Firetrace USA, LLC, et al. v. Jesclard, et al, No. 2:2007cv02001 - Document 611 (D. Ariz. 2010)
Court Description: ORDER denying Plaintiff's 606 Motion for Reconsideration. Signed by Judge Roslyn O Silver on 09/03/10.(ESL)
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Firetrace USA, LLC, et al. v. Jesclard, et al 1 Doc. 611 wo 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Plaintiffs, 10 11 ) ) ) ) ) ) ) ) ) ) ) ) Firetrace USA, LLC, et al., vs. 12 Candice Jesclard, et al., 13 Defendants. 14 No. CV-07-02001-PHX-ROS ORDER 15 16 Before the Court is Plaintiffs’ Motion for Reconsideration of the Court’s Order 17 granting in part Defendants’ motion for partial summary judgment. For the reasons 18 discussed, the Motion will be denied. 19 BACKGROUND 20 In the Court’s Order resolving Defendants’ motion for partial summary judgment, the 21 Court ruled that Plaintiffs’ common law tort claims are preempted by the Arizona Uniform 22 Trade Secrets Act (“AUTSA”) to the extent they are based on misappropriation of 23 information. The Court ruled that the common law tort claims are not entirely preempted 24 because they are also based on other wrongful acts allegedly committed by Defendant 25 Lawrence Jesclard. Plaintiffs identified the following alleged wrongful acts, committed by 26 Mr. Jesclard, as forming an additional factual basis for their tort claims: (1) he initiated his 27 plan to develop a competing product, (2) concealed a request from a customer for a “blanket- 28 type” product, and (3) discussed with a potential Firetrace customer the limitations of the Dockets.Justia.com 1 Firetrace product, and failed to share those observations with Firetrace. Other than 2 misappropriation of information related allegations, Plaintiffs did not allege any other 3 wrongful conduct, by Mr. Jesclard or other Defendants in this action, as a basis for their 4 common law tort claims. 5 STANDARD 6 Under Federal Rule of Civil Procedure 59(e), a motion for reconsideration of a 7 judgment “should not be granted, absent highly unusual circumstances, unless the district 8 court is presented with newly discovered evidence, committed clear error, or if there is an 9 intervening change in controlling law.” 380 Orange Street Partners v. Arnold, 179 F.3d 656, 10 665 (9th Cir. 1999). Local Rule of Civil Procedure 7.2(g) similarly instructs the Court to 11 deny reconsideration “absent a showing of manifest error or a showing of new facts or legal 12 authority that could not have been brought to [the Court’s] attention earlier with reasonable 13 diligence.” 14 15 DISCUSSION I. Unjust Enrichment Claim 16 The Court granted summary judgment to Defendants on Plaintiffs’ unjust enrichment 17 claim because a contract governed the relationship between Mr. Jesclard and Plaintiffs. The 18 Court stated: 19 20 21 Where “there is a specific contract which governs the relationship of the parties, the doctrine of unjust enrichment has no application.” Brooks v. Valley Nat’l Bank, 548 P.2d 1166, 19071 (Ariz. 1976). As discussed above, all of the wrongful acts Plaintiffs allege Mr. Jesclard committed were expressly governed by his employment contract with Firetrace. The unjust enrichment claim is therefore barred. 22 Plaintiffs move for reconsideration on the ground that the unjust enrichment claim was 23 asserted against all Defendants, and no contract governed Plaintiffs’ relationship with 24 Defendants Hazard Protection Systems, Inc. (“HPS”) and Candice Jesclard. Unjust 25 enrichment occurs when “one party has and retains money or benefits that in justice and 26 equity belong to another” and a different legal remedy is lacking. Trustmark Ins. Co. v. Bank 27 28 -2- 1 One, Arizona, NA, 48 P.3d 485, 491 (Ariz. Ct. App. 2002). Plaintiffs did not allege any 2 wrongful acts committed by or benefits conferred on HPS and Candice Jesclard as a basis 3 for their unjust enrichment claim. As the Court stated in its Order, all of the alleged wrongful 4 acts and benefits received that formed the basis for the unjust enrichment claim (that were 5 not preempted by the AUTSA) were expressly governed by Mr. Jesclard’s