RevolutionAR, Inc. v. Gravity Jack, Inc.
| Decision Date | 28 April 2020 |
| Docket Number | No. 36499-2-III,36499-2-III |
| Court | Washington Court of Appeals |
| Parties | REVOLUTIONAR, INC., a Washington Corporation; JOSHUA W. ROE, a married individual, Appellants, v. GRAVITY JACK, INC., a Washington Corporation; and AARON L. RICHEY a/k/a LUKE RICHEY, individually, and his marital community, Respondents. |
FEARING, J. — Plaintiff RevolutionAR, Inc. hired defendant Gravity Jack, Inc. to design a demonstration application and software code for an augmented reality platform that would train users in the performance of various tasks. After the relationship soured, RevolutionAR sued Gravity Jack and its president, Luke Richey, under numerous contract and tort theories. RevolutionAR's Chief Executive Officer (CEO) Joshua Roe also sued for invasion of privacy. The superior court dismissed the claims on summary judgment because of limitations on liability in the parties' contracts and the failure to present an issue of fact with regard to damages. The trial court also awarded Gravity Jack and Luke Richey an award of reasonable attorney fees and costs on the theory that RevolutionAR and Joshua Roe filed a frivolous lawsuit. We affirm in part and reverse in part.
This appeal involves a business dispute between RevolutionAR and its CEO, Joshua Roe, on the one hand, and Gravity Jack and its President, Luke Richey, on the other hand. Because the trial court dismissed RevolutionAR's and Joshua Roe's claims on summary judgment, we review the facts in a light favorable to Roe and RevolutionAR.
Joshua Roe holds a master's degree in organizational leadership from Gonzaga University. Roe specializes in training workers. According to Roe and other experts, students and workers learn by form formats: (1) reading and writing, (2) visual, (3) auditory and aural, and (4) kinesthetic. While consulting for a Spokane-headquartered oil and gas management company, Roe observed ineffective and inconsistent training methods of industry workers, which compelled his active mind to contemplate new processes and methods for worker instruction.
In February 2014, Joshua Roe contacted Luke Richey, founder and president of Gravity Jack, a software development company in Liberty Lake. Roe understood Richey to possess experience and expertise with computer technology and in forming and operating start-up businesses. Roe and Richey discussed forming a start-up company thatengaged in software development and management consulting. The company would develop and market interactive training and maintenance software using augmented reality technology. Augmented reality technology allows "computer-generated virtual imagery information to be overlaid onto a live direct or indirect real-world environment in real time." Clerk's Papers (CP) at 400. For example, a mechanic could place an iPhone, smartphone, tablet, or iPad next to a car's fuel injection system. The device screen's imagery would show the injection system's components and display directions for repairing or replacing the components. Because augmented reality employs all four iconic methods of learning, the software platform excels in teaching workers new skills.
Joshua Roe and Luke Richey discussed the augmented reality platform start-up firm contracting with Gravity Jack for software development needed to produce the interactive learning computer applications. The start-up company would later perform additional product development on its own. During the discussions, Richey never informed Roe that Gravity Jack had developed applications for learning, training, or maintenance or of any plan to develop such products. Roe did not know of any experience of Richey or Gravity Jack in this form of technology.
Luke Richey expressed approval of the concept of developing augmented reality teaching software applications. Richey advised and encouraged Joshua Roe to pursue theproject. Richey also gave Roe advice regarding agreements Roe entered with the oil and gas management company. Joshua Roe spoke with Brendan Weatherly, a coworker at the oil and gas management firm, about forming the start-up company, RevolutionAR. RevolutionAR would develop and market custom interacting learning, process training, and maintenance applications using augmented reality technology. Roe and Weatherly incorporated RevolutionAR on May 5, 2014, after RevolutionAR entered contracts with Gravity Jack. Neither party contends that any of the contracts are void because RevolutionAR did not legally exist at the time of signing.
Because of Luke Richey's business experience and acumen, Joshua Roe and Brendan Weatherly invited Richey to serve on RevolutionAR's board of directors. Richey agreed to the position and also requested an ownership interest in the company. Richey requested the shares be held in the name of his wife due to difficulties with his former wife over income and child support. Roe granted the request.
According to Brendan Weatherly, Luke Richey assured him and Joshua Roe that Richey, along with his company, Gravity Jack, would assist as a trusted advisor and consultant for RevolutionAR. Roe and Weatherly relied on Richey, with his business contacts, to approach investors in and potential customers of RevolutionAR.
On April 8, 2014, Gravity Jack and RevolutionAR executed three contracts: (1) a design and developing resourcing contract, (2) a master services agreement between RevolutionAR and Gravity Jack, and (3) a memorandum of understanding. The business agreements covered Gravity Jack's development of software for RevolutionAR's interactive augmented reality applications for learning and training. We do not know why the three agreements could not be synthesized into one contract.
Under the unique, always clever, sometimes humorous, and lawyer bashing design and developing resourcing contract, Gravity Jack would deliver design and development services to RevolutionAR's project, including branding, logo preparation, website planning and development, and prototype product design and development. Project development and use of resources would be "dictated by ongoing collaboration between RevolutionAR and Gravity Jack—on an agile development structure." CP at 174. Gravity Jack estimated monthly charges of $13,000 for one "man month" of work. CP at 175. The agreement further read:
CP at 173-76 (boldface omitted).
The design and developing resourcing agreement additionally provided:
We know that's a lot of info.
CP at 178 (emphasis added) (boldface omitted). In a corporate deposition of Gravity Jack, Luke Richey testified concerning the meaning of the contract term "portfolio:"
In addition, the design and developing resourcing contract included a "release of liability" clause:
CP at 179 (boldface omitted). A section on intellectual property read:
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