United States District Court, D. Colorado
AARON, BELL INTERNATIONAL, INC., a Colorado corporation, Plaintiff,
JOHN ROWELL, an individual, Defendant.
BROOKE JACKSON UNITED STATES DISTRICT JUDGE
matter is before the Court on defendant John Rowell's
motion for summary judgment. ECF No. 47. For the reasons
discussed herein, the motion is granted in part and denied in
Aaron, Bell International, Inc., (“ABI”) is an
investment banking service provider. It initiated this action
against Defendant John Rowell, ABI's former executive
vice president, chief operating officer, and managing
director. ABI claims that Mr. Rowell intentionally interfered
with ABI's business operations, primarily a transaction
ABI had developed for its client, Skilcraft, LLC
(“Skilcraft”). It also claims that Mr. Rowell
misappropriated and disclosed trade secrets and other
Rowell joined ABI in 2016. ECF No. 47 (Defendant John
Rowell's Motion for Summary Judgment). He alleges that
shortly after he began, ABI president Ralph Bellizzi became
“belligerent and hostile, repeatedly berating and
degrading Mr. Rowell.” Id. Mr. Rowell no
longer wished to work for ABI and executed a
“Transition Employment Agreement and Release of All
Claims” (“transition agreement”) with ABI
on September 9, 2017. ECF No. 13 (Transition Agreement).
Under the agreement, Mr. Rowell would continue to finish
ongoing projects. His employment would cease either ten days
after all “transition deals have been completed,
” “as agreed mutually in writing, ” or for
cause. Id. The agreement also included a
confidentiality provision, a two-year non-competition
provision, and a non-disparagement provision. Id.
the transition period, Mr. Rowell was expected to finish a
transaction for the sale of Skilcraft. Id. During
his work on Skilcraft, Mr. Rowell generated two letters of
interest as well as two letters of intent from potential
buyers interested in purchasing Skilcraft. ECF No. 50
(Declaration of Ralph Bellizzi on behalf of ABI); ECF No. 47.
Despite these offers, on December 5, 2017 Skilcraft
terminated its agreement with ABI. ECF No. 49 (Plaintiff
ABI's Response to Motion for Summary Judgment).
central question in this dispute is why Skilcraft chose to
terminate. Mr. Rowell alleges that it had nothing to do with
him. He asserts that he made diligent efforts to generate
interest in the sale, shown by the multiple letters of
interest and purchase offers for Skilcraft he received. ECF
No. 47. He claims that despite his diligence, Skilcraft
decided the offers were lower than desired, and that it was
no longer interested in trying to sell. Id. Mr.
Rowell points to testimony by Skilcraft's CEO and Rule
30(b)(6) representative John Zurborg to support this
argument. ECF No. 47-1 (Deposition of John Zurborg). Mr.
Zurborg testified that Skilcraft terminated its relationship
with ABI only because it did not receive the value it had
hoped for from the offers, not because of anything Mr. Rowell
said or did. Id. at 59:19-21, 66:4-9. He further
testified that he believed Mr. Rowell gave his best effort to
try to create a transaction for Skilcraft while working for
ABI. Id. at 41: 18-21. The letters of intent,
according to Zurborg, offered purchase prices of
approximately $28 million and $27 million respectively.
Id. at 51:3-52:20. Yet Skilcraft was hoping for a
differently structured transaction with a purchase price of
at least $30 million. Id. at 51:14-15. Mr. Zurborg
explained that the prices Mr. Rowell and ABI generated were
likely hampered by concerns over Skilcraft's projected
earnings and by Skilcraft's unionization. Id. at
contrast, ABI says that the Skilcraft deal fell through
because of Mr. Rowell. It alleges that Mr. Rowell disparaged
ABI to Skilcraft in an attempt to undermine ABI's
agreement with Skilcraft and enrich himself. ABI claims it
discovered this disparagement from former ABI employee Chuck
Caswell. As evidence, ABI submitted a declaration of ABI
president Ralph Bellizzi. ECF No. 50. According to Mr.
