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Geometwatch v. Hall

United States District Court, D. Utah

March 11, 2019

GEOMETWATCH CORP., a Nevada corporation, Plaintiff,
ALAN E. HALL, et al., Defendants.



         Before 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).

         After 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 court's notice.

         I. BACKGROUND

         This 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.[1] 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.

         A. Statement of Facts

         In 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).

         Dr. 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 Agreement”).

         When 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 Marshall.

(ECF No. 596-8 at 2).

         In May 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”).

         In or 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 ...

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