Chemeon Surface Tech., LLC v. Metalast Int'l, Inc.

312 F. Supp. 3d 944
CourtDistrict Court, D. Nevada
DecidedMarch 30, 2018
DocketCase No. 3:15–cv–00294–MMD–VPC; Related Case No. 3:15–cv–00295–MMD–VPC
StatusPublished
Cited by3 cases

This text of 312 F. Supp. 3d 944 (Chemeon Surface Tech., LLC v. Metalast Int'l, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Nevada primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chemeon Surface Tech., LLC v. Metalast Int'l, Inc., 312 F. Supp. 3d 944 (D. Nev. 2018).

Opinion

MIRANDA M. DU, UNITED STATES DISTRICT JUDGE

I. SUMMARY

The dispute stems from the breakup of a business and disagreement over the terms of a subsequent settlement agreement. Before the Court are three motions: (1) Defendants and Counterclaimants David M. Semas ("Semas"), Metalast International, Inc. ("the Inc."), Metalast Inc. ("MI"), and Sierra Dorado, Inc.'s ("Sierra Dorado") (collectively, "Metalast Defendants") Motion for Partial Summary Judgment ("Metalast Defendants' Motion") (ECF No. 313); (2) Plaintiff Chemeon Surface Technology, LLC's ("Chemeon") Motion for Summary Judgment ("Plaintiff's Motion") (ECF No. 315); and (3) Defendant Marc Harris' Motion for Summary Judgment ("Harris' Motion") (ECF No. 331). The Court has reviewed the parties' respective responses and replies. (ECF Nos. 324, 326, 330, 337, 338, 339, 342.) The Court has also reviewed the supplemental briefs filed by the parties in relation to the Second Amended Complaint ("SAC").2 (ECF Nos. 354, 356.) The Court held a hearing ("the Hearing") on the relevant motions on March 16, 2018.3 (ECF No. 368.)

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.

II. RELEVANT BACKGROUND

The Inc. managed Metalast International, LLC ("the LLC") when the LLC was placed into receivership in April 2013. (ECF No. 313 at ¶¶ 1, 5; ECF No. 315 at ¶¶ 6, 50.) Chemeon's predecessor, Metalast Surface Technology, LLC ("MST"), acquired the assets of the LLC in November 2013. (ECF No. 315 at ¶ 51.)

*949The next month, David Semas and his wife initiated a personal Chapter 11 bankruptcy proceeding. (ECF No. 313 at 3.) On July 14, 2014, MST initiated an adversary proceeding against Semas asserting ownership of the Metalast trademark. (Id. at 4.) Bankruptcy Judge Gregg W. Zive mediated a settlement ("the Settlement") of the dispute on January 27, 2015, in which he stated that "the Meilings have the right to use [the Metalast] mark without compensation and in the ordinary course of their business for a period not to exceed 90 days from the date of the entry of the order approving the settlement by Judge Beesley[.]" (ECF No. 314-14 at 14.) Similarly, Judge Zive stated that "[t]he Meilings agree to dismiss [the adversary proceeding] with prejudice and to waive any and all claims they have from the beginning of time and through the date of entering of the settlement agreement that they may have, known or unknown, anticipated or unanticipated, against [David Semas]," that the Semas's would "release the Meilings and [MST] from any claims they may have ... from the beginning of time until the settlement agreement is approved ," and that the release was one "between these parties or related entities." (Id. at 13 (emphasis added).) On March 11, 2015, the Bankruptcy Court (Judge Beesley) entered the order approving the Settlement. (Id. at 2.)

On February 24, 2015, after the settlement conference but before Judge Beesley's approval of the Settlement, Semas and Harris contacted a potential investor, sending various investment and marketing materials to him. (ECF No. 343 at 9; ECF no. 326-1 at ¶ 102.) On March 25, 2015, Semas also contacted a distributor of Chemeon. (ECF No. 314-16.) Then, on June 21, 2015, Semas applied for renewal of the trademark registration of the Metalast wordmark. (ECF No. 315-3 at 103.)

Metalast Defendants seek partial summary judgment as to two issues: (1) whether certain claims are barred based on the prior settlement and release (specifically, trademark infringement,4 breach of Semas' fiduciary duty to the LLC, breach by Semas of the LLC's operating agreement, contractual and tortious breach of the implied covenant of good faith and fair dealing based on breach of the LLC's operating agreement, conversion, conspiracy, and breach of Semas' employment contract with the LLC); and (2) whether Chemeon has any evidence that supports other claims (specifically misappropriation of trade secrets, copyright infringement, intentional interference with prospective economic advantage, unfair competition, consumer fraud, and unjust enrichment). (ECF No. 313 at 1-2.)

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.

*950III. LEGAL STANDARD

"The purpose of summary judgment is to avoid unnecessary trials when there is no dispute as to the facts before the court." Nw. Motorcycle Ass'n v. U.S. Dep't of Agric ., 18 F.3d 1468, 1471 (9th Cir. 1994) (internal citation omitted). Summary judgment is appropriate when the pleadings, the discovery and disclosure materials on file, and any affidavits show "there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Celotex Corp. v. Catrett , 477 U.S. 317, 330, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). An issue is "genuine" if there is a sufficient evidentiary basis on which a reasonable fact-finder could find for the nonmoving party and a dispute is "material" if it could affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248-49, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Where reasonable minds could differ on the material facts at issue, however, summary judgment is not appropriate. See

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Bluebook (online)
312 F. Supp. 3d 944, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chemeon-surface-tech-llc-v-metalast-intl-inc-nvd-2018.