Caswell, Mr. Rowell told Skilcraft that ABI was
“grossly understaffed, ” “lacked sufficient
resources to service Skilcraft's transaction, ”
“did not prioritize Skilcraft's needs, ” and
“was incapable of meeting Skilcraft's needs.”
also alleges Mr. Rowell disclosed confidential and trade
secret information about the Skilcraft deal to a competitor,
First Line Advisors, LLC., (“First Line”). ECF
No. 49. In January of 2018, ABI discovered an email sent by
Patrick Vaughan of First Line. The email, sent on January 2,
2018 by Mr. Vaughan to the email
“jrowell@aaron*bell.com, ” reads:
John, Thank you for taking the time to speak with me today
re: Skilcraft. As a follow-up, I'd like to discuss
potential next steps tomorrow with you and my colleague,
Alison Kennedy. Please let me know how your schedule looks
and we can arrange a call. Finally, can you please reply to
this email to confirm you received this? Best, Patrick
ECF No. 50-10. Mr. Rowell says he did not receive this email,
which seems likely because Mr. Rowell's email at ABI was
“email@example.com” and not
“jrowell@aaron*bell.com.” ECF No. 47. ABI does
not allege that Mr. Rowell either received the email or
responded to it. ECF No. 49.
January 10, 2018 ABI sent Mr. Rowell a letter terminating him
for cause. ECF No. 47-1. The letter laid out allegations that
Mr. Rowell had breached his transition agreement and demanded
that Mr. Rowell return ABI “documents, ESI, and
tangible things” in his possession and submit his
devices to a forensic examination. Id.
discovery for this case, ABI also uncovered another email.
This one was sent on January 4, 2018 by Mr. Vaughan to Mr.
Zurborg at Skilcraft. Id. It reads:
John, We have a client who has an interest in your
fabrication division. Upon some hunting, we learned that you
are being represented by John Rowell, and therefore reached
out to him. My colleague made a couple of attempts, leaving
multiple voicemail messages. No. response. I also called
John, and finally was able to reach him. He informed me that
you may be “close” to finishing the transaction,
therefore I asked for clarity if he wanted to speak further
or if the deal was done. He said he would contact me the next
morning but I never heard from him. Based on the transaction
being close to the finish line, I tried calling him multiple
times. my last attempt, he sent me a text to leave him alone.
Based on this, I decided I would reach out to you directly to
see if you are interested in a potential investment in/buyout
of your fabrication division. Please let me know if there is
room to get a seat at the table or if you already have
decided on the right partner. Thank you very much in advance
for reading my email, and I look forward to hearing from you.
also produced electronic records of an ABI communication log
detailing a December 19, 2017 call between Skilcraft's
Mr. Zurborg and ABI's Mr. Caswell. The subject of the
communication was described in the ABI log as “Discuss
Engagement Termination.” ECF No. 50-8.
on these allegations, ABI brings six claims against Mr.
Rowell. ABI claims (1) Mr. Rowell breached the transition
agreement by (a) failing to maintain confidentiality of the
existence and details of the Skilcraft transaction; (b)
attempting to usurp and divert the Skilcraft transaction; (c)
disparaging ABI to Skilcraft, and (d) failing to timely
return ABI's information after termination; (2) Mr.
Rowell misappropriated its trade secrets; (3) Mr. Rowell
commercially disparaged ABI; (4) Mr. Rowell breached his duty
of loyalty to ABI; (5) Mr. Rowell interfered with ABI's
contracts and prospective business advantages; (6) Mr. Rowell
unjustly enriched himself. ECF No. 49.
Court may grant summary judgment if “there is no
genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed.R.Civ.P.
56(a). The moving party has the burden to show that there is
an absence of evidence to support the nonmoving party's
case. Celotex Corp. v. Catrett, 477 U.S. 317, 325
(1986). The nonmoving party must “designate specific
facts showing that there is a genuine issue for trial.”
Id. at 324. A fact is material “if under the
substantive law it is essential to the proper disposition of
the claim.” Adler v. Wal-Mart Stores, Inc.,
144 F.3d 664, 670 (10th Cir. 1998) (citing Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). A
material fact is genuine if “the evidence is such that
a reasonable jury could return a verdict for the nonmoving
party.” “If the evidence is merely colorable, or
is not significantly probative, summary judgment may be
granted.” Id. at 249-50. (internal citations
omitted). The Court will examine the factual record and make
reasonable inferences therefrom in the light most favorable
to the party opposing summary judgment. Concrete Works of
Colo., Inc. v. City & Cnty. of Denver, 36 F.3d 1513,
1517 (10th Cir. 1994).
Breach of Contract
recover on its Colorado state law breach of contract claim,
ABI must prove (1) the existence of a contract (the
transition agreement); (2) that ABI performed under the
contract; (3) that Mr. Rowell failed to perform under the
contract; and (4) resulting damages. Long v.
