Tankmax Inc v. Duran

• Court: District Court, E.D. Washington
• Decided: July 23, 2024
• Docket: 2:22-cv-00101
• Status: Unknown

Opinion

1 FILED IN THE 2 U.S. DISTRICT COURT EASTERN DISTRICT OF WASHINGTON 3 Jul 23, 2024 4 SEAN F. MCAVOY, CLERK 5 6 UNITED STATES DISTRICT COURT 7 EASTERN DISTRICT OF WASHINGTON 8 9 TANKMAX, INC., a Washington 10 Corporation, No. 2:22-CV-00101-SAB 11 Plaintiff, 12 v. 13 WAYNE DURAN, an individual and FINDINGS OF FACT AND 14 AMERICAN GAS SERVICES, LLC, a CONCLUSIONS OF LAW 15 Washington Limited Liability Company, 16 Defendants. 17 18 A bench trial in the above-captioned case was held on March 11, 2024, 19 through March 14, 2024, in Spokane, Washington. Plaintiff was represented by 20 Ronald Van Wert and Samir Dizdarevic-Miller. Defendants were represented by 21 James Bulthuis. 22 I. Nature of proceedings and statement of jurisdiction 23 Plaintiff Tankmax, Inc. (“Tankmax”) asserted the following claims against 24 Defendants Wayne Duran and American Gas Services, LLC “(“AGS”): (1) 25 violation the Washington Uniform Trade Secrets Act, RCW 19.108, et seq. 26 (“WUTSA”); (2) violation of the Defend Trade Secrets Act, 18 U.S.C. § 1836 27 (“DTSA”); (3) tortious interference with business relationships; (4) unjust 28 enrichment; (5) breach of fiduciary duties; (6) conversion; and (7) violation of the 1 Computer Fraud and Abuse Act, 18 U.S.C. § 1030 (“CFAA”). The foregoing 2 claims arise from Mr. Duran’s conduct during his employment with Tankmax and 3 following his resignation from Tankmax on January 3, 2024. Defendants deny all 4 claims for liability, and they contest damages. 5 II. Jurisdiction 6 This Court has jurisdiction over this matter under 28 U.S.C. § 1331 based on 7 Tankmax’s claims asserted under 18 U.S.C. §§ 1030 & 1836. In addition, this 8 Court has supplemental jurisdiction over the state law claims under 28 U.S.C. § 9 1367. 10 III. Findings of Fact 11 1. Plaintiff Tankmax, Inc. is a Washington corporation formed in 2016 12 by Jack Lacher, his wife Kelly Howard, and Pacific Truck Tank. 13 2. In November 2019, Mr. Lacher began managing, in part, Pacific 14 Meter & Equipment Inc., (“PME”) located in Kent, Washington. 15 3. PME’s sole physical location was a shop in Kent, Washington. 16 4. Defendant Wayne Duran is a propane mechanic who worked for 17 Pacific Meter & Equipment Inc. (“PME”) in Kent, Washington, from 2003 to 18 March 2021. Mr. Duran became an employee of Tankmax in 2021. 19 5. Defendant American Gas Services, LLC (“AGS”) is a Washington 20 limited liability company headquartered in Kent, Washington. AGS is solely 21 owned by Mr. Duran. 22 6. Tankmax builds propane and petroleum trucks, offers repairs to 23 propane and petroleum trucks and cargo tanks, offers DOT inspections, and sells 24 parts to customers, among other services. Tankmax is headquartered in Spokane 25 Valley, Washington, and has branches throughout Eastern Washington including 26 the Tri-Cities, Spokane Valley, and Sunnyside. 27 7. On June 30, 2021, Tankmax entered into a Stock Purchase Agreement 28 with PME, effective, retroactively, to May 31, 2021. 1 8. Tankmax’s purchase of PME included all PMEs assets. 2 9. Tankmax distributed new hire packets to all PME employees in April 3 2021, in preparation of Tankmax’s purchase of PME. The new hire packets 4 included Tankmax’s Employee Handbook dated November 2019. The evidence is 5 disputed and inconclusive whether Mr. Duran received a copy of the new hire 6 packet. 7 10. Tankmax’s Employee Handbook defined “equipment, vehicles, 8 telephones, computers, and software” as “Company Property,” and provided that 9 Tankmax had the right to access all company property at any time. 10 11. After Tankmax purchased PME, Mr. Lacher implemented a mobile- 11 based operation at PME’s former Kent location. 12 12. Mr. Duran is married and a resident of King County, Washington. 13 13. Mr. Duran is a registered inspector with the Department of 14 Transportation (“DOT”). 