United States District Court, D. Nebraska
MEMORANDUM AND ORDER
John
M. Gerrard United States District Judge.
This
dispute involves the purchase of a custom printing business
located in Omaha, Nebraska. The plaintiff, Crabar/GBF, Inc.,
bought the business from the defendants, Mark Wright and
Wright Printing Co.-but now, Crabar is suing them for
allegedly breaching various contractual obligations by
reentering the custom printing business and using assets
previously sold to Crabar. Wright and Wright Printing have
counterclaimed, arguing that Crabar, too, breached various
contractual obligations.
This
matter is before the Court on the parties' cross-motions
for partial summary judgment (filing 56; filing
75), and Crabar's motion to dismiss (filing
65) Wright and Wright Printing's counterclaim. For
the reasons set forth below, the Court will grant Wright
Printing's partial motion for summary judgment
(filing 75) with respect to § 5 of the Purchase
Agreement, and deny Crabar's partial motion for summary
judgment (filing 56). The Court will also grant
Crabar's motion to dismiss (filing 65) Wright
and Wright Printing's counterclaim.
BACKGROUND
Mark
Wright is the president and CEO of Wright Printing, a
Nebraska corporation specializing in designing and
manufacturing custom printed pocket folders. Filing 45 at
2. Crabar is in the business of producing printed
business materials for commercial vendors. Filing 45 at
2. In September 2013, Wright Printing sold its custom
printing business to Crabar for approximately $15 million.
Filing 45 at 48-90. And in effectuating that sale,
the parties entered into a series of agreements, two of which
are particularly important for purposes of this suit: the
Asset Purchase Agreement ("the Purchase Agreement")
and the Release Agreement. See Filing 45 at 48-100;
filing 45 at 93-100.
Under
the Purchase Agreement, Crabar acquired the assets of three
custom printing entities: (1) "Folder Express, "
(2) "Progress Music, " and (3) "Progress
Publications" (collectively, the "custom printing
business"), all of which were previously owned and
operated by Wright Printing. Filing 45 at 3-5;
see also filing 45 at 48-90. As part of the Purchase
Agreement, Wright Printing also promised that it would not,
at any time, use the tradenames, domain names, and other
intellectual property associated with its custom printing
business. Filing 45 at 63. Nor would it use or
disclose any confidential information involving the
"manufacturing processes, methods of operation,
products, financial data, sources of supply and
customers." Filing 45 at 64.
In
addition to acquiring various assets under the Purchase
Agreement, the parties agreed that Crabar would enter into a
lease with 11616 I Street, LLC--a limited liability company
managed by Wright. Filing 45 at 12. The lease
allowed Crabar to operate the custom printing business out of
the same Omaha facility that it had occupied prior to the
acquisition. Filing 45 at 12.
But in
the spring of 2015, tensions between the parties began to
rise. Around this time, Wright notified Crabar that 11616 I
Street, LLC, would not renew Crabar's lease, and that the
property must be vacated by September 30, 2015. Wright
offered to extend Crabar's lease to December 30, 2015 to
give Crabar enough time to find an alternative location, but
on two conditions: (1) that Crabar release and return $1.1
million held in escrow as security for legal claims arising
under the terms of the Purchase Agreement, and (2) that
Crabar release Wright Printing from all representations and
warranties under the Purchase Agreement. Filing 45 at
16. Crabar agreed to those terms, and on June 25, 2015,
Crabar released the escrow funds and the parties executed the
second agreement at issue in this case--the Release
Agreement. Filing 45 at 93-100.
The
Release Agreement, in essence, extinguished
nearly[1] all existing rights, and obligations, of
the parties under the Purchase Agreement. See filing 45
at 93-100. Indeed, the agreement explicitly terminated
"all indemnification and other obligations of
performance for which [the parties are] otherwise responsible
under the Purchase Agreement[.]" Filing 45 at
94. And it released all causes of action and claims for
relief arising under the Purchase Agreement. Filing 45 at
95. It also included a non-disparagement provision which
prohibited the parties from making negative, derogatory, or
disparaging comments about one another. Filing 45 at
96-97.
It is
against that backdrop that this litigation ensued. Once the
lease ended--and Crabar vacated the Omaha facility --on
December 30, 2015, Wright Printing began using the building
to re-launch two custom printing businesses: "Pocket
Folders Fast" and "Bandfolder Press." This re-
launch, Crabar alleges, violates several of Crabar's
contractual, common law, and statutorily protected rights.
Specifically,
Crabar's amended complaint asserts nine theories of
recovery: (1) breach of contract, i.e. the Purchase
Agreement, against Wright Printing only; (2) misappropriation
of trade secrets in violation of Neb. Rev. Stat.
§ 87-504; (3) tortious interference with business
relationships; (4) federal trademark infringement in
violation of 15 U.S.C. § 1114(1) (against Wright
Printing only); (5) federal unfair competition in violation
of 15 U.S.C. § 1125(a) (against Wright Printing only);
(6) unfair completion (against Wright Printing only); (7)
violation of the Nebraska Deceptive Trade Practices Act,
Neb. Rev. Stat. § 87-302 (against Wright
Printing only); (8) fraud; and (9) breach of contract,
i.e. the Release Agreement. Wright and Wright
Printing have asserted a counterclaim alleging that Crabar
breached the non-disparagement provision of the Release
Agreement.
Crabar
has moved to dismiss the counterclaim, and the parties have
filed cross-motions for partial summary judgment on
Crabar's first claim for relief--breach of the Purchase
Agreement. Those motions will be denied in part, and granted
in part, as set forth below.
STANDARD
OF REVIEW
Rule
12(b)(6)
A
complaint must set forth a short and plain statement of the
claim showing that the pleader is entitled to relief.
Fed. R. Civ. P. 8(a)(2). This standard does not
require detailed factual allegations, but it demands more
than an unadorned accusation. Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009). The complaint need not contain detailed
factual allegations, but must provide more than labels and
conclusions; and a formulaic recitation of the elements of a
cause of action will not suffice. Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007). For the purposes of a
motion to dismiss a court must take all of the factual
allegations in the complaint as true, but is not bound to
accept as true a legal conclusion couched as a factual
allegation. Id.
And to
survive a motion to dismiss under Fed.R.Civ.P. 12(b)(6), a
complaint must also contain sufficient factual matter,
accepted as true, to state a claim for relief that is
plausible on its face. Iqbal, 556 U.S. at 678. 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. Where the well-pleaded facts do not permit the
court to infer more than the mere possibility of misconduct,
the complaint has alleged-but has not shown-that the pleader
is entitled to relief. Id. at 679.
Determining
whether a complaint states a plausible claim for relief will
require the reviewing court to draw on its judicial
experience and common sense. Id. The facts alleged
must raise a reasonable expectation that discovery will
reveal evidence to substantiate the necessary elements of the
plaintiff's claim. See Twombly, 550 U.S. at 545.
The court must assume the truth of the plaintiff's
factual allegations, and a well-pleaded complaint may
proceed, even if ...