Steves & Sons, Inc. v. Jeld-Wen, Inc.

271 F. Supp. 3d 835
District Court, E.D. Virginia·Decided September 13, 2017·No. Civil Action No. 3:16cv545·Published·Cited by 11 cases

Opinion

MEMORANDUM OPINION

Robert E. Payne, Senior United States District Judge

This matter is before the Court on PLAINTIFF STEVES AND SONS, INC.’S MOTION TO DISMISS JELD-WEN INC.’S SECOND, SIXTH, AND SEVENTH COUNTERCLAIMS (ECF No. 267). For the reasons set forth below, the motion will be granted.

BACKGROUND

On May 22, 2017, after the Court granted DEFENDANT JELD-WEN, INC.’S MOTION FOR LEAVE TO AMEND ANSWER TO ADD COUNTERCLAIMS AGAINST STEVES & SONS, INC. (ECF No. 101), JELD-WEN filed an Amended Answer and Counterclaims.1 JELD-WEN asserts the' ' following counterclaims': FIRST COUNTERCLAIM FOR RELIEF, Violation of the Defend Trade Secrets- Act, 18' U.S.C. § 1836; SECOND COUNTERCLAIM FOR RELIEF, Conspiracy to Violate Defend Trade Secrets Act, 18 U.S.C. § 1832(a)(5); THIRD COUNTERCLAIM FOR RELIEF, Violation of the-Texas Uniform Trade Secret Act, Texas Civil Practice & Remedies Code Annotated ■§§ 134A.001-134A.008; FOURTH COUNTERCLAIM FOR RELIEF, Tortious Interference with Contract Under Texas Common Law; FIFTH COUNTERCLAIM FOR RELIEF, Tor-tious Interference with Contract Under Texas Common Law; SIXTH COUNTERCLAIM FOR RELIEF, Breach of the Implied Covenant of Good Faith and Fair Dealing Under Delaware Law; and SEVENTH COUNTERCLAIM FOR . RELIEF, Breach of Contract.

On June 19, 2017, Steves and Sons Inc. (“S.teves”) moved, under Fed. R. Civ. P. 12(b)(6) to dismiss the SECOND, SIXTH, and SEVENTH COUNTERCLAIMS.2 The factual allegations pertaining to the three counterclaims challenged in the motion to dismiss are as follows and must be taken as true for purposes of this motion.

According to JELD-WEN, “John Pierce (‘Pierce’) is a former Senior Executive Vice President of defendant/counter-claimant JELD-WEN. Pierce worked for JELD-WEN- from June 4, 1979 until June 29, 2012. In bis role-as Senior Executive Vice President, Pierce oversaw JELD-WEN’s entire molded door skins operations.” JELD-WEN’S COUNTERCLAIMS (“CC”) ¶ 4 (ECF No. 252).

On January 1, 1988, Pierce and JELD-WEN entered into a Management Employment Contract which provided that Pierce would be exposed to “matters of confidence relating to manufacturing processes, costs, customer information and pricing, JELD-WEN policies and procedures and financial data,” which “JELD-WEN regards [as] confidential and in many eases as trade secrets.” Id. ¶ 5. “On January 27, 2006, Pierce and JELD-WEN entered into a second' Management' Employment Contract.” Id. ¶6. “During Pierce’s employment at JELD-WEN, Steves purchased door skins from JELD-WEN. At various times during his employment, Pierce worked directly with Steves CEO Edward Steves- and with other Steves employees, regarding these purchases.” Id. ¶8. “Pierce, retired from JELD-WEN.. on ;June 29, 2012,” Id. ¶ 9.