15 14. The DOT requires inspections of certain propane equipment at regular 16 intervals, typically every year or every five years depending on the inspection 17 performed. 49 CFR 180.407. Such inspections are required to be performed by a 18 Registered Inspector. 49 CFR 180.409. 19 15. Following each inspection, the inspector is required to “durably and 20 legibly” mark the inspected vehicle or equipment with the date of the inspection 21 and type of inspection performed, among other information. 49 CFR 180.415. 8. 22 Tankmax provided Mr. Duran a decal to place on tanks and equipment after the 23 inspection to mark the required information. On the decal, Mr. Duran would 24 provide information including Mr. Duran’s license number, Tankmax’s name, the 25 type of inspection performed, and the date performed. 26 16. The decal that Tankmax provided, and Mr. Duran used, contained the 27 same substantive information as inspection decals used by competitors offering 28 inspection services. 1 17. The decals are required to be publicly visible by being affixed near the 2 “specification plate,” which is a location easily visible to the public. 49 CFR 3 180.415. As a result, the type of inspection performed, and its date is public 4 knowledge. A company offering inspection services can discover the type of 5 inspection and its inspection date by simply looking at the decal. Because 6 inspections are mandated by the DOT to occur at certain intervals, the deadline for 7 upcoming inspections is easily ascertainable by competitors in the propane 8 inspection industry. The inspection deadlines are not unique to the customer, each 9 customer is required to abide by the DOT’s timelines for inspections. 10 18. In addition to placing the inspection sticker on the tank or vehicle, the 11 Registered Inspector must complete an inspection report. 49 CFR 180.417(b). The 12 inspection report must identify the customer’s name, the serial number of the 13 vehicle or tank inspected, the type of inspection performed, the date, the contact 14 information of the inspector, the Registered Inspector’s DOT license number, and 15 other information. 16 19. The inspection report is provided to the customer, who is required by 17 code to retain the inspection report until the next inspection, and for a year 18 thereafter. 49 CFR 180.417(c)(2). 19 20. If repairs were performed during the inspection, the Registered 20 Inspector must complete a report containing the same information and describe the 21 repairs. 49 CFR 413. 14. At any point in time, the DOT may request copies of the 22 inspection reports. 49 CFR 180.517(b)(tank cars). 23 21. When the customer sells or leases the vehicle or tank, they are 24 required to provide the inspection reports to the buyer or lessee. 49 CFR 417(d). 25 22. Tankmax retained copies of inspection reports prepared by Mr. Duran 26 during his employment. Tankmax used these inspection reports to prepare invoices 27 that it sent to the customers for Mr. Duran’s inspections. Mr. Duran was not 28 provided copies of the invoices. Mr. Duran did not deliver the invoices to 1 customers; Tankmax personnel would send the invoices to the respective 2 customers. 3 23. In addition to preparing the invoices, a Tankmax employee, Kelly 4 Martinez, created a spreadsheet tracking all inspections performed by Mr. Duran 5 starting in April 2021. Mr. Duran was not shown or provided this spreadsheet. 6 24. Instead, Mr. Duran handwrote on a notecard the customer truck 7 number, the type of inspection and the date of inspection. Mr. Duran developed 8 this process of organization while employed by PME. 9 25. Mr. Lacher traveled to the PME location in Kent before Tankmax 10 closed on its acquisition of PME. At the time, Mr. Duran was still working inside 11 of the shop. Mr. Lacher saw the notecards that Mr. Duran used and asked Mr. 12 Duran to throw them away because, he explained, Tankmax would track 13 inspections digitally. 14 26. Mr. Duran was not very savvy with computers. So, he took the 15 notecards home and continued his handwritten note-taking on the cards while he 16 continued inspecting tanks as a mobile propane prover. 