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Vivint, Inc. v. Bailie

United States District Court, D. Utah, Central Division

January 31, 2018

VIVINT, INC., Plaintiff,
v.
CRAIG BAILIE, JOHNATHAN ANTHONY, ARMOR PROTECTION, LLC, Defendants.

          MEMORANDUM DECISION AND ORDER

          DALE A. KIMBALL UNITED STATES DISTRICT JUDGE.

         This matter is before the court on Defendant Johnathan Anthony's Motion for Summary Judgment [Docket No. 63], Plaintiff Vivint, Inc.'s Rule 41(a)(2) Motion to Dismiss Its Claims with Prejudice against Defendant Johnathan Anthony [Docket No. 68], and Vivint's Motion for Summary Judgment Against Defendant Johnathan Anthony [Docket No. 69]. On January 24, 2018, the court held a hearing on the motions. At the hearing, Plaintiff Vivint was represented by Timothy R. Pack and Trent L. Lowe and Defendant Johnathan Anthony was represented by Brian D. Boggess. The court took the motions under advisement. The court has carefully considered the materials submitted by the parties and the facts and law relevant to the motions. Now being fully advised, the court issues the following Memorandum Decision and Order.

         BACKGROUND

         Johnathan Anthony was employed at Vivint as a home security field service technician in Missouri and then as a service manager in Chicago. Vivint terminated Anthony's employment after investigating and concluding that Anthony was sharing Vivint customer information with a competitor, Defendant Craig Bailie and his company Armor Protection. Vivint brought the present action against all three defendants alleging computer fraud, misappropriation of trade secrets, violation of the Lanham Act, unfair competition, intentional interference with contract, and civil conspiracy.

         Vivint obtained an early default judgment against Armor Protection, which appears to be a defunct entity. During discovery, Vivint interviewed customers and witnesses involved in the investigation but did not take Anthony's deposition. At about the time that discovery was closing, Vivint approached Bailie and Anthony about settlements that would allow them to walk away from the lawsuit if they agreed to an injunction not to access Vivint customer information. Anthony's counsel did not respond. However, in one contact with Anthony's counsel, his counsel told Vivint that they were waiting to see what Bailie did and would get back to Vivint after the weekend.

         Bailie settled with Vivint but Vivint never heard back from Anthony. Instead, Anthony filed the present motion for summary judgment. In response, Vivint filed a motion for voluntary dismissal of its claims against Anthony and a motion for summary judgment on Anthony's counterclaims.

         DISCUSSION

         The three pending motions address the remaining claims at issue in this case. Vivint seeks to voluntarily dismiss its claims against Anthony and to obtain summary judgment on Anthony's counterclaims. Anthony seeks summary judgment on Vivint's claims and a jury trial on his counterclaims against Vivint. At the hearing on the motions, Anthony acknowledged that he cannot maintain his malicious prosecution claim as part of this action. Hatch v. Davis, 2004 UT App 378, ¶ 29 102 P.3d 774 (“[U]nder Utah law, a defendant is required to have the underlying action resolved on the merits in his or her favor prior to initiating a claim for wrongful use of civil proceedings.”).

         Anthony's Motion for Summary Judgment & Vivint's Motion for Voluntary Dismissal

         Vivint's motion for voluntary dismissal of its claims against Anthony with prejudice moots Anthony's motion for summary judgment except for Anthony's request for an award of attorney fees. The Tenth Circuit “continue[s] to adhere to the rule that a defendant may not recover attorneys' fees when a plaintiff dismisses an action with prejudice absent exceptional circumstances.” Aerotech, Inc. v. Estes, 110 F.3d 1523, 1528 (10th Cir. 1997). “[W]hen a plaintiff dismisses an action with prejudice, attorneys' fees are usually not a proper condition of dismissal because the defendant cannot be made to defend again.” Id. However, attorney fees “might” be appropriate “when a litigant makes a repeated practice of bringing claims and then dismissing them with prejudice after inflicting substantial litigation costs on the opposing party and the judicial system.” Id.

         Vivint is requesting dismissal of its claims pursuant to Rule 41(a)(2) with prejudice. Neither party in this case conducted any substantial discovery. Vivint did not take Anthony's deposition. Vivint sought to voluntarily dismiss the claims prior to the close of the fact discovery period and prior to Anthony filing his motion for summary judgment. Vivint has never brought claims against Anthony in any prior action and the dismissal with prejudice will prevent it from doing so again.

         Anthony, however, claims that attorney fees are appropriate because Vivint has a history of bringing lawsuits against individuals for tactical reasons and then settling. Vivint argues that multiple lawsuits against multiple defendants is not the Tenth Circuit standard. Rather, the Tenth Circuit refers to multiple lawsuits between the same parties dismissed without prejudice to harass a given defendant. The court agrees that the Tenth Circuit standard appears to apply to multiple cases between the same parties. This is the only lawsuit between the present parties. Anthony also takes issue with Vivint's filing of the case against Anthony at all because he claims it was brought only to force him to testify against Bailie. However, Vivint alleges a conspiracy between the parties and, based on the telephone records disclosed as part of its initial disclosure, there appears to be a basis for such a claim. Filing a lawsuit against both alleged conspirators in an effort to get one of them to testify against the other is not improper when there is a basis for bringing the claim.

         In any event, even if the Tenth Circuit standard applied to multiple cases between multiple parties, Anthony has not demonstrated a basis for attorney fees. While Anthony cites to several cases in this district in which Vivint had commercial disputes and/or sought to protect its trade secrets, Vivint is a large company and there is nothing improper about Vivint resorting to litigation to protect its customer information or other business interests. Anthony does not provide evidence demonstrating that Vivint lacked a good faith basis for bringing any of those lawsuits or the terms of any of the settlements.

         Moreover, while Anthony attacks the basis for Vivint's present lawsuit, Vivint's initial disclosures demonstrate a basis for Vivint's allegations and Anthony never pursued a motion to dismiss the claims as unfounded. Vivint's investigation showed that Anthony and Bailie had previously worked together and the produced telephone records showed that Anthony and Bailie were in repeated contact with each other. Vivint also listed eight individuals or entities and 36 Vivint customers as witnesses affected by Anthony's and Bailie's alleged actions. Vivint produced 141 pages of documents to Anthony, including his employment file and telephone logs associated with Anthony's telephone that Vivint intended to use to supports its claims. That production of records was the only discovery in the case, but it supports Vivint's claims and shows that the claims have a foundation. Vivint did not move for summary judgment on its claims and was under no obligation to present all of the evidence it acquired during discovery in support of those claims. Anthony improperly asserts that a party's desire to settle an action demonstrates that there is no merit to the party's claims. However, a myriad of legal, factual, and financial considerations inform a party's desire to settle a case. The ...


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