Webco Indus., Inc. v. Diamond
| Decision Date | 30 November 2012 |
| Docket Number | Case No. 11-CV-774-JHP-FHM |
| Parties | WEBCO INDUSTRIES, INC. Plaintiff, v. RICHARDS KELLY DIAMOND, and ACCURATE NDT SERVICES, INC., Defendants. |
| Court | U.S. District Court — Northern District of Oklahoma |
Before the Court are Plaintiff Webco, Inc.'s ("Webco") Opposed Motion to Voluntarily Dismiss Counts VII and VIII [Doc. No. 44]; Webco's Opposed Motion to Voluntarily Dismiss Counts II and III [Doc. No. 86]; Webco's Motion for Partial Summary Judgment [Doc. No. 57]; and Defendants' Motion for Summary Judgment [Doc. No. 56]; Defendants' First Motion in Limine [Doc. No. 68]; Defendants' Second Motion in Limine [Doc. No. 69]; Defendants' Third Motion in Limine [Doc. No. 70]; Defendants' Fourth Motion in Limine [Doc. No. 71]; Webco's Motion in Limine [Doc. No. 74]; Defendants' Motion to Compel [Doc. No. 112]; Defendants' Objection to Deposition Designations of the Deposition of David Culbertson [Doc. No. 119]; Defendants' Objection to Deposition Designations of the Deposition of George Holliday [Doc. No. 120]; Defendants' Objection to Deposition Designations of the Deposition of Richards Kelly Diamond [Doc. No. 121]; Defendants' Objection to Deposition Designations of the Deposition of Robert Bonin [Doc. No. 122]; Defendants' Objection to Deposition Designations of the Deposition of Thomas Pitts [Doc. No. 123]; and Defendants' Objection to Deposition Designations of the Deposition of Rick Taylor [Doc. No. 124].
After consideration of the briefs and for the reasons detailed below, Defendants' Motion for Summary Judgment [Doc. No. 56] is GRANTED and Webco's Motion for Partial Summary Judgment [Doc. No. 57] is DENIED. In addition, Webco's Opposed Motion to Voluntarily Dismiss Counts VII and VIII [Doc. No. 44] is GRANTED without prejudice, and Webco's Opposed Motion to Voluntarily Dismiss Counts II and III [Doc. No. 86] is conditionally GRANTED with prejudice.
All remaining motions will be DENIED as MOOT if Webco does not withdraw its Opposed Motion to Voluntarily Dismiss Counts II and III [Doc. No. 86].
A. Undisputed Factual Background
Plaintiff Richards Kelly Diamond ("Diamond") is an expert in non-destructive testing ("NDT") of stainless steel tubing. Diamond began developing his expertise through training he received as a member of the United States Navy. Both during and after his tenure with the United States Navy, Diamond received a number of certifications concerning or related to NDT, and has completed around 2800 hours of training on to further his expertise. Since leaving the United States Navy, Diamond has used his NTD skills in various capacities to assist in NDT. In 2002, Diamond went to work for RathGibson, Inc., a specialty tube manufacturer, where he assisted in developing processes for the manufacture and NDT of stainless steel tubing. In 2009, Diamond left RathGibson, Inc. to start Accurate NDT Services, Inc. ("Accurate"), a corporation organized by Diamond in 2009 through which he provides NTD consulting services.
In 2009, Webco, a specialty tube manufacturer headquartered in Sand Springs, Oklahoma, sought Diamond's consulting services in order to develop a new line of stainless steel tubing made from a super duplex material. Webco was referred to Diamond by one of itscustomers based on his experience in NDT, who believed Diamonds expertise would be necessary to develop Webco's new line of stainless steel tubing. On October 10, 2009, Webco and Diamond, who was acting on behalf of Accurate, entered into the "Webco Industries and Accurate NDT Services Agreement" ("Services Agreement"). The Services Agreement was for a one-year term commencing on October 15, 2009, with the option to extend for an additional year. Pursuant to the Services Agreement, Webco paid Accurate a $25,000 fee at the time the Services Agreement commenced, and an agreed upon hourly rate for services performed pursuant to the contract thereafter.
