Hogan v. Utah Telecomm. Open Infrastructure Agency

• Decision Date: 18 October 2011
• Docket Number: Case No. 1:11-CV-64 TS
• Parties: CHRIS HOGAN, Plaintiff, v. UTAH TELECOMMUNICATION OPEN INFRASTRUCTURE AGENCY, AKA UTOPIA, AND TODD MARRIOT, EXECUTIVE DIRECTOR OF UTAH TELECOMMUNICATION OPEN INFRASTRUCTURE AGENCY AND DOES 1-5 Defendants.
• Court: U.S. District Court — District of Utah

CHRIS HOGAN, Plaintiff,

v.UTAH TELECOMMUNICATION OPEN INFRASTRUCTURE AGENCY, AKA UTOPIA,AND TODD MARRIOT, EXECUTIVE DIRECTOR OF UTAH TELECOMMUNICATION OPEN INFRASTRUCTURE AGENCYAND DOES 1-5 Defendants.

Case No. 1:11-CV-64 TS

UNITED STATES COURT FOR THE DISTRICT OF UTAH NORTHERN DIVISION

DATED: October 18, 2011.

MEMORANDUM DECISION AND

ORDER GRANTING IN PART AND

DENYING IN PART DEFENDANTS'

MOTION TO DISMISS AND

DENYING PLAINTIFF'S MOTION

TO STRIKE

This matter is before the Court on Defendants Utah Telecommunication Open Infrastructure Agency ("UTOPIA") and Todd Marriott's (collectively "Defendants") Motion toDismiss¹ and Plaintiff Chris Hogan's Motion to Strike.² For the reasons discussed more fully below, the Court will grant in part and deny in part Defendants' Motion to Dismiss and will deny Plaintiff's Motion to Strike.

I. BACKGROUND

The following facts are taken from Plaintiff's Amended Complaint. Plaintiff's Complaint centers around actions allegedly taken by UTOPIA, an inter-local cooperative entity and political subdivision of the State of Utah, and Mr. Marriott—a Utah resident—who serves as UTOPIA's executive director. Plaintiff is a citizen of the State of Colorado.

Plaintiff alleges that, on or about May 9, 2009, he entered into an agreement with UTOPIA (the "Agreement") to provide his services as an independent contractor. According to Plaintiff, he had already been working for UTOPIA for almost a year when he entered into the Agreement. Under the terms of the Agreement, Plaintiff was to provide certain services including "sales, marketing, business development, operations, IT, and engineering efforts regarding the UTOPIA network."³ In exchange, Plaintiff was to receive $11,500 per month. By its terms, the Agreement was to expire in May of 2011. Plaintiff asserts that despite the termination clause in the Agreement, Mr. Marriott and UTOPIA's general counsel, David Shaw, led Plaintiff to believe that the Agreement would be renewed.

Though not included in the terms of the Agreement, UTOPIA also provided Plaintiff an apartment to live in during the week, for which it paid both the utilities and internet. UTOPIA also provided Plaintiff with an office, computer, and cell phone, none of which were provided for under the Agreement.

Plaintiff alleges that his duties with UTOPIA included:

developing sales, marketing, developments functions for UTOPIA in the business and consumer markets, branding, marketing strategy and plan, hiring, hiring of employees, developing marketing, hiring partner agencies, conducting requests for proposal processes to secure partners, liaising with all of UTOPIA's partners and stakeholders, meeting with city officials to attract new member cities to UTOPIA, making presentation about UTOPIA, meeting with strategic partners both inside and outside of UTOPIA, attracting and developing new service providers and application providers to the UTOPIA network, helping to develop the business model for the organization, and actively participating in board and executive committee meetings.⁴

Plaintiff alleges that Utopia dictated the pace and sequence of how he performed his job and also set the hours he worked. According to Plaintiff, as the head of multiple departments, he was able to delegate his functions. In early 2011, Plaintiff was made the Director of Operations for UTOPIA. This meant that Plaintiff also became responsible for such processes as customer care, service provider support, trouble ticketing, installation and customer fulfillment, billing, and other similar processes. Plaintiff acknowledges that throughout the term of his contract he was a 1099 contractor and maintained separate business and tax records.

Plaintiff alleges that the negative employment actions taken against him were in retaliation for statements Plaintiff made to Mr. Jared Pantier, an outside plant manager andUTOPIA employee, who also reports directly to Mr. Marriott. Plaintiff had suspicions that UTOPIA, through Mr. Marriott, may be engaging in anti-competitive bidding practices. Plaintiff asserts that his suspicions were based on the involvement of Tetra Tech, a company for which Mr. Marriott's brother serves on the upper management for the region of Utah. According to Plaintiff, Tetra Tech is a company with a disfavored status with UTOPIA. Plaintiff became suspicious when Tetra Tech submitted bid amounts that were extremely close to the projected cost amounts developed by UTOPIA. UTOPIA later terminated the bidding process in which Tetra Tech had directly been involved. However, Plaintiff alleges that it was his understanding that Tetra Tech had discussed working under another general contractor, Corning Incorporated.

