Craig v. Xlear et al

Filing 99

MEMORANDUM DECISION AND ORDER denying 64 Defendant's Motion for Partial Summary Judgment; denying 65 Motion in Limine; denying 67 Plaintiff's Motion for Summary Judgment. Signed by Judge Dee Benson on 9/6/2018. (mas)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
BRIAN CRAIG, an individual,
Plaintiff,

MEMORANDUM DECISION AND
ORDER

v.
XLEAR, INC., a Utah corporation; and
NATHAN JONES, an individual,
Defendants.

Case No. 2:16-cv-392-DB
District Judge Dee Benson

Before the court are three Motions: 1) Defendants’ Motion for Partial Summary
Judgment (Dkt. No. 64); 2) Defendants’ Motion in Limine to Exclude Evidence Regarding this
Court’s Prior Summary Judgment Ruling (Dkt. No. 65); and 3) Plaintiff’s Motion for Summary
Judgment on Xlear, Inc.’s Counterclaim. (Dkt. No. 67.) The Motions have been fully briefed by
the parties, and the court has considered the facts and arguments set forth in those filings.
Pursuant to civil rule 7-1(f) of the United States District Court for the District of Utah Rules of
Practice, the Court elects to determine the Motions on the basis of the written memoranda and
finds that oral argument would not be helpful or necessary. DUCivR 7-1(f).
Defendants’ Motion for Partial Summary Judgment
In their Motion, Xlear, Inc. (“Xlear”) and Nathan Jones (“Jones”) (collectively,
“Defendants”) seek summary judgment on Plaintiff’s first cause of action for breach of fiduciary
duty against Jones. (Dkt. No. 64.) Defendants argue that the amendment of U.C.A. § 16-10a622(3) in May of 2010 eliminated any unique fiduciary duties with respect to shareholders in
closely held corporations. Even assuming that Defendants’ interpretation of the impact of the

amendment is correct, the court finds that the alleged facts here are sufficient to survive a Motion
for Summary Judgment. Plaintiff alleges that Jones, as officer and director of Xlear, forced
Plaintiff out of his employment with Xlear and then months later wrongly stated that the
termination was for misconduct—all to cancel his shares and oust him as a shareholder. Those
facts are sufficient to present to a jury to determine whether Jones breached his fiduciary duties
as an officer and director of Xlear. Accordingly, Defendants’ Motion for Summary Judgment is
denied.
Defendants’ Motion in Limine to Exclude Evidence Regarding this Court’s Prior Summary
Judgment Ruling
In their Motion in Limine, Defendants argue that all evidence related to this court’s prior
summary judgment ruling in favor of Plaintiff on his breach of contract claim should be excluded
pursuant to Federal Rule of Evidence 403. (Dkt. No. 65.) Defendants argue that the evidence
would be unduly prejudicial and confusing to the jury. The court finds that it is not confusing or
unfairly prejudicial to Defendants for the jury to hear the complete story of the dealings between
the parties. Defendants’ Motion in Limine is therefore denied.
Plaintiff’s Motion for Summary Judgment on Xlear, Inc.’s Counterclaim
Plaintiff seeks summary judgment on the second and third causes of action1 in Xlear’s
Counterclaim, arguing that Xlear has failed to provide facts to support the damages element of
each claim. (Dkt. No. 67.) Although Xlear will be required to carry its burden at trial of proving
damages for its breach of fiduciary duty and tortious interference with business relations claims,
the Court finds that Xlear has provided sufficient facts to create a triable issue of fact with

1

Xlear’s first cause of action has been rendered moot by the Court’s previous ruling on Plaintiff’s Motion for
Summary Judgment.

2

respect to its damages at this stage. Plaintiff’s Motion for Summary Judgment is accordingly
denied.
Conclusion
For the foregoing reasons, Defendants’ Motion for Summary Judgment (Dkt. No. 64),
Defendants’ Motion in Limine (Dkt. No. 65), and Plaintiff’s Motion for Summary Judgment
(Dkt. No. 67) are all hereby DENIED.

DATED this 6th day of September, 2018.

BY THE COURT:

Dee Benson
United States District Judge

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