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Omnimax International, Inc. v. Anlin Industries, Inc.

United States District Court, D. Colorado

June 17, 2019

OMNIMAX INTERNATIONAL, INC., Plaintiff-Counterclaim Defendant,
v.
ANLIN INDUSTRIES, INC., JOHN APPLEGATE, MARIE CLARK, PATRICIA MOLINE, Defendants-Counterclaim Plaintiffs.

          ORDER

          DANIEL D. DOMENICO, UNITED STATES DISTRICT JUDGE

         Plaintiff-a manufacturer and distributor of metal and vinyl products, including replacement windows and doors-brought this case against three of its former sales representatives and the competitor that hired them, seeking damages and injunctive relief for alleged breach of contract, misappropriation of trade secrets, defamation, and related harms. Defendants filed four counterclaims (Doc. 41), three of which Plaintiff moves to dismiss for failure to state claims under Federal Rule of Civil Procedure 12(b)(6). (Motion, Doc. 44.) For the reasons that follow, the Court GRANTS the Motion.

         I. BACKGROUND

         Plaintiff Amerimax[1] and Defendant Anlin are window vendors that sell to dealers. (Countercl. ¶ 1, Doc. 41.) This case centers on certain customer lists and confidential information that Amerimax alleges it owns but that its former employees misappropriated as they departed Amerimax to work for Anlin. (See generally Am. Compl., Doc. 38.) The facts as described below are drawn from the allegations in the counterclaim, which the Court must treat as true when considering a motion to dismiss. Wilson v. Montano, 715 F.3d 847, 850 n.1 (10th Cir. 2013) (citing Brown v. Montoya, 662 F.3d 1152, 1162 (10th Cir. 2011)).

         Amerimax publishes a price book for its products, which is widely available and routinely received by dealers. (Countercl. ¶ 3.) However, Amerimax typically charges dealers less than the price published in the book-at a discount that varies per dealer based on a “Base Factor” and “Options Factor”-pursuant to an industry standard practice. (Id.) Dealers are not required to keep their individualized pricing confidential and regularly disclose such information in negotiations with competitors of Amerimax. (Id. ¶ 4.) Amerimax maintains a spreadsheet of the Base Factors for all its customers, which it calls the “Master Pricing List.” (Id. ¶ 5.)

         In October 2003, Amerimax hired Defendant Marie Clark, who worked as a sales representative for the company with territory in Colorado, Wyoming, and Nebraska. (Id. ¶ 21.) In July 2006, Amerimax hired Defendant John Applegate, who worked as a sales representative with territory in Colorado, New Mexico, and Texas. (Id. ¶ 6.) Neither had any supervisory responsibilities. (Id. ¶¶ 8, 23.) In May 2016, Amerimax sent Applegate and Clark an e-mail with the subject “Restrictive Covenant Agreement, ” stating that “effective immediately . . . [e]mployees who are eligible for any bonus or incentive must sign the agreement on an annual basis. Employees who fail to do so will not be paid any bonus or incentive payment.” Amerimax sent a follow-up e-mail a few days later stating that “[i]n order for Q1 SIP bonuses to be processed and paid - these [agreements] need to be turned in today.” (Id. ¶¶ 11, 26 (“Agreements”).) Both Applegate and Clark were eligible for bonuses and signed the documents, but currently insist that none of the information to which they had access during their time with the company was ever identified as confidential or secret. (Id. ¶¶ 13, 27.)

         Citing ineffective servicing of customers, compensation and benefits issues, unrealistic sales targets, and (in the case of Clark) offensive offhand remarks, Clark and Applegate eventually provided two weeks' notice and resigned effective May and June 2018, respectively. (Id. ¶¶ 16, 18, 27, 30.) Shortly after their departures, both went to work for Anlin. (Id. ¶¶ 17, 31.) On June 25, 2018, Anlin mailed an announcement to many window contractors, including Amerimax customers, advertising Clark's new affiliation with Anlin. (Id. ¶ 32.) On July 2, 2018, Anlin did the same regarding Applegate. (Id. ¶18.) Both employees maintain that they did not take the Master Pricing List, memorize it, or use the information contained therein with respect their employment with Anlin. (Id. ¶¶ 17, 31.) Neither directly solicited any Amerimax customers or made any disparaging comments concerning their former employer. (Id. ¶¶ 19-20, 33-34.)