employment 6 contract. Plaintiffs only alleged, in other words, that Defendants HPS and Candice Jesclard 7 are liable for unjust enrichment based on acts committed and benefits received by Mr. 8 Jesclard. Plaintiffs do not dispute the Court’s finding that these acts and benefits were all 9 expressly governed by Mr. Jesclard’s employment contract, and the unjust enrichment claim 10 only arises from obligations imposed by that contract. For the purpose of determining 11 whether the employment contract precludes the unjust enrichment claim against HPS and 12 Candice Jesclard, these Defendants thus step into the shoes of Mr. Jesclard. Reconsideration 13 of summary judgment on the unjust enrichment claim will therefore be denied. 14 II. Breach of Contract and Trade Secret Misappropriation 15 The Court granted Defendants summary judgment on the breach of contract and trade 16 secret misappropriation claims because Plaintiffs failed to show sufficient evidence of 17 proximately caused damages. Plaintiffs argue the Court erred because under Arizona law 18 they may recover nominal damages for a breach of contract claim. Plaintiffs quote Kain v. 19 Arizona Copper Co., 133 P. 412, 414 (Ariz. 1913) (quoting Aachen & Munich Fire Ins. Co. 20 v. Morton, 156 F. 654 (6th Cir. 1907), for the proposition that they are entitled to nominal 21 damages: “If an act occurs, whether it be a breach of contract or duty which one owes 22 another or the happening of a wrong, whether willful or negligent, by which one sustains an 23 injury, however slight, for which the law gives a remedy . . . That nominal damages would 24 be recoverable for the breach of the wrong is enough.” 25 Kain does not support Plaintiffs’ position that they are not required to show a 26 proximately caused injury in order to recover on a breach of contract claim, and in fact does 27 just the opposite. The court expressly stated that nominal damages are only available on a 28 -3- 1 contract claim where “one sustains an injury, however slight . . .” Id. Although nominal are 2 available in a breach of contract action, in order to recover one must show at least some 3 resulting injury. See Chartone, Inc. v. Bernini, 83 P.3d 1103, 1111 (Ariz. Ct. App. 2004) (“It 4 is well established that, in an action based on breach of contract, the plaintiff has the burden 5 of proving the existence of a contract, breach of the contract, and resulting damages.”) 6 (emphasis added); Graham v. Asbury, 540 P.2d 656, 657 (Ariz. 1975) (“To bring an action 7 for the breach of the contract, the plaintiff has the burden of proving the existence of the 8 contract, its breach and the resulting damages.”) (emphasis added). Nominal damages are 9 awarded where actual damages are slight or difficult to calculate. But the availability of 10 nominal damages does not eliminate the requirement that Plaintiffs show they have suffered 11 (or will suffer) an injury some kind. See Kain, 133 P. 412. 12 Plaintiffs further argue they provided sufficient evidence to show they were 13 proximately injured by the breach of contract and misappropriation of trade secrets. Local 14 Rule of Civil Procedure 7.2(g) requires a party moving for reconsideration to “point out with 15 specificity the matters that the movant believes were overlooked or misapprehended by the 16 Court . . . .” Plaintiffs point to evidence that Mr. Jesclard disclosed “certain testing 17 information” about the FIRE Panel, “including certain tolerances and the reaction of FIRE 18 Panel during certain testing events.” (Doc. 606 at 4). 