United States District Court, D. Utah
MEMORANDUM DECISION AND ORDER GRANTING SUMMARY
JUDGMENT TO DAVID CRAIN
N. PARRISH, UNITED STATES DISTRICT COURT JUDGE.
the court is a Motion in Limine and Motion for Summary
Judgment filed by third-party defendant Dr. David Crain on
July 27, 2018. (ECF No. 596). Third-party plaintiff Utah
State University Research Foundation (“USURF”)
filed an opposition on October 11, 2018, (ECF No. 725), to
which Dr. Crain replied on November 30, 2018, (ECF No. 812).
reviewing the papers submitted in connection with this
motion, the court identified grounds for partial summary
judgment in favor of Dr. Crain that were not raised by his
motion. Pursuant to Rule 56(f)(2) of the Federal Rules of
Civil Procedure, the court issued a notice to apprise the
parties of the basis of the proposed partial summary
judgment, and to provide them an opportunity to be heard
prior to the entry thereof. (ECF No. 830). Dr. Crain accepted
the court's invitation, submitting a memorandum in
support of the court's proposed partial summary judgment.
(ECF No. 831). USURF declined to file a response to the
third-party action emanates from a multi-defendant lawsuit
involving a nascent satellite-hosted weather sensor venture.
In that suit, plaintiff GeoMetWatch Corporation
(“GeoMet”) asserts that USURF-GeoMet's
erstwhile partner in the venture-colluded with others to
deprive GeoMet of the business opportunity it had
developed. Dr. Crain, the founder of GeoMet, acted as
its president while concurrently working for USURF for a
period of 15 months in 2010-2011. USURF's third-party
complaint against Dr. Crain asserts two claims related to
that period of employment.
Statement of Facts
2008, Dr. Crain formed GeoMet for the purpose of pursuing his
idea to sell weather data derived from a series of
hyperspectral sounders launched into geostationary orbit.
USURF had previously developed such a system for NASA. In
2009, Dr. Crain approached USURF about working directly for
them as part of an effort to commercialize USURF's
technology. In these discussions, Dr. Crain indicated that he
would like to “maintain an active role in [his]
commercial sounder pursuit” (i.e., GeoMet),
and that “ideally, [he] would like to include [USURF]
as a partner” in that project. (ECF No. 596-6 at 4).
Crain accepted an offer of employment in January of 2010, and
began work at USURF in February of 2010. On February 1, 2010,
Dr. Crain executed USURF's Acceptance of Proprietary
Information and Intellectual Property Policy and Procedure,
by which he agreed to be bound by the terms of USURF's
proprietary information and intellectual property policy
outlined in Policy USURF-AD-001 (the “IP
GeoMet and USURF began their joint venture in March of
2010-with USURF acting as the developer and manufacturer of
the sensor-Dr. Crain and USURF developed and executed a
Conflict of Interest declaration (the “COI
Agreement”). The COI Agreement acknowledged the
conflict of interest arising from Dr. Crain's dual roles,
and erected certain safeguards “as a protection to Dr.
Crain, [GeoMet], [and] USURF[.]” (ECF No. 596-8 at 2).
In relevant part, the COI agreement reads:
2. It is understood that Dr. Crain will pursue business
opportunities for both [USURF] and [GeoMet]. When he is
representing himself as an employee of [GeoMet, GeoMet] will
pay his time and travel expenses. When he is pursuing
opportunities or performing work on behalf of [USURF], he
will represent himself as an employee of [USURF], and [USURF]
will pay his expenses. When he travels with mixed objectives,
we will have a prior understanding allowing for an equitable
allocation of his expenses. Travel plans will be approved in
advance by the [USURF] Director of Business Development, Jim
(ECF No. 596-8 at 2).
of 2011, Dr. Crain ended his employment with USURF in order
to work in a fulltime capacity for GeoMet. As part of this
voluntary termination, Dr. Crain and USURF entered into an
employment release (the “2011 Release”).
around April of 2013, GeoMet and USURF voluntarily terminated
their operating agreements in order to facilitate the
substitution of Advanced Weather Systems Foundation
(“AWSF”) as the sensor manufacturer. In addition,
on April 19, 2013, GeoMet and USURF entered into a general
mutual release agreement (the “2013 Release”),
which reads, in relevant part:
Release of [GeoMet] by USURF. USURF does
hereby remise, release, waive, and discharge [GeoMet], its
officers, agents, and employees from any and all liabilities,
obligations, claims, demands whatsoever that have or may have
arisen between the ...