Source: http://nv.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20180330_0004048.DNV.htm/qx
Timestamp: 2019-04-21 00:09:34+00:00

Document:
For the reasons discussed herein, Metalast Defendants' Motion is granted in part and denied in part, Plaintiff's Motion is granted in part and denied in part, and Harris' Motion is granted in part and denied in part.
Plaintiff seeks summary judgment on its claims, consisting of: (1) copyright infringement against Metalast Defendants and Harris; (2) misappropriation of trade secrets against Metalast Defendants and Harris; (3) cancellation of the Metalast wordmark; (4) cancellation of the Logo Marks; (5) breach of fiduciary duty to the LLC against Semas; (6) breach of the LLC's operating agreement against Semas; (7) breach by Semas of his employment agreement with the LLC; (8) Counterclaimants' breach of contract counterclaim; and (9) Counterclaimants' specific performance counterclaim.
Harris seeks summary judgment on Chemeon's claims of: (1) misappropriation of trade secrets; (2) copyright infringement; (3) intentional interference with prospective economic advantage; and (4) unfair competition.
The moving party bears the burden of showing that there are no genuine issues of material fact. Zoslaw v. MCA Distrib. Corp., 693 F.2d 870, 883 (9th Cir. 1982). “In order to carry its burden of production, the moving party must either produce evidence negating an essential element of the nonmoving party's claim or defense or show that the nonmoving party does not have enough evidence of an essential element to carry its ultimate burden of persuasion at trial.” Nissan Fire & Marine Ins. Co., Ltd v. Fritz Cos., Inc., 210 F.3d 1099, 1102 (9th Cir. 2000) (internal citation omitted). Once the moving party satisfies Rule 56's requirements, the burden shifts to the party resisting the motion to “set forth specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 256. The nonmoving party “may not rely on denials in the pleadings but must produce specific evidence, through affidavits or admissible discovery material, to show that the dispute exists, ” Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 1991), and “must do more than simply show that there is some metaphysical doubt as to the material facts.” Orr v. Bank of Am., NT & SA, 285 F.3d 764, 783 (9th Cir. 2002) (internal citations omitted). “The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient.” Anderson, 477 U.S. at 252.
A party is permitted to seek partial summary judgment as to any claim or defense in a case. Fed.R.Civ.P. 56(a); see also First Nat'l Ins. Co. v. Fed. Deposit Ins. Corp., 977 F.Supp. 1051, 1055 (S.D. Cal. 1997) (a court may grant summary adjudication as to specific issues if it will narrow the issues for trial). Further, “when parties submit cross-motions for summary judgment, ‘[e]ach motion must be considered on its own merits.'” Fair Hous. Council of Riverside Cty., Inc. v. Riverside Two, 249 F.3d 1132, 1136 (9th Cir. 2001) (quoting William W. Schwarzer, et al., The Analysis and Decision of Summary Judgment Motions, 139 F.R.D. 441, 499 (Feb. 1992) (citations omitted)). “In fulfilling its duty to review each cross-motion separately, the court must review the evidence submitted in support of each cross-motion.” Id.
Metalast Defendants move for partial summary judgment on the basis that the release provision in the Settlement bars many of Chemeon's claims and that Chemeon has no evidence to establish the elements of certain of its other claims. The Court agrees with Metalast Defendants except as for one of Chemeon's claims (copyright infringement).
Chemeon also argues that Judge Zive's use of the phrase “related entities” does not extend to MI or Sierra Dorado because they did not participate in the settlement conference or have pending claims against them and further asserts that the phrase, “[a]t best, . . . may have encompassed [the Inc.] since that entity . . . was a named defendant in the bankruptcy adversary action initiated by Chemeon's owners.” (ECF No. 324 at 9.) The Court disagrees. As Semas points out, the only parties to the adversary action were Chemeon's predecessor MST, Semas, and the Inc. (ECF No. 342 at 7), yet the Meilings were indisputably a part of the release (ECF No. 314-14 at 13). While the Meilings participated in the settlement conference representing MST, Semas maintained controlling interests in MI and Sierra Dorado at the time of the conference, which was readily available information disclosed in the bankruptcy schedules. (See ECF No. 314-5 at 6.) Moreover, at the hearing, Chemeon admitted that these two entities were vehicles through which Semas advanced the Inc.'s business interests. Chemeon does not contend that “related entities” is ambiguous; rather it advocates for a particular reading that is far narrower than the plain language of the phrase permits. The Court therefore finds that “related entities” encompasses MI and Sierra Dorado.