17 27. Tankmax did not request Mr. Duran return the notecards or card file 18 before filing this lawsuit. 19 28. The information on the notecards kept by Mr. Duran is the same 20 information contained on the public-facing decals, the information contained in the 21 spreadsheet maintained internally by Tankmax, and the inspection reports provided 22 to the customers and retained by Tankmax. 23 29. Tankmax did not provide Mr. Duran with an employment contract. 24 Mr. Duran was an at-will employee. 25 30. Mr. Duran was never asked to sign a non-compete, non-solicitation or 26 confidentiality agreement with Pacific Meter or Tankmax. 27 31. Mr. Duran was transitioned from shop foreman of PME’s Kent 28 location to a Tankmax mobile prover position in April 2021. 1 32. As mobile prover manager, Mr. Duran’s job duties included, but were 2 not limited to, traveling to customer locations to test, calibrate, and repair propane 3 equipment; set up and manage company test schedules for designated locations; 4 and to test and inspect cargo tanks in compliance with Department of 5 Transportation (“DOT”) standards. 6 33. Following Mr. Duran’s promotion to mobile prover, he spent ninety 7 percent of his time outside of the shop, servicing customers in Washington, 8 Oregon, and Idaho. 9 34. Mr. Duran’s job duties as mobile prover included, but were not 10 limited to, traveling to customer locations to test, calibrate and repair propane 11 equipment, and test and inspect cargo tanks in compliance with DOT standards. 12 35. In the summer of 2021, Tankmax provided Mr. Duran with an iPhone 13 that shipped directly to him from Verizon. The phone plan was paid for by PME 14 during his employment. 15 36. Tankmax directed Mr. Duran to set up an Apple ID for the Tankmax 16 iPhone using his Tankmax e-mail address. Unbeknownst to Tankmax, Mr. Duran 17 ignored this instruction and instead used his personal e-mail address in setting up 18 the Apple ID. 19 37. The information from Mr. Duran’s PME phone was downloaded to 20 the Tankmax iPhone, including compiled customer information. When scheduling 21 services with customers in his role as a Tankmax employee, Mr. Duran used the 22 contact information maintained on the iPhone. 23 38. Mr. Duran purchased a new iPhone for AGS. Mrs. Duran set up the 24 AGS iPhone using the same Apple ID that was used for his Tankmax iPhone. By 25 using the same AppleId, the contact information that Mr. Duran developed over the 26 last 25+ years was imported into the AGS iPhone. 27 39. Mr. Duran disliked computers. As such, he kept track of PME’s and, 28 subsequently, Tankmax’s customers and when they needed inspections completed 1 by using the card file. Mr. Duran was the only individual in possession of the card 2 file at the time Tankmax purchased PME. 3 40. The card file was kept in the Kent shop while Mr. Duran worked as 4 shop foreman. After he became a mobile prover, Mr. Duran took the card file to his 5 home, where he continues to use it to this day. 6 41. Mr. Duran kept a day planner detailing work scheduled with Tankmax 7 customers. 8 42. The evidence is disputed and inconclusive whether Mr. Duran used 9 his AGS phone to contact Tankmax customers for the benefit of AGS. 10 43. At some point after being promoted to mobile prover, Mr. Duran 11 began planning to resign from his position at Tankmax and start a competing 12 company, American Gas Service. 13 44. On October 22, 2021, Mr. Duran registered his business, American 14 Gas Services LLC in Washington. 15 45. Mr. Duran resigned from his employment with Tankmax, giving 16 Tankmax one hour’s notice. He gave no notice to Tankmax, other than calling 17 Tankmax’s operations manager, Brian Dempsey, at roughly 3:45 p.m., on January 18 3, 2022, to advise that he was ending his employment with Tankmax and starting 19 his own business. Mr. Dempsey asked whether Mr. Duran would consider buying 20 parts from Tankmax with his new venture. 