United States District Court, D. Colorado
EAGLE VALLEY CLEAN ENERGY, LLC, a Utah limited liability company, Plaintiff,
WELLONS, INC., an Oregon corporation, WELLONS GROUP, INC., a Washington corporation, MARTIN NYE, an individual, and JASON JONER, an individual, Defendants.
Brooke Jackson United States District Judge.
are two motions to dismiss before the Court. The first is by
defendants under Fed.R.Civ.P. 12(b)(6) to dismiss all four of
plaintiff's claims. ECF No. 20. The second motion to
dismiss is by plaintiff under Fed.R.Civ.P. 41(a)(2) to
dismiss its claims for tortious interference with contract
(second and third causes of action) and interference with
performance of contract (fourth cause of action) without
prejudice. ECF No. 25. The first motion to dismiss has been
fully briefed, but the second motion to dismiss has not. For
the reasons explained in this order I GRANT defendants'
motion to dismiss, ECF No. 20, and find that plaintiff's
motion to dismiss, ECF No. 25, is now MOOT.
August 2016, plaintiff Eagle Valley Clean Energy, LLC,
(“Eagle Valley”) entered into a Noncompetition
Agreement with, among other parties, defendants Wellons, Inc.
(“Wellons”), Wellons Group, Inc., Martin Nye and
Jason Joner. Compl., ECF No. 1 at ¶8. The parties
executed this Noncompetition Agreement to resolve a discovery
dispute in a lawsuit between Wellons and Eagle Valley, No.
15-CV-01252-RBJ. In this discovery dispute, Wellons sought
records from Holy Cross Energy, a company that purchased
electricity produced at Eagle Valley's biomass facility,
to evaluate Eagle Valley's lost profit claims. ECF No.
20, Ex 1 at ¶A.Eagle Valley objected to Wellons's
discovery of these records, claiming it contained
confidential business and trade secret information.
Id. at ¶B. To resolve this dispute, plaintiff
and defendants executed a Protective Order governing access
to confidential information and a Noncompetition Agreement.
ECF No.1 at ¶17; ECF No. 20, Ex. 1 at ¶D.
purpose of the Noncompetition Agreement was to
“enabl[e] Wellons to obtain and utilize the Holy Cross
Energy records for the sole purpose of the Litigation, while
protecting Eagle Valley's competitive interests as set
forth herein, ” by having defendants agree “not
to compete, or prepare to compete, with Eagle Valley within
the States of Colorado and Wyoming for a three-year
period.” ECF No. 20, Ex. 1 at ¶D. More
specifically, this agreement restricted defendants from
owning, operating, financing or developing “a biomass
facility” in this territory. Id. at ¶1.
case had a nine-day jury trial before this Court in May and
June 2017, and a $10, 840, 000 judgment was rendered against
Eagle Valley. See Wellons, Inc. v. Eagle Valley Clean
Energy, LLC, No. 15-CV-01252-RBJ, ECF Nos. 368, 369;
Wellons, Inc. v. Eagle Valley Clean Energy, LLC,
2017 WL 4337856 (D. Colo. Sept. 29, 2017) (denying motion for
a new trial). However, litigation has continued over
Wellons's efforts to collect on this judgment. See
Wellons, Inc. v. Eagle Valley Clean Energy, LLC, No.
15-CV-01252-RBJ, ECF Nos. 426-540. On June 21, 2018 Eagle
Valley filed the present lawsuit bringing four claims against
defendants for improper actions they allegedly took in
seeking to recover on this judgment. Eagle Valley alleges (1)
breach of the Noncompetition Agreement by all defendants; (2)
tortious interference with Eagle Valley's contract with
the Rural Utilities Service (“RUS”); (3) tortious
interference with Eagle Valley's contract with Holy Cross
Energy (“HCE”); and (4) interference with
performance of the RUS and HCE contracts. See
generally Compl., ECF No. 1. Eagle Valley asks for
general, compensatory and consequential damages as well as
attorney fees and costs. Id.
August 2018 defendants filed a motion to dismiss, ECF No. 20,
plaintiff filed a response, ECF No. 21, and this motion
became ripe upon defendants' filing of a reply, ECF No.