Cordain, 343 P.3d 1061, 1067 (Colo.App. 2014). The
parties do not dispute the first two elements. However, ABI
claims Mr. Rowell failed to perform under his transition
agreement and such failure resulted in damages. ABI asserts
four theories of breach: that Mr. Rowell (a) breached the
confidentiality provision; (b) attempted to usurp and divert
the Skilcraft deal; (c) disparaged ABI to Skilcraft; and (d)
failed to return ABI information as required. ECF No. 49. I
address each theory and corresponding damages argument in
claims Mr. Rowell breached the confidentiality provision by
disclosing the existence of the Skilcraft deal and some of
its details. ECF No. 4 (Plaintiff ABI's Compliant). ABI
alleges that these disclosures “caused Skilcraft to
terminate its relationship with ABI and to continue to not do
business with ABI, ” which in turn caused ABI damages.
ECF No. 49. In response, Mr. Rowell argues he did not
disclose any confidential information about the Skilcraft
deal, and that ABI cannot prove damages. ECF No. 47.
Disclosure of Confidential Information
confidentiality provision in the transition agreement
requires that the “employee will hold in strictest
confidence and not disclose Confidential Information . . . to
anyone who is not an employee of ABI or to any employee of
ABI that does not have access to said Confidential
Information without express written permission from ABI's
President.” ECF No. 13. The agreement defines
confidential information as “any trade secrets or ABI
proprietary information, including, but not limited to
techniques, processes, operating methods, cost, pricing,
financial data, business plans, and proposals, customer
lists, data and information that ABI received in confidence
from any other party, or any other secret or confidential
matters of ABI.” Id.
asserts that the very existence of its deal with Skilcraft is
confidential information. It explains that “in the
private M&A industry, clients, potential clients, deals,
potential deals, and, essentially, everything related to our
work, is highly confidential.” ECF No. 50. It seems to
me that whether the existence of the deal was
“confidential information” is a factual question
ABI would have to prove at trial. However, Mr. Rowell has not
argued that the existence of the deal was not covered by the
that Mr. Rowell disclosed the existence of the deal, ABI
points to the first Vaughan email, in which Mr. Vaughan
states “[t]hank you for taking the time to speak with
me re: Skilcraft.” ECF No. 50-10. ABI argues that this
demonstrates that Mr. Rowell disclosed or at least
acknowledged the Skilcraft deal's existence to Mr.
Vaughan. ECF No. 49. This email could be read two ways:
either to suggest that Mr. Rowell told Mr. Vaughan that the
Skilcraft deal existed, or, in light of the other evidence,
to suggest that Mr. Vaughan pestered Mr. Rowell for details
about the Skilcraft deal to no avail. Yet I must take all
evidence in the light most favorable to ABI, and so I find
that a reasonable jury could conclude from this that Mr.
Rowell disclosed that the Skilcraft deal existed.
that Mr. Rowell disclosed details of the deal, ABI points to
the second Vaughan email. Id. In that email Mr.
Vaughan states that he discovered Skilcraft was represented
by Mr. Rowell, and that the Skilcraft deal was
“close” to finishing a transaction. Id.
This is the only detail ABI can point to. It presents no
specific facts showing Mr. Rowell disclosed any other details
of the Skilcraft transaction. Despite this, ABI has at least
raised a genuine dispute about whether Mr. Rowell told Mr.
Vaughan that the transaction was close to finishing.
claims that it incurred damages due to Skilcraft's
termination of its agreement in December of 2017. If
Skilcraft had accepted one of the offers ABI generated,
Skilcraft would have owed ABI a significant fee. ECF No. 50.
ABI also claims lost resources dedicated to the Skilcraft
transaction. Id. All of ABI's damages are tied
to the loss of the Skilcraft deal. This means ABI must show
that the alleged breaches caused ABI's loss.
that there is no genuine dispute as to whether Mr.
Rowell's alleged breaches in confidentiality caused
ABI's loss, because the evidence submitted indicates that
they did not occur until after Skilcraft's termination.
Skilcraft terminated the agreement on December 5, 2017. ECF
No. 49. Both the disclosure of the deal and its details are
alleged to have occurred in a conversation with Mr. Vaughan
preceding the first Vaughan email, sent January 2, 2018. ECF
No. 50-10. In that email, Mr. Vaughan thanks Mr. Rowell for
speaking with him “today, ” suggesting that
conversation occurred on January 2 as well. Taking Mr.
Vaughan at his word, as ABI asks me to do, there is no
question to submit to the jury as to whether Mr. Rowell's
breaches of confidentiality caused ABI's damages from
loss of the Skilcraft agreement.
ABI claims that Mr. Rowell breached his transition agreement
by attempting to usurp the deal the Skilcraft deal for his
own benefit and divert the deal to ABI's competitor,
First Line. ECF No. 49. In response, Mr. Rowell argues there
is no evidence he attempted to do either, and ABI cannot
prove damages. ECF No. 47.
Usurping and Diverting Mr. Rowell's transition