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ORDER 

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UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT SEATTLE

CALENCE, LLC, )

) CASE NO. C06-0262RSM

Plaintiff, )

) ORDER GRANTING IN PART 

v. ) CORPORATE DEFENDANTS’

) MOTION FOR SUMMARY

DIMENSION DATA HOLDINGS, et al., ) JUDGMENT AND DENYING 

) PLAINTIFF’S MOTION FOR

Defendants. ) SUMMARY JUDGMENT

_________________________________________)

I. INTRODUCTION

This matter comes before the Court on corporate defendants’ Motion for Summary

Judgment and plaintiff’s related Motion for Partial Summary Judgment. (Dkts. #193 and #214). 

Corporate defendants argue that there is no evidence supporting a tortious interference claim

against them; there is no evidence that any employee actually possessed any trade secrets, and

even if they did, there is no evidence that any trade secrets were used by any of the employees;

plaintiff’s unfair competition act must fail because the legitimate hiring of employees does not

constitute an unfair act, and the act of hiring several of Calence’s employees was not an act

occurring in the public interest; plaintiff’s civil conspiracy must fail because there is no evidence

of any unlawful or dishonest undertaking; plaintiff’s claims for conversion or replevin must be

dismissed because Calence cannot establish ownership of the disputed materials; and there is no

evidence supporting plaintiff’s unjust enrichment claim, nor is there any basis for liability under

the Computer Fraud Act, as there is no evidence that corporate defendants directed defendant

Dunlap to copy any information from his Calence computer.

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ORDER 

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Plaintiff has moved for summary judgment against corporate defendants only with respect

to the liability components of its claims for conspiracy/aiding and abetting breaches of fiduciary

duty and tortious interference claims. Plaintiff first argues that corporate defendants are liable

as a matter of law for aiding and abetting defendant Falk’s breaches of his fiduciary duty. 

Plaintiff next argues that corporate defendants are liable as a matter of law for tortious

interference with business relations by causing defendant Falk to breach his duty of loyalty, and

by using improper means to solicit Calence employees.

For the reasons set forth below, the Court DENIES plaintiff’s motion for summary

judgment and GRANTS IN PART defendants’ motion for summary judgment.

II. DISCUSSION

A. Background

The Court has set forth the background of this action in its previous Orders, and will not

repeat it here. Facts specifically relevant to the instant defendants will be discussed in context

below. This Order addresses arguments pertaining only to corporate defendants, Mark Zerbe

and Dimension Data. 

B. Motions to Strike

To the extent that plaintiff raises the same motions to strike with respect to corporate

defendants as it raised with respect to the individually named defendants, the decisions made on

those motions to strike, as set forth in the Court’s Order on defendant Dunlap’s motion for

summary judgment, apply with equal force to the instant motion, and they will not be repeated

here. (See Dkt. #319). Further, the Court DENIES plaintiff’s motion to strike defendants’ brief

on the basis that it was written in 11-point font versus 12-point font. The Court finds that

motion without merit.

The Court also declines to consider any declarations or other evidence submitted after the

close of briefing on the instant motions for summary judgment, including Dkts. #275 - 281. 

None of the parties sought permission from this Court to file briefing related to the motions for

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ORDER 

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summary judgment outside of the Court’s normal briefing schedule as set forth in the Local

Rules.

Finally, the Court DENIES defendants’ motions to strike as moot. The Court makes the

following determinations on an analysis of the evidence presented other than that disputed by

defendants in their motions to strike. 

C. Standard of Review for Summary Judgment

Summary judgment is proper where “the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving party is entitled to judgment as a

matter of law.” Fed. R. Civ. P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247

(1986). The Court must draw all reasonable inferences in favor of the non-moving party. See

F.D.I.C. v. O’Melveny & Meyers, 969 F.2d 744, 747 (9th Cir. 1992), rev’d on other grounds,

512 U.S. 79 (1994). The moving party has the burden of demonstrating the absence of a

genuine issue of material fact for trial. See Anderson, 477 U.S. at 257. Mere disagreement, or

the bald assertion that a genuine issue of material fact exists, no longer precludes the use of

summary judgment. See California Architectural Bldg. Prods., Inc., v. Franciscan Ceramics,

Inc., 818 F.2d 1466, 1468 (9th Cir. 1987). 

