United States District Court, D. Utah
VICIDIEM, INC., a Utah corporation, and CRAIG HUTCHINSON, an individual, Plaintiffs,
PAUL CHRISTENSEN, an individual, and FIBERWAVE TECHNOLOGIES, LLC, a Utah limited liability company; JOHN DOES I - X, and DOE CORPORATIONS I - X, Defendants.
MEMORANDUM DECISION AND ORDER
Benson United States District Judge.
Judge Dee Benson Before the court is Defendants' Motion
to Dismiss. (Dkt. No. 7.) The motion has been fully briefed
by the parties, and the court has considered the facts and
arguments set forth in those filings. Pursuant to civil rule
7-1(f) of the United States District Court for the District
of Utah Rules of Practice, the Court elects to determine the
motion on the basis of the written memoranda and finds that
oral argument would not be helpful or necessary. DUCivR
action, Vicidiem, Inc. (“Vicidiem”) has sued its
former attorney Chief Operating Officer
(“Christensen”) and the new company Christensen
formed after the termination of his relationship with
Vicidiem (“Fiberwave”). Vicidiem is a provider of
wholesale internet, television, and telephone services to
apartment complexes and other multi-unit developments.
(Complaint ¶ 8.) Christensen is an attorney.
(Id. ¶ 11.) Plaintiff Craig Hutchinson
(“Hutchinson”) is a principal and founder of
Vicidiem. (Id. ¶ 10.)
and 2013, Christensen represented Vicidiem, Hutchinson, and
another owner of Vicidiem on a part- time basis.
(Id. ¶ 12.) In late 2013 or early 2014,
Christensen proposed a new arrangement in which he would work
full-time as the COO of Vicidiem. (Id. ¶ 14,
Dkt. No. 13-1.) Christensen drafted a Service Agreement,
which provided that Christensen would use his business
experience to promote Vicidiem, that he would assist in
securing financing for the growth of the business, and that
he would “also use his legal training and experience to
benefit Vicidiem.” (Id. ¶ 15, Dkt. No.
13-1, ¶ 1.) The Agreement provided a
guaranteed minimum salary to Christensen and granted equity
in Vicidiem to Christensen. (Id. ¶ 18, Dkt. No.
13-1, ¶ 3.) Christensen did not advise Hutchinson or
Vicidiem to seek independent legal counsel to review the
Service Agreement. (Id. ¶ 20.)
2014, Christensen began to work full-time for Vicidiem as its
COO. During his tenure as COO, Christensen continued to
advise Plaintiffs on various legal matters, including
drafting vendor contracts and employment agreements for key
Vicidiem employees. (Id. ¶¶ 24, 25, 31.)
Christensen was also given access to Vicidiem's
confidential information and trade secrets, including:
customer contracts (id. ¶ 25);
“confidential information regarding Vicidiem's
business and business strategies” including
“confidential information regarding technology,
software development, business strategy, pricing, terms,
duration, and key C level executives for Vicidiem's
customers and vendors and strategic partners”
(id. ¶ 26); “confidential information
about upcoming and potential projects that Vicidiem intended
to monetize, including a full list of all project and
contacts in the company's backlog and pipeline through
2021” (id. ¶ 27); and “programs,
methods, techniques and processes” developed and
utilized by Vicidiem. (Id. ¶ 28.)
March 29, 2019, Vicidiem terminated its relationship with
Christensen. (Id. ¶ 35.) On April 2, 2019,
Christensen formed Fiberwave. (Id. ¶ 37.) On
April 4, 2019, three key Vicidiem employees who provided
engineering services to Vicidiem abruptly resigned without
notice. (Id. ¶ 36.) Christensen, either
directly or through Fiberwave, employed or partnered with the
Vicidiem engineers following their departure. (Id.
days of forming Fiberwave, Christensen and others associated
with Fiberwave contacted and met with Vicidiem customers and
vendors. (Id. ¶ 39.) Those contacts included
soliciting several Vicidiem customers, reaching out to
Vicidiem's fiber services vendor, and contacting a
developer with whom Vicidiem was engaged in negotiations and
falsely stating that Fiberwave's hiring of Vicidiem's
engineers rendered Vicidiem unable to perform the work it had
solicited from the developer. (Id. ¶¶
alleges ten Causes of Action against Christensen and
Fiberwave: 1) Declaratory Judgment that the contract with
Christensen is void; 2 and 9) Breach of fiduciary duty
against Christensen; 3) tortious interference; 4) violation
of the Defend Trade Secrets Act; 5) violation of the Utah
Trade Secrets Act; 6 and 7) fraudulent/ negligent
non-disclosure against Christensen; 8) breach of contract
against Christensen; and 10) legal malpractice against
Christensen. Defendants have moved to dismiss all claims.
survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to ‘state
a claim to relief that is plausible on its face.'”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570
(2007)). Plausibility, in the context of a motion to dismiss,
requires facts which allow “the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Id.
Rule 12(b)(6), the court must accept all well-pleaded
allegations in the Amended Complaint as true and view those
allegations in the light most favorable to the nonmoving
party. Stidham v. Peace Officer Standards Training,
265 F.3d 1144, 1149 (10th Cir. 2001) (quoting Sutton v.
Utah Sch. for the Deaf & Blind, 173 F.3d 1226, 1236
(10th Cir. 1999)). The Court must limit its consideration to
the four corners of the Complaint, and any documents attached
thereto, and any external documents that are referenced in
the Complaint and whose accuracy is not in dispute.
Oxendine v. Kaplan, 241 F.3d 1272, 1275 (10th Cir.
2001); Jacobsen v. Deseret Book Co., 287 F.3d 936,
941 (10th Cir. 2002).
have moved to dismiss Plaintiffs' Complaint in its
entirety pursuant to Rule 12(b)(6). Defendants first argue
that Plaintiffs have not alleged sufficient facts and law to
support their claim that the Service Agreement was void and
constituted fraudulent or negligent non-disclosure.
Plaintiffs have alleged, among other things, that their
attorney drafted his own employment agreement granting
himself a substantial equity interest in Vicidiem without
recommending outside counsel or independent review. The court
finds sufficient alleged facts and law ...