“On or before February 26, 2015, Steves contacted Pierce, with knowledge of Pierce’s former position at JELD-WEN, and entered into an agreement with Pierce pursuant to which Pierce would by surreptitious means ácquire JELD-WEN trade secrets and other confidential information relating to JELD-WEN’s door and door skin businesses and deliver that information to Steves. Steves and Pierce signed a Mutual Confidentiality and Non-Disclosure Agreement on March 15, 2015.” Id. ¶ 10. “Steves agreed to pay Pierce at the rate of $8.00 per day, plus travel expenses, to travel to JELD-WEN facilities and to communicate with JELD-WEN employees. for the purpose of. eliciting confidential information about JELD-WEN operations and passing that information to Steves. Pursuant to that agreement, Pierce traveled to several JELD-WEN door skin plants and obtained trade secret and other confidential information from JELD-WEN employees.” Id. ¶ 12. “Pierce acknowledged that he sold to Steves confidential financial information, and confidential information about, primer costs, JEJ^D-WEN’s future plans for a primer facility in Towanda, and manufacturing process and plans for a new door adhesive, that Pierce learned through those trips.” Id. ¶ 13. “The Steves brothers and Pierce discussed that Steves was buying confidential JELD-WEN information from Pierce” and “[o]n March 12, 2015, Pierce suggested to Edward and Sam Steves II that they keep Pierce’s upcoming visit to Steves headquarters in San Antonio, Texas confidential.” Id. ¶ 19.

Furthermore, says JELD-WEN, “John Ambruz is a former Executive Vice President of Corporate Development for defen-danVcounter-claimant JELD-WEN. Am-bruz worked for JELD-WEN from April 16, 2012, until March 12, 2014.” Id. ¶24. JELD-WEN also had an employment contract with Ambruz, beginning April 18, 2012, which indicated that Ambruz would be exposed to confidential matters. Id. ¶ 25. “After the termination of his employment with JELD-WEN, on April 21, 2014, Ambruz signed a declaration certifying that he had returned and delivered to JELD-WEN all materials embodying any confidential information,” and “he acknowledged his ongoing duty to maintain as confidential any confidential information he acquired during his employment.” Id. ■¶¶ 27-28.

“Following his departure from JELD-WEN, Ambruz started a consulting firm called Global Strategic Partners (‘GSP’).” Id. ¶ 29. “Steves retained Ambruz, through GSP, as a consultant on or around July 8, 2015. Steves admits that it retained Am-bruz to help it evaluate the feasibility, logistics and economics of financing and developing its own nfiolded door skin plant.” Id. ¶ 30. “On information and belief, Steves provided to Ambruz confidential JELD-WEN information that JELD-WEN had provided to Steves pursuant to the confidentiality provisions of the parties’ [Long Term] Supply Agreement.” Id. ¶ 31.

JELD-WEN alleges that, “[o]n information and belief, Steves has planned to use, and will continue to use, JELD-WEN’s trade secrets and confidential information to assess whether it is feasible for the company to develop á door skin manufacturing operation in direct competition with JELD-WEN. The information stolen from JELD-WEN provides Steves a roadmap to develop a door skin manufacturing operation.” Id. ¶ 39.

These facts form the predicate .for JELD-WEN’s SECOND counterclaim and also are integral to .JELD-WEN’s SIXTH and SEVENTH counterclaims.3 The SIXTH and SEVENTH counterclaims purport to be based on contract provisions that will be discussed fully in considering whether those two counterclaims are subject to dismissal.

ANALYSIS AND APPLICATION OF LAW

A motion to dismiss under Fed. R. Civ. P. 12(b)(6) challenges the legal sufficiency of a complaint. Jordan v. Alternative Resources Corp., 458 F.3d 332, 338 (4th Cir. 2006). When deciding a motion to dismiss under Rule 12(b)(6), a court must “draw all reasonable inferences in favor of the plaintiff.” Nemet Chevrolet, Ltd. v. Consumer-affairs.com, Inc., 591 F.3d 250, 253 (4th Cir. 2009).

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Steves & Sons, Inc. v. Jeld-Wen, Inc., 271 F. Supp. 3d 835 (E.D. Va. 2017).

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