Plaintiff asserts that he spoke with Mr. Pantier about his suspicions, instead of filing a report with the authorities, because he acknowledged that he could be wrong and decided to be cautious before accusing Mr. Marriott and Tetra Tech of engaging in anti-competitive bidding practices. Plaintiff alleges:

In order to make sure the bidding process did not jeopardize the success of UTOPIA and in hopes of making the process transparent, [Plaintiff] suggested to [Mr.] Pantier that he ensure that the Executive Board knew about the relationship between Tetra Tech and [Mr.] Marriott as well as the possibility that Corning, Incorporated, may be having discussions with Tetra Tech about awarding the curb to home subcontract to Tetra Tech.⁵

Plaintiff alleges that soon thereafter, Mr. Marriott requested that Plaintiff sign a termination agreement. Plaintiff asserts that he would not sign the termination agreement and, as a result, Mr. Marriott began sending texts to Plaintiff's wife's cell phone warning Plaintiff tokeep quiet about UTOPIA's dealings. Plaintiff further alleges that Defendants attempted to have him evicted from the apartment he lived in during the week and locked him out of the UTOPIA office he used. Plaintiff also believes that, after he refused to sign the termination agreement, a member of UTOPIA's executive staff told UTOPIA employees that Plaintiff had been committing crimes.

Plaintiff also makes various allegations about being removed from a separate company in which he was involved with Mr. Marriott and Mr. Shaw, a non-profit corporation entitled "GigNation."

Plaintiff subsequently sought legal advice and directed counsel to serve a draft complaint on the executive—Plaintiff alleges managing—board of UTOPIA. Plaintiff asserts that the draft complaint was accompanied by a letter notifying UTOPIA that Plaintiff intended to file a lawsuit but was open to negotiating a mutually acceptable resolution instead of litigation. Plaintiff alleges that, in response, he received a letter from Mr. Marriott, indicating that "your actions specific to recent interactions with Mr. Jarrod (sic) Pantier are clearly outside the scope of that certain Professional Services Agreement, together with applicable Statements of Work, dated as of May 12, 2009."⁶ Plaintiff subsequently sent a demand letter to UTOPIA's executive board on March 24, 2011. Mr. Shaw responded to Plaintiff's demand letter on April 4, 2011, and, according to Plaintiff, denied all of Plaintiff's claims.

Plaintiff has attached as an exhibit to his Amended Complaint a redacted version of this response to his demand letter and alleges that he has redacted the letter because the Utah ThirdDistrict Court found the paragraphs to be redundant, immaterial, impertinent, or scandalous. Defendants attached the same letter to their Answer to Plaintiff's Amended Complaint and Motion to Dismiss, without redactions.

II. STANDARD OF REVIEW

In considering a motion to dismiss under Rule 12(b)(6), all well-pleaded factual allegations, as distinguished from conclusory allegations, are accepted as true and viewed in the light most favorable to Plaintiff as the nonmoving party.⁷ Plaintiff must provide "enough facts to state a claim to relief that is plausible on its face."⁸ All well-pleaded factual allegations in the complaint are accepted as true and viewed in the light most favorable to the nonmoving party.⁹ But, the court "need not accept . . . conclusory allegations without supporting factual averments."¹⁰ "The court's function on a Rule 12(b)(6) motion is not to weigh potential evidence that the parties might present at trial, but to assess whether the plaintiff's complaint alone is legally sufficient to state a claim for which relief may be granted."¹¹ The Supreme Court hasexplained that a plaintiff must "nudge[ ][his] claims across the line from conceivable to plausible" to survive a motion to dismiss.¹²

Thus, the mere metaphysical possibility that some plaintiff could prove some set of facts in support of the pleaded claims is insufficient; the complaint must give the court reason to believe that this plaintiff has a reasonable likelihood of mustering factual support for these claims.¹³

The Supreme Court recently provided greater explanation of the standard set out in Twombly in Ashcroft v. Iqbal.¹⁴ In Iqbal, the Court reiterated that while FED.R.CIV.P. 8 does not require detailed factual allegations, it nonetheless requires "more than unadorned, the-defendant-unlawfully-harmed-me accusation[s]."¹⁵ "A pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.'"¹⁶ "Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'"¹⁷

The Court in Iqbal stated:

Two working principles underlie our decision in Twombly. First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. Rule 8 marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed

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