21 46. After calling Mr. Dempsey to terminate his employment, Mr. Duran 22 then called several customers to advise of his new business venture. 23 47. Mr. Duran knew that several of the customers had work that would 24 need to be done in the near future based on parts orders he previously fulfilled for 25 them on behalf of Tankmax in the weeks prior. 26 48. On January 4, 2022, Mr. Duran serviced two customers in Central 27 Washington on behalf of AGS. 28 49. Mr. Duran did not notify customers before January 3, 2022, that he 1 formed his own business or planned to leave Tankmax. 2 50. The evidence is inconclusive whether Mr. Duran scheduled work for 3 customers prior to terminating his employment with Tankmax. 4 51. Mr. Duran did not start to perform inspections for customers on behalf 5 of AGS until the second half of January 2022. 6 52. At all times, Mr. Duran used one phone, for both personal and work. 7 PME and Tankmax management knew this. 8 53. The phone number that Mr. Duran used was his personal phone 9 number for at least two decades. 10 54. Before starting work for PME in 2003, Mr. Duran worked for a 11 competitor, Western Cascade for approximately five years. During that time, Mr. 12 Duran inputted the names and phone numbers of customers into his personal 13 phone. This was done for convenience in contacting them for work as well as for 14 personal reasons, i.e., Mr. Duran became friends with several of his customer 15 contacts. 16 55. When Mr. Duran started work for PME in 2003, he contacted 17 customer contacts from his personal phone to notify them that he switched to PME. 18 Nearly a dozen such customers followed Mr. Duran to PME. 19 56. During the last few years of his employment with PME, the company 20 paid for Mr. Duran’s monthly cell service bill. However, PME did not pay for Mr. 21 Duran’s cell phone device. The phone remained his personal phone. 22 57. Mr. Duran’s cell phone contacts were saved to a Google-Drive 23 account associated with his personal email address. 24 58. After Mr. Duran became a Tankmax employee, he initially continued 25 using the same personal cell phone device. Tankmax continued paying his monthly 26 wireless service bill as PME had previously. 27 59. In the summer of 2021, Mr. Duran’s cell phone was damaged, and 28 Tankmax paid for a replacement cell phone device. Tankmax had an Apple iPhone 1 shipped directly from a Verizon store to the Kent shop to be provided to Mr. 2 Duran. 3 60. Tankmax did not setup or install software on the iPhone. Tankmax did 4 not load customer contacts onto the iPhone provided to Mr. Duran. Tankmax did 5 not request, and did not explain how, Mr. Duran would load the contact 6 information of customers from his personal phone onto the Tankmax-provided 7 iPhone. 8 61. Tankmax employee Kim Dempsey testified that she instructed Mr. 9 Duran to set up an AppleId account using his Tankmax email address. Mr. Duran 10 disputes this. Ms. Dempsey did not inform Mr. Duran why a Tankmax email 11 address was to be used, and she did not inform Mr. Duran that using the Tankmax 12 email address would enable Tankmax to have its own copy of Mr. Duran’s phone 13 contacts and other data. 14 62. Mr. Duran setup an AppleId for the iPhone using his personal Gmail 15 address. This enabled him to migrate his contacts to the iPhone from his Google 16 account. 17 63. Because Mr. Duran used the iPhone for personal and work purposes, 18 the iPhone contained Mr. Duran’s personal banking information. The iPhone 19 contained contact information for Mr. Duran’s friends and family members. The 20 iPhone contained photographs taken by Mr. Duran and other personal information. 21 64. Tankmax never checked to see if Mr. Duran set up an AppleId using 22 his Tankmax email address while Mr. Duran was employed with Tankmax. 23 65. Tankmax never checked Mr. Duran’s iPhone and never saw the 24 contacts on his iPhone. 25 66. Tankmax did not instruct Mr. Duran or other Tankmax employees that 26 they could not change their phones’ settings. 