22. On January 27, 2019 plaintiff filed a motion to dismiss
claims two, three and four without prejudice. ECF No. 25.
This motion has not yet been fully briefed. However, I will
discuss the content of this motion for context.
plaintiff's motion to dismiss its claims without
prejudice, plaintiff calls the Court's attention to two
lawsuits currently pending in the Third Judicial District of
Utah: Wellons, Inc. v. Eagle Valley Clean Energy, LLC et
al, case no. 180901367, and Wellons, Inc. v. Eagle
Valley Clean Energy, LLC et al., case no. 186900456.
These two cases also concern Wellons's efforts to collect
on the judgment rendered against Eagle Valley in a jury trial
before this Court. See Wellons, Inc. v. Eagle Valley
Clean Energy, LLC, No. 15-CV-01252-RBJ. In the first
Utah action, Wellons alleges that Eagle-Valley has made
post-judgment fraudulent transfers, and discovery is
currently ongoing. ECF No. 25 at 3. Eagle Valley asserts
counterclaims in this action that are similar to claims two,
three and four raised in the complaint before this court. In
the second Utah action, the court granted Wellons a charging
order against Eagle Valley, and Wellons has issued writs of
execution to execute on debts owed to Eagle Valley. ECF No.
25 at 3-4. Because Eagle Valley prefers to litigate its
claims of tortious interference with contract in these two
Utah cases, they ask that I dismiss these claims without
prejudice here. However, Eagle Valley wishes to continue with
its breach of contract claim against Wellons in the lawsuit
now before the Court. Defendants do not stipulate to an order
dismissing claims two, three and four without prejudice,
presumably (as briefing on this issue has not yet occurred),
because they think that these claims should be dismissed with
prejudice. Based on the parties' briefings for
defendants' motion to dismiss, ECF Nos. 20, 21, 22, I
find that claim one and four should be dismissed with
prejudice and that claims two and three should be dismissed
without prejudice. Therefore, plaintiff's motion to
dismiss claims two, three, and four without prejudice is now
STANDARD OF REVIEW
survive a 12(b)(6) motion to dismiss, the complaint must
contain “enough facts to state a claim to relief that
is plausible on its face.” Ridge at Red Hawk,
L.L.C. v. Schneider, 493 F.3d 1174, 1177 (10th Cir.
2007) (quoting Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 570 (2007)). A plausible claim is a claim that
“allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). While
the Court must accept the well-pleaded allegations of the
complaint as true and construe them in the light most
favorable to the plaintiff, Robbins v. Wilkie, 300
F.3d 1208, 1210 (10th Cir. 2002), conclusory allegations are
not entitled to be presumed true. Iqbal, 556 U.S. at
681. However, so long as the plaintiff offers sufficient
factual allegations such that the right to relief is raised
above the speculative level, he has met the threshold
pleading standard. See, e.g., Twombly, 550
U.S. at 556; Bryson v. Gonzales, 534 F.3d 1282, 1286
(10th Cir. 2008).
Claim One: Breach of Contract.
alleges that defendants breached the Noncompetition Agreement
by approaching the Rural Utilities Service
(“RUS”), Holy Cross Energy (“HCE”),
the United States Forest Service and Eagle Valley's fuel
suppliers “concerning matters in preparation or
furtherance of their desire to own, operate or finance the
Eagle Valley plant.” ECF No. 1 at ¶22. Defendants
argue that plaintiff fails to state a breach of contract
claim because the Noncompetition Agreement bars defendants
from competing with Eagle Valley in owning, operating or
developing a different biomass facility in the restricted
territory, but that it does not encompass a situation in
which defendants obtain ownership of Eagle Valley's own
biomass facility. I agree.
agreement has a choice of law provision that specifies that
the interpretation of this agreement will be governed by
Colorado state law. ECF No. 20-1 ¶5. Contract
interpretation is a question of law. Ad Two, Inc. v. City
& Cty of Denver, 9 P.3d 373, 376 (Colo. 2000).
“The primary goal of contract interpretation is to give
effect to the intent of the parties.” Id.
(citing USI Props. East, Inc. v. Simpson, 938 P.2d
168, 173 (Colo. 1997)). A court determines the intent of the