come forward with insufficient
evidence to survive Defendant’s Motion for Summary Judgment as to
its claim for misappropriation of trade secrets.
Conclusion
On the instant facts, a genuine issue of material fact exists
as to whether Defendant delivered unmerchantable PCRs and Developer
Rollers to Plaintiff; however, Defendant has identified an absence
of
evidence
necessary
to
sustain
Plaintiff’s
trade
secrets
misappropriation claim.
IT
IS
THEREFORE
RECOMMENDED
that
Defendant’s
Motion
for
Summary Judgment (Docket Entry 63) be granted in part and denied in
part in that the Court should enter summary judgment for Defendant
on Plaintiff’s claim for “Violation of the North Carolina Trade
-15-
Secrets Protection Act N.C.G.S. 66-153” (Docket Entry 51, ¶¶ 22-31)
but not on Plaintiff’s claims for “Breach of Contract and Warranty
of Merchantability - Developer Rollers” (id. ¶¶ 16-21) and “Breach
of Contract and Warranty of Merchantability - PCRs” (id. ¶¶ 10-15)
or on Defendant’s counterclaim for breach of contract.
/s/ L. Patrick Auld
L. Patrick Auld
United States Magistrate Judge
April 20, 2012
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