27 67. Before Mr. Duran returned the iPhone, laptop, and other equipment to 28 Tankmax, he restored the iPhone to factory settings. 1 68. Tankmax never instructed Mr. Duran that he could not delete data 2 from the iPhone. Tankmax never expressed to Mr. Duran that his authorization to 3 use the iPhone or laptop was revoked. 4 69. When Mr. Duran returned the iPhone to the PME location in Kent, on 5 January 5, 2022, he informed Tankmax branch manager, Destiny Solid, that he had 6 reset the iPhone to factory settings, thereby deleting all it contents. He also told 7 Ms. Solid that if she needed any customer’s phone number, he would provide it. 8 70. After Mr. Duran terminated his employment, Tankmax assigned Mr. 9 Duran’s phone to Tankmax employee, Adam Wright. Customers called Mr. Wright 10 thinking they were calling Mr. Duran. 11 71. Mr. Duran was provided a laptop by PME and used the same laptop 12 after becoming a Tankmax employee. 13 72. Mr. Duran did not track customer scheduling using the laptop. 14 73. Mr. Duran did not load customer contact information to the laptop or 15 its programs. Similarly, PME and Tankmax did not load customer contact 16 information or scheduling onto the laptop. 17 74. On January 5, 2022, Mr. Duran returned to Tankmax a laptop, tablet, 18 and iPhone, all of which were Tankmax’s property. 19 75. Mr. Duran uploaded all the information on the Tankmax iPhone, 20 including Tankmax’s customer contact information, to his personal Apple 21 ID, which information he subsequently downloaded to his AGS phone. 22 76. Mr. Duran did not return the card file to Tankmax because Jack 23 Lacher had previously told him to destroy it. 24 77. The evidence is disputed and inconclusive as to whether Mr. Duran 25 returned certain tools and equipment to Tankmax following his resignation, 26 including pipe taps, pipe wrenches, propane and petroleum pressure gauges, 27 propane prover fittings, gas bottles, a propane burner, and a truck-mounted hose 28 reel. 1 78. In May 2022, AGS hired former Tankmax’s former employee Adam 2 Wright to work for AGS. 3 79. Mr. Wright sought employment from AGS and Mr. Duran. 4 80. Mr. Duran did not encourage Mr. Wright to leave Tankmax to come 5 work for him. 6 81. Tankmax never provided Mr. Duran with a customer list to use for his 7 job. 8 82. Tankmax did not maintain a compiled “customer list” containing 9 customer contact information or scheduling calendars in one file or document for 10 the customers whom Mr. Duran serviced while he worked for Tankmax. 11 83. Tankmax did not request Mr. Duran provide it with the phone contacts 12 or the notecards prior to this lawsuit being filed. 13 84. A few months after Mr. Duran left Tankmax, Tankmax sent 14 correspondence to all customers requesting the customers provide updated contact 15 information. 16 85. Despite having customer contact information for numerous customers, 17 Tankmax never called customers to secure their inspection or mobile propane 18 repair work. 19 86. Tankmax knew the names of several points of contact for numerous 20 customers after Mr. Duran left. Tankmax never called these specific contacts to 21 secure their inspection or mobile propane repair work. 22 87. The contact information on Mr. Duran’s iPhone consisted of a 23 customer name and their phone number. Most, if not all, such information is freely 24 available to the public and may be ascertained through internet searches. 25 88. Tankmax has never seen the customer list it accuses Mr. Duran of 26 stealing. 27 // 28 // 1 IV. Conclusions of Law 2 1. Washington Uniform Trade Secrets Act (WUTSA) 3 1.1. The Washington Uniform Trade Secrets Act (WUTSA), Wash. Rev. 4 Code § 19.108, “codifies the basic principles of common law trade secret 5 protection” by which a plaintiff can receive damages for misappropriation of trade 6 secrets. Ed Nowogroski Ins., Inc. v. Rucker, 137 Wash.2d 427, 438 (1999). 7 1.2. Wash. Rev. Code § 19.108.010(4) defines “trade secret” as

