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Nexus Technologies, Inc. v. Unlimited Power Ltd.

United States District Court, W.D. North Carolina, Asheville Division

October 7, 2019

NEXUS TECHNOLOGIES, INC., DANIEL CONTI, and BENJAMIN BOMER, Plaintiffs,
v.
UNLIMITED POWER LTD. and CHRISTOPHER J. PETRELLA, Defendants. UNLIMITED POWER LTD. and CHRISTOPHER J. PETRELLA, Counterclaim-Plaintiffs,
v.
NEXUS TECHNOLOGIES, INC., DANIEL CONTI, BENJAMIN BOMER, and EDWARD PRATHER, Counterclaim-Defendants

          MEMORANDUM OF DECISION AND ORDER

          MARTIN REIDINGER UNITED STATES DISTRICT JUDGE.

         THIS MATTER is before the Court on the Counterclaim-Defendants' Motion to Dismiss for Failure to State a Claim [Doc. 17].

         I. BACKGROUND

         On January 9, 2019, Nexus Technologies, Inc. (“NTI”), Daniel Conti (“Conti”), and Benjamin Bomer (“Bomer”) filed this civil action against Unlimited Power Ltd. (“UPL”) and Christopher J. Petrella (“Petrella”) (collectively “Unlimited Power”) to correct inventorship of patents. Unlimited Power sought the dismissal of that action pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, arguing that the complaint failed to state claims upon which relief can be granted. [Doc. 11]. The Court denied Unlimited Power's motion. [Doc. 14].

         On July 14, 2019, Unlimited Power filed an amended answer, asserting counterclaims against NTI, Conti, Bomer, and Edward Prather (“Prather”) (collectively “Nexus”) for: (1) negligent misrepresentation, (2) breach of contract, (3) unjust enrichment/quantum meruit, (4) conversion, (5) constructive fraud, (6) unfair and deceptive trade practices, and (7) civil conspiracy. [Doc. 16]. Nexus now seeks the dismissal of those counterclaims pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, arguing that the counterclaims fail to state claims upon which relief can be granted. [Doc. 17]. Unlimited Power has filed an opposition to Nexus's motion [Doc. 18], to which Nexus has replied [Doc. 19].

         Having been fully briefed, this matter is ripe for disposition.

         II. STANDARD OF REVIEW

         To survive a motion to dismiss pursuant to Rule 12(b)(6), the counterclaims “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). To be “plausible on [their] face, ” the counterclaims must demonstrate more than “a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678.

         In considering the motion to dismiss, the Court accepts the allegations in Unlimited Power's counterclaims as true and construes the allegations in the light most favorable to Unlimited Power. Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc., 591 F.3d 250, 253 (4th Cir. 2009); Francis v. Giacomelli, 588 F.3d 186, 190-92 (4th Cir. 2009). The Court must accept the truthfulness of all factual allegations but is not required to assume the truth of “legal conclusions, elements of a cause of action, and bare assertions devoid of further factual enhancement . . . .” Consumeraffairs.com, 591 F.3d at 255; see also Giacomelli, 588 F.3d at 189. “The mere recital of elements of a cause of action, supported only by conclusory statements, is not sufficient to survive a motion made pursuant to Rule 12(b)(6).” Walters v. McMahen, 684 F.3d 435, 439 (4th Cir. 2012).

         Determining whether the counterclaims state a plausible claim for relief is “a context-specific task, ” Giacomelli, 588 F.3d at 193, which requires the Court to assess whether the factual allegations of the counterclaims are sufficient “to raise the right to relief above the speculative level, ” Twombly, 550 U.S. at 555. As the Fourth Circuit has explained:

To satisfy this standard, a [claimant] need not forecast evidence sufficient to prove the elements of the claim. However, the [counterclaims] must allege sufficient facts to establish those elements. Thus, while a [claimant] does not need to demonstrate in a complaint that the right to relief is probable, the complaint must advance the [claimant's] claim across the line from conceivable to plausible.

Walters, 684 F.3d at 439 (citations and internal quotation marks omitted).

         III. FACTUAL BACKGROUND

         Taking the well-pleaded factual allegations of Unlimited Power's amended answer as true, the following is a summary of the relevant facts.[1]

         Conti is the President and Chief Operating Officer of NTI and has power to direct and control its actions. [Doc. 16 at ¶ 1-2]. Prather is the Chief Executive Officer of NTI also has the power to direct and control its actions. [Id. at ¶ 3-4]. Bomer is an employee of NTI. [Id. at ¶ 5].

         Petrella invented a solar-powered, portable renewable energy system. [Id. at ¶ 6]. On behalf of UPL, Petrella contacted Nexus to see if they could create a manufacturing design of his invention that could be commercially produced. [Id. at ¶ 7-8].

         Around January 2013, Petrella met with Conti. [Id. at ¶ 9]. Petrella brought three prototypes of his invention to the meeting. [Id. at ¶ 10]. Petrella asked Nexus if they could produce a thinner version of one of the prototypes that could recharge more easily than the prototype. [Id. at ¶ 11]. Nexus agreed to develop such a system. [Id. at ¶ 12]. After the meeting, Petrella communicated technical information and specifications regarding his invention to Conti to begin the manufacturing process. [Id. at ¶ 13].

         Around January 2013, Nexus created a “PREPS proposal” outlining the potential costs of manufacturing the system Petrella requested. [Id.]. The proposal was derived from the technical designs and information that Petrella provided to Nexus. [Id. at ¶ 14]. Nexus marked the proposal as confidential and proprietary to NTI and incorrectly marked the proposal as having been created in 2012. [Id. at ¶ 16-17].

         Over the following months, Nexus asked Petrella for technical information regarding the system and Petrella responded by giving them instructions and guidance. [Id. at ¶ 20-21]. Petrella requested and received office space inside of NTI's building so he could serve as a resource and provide technical information concerning the manufacturing design during the process. [Id. at ¶ 39].

         During that time, Conti approached Petrella to negotiate the possibility of UPL purchasing NTI. [Id. at ¶ 25]. Soon after, UPL approached Morgan Stanley Expansion Capital about the possibility of financing UPL's acquisition of NTI. [Id. at ¶ 35]. During the continued negotiations and discussions regarding UPL purchasing NTI, the parties created business plans, brochures, and business cards. [Id. at ¶ 29]. One of the brochures listed NTI's address as the address for UPL, Petrella as the founder and Chief Executive Officer of UPL, Conti as the President and Chief Operating Officer of UPL, and Prather as the Chief Technical Officer of UPL. [Id. at ΒΆΒΆ 30-31]. The business plan likewise listed NTI's address as the address for UPL, Petrella as the founder and Chief Executive Officer of UPL, Conti as the President and Chief Operating Officer of ...


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