Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Sitevoice, LLC v. Gyrus Logic, Inc.

United States District Court, D. Arizona

September 23, 2014

SITEVOICE, LLC, an Oregon Limited Liability Company, Plaintiff/counterdefendant,
v.
GYRUS LOGIC, INC., et al., Defendants/counterclaimants, GYRUS LOGIC, INC., et al., Third-party plaintiffs,
v.
Motions to Dismiss DOUGLAS BEAN, et al., Third-party defendants.

ORDER

RUSSEL HOLLAND, District Judge.

Defendants move to dismiss[1] plaintiff's amended complaint. This motion is opposed.[2] Oral argument was not requested and is not deemed necessary.

Facts

Plaintiff is Sitevoice, LLC. Defendants are Gyrus Logic, Inc.; Luis and Esemel Valles; Peter and Stacie Trompetter; and John Dale. Mr. Valles and Mr. Trompetter are alleged to be officers of Gyrus Logic and Mr. Dale is alleged to be a former employee/officer of plaintiff.[3]

Plaintiff "is engaged in the development and marketing of interactive natural language processing software and systems[.]"[4] Plaintiff alleges that it "entered into a series of contracts... collectively referred to... as the GLA'[, which] governed the sale and transfer of ownership of the Platica software patent, technology, and related intellectual property from" Gyrus Logic to plaintiff.[5]

Plaintiff alleges that defendants have breached the GLA "on a number of counts, causing measurable and significant damages to its past, present, and future business interests."[6] Plaintiff asserts eight breach of contract claims. In Count I, plaintiff alleges that Gyrus Logic, Mr. Valles, and Mr. Trompetter breached the GLA by failing to deposit the source code for Platica into escrow.[7] In Count II, plaintiff alleges that Gyrus Logic, Mr. Valles, and Mr. Trompetter breached the GLA by failing to release the permanent license generation algorithm.[8] In Count III, plaintiff alleges that Gyrus Logic, Mr. Valles, and Mr. Trompetter breached the GLA by failing to assign certain intellectual property to plaintiff.[9] In Count IV, plaintiff alleges that Gyrus Logic, Mr. Valles, and Mr. Trompetter breached the GLA by failing to provide programming development and maintenance services in a timely manner.[10] In Count V, plaintiff asserts a breach of warranty claim against Gyrus Logic, Mr. Valles, and Mr. Trompetter based on allegations that the Platica technology was not fully developed when it was sold to plaintiff.[11] In Count VI, plaintiff alleges that Gyrus Logic, Mr. Valles, and Mr. Trompetter breached the non-compete provision in the GLA.[12] In Count VII, plaintiff alleges that Gyrus Logic, Mr. Valles, and Mr. Trompetter breached he GLA by continuing to market Platica on its website.[13] And, in Count VIII, plaintiff alleges that Gyrus Logic's, Mr. Valles', and Mr. Trompetter's breaches of the GLA were willful.[14]

Plaintiff also asserts five conversion claims in its amended complaint. In Count IX, plaintiff alleges that Gyrus Logic, Mr. Valles, Mr. Trompetter, and Mr. Dale converted an idea originally conceived by Doug Bean, plaintiff's CEO, by refusing to name Mr. Bean as an inventor on the patent for the idea (the Question Generator patent).[15] In Count X, plaintiff alleges that Gyrus Logic, Mr. Valles, Mr. Trompetter, and Mr. Dale converted the ownership of the Question Generator patent.[16] In Count XI, plaintiff alleges that Gyrus Logic, Mr. Valles, Mr. Trompetter, and Mr. Dale converted the ownership of the Grammar Expert technology by refusing to assign this technology to plaintiff.[17] In Count XII, plaintiff alleges that Gyrus Logic, Mr. Valles, Mr. Trompetter, and Mr. Dale converted intellectual property belonging to plaintiff when it placed the Grammar Expert technology into the non-provisional patent application for the Question Generator.[18] And, in Count XV, plaintiff asserts a conversion claim against Gyrus Logic, Mr. Valles, and Mr. Trompetter based on allegations that they converted "software, technology, and intellectual property...."[19]

Next, plaintiff asserts a number of tort claims. In Count XIII, plaintiff asserts a fraud claim against Gyrus Logic, Mr. Valles, and Mr. Trompetter based on representations they made regarding the readiness of the technology plaintiff was purchasing.[20] In Count XIV, plaintiff asserts a negligent misrepresentation claim against the same three defendants based on the same representations about the readiness of the technology.[21] In a second Count XI, plaintiff asserts a defamation claim against Gyrus Logic, Mr. Valles, and Mr. Trompetter.[22] In a second Count XII, plaintiff asserts a tortious interference with contract claim against Gyrus Logic, Mr. Valles, and Mr. Trompetter.[23] In a second Count XIII, plaintiff asserts a tortious interference with business claim against Gyrus Logic, Mr. Valles, and Mr. Trompetter.[24] And, in Count XIX, plaintiff asserts an aiding and abetting claim against Mr. Dale, Mrs. Valles, and Mrs. Trompetter.[25]