Genuine factual issues are those for which the evidence is such that “a reasonable jury

could return a verdict for the non-moving party.” Anderson, 477 U.S. at 248. Material facts

are those which might affect the outcome of the suit under governing law. See id. In ruling on

summary judgment, a court does not weigh evidence to determine the truth of the matter, but

“only determine[s] whether there is a genuine issue for trial.” Crane v. Conoco, Inc., 41 F.3d

547, 549 (9th Cir. 1994) (citing O’Melveny & Meyers, 969 F.2d at 747). Furthermore,

conclusory or speculative testimony is insufficient to raise a genuine issue of fact to defeat

summary judgment. Anheuser-Busch, Inc. v. Natural Beverage Distributors, 60 F. 3d 337, 345

(9th Cir. 1995). Similarly, hearsay evidence may not be considered in deciding whether material

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ORDER 

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facts are at issue in summary judgment motions. Blair Foods, Inc. v. Ranchers Cotton Oil, 610

F. 2d 665, 667 (9th Cir. 1980).

D. Tortious Interference

In its Amended Complaint, plaintiff first alleges that corporate defendants: (1) knowingly

and intentionally acted to interfere with and misappropriate Calence’s contractual relationships

with the customers of its Seattle office; (2) knowingly and intentionally acted to induce the

breach of the individually-named defendants’ employment contracts with Calence;

(3) knowingly and intentionally acted to induce the breaches of Calence’s employment contracts

with each of the Terminating Employees; (4) knowingly and intentionally acted to induce

breaches of fiduciary duty by the individually-named defendants; and (5) knowingly and

intentionally acted to induce breaches of fiduciary duty and other contractual duties by the

Terminating Employees. (Dkt. #127 at 19-20).

In Pleas v. Seattle, 112 Wn.2d 794 (1989), the Washington Supreme Court adopted the

Oregon Supreme Court’s approach to tortious interference claims, holding that:

a cause of action for tortious interference arises from either the defendant’s

pursuit of an improper objective of harming the plaintiff or the use of

wrongful means that in fact cause injury to plaintiff’s contractual or business

relationships. A claim for tortious interference is established when

interference resulting in injury to another is wrongful by some measure

beyond the fact of the interference itself. Defendant’s liability may arise from

improper motives or from the use of improper means. . . . No question of

privilege arises unless the interference would be wrongful but for the privilege

. . . Even a recognized privilege [however] may be overcome when the

means used by defendant are not justified by the reason for recognizing the

privilege.

Interference can be “wrongful” by reason of a statute or other regulation, or

a recognized rule of common law, or an established standard of trade or

profession. Therefore, plaintiff must show not only that the defendant

intentionally interfered with his business relationship, but also that the

defendant had a “duty of non-interference; i.e., that he interfered for an

improper purpose . . . or . . . used improper means . . .”.

Pleas, 112 Wn.2d at 803-04 (citations omitted).

As an initial matter, the Court agrees with defendants that plaintiff has failed to allege

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ORDER 

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tortious interference with a business expectancy. The reasoning for that determination is fully

explained in the Court’s previous Orders on summary judgment, and incorporated by reference

herein. Further, the Court agrees with defendants that plaintiff’s claim must be dismissed to the

extent that it alleges inducement of breaching fiduciary duties. This Court finds no Washington

authority recognizing such a claim. Finally, the Court also finds no basis for the allegation that

corporate defendants have tortiously interfered with customer contracts. Plaintiff has produced

no evidence that it had any ongoing customer contracts with which corporate defendants

interfered. Accordingly, the Court focuses only on allegations that defendants interfered with

plaintiff’s employee contractual relationships.

