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Williams Powers v. Emcon Associates, Inc.

United States District Court, D. Colorado

September 14, 2017

WILLIAM POWERS, MAP MANAGEMENT LLC, and BLACK WIDOW LLC, Plaintiffs,
v.
EMCON ASSOCIATES, INC., MICHAEL COCUZZA, and MICHAEL MICHOWSKI, Defendants.

          ORDER

          KATHLEEN M. TAFOYA UNITED STATES MAGISTRATE JUDGE.

         This matter is before the court on Defendants' “Motion for Summary Judgment.” (Doc. No. 86 [“Mot.”].) Plaintiffs filed a Response (Doc. No. 93 [“Resp.”]), to which Defendants replied. (Doc. No. 100.)

         Facts

         Defendant Emcon Associates, Inc. (“Emcon”) is a New Jersey corporation. (Doc. No. 24 at 2; Doc. No. 58 at 2.) Defendant Michael Cocuzza is a co-founder and CEO of Emcon. (Doc. No. 24 at 3; Doc. No. 58 at 3.) Defendant Michael Michowski is a co-founder and Chief Administrative Officer of Emcon. (Doc. No. 24 at 3; Doc. No. 58 at 3.)

         Former Defendant FMNow LLC (“FMNow”) was a Colorado limited liability company formed on June 13, 2012. (Doc. No. 93-1.) FMNow's initial Operating Agreement indicates that Defendants Cocuzza and Michowski each contributed $12, 500.00 of capital and each held 16.667% (one-sixth) ownership interest. (Doc. No. 86-3; Doc. No. 93-1 at 40.)[1] Emcon paid for the capital contributions of both individuals. (Doc. No. 93-3 at 95-97.)[2] Three years later, Defendants Michowski and Cocuzza each issued separate Notes Receivable to Emcon that they contend include their capital contributions. (Doc. No. 91-3.) Both Notes Receivable are dated January 1, 2015, after this litigation began. (Id.)

         FMNow and Plaintiff Powers executed an Employment Agreement (“EA”) on October 15, 2012. (Doc. No. 86-2.) Plaintiff Powers also completed a 1099 Form for 2013. (Doc. No. 86-6.) Throughout the EA, Plaintiff Powers is referred to as an “employee” and is designated as “Director and Business Analyst, Industrial Sector, a management position.” (Id. at 1.) The EA contains the following provisions:

[Employees'] responsibilities may change from time to time, and Employer may assign such other duties as it deems appropriate in its sole discretion.
Employee agrees to abide by all Company policies as the same may be prescribed from time to time by Company and furnished in writing to the Employee.
Employee shall be entitled to participate in the then applicable 401k program immediately upon establishment of such program by the employer.
Employee is eligible to participate in Employee Stock Option Program [] to be established in calendar 2013.
In the event the Employee shall resign from the Company or no longer be employed by the Company for any reason other than termination by the Company without cause, prior to the end of a two year period commencing with the signing of the agreement, then all Options which may have vested in Employee on or before that time shall lapse and be of no further force or effect.
In the event the Company is purchased, merges or sells substantially all of its assets in exchange of consideration valued at twenty-five million dollars ($25, 000, 000.00) or more[, ] then the vesting schedule for Employees' initial (percent) Options Interest is waived and the entire remaining (percentage) shall vest immediately.
Both parties acknowledge that Employee is an at-will employee and has no vested rights to employment.
Following the termination of this Agreement without cause, Company will continue to pay Employee for the duration of 12 months full earned compensation on all accounts sold at the date of termination.
THIS AGREEMENT DESCRIBES THE BASIC LEGAL AND ETHICAL RESPONSIBILITIES THAT EMPLOYEE IS EXPECTED TO OBSERVE AS AN EXECUTIVE OR MANAGERIAL EMPLOYEE.

(Id. at 1, 2, 5, 6, 9.) (emphasis in original.) Additionally, the EA also includes a non-compete agreement prohibiting Plaintiff Powers from working for a competing business located within the United States for a period of two years following the termination of his employment. (Id. at 4-5.)

         FMNow filed a Statement of Dissolution with the Colorado Secretary of State on September 2, 2015. (Doc. No. 86-1) Initially, Plaintiffs also named as Defendants in this action FMNow, Jon Mattei, President of FMNow, and Patricia Moscarelli, former President of FMNow. (Doc. No. 24.) Prior to the dissolution of FMNow, Plaintiffs reached a settlement with Defendants FMNow and Mattei. (Doc. Nos. 40, 42; Doc. No. 86-12 at 3.)[3] The settlement agreement included the following reservation of rights: “Nothing in this Agreement and Release shall apply to any of the other defendants in this Lawsuit. Powers contends that FMNow is an alter ego of Emcon in the Lawsuit (and FMNow/Mattei disagree). Nothing in this Agreement and release shall be construed as an admission that takes a position against Powers's Interest or contentions in the Lawsuit.” (Doc. No. 95 at 3.)

         Standard ...


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