In sum, the Court considers March 11, 2015, to be the effective date of the release provision in the Settlement. Thus, Chemeon's claims cannot be based on conduct that occurred on or before March 11, 2015 (“the Release Date”). The Court also finds that the release provision covers Semas and the Inc., as well as MI and Sierra Dorado.
Metalast Defendants argue that claims for breach of Semas' employment agreement, breach of the LLC's operating agreement, contractual and tortious breach of the implied covenant of good faith and fair dealing, breach of fiduciary duty, conversion, and conspiracy are barred under the Settlement's release provision. (ECF No. 313 at 10-12.) The Court agrees that all claims identified by Metalast Defendants except for the breach of employment agreement claim are covered under the Settlement's release provision.
Chemeon generally relies on alleged conduct that occurred before the dissolution of the LLC through the 2013 asset sale to support these claims. For instance, in the SAC, Plaintiff bases the breach of operating agreement, breach of implied covenant of good faith and fair dealing, and breach of fiduciary duty claims on Semas causing the LLC to pay for trademark registrations of Semas/the Inc., improperly paying excessive perquisite benefits, travel and entertainment expenses, and reimbursements using the LLC's funds. (See ECF No. 348 at 53-57). Chemeon's Motion similarly points to Semas spending LLC funds on trademark registrations that he owned as the basis for the claims related to breach of the operating agreement and breach of fiduciary duty. (ECF No. 315 at 31-34.) This alleged conduct occurred while the LLC still existed. Thus, the release provision of the Settlement bars these claims, and the Court grants summary judgment in favor of Metalast Defendants as to these claims.
Similarly, while Chemeon does not actually address Semas' contention that the conversion claim is based on acts arising before the Release Date, in the SAC Plaintiff states that the conversion claim is based on Defendants “spending [the LLC's] funds on property, such as trademark registrations, that were owned or to be owned by the Inc. or D. Semas, and improperly paying excessive perquisite benefits, large travel and entertainment expenses, and reimbursements to themselves and others with [the LLC's] funds.” (ECF No. 348 at ¶ 336.) Because these events clearly arose while the LLC still existed, and thus prior to the Release Date, and because Chemeon has not met its burden in opposing summary judgment on this claim, the Court grants summary judgment in favor of Semas on Plaintiff's conversion claim.
This argument, however, falls short of Plaintiff's burden in opposing summary judgment, as no evidence is specifically cited to in its opposition to support that these acts occurred after the Release Date. Plaintiff also fails to address what acts the other purported parties to the conspiracy-the Inc., MI, Sierra Dorado, Greg Semas and/or Wendi Semas-took in concert with David Semas and in furtherance of any unlawful objectives. Summary judgment is therefore granted in favor of Metalast Defendants on the civil conspiracy claim.
Metalast Defendants next move for summary judgment on Plaintiff's claims of misappropriation of trade secrets, copyright infringement, interference with prospective economic advantage, unfair competition, consumer fraud, and unjust enrichment against them, contending that Plaintiff fails to support these claims with any evidence. (ECF No. 313 at 13-15.) The Court finds that summary judgment should be granted in favor of Metalast Defendants as to Plaintiff's claims for intentional interference with prospective economic advantage, unfair competition, consumer fraud, and unjust enrichment.
