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Northstar Alarm Services, LLC v. Alder Home Protection

United States District Court, D. Utah, Central Division

January 9, 2019

NORTHSTAR ALARM SERVICES, LLC, Plaintiff,
v.
ALDER HOME PROTECTION, d/b/a ALDER HOLDINGS, LLC, Defendant.

          MEMORANDUM DECISION AND ORDER DENYING MOTION TO DISMISS COUNTERCLAIM

          David Nuffer Judge

         Plaintiff NorthStar Alarm Services LLC (“NorthStar”) filed a motion (“Motion”)[1] to dismiss the amended counterclaim (“Counterclaim”)[2] of Defendant Alder Home Protection (“Alder”) under Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief can be granted. Because the Counterclaim adequately states a claim for relief, the Motion1 is DENIED.

         BACKGROUND

         “To survive a motion to dismiss, a complaint must allege facts that, if true, state a claim to relief that is plausible on its face. A claim is facially plausible when the allegations give rise to a reasonable inference that the defendant is liable.”[3] Accepting Alder's well-pleaded factual allegations as true, and “view[ing] them in the light most favorable to” Alder, [4] the relevant facts for purposes of this Motion are as follows.

         Alder is a residential security and home automation company with thousands of customers throughout the United States.[5] NorthStar is also in the business of selling and installing electronic security services and equipment.[6] MX Security LLC (“MX”) is an agent of NorthStar and subject to NorthStar's control.[7] Alder and NorthStar are direct competitors.[8]

         NorthStar and MX have knowingly engaged in an intentional and targeted campaign to damage Alder's reputation, goodwill, and business relationships by, among other things, disseminating materially false, disparaging, and damaging information about Alder in connection with the commercial advertisement and promotion of NorthStar's products and services.[9] For example, NorthStar and MX have affirmatively and dishonestly solicited the cancellation and breach of Alders' customers' contracts;[10] intentionally lied and caused confusion about their relationship to and association with Alder and Alder's products and services;[11] falsely stated that Alder had gone out of business or was going out of business;[12] wrongfully accused Alder of being an unlawful “scam company”;[13] and made other misrepresentations regarding the nature, availability, safety, efficacy, quality, and status of Alder's products and services.[14] Such false and misleading representations have caused, and continue to cause, Alder to lose many customers and suffer damages.[15]

         Alder is suing NorthStar and MX for (1) tortious interference with contractual relations, (2) tortious interference with economic relations, (3) unfair competition under the Lanham Act, [16](4) defamation, (5) unfair competition under Utah law, and (6) civil conspiracy.

         DISCUSSION

         Alder has adequately stated claims for tortious interference.

         To recover damages for tortious interference, a plaintiff must prove (1) that the defendant intentionally interfered with the plaintiff's existing or potential economic relations, (2) by improper means, and (3) thereby caused injury to the plaintiff.[17]

         NorthStar argues that Alder's tortious interference claims should be dismissed because Alder has not satisfied the improper-means requirement.[18] Specifically, NorthStar argues that the Counterclaim does not “allege that the statements . . . made by NorthStar (or MX) were in fact false or anything more than mere puffery.”[19]

         NorthStar's argument fails for at least two reasons. First, Alder has affirmatively alleged that the statements at issue were false.[20] And, second, Alder is not required to allege that the statements were “more than mere puffery.” Accordingly, the Motion will be denied as to Alder's tortious interference claims.

         Alder has adequately stated claims for unfair competition.

         Alder has asserted claims for unfair competition under federal and state law. NorthStar argues that both[21] claims should be dismissed because Alder has not alleged that NorthStar's statements: (1) proximately caused Alder damage;[22] (2) were likely to cause confusion as to NorthStar's association with Alder;[23] or (3) falsely represented the nature, characteristics, or qualities of Alder's or NorthStar's goods or services.[24]

         NorthStar's argument is incorrect. Alder has adequately alleged that NorthStar's conduct and statements: (1) were the cause of injury to Alder;[25] (2) caused or were likely to cause confusion regarding NorthStar's association with Alder;[26] and (3) falsely[27] represented the nature, ...


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