United States District Court, D. Colorado
OPINION AND ORDER DENYING MOTION TO DISMISS
S. Krieger, Chief United States District Judge.
MATTER comes before the Court pursuant to the
Defendants' Motion to Dismiss Second Amended Complaint
Pursuant to Fed.R.Civ.P. 12(b)(6) (#61), the
Plaintiffs' response (#62), and the
Defendants' reply (#63).
Court exercises jurisdiction over this matter pursuant to 28
U.S.C. § 1332.
Court offers a brief summary of the Second Amended
Complaint's allegations here and elaborates as necessary
in its analysis.
SGS Acquisition Company Limited (“SGS”) intended
to purchase a zinc mine and retained Defendants David Linsley
and Bernard Guarnera to assist in obtaining financing and
performing due diligence for the purchase. Mr. Linsley and
Mr. Guarnera are partners at non-party Centurion Resource
Group (“Centurion”). It was contemplated that SGS
would purchase the mine with private equity from Centurion,
and Mr. Linsley and Mr. Guarnera assured SGS that
Centurion would finance the purchase of the mine.
on Mr. Linsley and Mr. Guarnera's assurance, on February
20, 2014, SGS prepared a Letter of Intent (“LOI”)
to purchase the mine and presented it to the mine's
owner. Shortly thereafter, the mine's owner agreed to the
terms of the LOI, and SGS and the mine's owner had 75
days to perform due diligence and finalize the transaction.
the due diligence period, SGS, Mr. Linsley, and Mr. Guarnera
visited the mine. At the mine, Mr. Linsley and Mr. Guarnera
learned SGS's plan for the mine and received certain
“confidential information” from the mine's
management. SGS also gave them access to SGS's
confidential financial information, tax information,
financial models, prospective business opportunities, mining
concept, deal or acquisition plan and structure, and the LOI.
the mine visit, Centurion changed the terms under which it
had proposed to finance the mine's purchase, requiring
SGS to make larger payments to repay Centurion and to adhere
to a different payment schedule than what was anticipated
under the LOI. Mr. Linsley and Mr. Guarnera also stopped
providing any assistance to finalize SGS's purchase of
the mine and would not return SGS's phone calls or
emails. SGS decided to seek financing from another source,
but was unable to do so. The due diligence period ended
without financing in place, the LOI expired, and SGS was
unable to purchase the mine.
Defendant Northern Zinc, LLC (“Northern Zinc”) -
a company in which Mr. Linsley and Mr. Guarnera were partners
- purchased the company that owned the mine. Thereafter,
Defendant Star Mountain Resources, Inc. (“Star
Mountain”) purchased Northern Zinc. As part of this
purchase, Mr. Linsley and Mr. Guarnera received 10, 000, 000
shares of Star Mountain's stock in exchange for their
interests in Northern Zinc, and Star Mountain assumed $1.39
million in Northern Zinc's debts.
Second Amended Complaint (# 58), SGS asserts
six claims, all arising under Colorado law: (i) Intentional
Interference with Prospective Business Relations against Mr.
Linsley and Mr. Guarnera; (ii) Intentional Interference with
Contract against Mr. Linsley and Mr. Guarnera; (iii) Breach
of Fiduciary Duty against Mr. Linsley and Mr. Guarnera; (iv)
Misappropriation of Trade Secrets, ostensibly against all
Defendants; (v) Misappropriation of Business Value against
Mr. Linsley and Mr. Guarnera; and (vi) Vicarious
Liability against Broadlands Mineral Advisory
Services, Ltd. (“Broadlands”)
Defendants filed a joint Motion to Dismiss
(#61) in which they argue that the Second
Amended Complaint does not allege sufficient facts to state
any of the claims against them under Federal Rule of Civil
Standard of review
considering a motion to dismiss pursuant to Rule 12(b)(6),
the Court accepts all well-pleaded allegations in the
Complaint as true and views 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 State Sch. for
the Deaf & Blind, 173 F.3d 1226, 1236 (10th Cir.
1999)). The Court limits its consideration to the four
corners of the Complaint, 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); Dean Witter Reynolds, Inc. v.
Howsam, 261 F.3d 956, 961 (10th Cir. 2001).
is subject to dismissal unless it is “plausible on its
face.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). To make such an assessment, the Court first discards
those averments in the Complaint that are merely legal
conclusions or “threadbare recitals of the elements of
a cause of action, supported by mere conclusory
statements.” Id. at 678-79. The Court takes
the remaining, well-pleaded factual contentions, treats them
as true, and ascertains whether those facts (coupled, of
course, with the law establishing the requisite elements of
the claim) support a claim that is “plausible” as
compared to merely being “conceivable” or
“possible”. What is required to reach the level
of “plausibility” varies from context to context,
but generally, allegations that are “so general that
they encompass a wide swath of conduct, much of it innocent,
” are not sufficient. Khalik v. United Air
Lines, 671 F.3d 1188, 1191 (10th Cir. 2012).
Intentional Interference with Prospective Business
prove a claim of intentional interference with prospective
business relations, SGS must establish that Mr. Linsley and
Mr. Guarnera: (i) interfered with (ii) SGS's prospective
business relation, (iii) which prevented SGS from entering
into, acquiring, or continuing the prospective relation, and
(iv) that Mr. Linsley and Mr. Guarnera did so intentionally
and improperly. See Amoco Oil Co. v. Ervin, 908 P.2d
493, 502 (Colo. 1995). Mr. Linsley and Mr. Guarnera argue
that the Second Amended Complaint's allegations are not
sufficient to show that they interfered with SGS's
prospective business relations with the mine's owner, and
that any such interference was not improper. They further
argue than any alleged improper influence did not prevent ...