In that regard, the Court finds that there are genuine issues of material fact as to whether

defendants interfered with the contractual relationships between plaintiff and the individuallynamed co-defendants and between plaintiff and the other former employees. Plaintiff has

produced evidence that defendant Mark Zerbe had conversations with co-defendants Jon Abb

and Thomas Falk asking them to recruit fellow employees, the timing of that recruitment, and

appropriate compensation for other employees. Plaintiff has also provided evidence that

defendants convinced Thomas Falk to assist with planning the targeted recruiting event, and

with helping to organize an en masse employee departure. While defendants argue with the

characterization of that evidence, it is up to the trier of fact to assess the credibility of the

witnesses and determine what actually happened in each alleged instance. The Court recognizes

that corporate defendants have also introduced numerous pieces of evidence raising issues of

material fact as to the nature and purpose of the meetings and conversations between defendants

Abb, Falk and Zerbe. Accordingly, the Court finds that summary judgment in favor of either

party on this claim is not appropriate.

E. Misappropriation of Trade Secrets

Plaintiff next alleges that corporate defendants have misappropriated, and continue to

intentionally misappropriate, its trade secrets, in violation of the Washington Uniform Trade

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ORDER 

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Secrets Act (“UTSA”), RCW 19.108, et seq. (Dkt. #127 at 20).

As an initial matter, the Court notes that there is a question of fact as to whether any trade

secrets were actually retained by any of the individual defendants, or other employees, in this

action, or whether any trade secrets were divulged to corporate defendants. As plaintiff itself

acknowledges, whether a particular piece of information is a trade secret, is a question of fact

for the jury. Ed Nowogroski Ins., Inc. v. Rucker, 137 Wn.2d 427, 436 (1999). That reason

alone is enough to deny summary judgment. Indeed, should a jury determine that no trade

secrets were retained or divulged, the claim against defendants necessarily fails.

However, even presuming that defendant did possess plaintiff’s trade secrets, this Court

has already determined that there is no evidence of misappropriation with respect to Mr. Falk’s

notebooks or Mr. Dunlap’s computer disks. Under the UTSA, a misappropriation is defined as

the:

(a) Acquisition of a trade secret of another by a person who knows or has

reason to know that the trade secret was acquired by improper means; or

(b) Disclosure or use of a trade secret of another without express or implied

consent by a person who:

(i) Used improper means to acquire knowledge of the trade secret; or

(ii) At the time of disclosure or use, knew or had reason to know that his

or her knowledge of the trade secret was (A) derived from or through a

person who had utilized improper means to acquire it, (B) acquired under

circumstances giving rise to a duty to maintain its secrecy or limit its use, or

(C) derived from or through a person who owed a duty to the person seeking

relief to maintain its secrecy or limit its use; or

(iii) Before a material change of his or her position, knew or had reason

to know that it was a trade secret and that knowledge of it had been acquired

by accident or mistake.

RCW 19.108.010(2); McLeod v. Northwest Alloys, Inc., 90 Wn. App. 30, 35-36 (1998).

There is no evidence that corporate defendants disclosed any of the information in the

notebooks or on the disks to third parties. There is no evidence that copies of the notebooks or

disks were ever made, and there is no evidence that corporate defendants misused the

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ORDER 

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information contained therein. Accordingly, the Court believes that summary judgment in favor

of corporate defendants on this claim is appropriate in part.

With respect to the information allegedly divulged to Mark Zerbe, assuming the trier of

fact determines that trade secrets were divulged, and with respect to the information contained

on Mr. Abb’s Blackberry device, there are genuine issues of material fact as to whether such

information was misappropriated as defined under the statute. Accordingly, summary judgment

in favor of either party is not appropriate on those portions of the claim.

F. Unfair Competition

By essentially reiterating its arguments with respect to tortious interference and

misappropriation of trade secrets, plaintiff next alleges that defendants’ actions constitute unfair

trade practices under RCW 19.86.020 and .030 and under the common law. (Dkt. #127 at 21). 

For the reasons set forth above with respect to the tortious interference and UTSA claims, the

Court finds that summary judgment on the unfair competition claim is also not appropriate.

G. Civil Conspiracy

Plaintiff next alleges that corporate defendants “conspired among themselves and with

others to, among other things, interfere with Calence’s relationships with its customers, interfere

with Calence’s contractual relationships with its employees, induce breaches of fiduciary duty by

Calence employees, and misappropriate Calence’s trade secrets.” (Dkt. #127 at 21).