The Services Agreement included the following relevant provisions:
[Doc. No. 57, Ex. 1 at 2]. The Services Agreement also included a "Nondisclosure & Non-Use Agreement" ("NDNU"). [Id. at 4]. The NDNU provided that Accurate would not disclose or use confidential information for any purpose not necessary to the performance of the Services Agreement. [Id. at 5]. The NDNU defined confidential information as follows:
'Confidential Information' means...any oral or written information,...equipment and manufacturing processes, technical data or know-how, patentable and unpatentable, registered and unregistered, including, but not limited to, trademarks, tradenames, licenses, research, product plans, products, services, customer lists,...developments, inventions, processes, designs, drawings,...or other trade secrets of the Disclosing Party, or similar items relating to the Disclosing Party's business activities.... 'Confidential Information' does not include information, technical data or know-how which (i) is in the possession of the Receiving Party at the time of disclosure as shown by the files and records of the Receiving Party immediately prior to the time of disclosure; or (ii) prior to or afterthe time of disclosure was or becomes party of the public knowledge or literature (other than as a result of any inaction or action of the Receiving Party in violation of this Agreement)....
[Id.] Accurate's obligations under the NDNU survived the termination of the Services Agreement. [Id. at 5]. The NDNU also provided that Webco "shall be entitled to equitable relief, including injunction, in the event of [an actual or threatened breach by Accurate]...." [Id.] Further, Section Eight of the services agreement required Accurate to "comply with Webco's policies concerning [its] conduct while at the Webco facilities or the facilities of its customers." [Id. at 3]. Webco's "Non-solicitation and Distribution of Literature Policy" ("Non-Solicitation Policy") provided the following:
Solicitation, distribution or literature or other non-work related items of any kind by employees during working time of the employee doing the soliciting or distribution, or distribution of literature of any kind or solicitation during the working time of the employee being solicited or receiving the literature is prohibited.
After the Services Agreement was executed, Accurate began assisting Webco in developing its new line of stainless steel tubing. Webco and Accurate renewed the Services Agreement for an additional year concluding on October 15, 2011. From the start of the Services agreement until May of 2011, Accurate presented Webco with periodic invoices, and Webco tendered payment to Accurate for the services it received. After May of 2011, however, Webco received and approved Accurate's invoices, but never tendered payment to Accurate. Accurate continued to provide services to Webco upon request until August of 2011. On September 11, 2011, Accurate notified Webco that invoices totally $24,831.20 were overdue and demanded payment of the outstanding balance to no avail.
While the Services Agreement was still in effect, Diamond and a business acquaintance, Ralph Gordon, made plans to start a tube manufacturing company and incorporated CoastalSpecialty Tubes, Inc. ("Coastal") in Florida. Diamond was named as Coastal's President, and participated in developing Coastal's business plan, including evaluating potential sites for a manufacturing facility and e-mailing a potential customer, which was also one of Webco's customers, regarding Coastal's plans. Webco learned of Coastal's existence sometime in July of 2011, and, subsequently, began an investigation into the matter. As a part of this investigation, Webco interviewed Kranthi Pallegar. Pallegar told Webco's management that he had discussed Coastal with Diamond and spoke with other employees about Coastal. Another Webco employee, Robert Epperly, the director of maintenance and engineering, told Pallegar that he wanted to speak with Diamond about Webco. After Pallegar relayed Epperly's request to Diamond, Diamond contacted Epperly at his residence and discussed the details of Coastal at length. Epperly provided Webco with notes he took during this conversation. Webco subsequently fired Pallegar and two other employees because Webco believed these employees had a conflict of interest arising from their relationships with Diamond and Coastal.
On August 29, 2011, Webco commenced the instant action against Defendants. Subsequently, in October of 2011, Coastal was dissolved without ever having the ability to manufacture any products.
On September 28, 2012, Webco filed an Opposed Motion for Order of Voluntary Dismissal for Counts VII and VIII. [Doc. No. 44]. On November 6, 2012, Webco filed a second Opposed Motion for Order of Voluntary Dismissal for Counts II and III. [Doc. No. 86]. In both motions, Webco explains that it "admits no invalidity or infirmity as to the causes of actionalleged and seeks only to streamline the litigation and reduce costs and expenses as the remainder of the case moves forward." [Id.]
A plaintiff who wishes to voluntarily dismiss its action but who cannot do so via notice or stipulation under Rule 41(a)(1) must seek an order of dismissal from the court. FED. R. CIV. P. 41(a)(2). Rule 41(a)(2) authorizes the voluntary dismissal of a cause of action, but only "upon order of ...
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