To prevail on a claim of intentional interference with prospective economic advantage, Chemeon must prove: (1) a prospective contractual relationship between Chemeon and a third party; (2) Semas knew about the relationship; (3) Semas intended to harm Chemeon by preventing the relationship; (4) the absence of privilege or /// justification by Semas and his related entities; and (5) Chemeon suffered actual harm as a result of Semas' actions. See Wichinsky v. Mosa, 847 P.2d 727, 729-30 (Nev. 1993).
The Court agrees with Semas and finds that Chemeon has failed to meet its burden in opposing summary judgment on this claim. Even viewing the email and the statement in the press release in the light most favorable to Chemeon, Chemeon has failed to provide even a scintilla of evidence that Chemeon suffered any actual harm as a result of Semas' or his related entities' actions-it does not claim any prospective contract with a distributor or supplier was affected or that its prospective contracts with specific “prominent chemical companies and other industry leaders” were harmed.
The Court therefore grants summary judgment in favor of Metalast Defendants on Chemeon's intentional interference with prospective economic advantage claim.
Chemeon's opposition does not actually address the unfair competition claim with any particularity. Instead, Chemeon states that Semas “made contacts with Chemeon distributors and suppliers to find interest by those companies to acquire rights to the Metalast brand (including logo and product marks and goodwill he did not own), ” that “Semas re-asserted his intention to use Chemeon's logo and product marks” during litigation, and then incorporates by reference the sixteen pages of “undisputed facts” in its Motion. (ECF No. 324 at 15.) Chemeon does not cite to any specific evidence to support these assertions in its opposition. In fact, the only evidence cited to regarding this claim is Defendants' answer to the FAC, Defendants' statements in response to Chemeon's motion for preliminary injunction, and Semas' renewal of the Metalast wordmark registration. (ECF Nos. 32, 36, 115; ECF No. 315-3 at 100-108.) None of these things implicate Semas' or his related entities' false use or misrepresentation of items owned by Chemeon in commerce; Semas was not attempting to market or sell a good when making statements during the course of litigation or when renewing a registration with the United States Patent and Trademark Office (“USPTO”). Moreover, because Chemeon is not moving for summary judgment on this claim the Court will not sift through the facts section of its Motion in an attempt to discern what other evidence its unfair competition claim may be based on to support its opposition to summary judgment. See Independent Towers of Washington v. Washington, 350 F.3d 925, 929 (9th Cir. 2003) (“judges are not like pigs, hunting for truffles buried in briefs”) (internal alteration omitted).
The Court therefore grants summary judgment in favor of Metalast Defendantson this claim.
Metalast Defendants contend that because the Settlement conferred ownership of the Metalast trademarks on Semas, he is not passing off for sale any of Chemeon's products and thus cannot be liable under the Nevada Deceptive Trade Practices Act (“NDTPA”), NRS §.598.0903 et seq. (ECF No. 313 at 14.) Chemeon fails to identify in its opposition any specific instances after the Release Date where Metalast Defendants solicited consumers for a transaction of goods. See NRS § 598.0915(1) (stating that a person is engaged in a deceptive trade practice if during the course of his business he “knowingly passes off goods or services for sale or lease as those of another person”). Instead Chemeon merely states that “[b]efore and after [the Release Date], David Semas made several attempts to contact companies that might be interest in controlling the Metalast trademark” and that he “made contacts with Chemeon distributors and suppliers to find interest by those companies to acquire rights to the Metalast brand (including logo and product marks and goodwill he did not own).” (ECF No. 324 at 15.) Regardless of Chemeon's failure to meet its burden in opposing summary judgment on this claim, the Settlement made clear that David Semas owned the Metalast wordmark; as such, it is unclear how Semas perpetuated fraud by trying to sell something he owned (or at least believed that he legally owned), and Chemeon presents no indication of what logo or product marks it, in fact, owned that Semas tried to sell to a consumer. Similarly, because Chemeon is not moving for summary judgment on this claim the Court will not sift through the facts section of Chemeon's Motion in an attempt to discern what other evidence its consumer fraud claim may be based on to support its opposition to summary judgment.
The Court therefore grants summary judgment in favor of Metalast Defendants on this claim.

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