To establish a civil conspiracy, [plaintiff] must prove by clear, cogent, and

convincing evidence that (1) two or more people combined to accomplish an

unlawful purpose, or combined to accomplish a lawful purpose by unlawful

means; and (2) the conspirators entered into an agreement to accomplish the

conspiracy. “Mere suspicion or commonality of interests is insufficient to

prove a conspiracy.” “[When] the facts and circumstances relied upon to

establish a conspiracy are as consistent with a lawful or honest purpose as

with an unlawful undertaking, they are insufficient.”

All Star Gas, Inc. v. Bechard, 100 Wn. App. 732, 740 (2000) (citations omitted).

The Court has already found that plaintiff raised genuine issues of material fact with

respect to its civil conspiracy claim against defendant Falk. That determination was made on a

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ORDER 

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review of certain evidence also pertaining to Mark Zerbe. Accordingly, for the same reasons,

the Court finds that summary judgment in favor of corporate defendants on this claim is not

appropriate.

H. Conversion and Replevin

Plaintiff next alleges that corporate defendants have “appropriated Calence’s confidential

information without Calence’s knowledge and consent, and without legal justification” and that

defendant is “using and will use this information to harm Calence and benefit Defendants.” 

(Dkt. #127 at 23). Plaintiff apparently bases its claim against corporate defendants on the

materials retained by the individually-named defendants. This Court has already dismissed all of

the conversion and replevin claims alleged against the other defendants. Accordingly, the Court

finds no basis for the claim against the corporate defendants, and finds that summary judgment

in favor of corporate defendants is also appropriate.

I. Unjust Enrichment

Plaintiff next alleges that defendants’ “actions have unjustly enriched Dimension, Falk,

Abb and Dunlap at the expense of Calence.” (Dkt. #127 at 23). “Unjust enrichment occurs

when one retains money or benefits which in justice and equity belong to another. The doctrine

also applies to retention of property or benefits.” Bailie Communications v. Trend Business

Sys., 61 Wn. App. 151, 160 (1991). This Court has already dismissed all of the unjust

enrichment claims alleged against the other defendants. Accordingly, the Court finds no basis

for the claim against the corporate defendants, and finds that summary judgment in their favor is

appropriate.

J. Computer Fraud and Abuse Act

Finally, plaintiff alleges that corporate defendants violated the Computer Fraud and Abuse

Act (“CFAA”). (Dkt. #127 at 23-24). There is no allegation that corporate defendants

improperly accessed computerized information themselves. Rather, plaintiff argues that

corporate defendants are liable for defendants Dunlap and Abb’s actions. Even assuming that

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ORDER 

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Mr. Dunlap or Mr. Abb violated the CFAA, plaintiff points to no evidence in the record that

corporate defendants directed either of those individuals to take any of the alleged improper

actions. Accordingly, the Court finds no basis for the CFAA claim, and agrees that summary

judgment in favor of corporate defendants on this claim is appropriate.

III. CONCLUSION

Having considered plaintiff’s and defendants’ motions for summary judgment, the briefs

and evidence in support and opposition of those motions, and the remainder of the record, the

Court hereby ORDERS:

(1) Corporate Defendant’s Motion for Summary Judgment (Dkt. #193) is GRANTED IN

PART. For the reasons set forth above, the Court hereby DISMISSES plaintiff’s claims for

conversion and replevin, unjust enrichment, and violations of the Computer Fraud and Abuse

Act against corporate defendants. The Court DISMISSES IN PART the tortious interference

and misappropriation of trade secrets claims against corporate defendants. All other claims

against corporate defendants remain pending for resolution at trial.

(2) Plaintiff’s Motion for Partial Summary Judgment with respect to corporate defendants

(Dkt. #214) is DENIED for the reasons discussed above.

(3) The Clerk SHALL direct a copy of this Order to all counsel of record.

DATED this 24th day of May, 2007.

A

RICARDO S. MARTINEZ

UNITED STATES DISTRICT JUDGE 

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