19 Defendants ultimately developed a competing product in much less time than it took 20 Firetrace, it can be inferred that Defendants use of Firetrace testing information was a 21 proximate cause of Defendants’ development of a competing product. Plaintiffs also point 22 to evidence that HPS was awarded a government contract for a price that was lower than 23 Firetrace’s confidential costs of production, which were wrongfully disclosed by Mr. 24 Jesclard. Plaintiffs argue a jury could infer from this that Mr. Jesclard’s disclosure of 25 26 27 28 -4- Plaintiffs argue that because 1 Firetrace’s costs proximately caused HPS to obtain the contract. Other than these two forms 2 of evidence, Plaintiffs do not identify anything else purportedly overlooked by the Court.1 3 Plaintiffs fail to show the Court erred in concluding that Plaintiffs failed to submit 4 sufficient evidence they were injured as a proximate consequence of Defendants’ breach of 5 contract and misappropriation of information. The proximate cause of an injury is defined 6 in Arizona as “that which, in a natural and continuous sequence, unbroken by any efficient 7 intervening cause, produces an injury, and without which the injury would not have 8 occurred.” Saucedo ex. re. Sinaloa v. Salvation Army, 24 P.3d 1274, 1278 (Ariz. Ct. App. 9 2001) (emphasis added). To have proximately caused an injury, the wrongful conduct must 10 be a “substantial factor in bringing about the harm.” Standard Chartered PLC v. Price 11 Waterhouse, 945 P.2d 317, 343 (Ariz. Ct. App. 1997) (emphasis added). The Court found 12 Mr. Jesclard misappropriated and improperly disclosed information about tests of the FIRE 13 Panel. Plaintiffs argue this fact, by itself, is enough to infer Defendants were able to develop 14 a competing product as a proximate result. The Court disagrees. Plaintiff has not shown any 15 evidence (or offered any explanation) to show Defendants would have been unable to 16 develop a competing product absent the disclosure of the “certain testing information” at 17 issue. With no other evidence of causation, a reasonable juror could not find Defendants 18 would have been unable to develop a competing product in the absence of the disclosed 19 information. The only injuries Plaintiffs claim to have suffered, it must be emphasized, is 20 that Defendants developed a competing product and were awarded a government contract. 21 Plaintiffs have not explained why Defendants would have been unable to develop a 22 competing product absent the testing information, and thus fail to show but-for causation, let- 23 alone that the information was a “substantial factor” in Defendants’ ability to develop the 24 25 1 27 Plaintiffs argue “[t]hese facts and others presented at summary judgment create an issue of fact . . . .” (Doc. 606 at 5). As noted, LRCiv 7.2(g) requires a party seeking reconsideration to point out with specificity the matters that were overlooked by the Court. Plaintiffs’ vague reference to other facts does not comport with the Local Rule. 28 -5- 26 1 product. Plaintiffs state in a conclusory manner that it can be inferred that Defendants used 2 the information because they were able to develop a competing product in a short amount of 3 time. Without further explanation as to why this inference must be made, or some evidence 4 to support it, Plaintiffs have not met their burden of making a minimal showing that they 5 were proximately injured by Mr. Jesclard’s disclosure of testing information. 6 Plaintiffs also argue Defendants successfully bid for and obtained a contract at a price 7 that was lower than Firetrace’s costs of manufacturing. From this Plaintiffs argue it can be 8 inferred that Mr. Jesclard’s disclosure of Firetrace’s costs was a proximate cause of 9 Defendants’ ability to obtain the contract. In their response to Defendants’ motion for partial 10 summary judgment, Plaintiffs presented no evidence to support this inference. Plaintiffs now 11 allege, without citation to supporting evidence in the record, that the government announced 12 during the bid competition that price was the dispositive factor. Plaintiffs do not explain why 13 they could not have brought this to the Court’s attention earlier, along with a citation to 14 evidence to support it. Plaintiffs presented no grounds upon which a reasonable juror could 15 infer that Mr. Jesclard’s disclosure of Firetrace’s costs was a proximate or even but-for cause 16 of Defendants’ acquiring a contract. 17 Accordingly, 18 IT IS ORDERED the Motion for Reconsideration (Doc. 606) IS DENIED. 19 DATED this 3rd day of September, 2010. 20 21 22 23 24 25 26 27 28 -6-
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