Finally, plaintiff alleges several claims against all defendants based on Arizona's Racketeering and Corrupt Influences Act (AZRAC). In Count XX, plaintiff asserts an AZRAC claim based on allegations that defendants engaged in theft.[26] In Count XXI, plaintiff asserts an AZRAC claim based on allegations that defendants engaged in extortion.[27] In Count XXII, plaintiff asserts an AZRAC claim based on allegations that defendants made false claims.[28] In Count XXIII, plaintiff asserts an AZRAC claim based on allegations that defendants committed fraud.[29] In Count XXIV, plaintiff asserts an AZRAC claim based on allegations that defendants used and invested income that was derived from racketeering.[30] In Count XXV, plaintiff alleges that defendants "acquired and maintained interests in and control of [an] enterprise through a pattern of racketeering activity."[31] And, in Count XXVII, plaintiff alleges that defendants conspired to violated AZRAC.[32]

Pursuant to Rule 12(b)(6), Federal Rules of Civil Procedure, [33] defendants now move to dismiss plaintiff's amended complaint. In the alternative, defendants move for a more definite and certain statement under Rule 12(e) and to strike the redundant, immaterial, impertinent, or scandalous matter pursuant to Rule 12(f). Defendants also request that they be awarded the attorneys' fees they have incurred in filing the instant motion and in filing their answer and counterclaim.

Rule 12(b)(6) Motion

Defendants' Rule 12(b)(6) motion must be treated as a Rule 12(c) motion for judgment on the pleadings because defendants have already filed their answer. Elvig v. Calvin Presbyterian Church , 375 F.3d 951, 954-55 (9th Cir. 2004). In evaluating a motion for judgment on the pleadings, "[t]he [c]ourt inquires whether the complaint at issue contains sufficient factual matter, accepted as true, to state a claim of relief that is plausible on its face.'" Harris v. County of Orange , 682 F.3d 1126, 1131 (9th Cir. 2012) (quoting Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009)). "The [c]ourt may find a claim plausible when a plaintiff pleads sufficient facts to allow the [c]ourt to draw a reasonable inference of misconduct, but the [c]ourt is not required to accept as true a legal conclusion couched as a factual allegation.'" Id . (quoting Iqbal , 556 U.S. at 678).

Although the court generally cannot consider matters outside the pleadings when evaluating a Rule 12(c) motion, "documents not attached to a complaint may be considered if no party questions their authenticity and the complaint relies on those documents." Id. at 1132. Thus, in deciding the instant motion, the court has considered the contracts which defendants attached to their amended answer.

Counts I and III

Plaintiff's breach of contract claims in Counts I and III are based on the Assignment of Intellectual Property (AIP) and are asserted against Gyrus Logic, Mr. Valles, and Mr. Trompetter. However, Mr. Trompetter has no liability to plaintiff for any alleged breach of the AIP because he was not a party to the AIP.[34] See A.R.S. ยง 29-651 ("a member, manager, employee, officer or agent of a limited liability company is not liable, solely by reason of being a member, manager, employee, officer or agent, for the debts, obligations and liabilities of the limited liability company whether arising in contract or tort"); see also, Lumbermen's Ins. Co. v. Heiner , 245 P.2d 415, 419 (Ariz. 1952) (employee acting within the scope of his employment cannot be held liable for his employer's breach of contract). Plaintiff's argument that Mr. Trompetter could be liable under a "piercing the corporate veil" theory fails because plaintiff has not alleged any facts that would suggest that Gyrus Logic was "the alter ego" of Mr. Trompetter. Standage v. Standage , 711 P.2d 612, 615 (Ariz.Ct.App. 1985). Thus, Counts I and III are dismissed as to Mr. Trompetter. Plaintiff is given leave to amend its breach of contract claims in Counts I and III against Mr. Trompetter as it is possible that plaintiff could allege some facts that would suggest that Gyrus Logic was the alter ego of Mr. Trompetter.

As for Mr. Valles, contrary to defendants' contention, he was a party to the AIP, and thus he could be liable for breaching the AIP, if plaintiff has stated plausible breach of contract claims in Counts I and III. "To bring an action for the breach of the contract, the plaintiff has the burden of proving the existence of the contract, its breach and the resulting damages." Graham v. Asbury , 540 P.2d 656, 657 (Ariz. 1975).

Plaintiff has not stated a plausible breach of contract claim against Gyrus Logic and Mr. Valles in Count I. As it is currently pled, it is not possible to tell if plaintiff is alleging that Gyrus Logic and Mr. Valles breached the AIP by failing to transfer the source code for the Platica software into escrow or if it is alleging that Gyrus Logic and Mr. Valles failed Page 10> to provide the escrow agent with the proper instructions to open the file that contained the source code. Plaintiff is, however, given leave to amend Count I as to Gyrus Logic and Mr. Valles.

Plaintiff has also failed to state a plausible breach of contract claim in Count III against Gyrus Logic and Mr. Valles. Although this count is not duplicative of Count I, as defendants contend, this count does not contain a plausible breach of contract claim. Plaintiff has not sufficiently alleged what intellectual property Gyrus Logic and Mr. Valles failed to assign. Vague, conclusory allegations that they have failed to assign "other patent applications and intellectual property" are not sufficient to state a ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.