         In September 2009, Amerimax hired Defendant Patricia Moline as a customer service representative to handle incoming orders and inquiries. (Id. ¶ 35.) She does not recall ever being presented with or signing a “Restrictive Covenant Agreement.” (Id. ¶ 38.) Citing stagnant compensation and decreasing benefits, she left Amerimax in June 2018. (Id. ¶¶ 39, 42.) Like Applegate and Clark, she maintains that none of the information to which she was privy at Amerimax was described as secret or confidential, she did not take or use the Master Pricing List, and she has never made any disparaging remarks about her former employer. (Id. ¶¶ 39, 43.)

         Amerimax brought this action for damages and injunctive relief against Defendants, alleging breaches of non-compete and non-solicitation covenants and related obligations, as well as violations of the Colorado Uniform Trade Secrets Act. Defendants asserted four counterclaims against Amerimax. Count One pursues a declaration under Colo. Rev. Stat. § 8-2-113(1)-(2) that none of the Agreements are enforceable against Applegate, Clark, or Moline. Count Two seeks damages pursuant to the same statute to compensate Applegate and Clark for the alleged threats and intimidation Amerimax employed in causing them to sign the Agreements. Count Three asserts unlawful restraint of trade in violation of Colo. Rev. Stat. § 6-4-104. Count Four claims that Amerimax's filing and prosecution of this case is an abuse of process. The instant Motion seeks dismissal of the latter three of these claims.

         II. ANALYSIS

         The legal sufficiency of a pleading is a question of law. Dubbs v. Head Start, Inc., 1194, 1201 (10th Cir. 2003). As noted above, at this stage all allegations of material fact in support of the counterclaims must be accepted as true. Wilson v. Montano, 715 F.3d at 850 n.1. Still, “[t]o 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) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Plausibility means that the pleader set forth facts which allow “the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. “[L]abels and conclusions, and a formulaic recitation of a cause of action's elements will not do.” Twombly, 550 U.S. at 545.

         A. Count Two: Claim for Damages Under Colo. Rev. Stat. § 8-2-113(1)

         Defendants' second claim is for damages they allege were caused by Amerimax's use of “threats and/or intimidation to cause Applegate and Clark to sign” the Agreements. (Countercl. ¶ 54, Doc. 41.) This, they argue, violates Colorado law and entitles them to sue for damages. The statute in question, dubbed “Unlawful to intimidate worker--agreement not to compete, ” declares it “unlawful to use force, threats, or other means of intimidation to prevent any person from engaging in any lawful occupation at any place he sees fit.” Colo Rev. Stat. § 8-2- 113(1). It goes on to declare that except for certain contracts, including those for the protection of trade secrets or regarding management personnel and executive staff, “any covenant not to compete . . . shall be void.” Id. § 8-2-113(2). Applegate and Clark allege that they were damaged by Amerimax's “use[ of] threats and/or intimidation . . . . Specifically, Amerimax threatened Applegate and Clark in emails that unless they signed [a] Restrictive Covenant Agreement, they would not receive bonuses to which they were already entitled.” (Countercl. ¶¶ 54-55.) Amerimax responds that even if one assumes its behavior violated the statute, the state legislature did not intend this provision to create a private right of action for damages.

         In a diversity case like this one, federal courts seek to ascertain and apply state law and must defer to the decisions of the controlling state's highest court. Kokins v. Teleflex, Inc., 621 F.3d 1290, 1295 (10th Cir. 2010). Unfortunately, no party has pointed to any Colorado decision with direct guidance on the question whether a party may seek damages for a statutorily improper threat under Section 113. And the statute itself provides no express authorization for a such a claim. So, the Court must divine whether such authorization should be inferred. In matters of statutory interpretation, Colorado's Supreme Court has declared that a court's “fundamental task must be to discern and effectuate the legislature's intent. When, as here, a claimant alleges that a statute, ordinance, or regulation implicitly creates a private right of action, the critical question is whether the legislature intended such a result.” City of Arvada ex rel. Arvada Police Dep't v. Denver Health & Hosp. Auth., 403 P.3d 609, 614 (Colo. 2017). This Court is not convinced of the practicality of that intent-based approach to ...


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