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Crabar/GBF, Inc. v. Wright

United States District Court, D. Nebraska

March 16, 2018

CRABAR/GBF, INC, Plaintiff and Counterclaim Defendant,
v.
MARK WRIGHT AND WRIGHT PRINTING CO., Defendants and Counterclaimant.

          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 ...


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