8 information, including a formula, pattern, compilation, program, device, 9 method, technique, or process that: (a) Derives independent economic value, actual or potential, from not 10 being generally known to, and not being readily ascertainable by proper 11 means by other persons who can obtain economic value from its disclosure or use; and 12 (b) Is the subject of efforts that are reasonable under the 13 circumstances to maintain its secrecy. 14 1.3. To have a legally protectable interest in trade information, a party 15 must establish that (1) the information derives independent economic value from 16 not being generally known or readily ascertainable to others who can obtain 17 economic value from knowledge of its use and (2) reasonable efforts have been 18 taken to maintain the secrecy of the information. Modumental, Inc. v. Xtalic Corp., 19 4 Wash.App.2d 810, 823 (2018) (citation omitted). 20 1.4. The evidence failed to establish that the phone contacts alone derived 21 independent economic value. 22 1.5. A list of names and phone numbers, without more, is not a trade secret 23 because such a list is not novel, unique, or innovative. 24 1.6. Tankmax did not create the list of names and phone numbers and did 25 not provide this information to Mr. Duran. Instead, Mr. Duran created this list on 26 his own both before he was employed by Tankmax and during his employment 27 with Tankmax. Tankmax never asked for this information from Mr. Duran and 28 never instructed him to keep it confidential. 1 1.7. Tankmax did not claim the card file was a trade secret, and, on the 2 contrary, instructed Mr. Duran to destroy it and instead rely on information stored 3 electronically on his laptop. 4 1.8. Tankmax did not make reasonable efforts to safeguard the customer 5 information located on Mr. Duran’s cell phone. Tankmax did not instruct Mr. 6 Duran to provide Tankmax with the customer information when he resigned his 7 employment. 8 1.9. Tankmax did not require Mr. Duran to sign a non-competition 9 agreement, a non-solicitation agreement or a confidentiality agreement. 10 1.10. Consequently, Tankmax has not proven the elements of the WUTSA 11 claim by a preponderance of the evidence. 12 2. Defense of Trade Secrets Act (DTSA), 18 U.S.C. § 1839(5) 13 2.1. To succeed on a claim for misappropriation of trade secrets under the 14 DTSA, Tankmax must prove by a preponderance of the evidence that: (1) 15 Tankmax possessed a trade secret, (2) Mr. Duran misappropriated the trade secret; 16 and (3) the misappropriation caused or threatened damage to Tankmax. See 18 17 U.S.C. § 1839(5); InteliClear LLC v. ETC Global Holdings, Inc., 978 F.3d 653, 18 657-58 (9th Cir. 2020). 19 2.2. The DTSA defines trade secret as:

20 (3) all forms and types of financial, business, scientific, technical, economic, 21 or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, 22 procedures, programs, or codes, whether tangible or intangible, and whether 23 or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if— 24 (A) the owner thereof has taken reasonable measures to keep such 25 information secret; and (B) the information derives independent economic value, actual or 26 potential, from not being generally known to, and not being readily 27 ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information; 28 1 18 U.S.C. § 1839(3). 2 2.3. The definition of what may be considered a “trade secret” is broad. 3 Inteliclear LLC, 978 F.3d at 657-58. 4 2.4. Federal DTSA claims are substantially similar to claims asserted 5 under the Washington Uniform Trade Secrets Act. NW Monitoring LLC v. 6 Hollander, 534 F.Supp.3d 1329, 1335 (W.D. Wash. 2021); Philips N. Am., LLC v. 7 Summit Imaging Inc., 2020 WL 1515624, at *5 (W.D. Wash. Mar. 30, 2020). 8 2.5. For the reasons stated above, Tankmax has not shown it has a legally 9 protectable interest in the customer lists that were located on Defendant’s cell 10 phone. 11 2.6. Tankmax has not proven the DTSA claim by a preponderance of the 12 evidence. 13 3. Tortious Interference with Business Expectancy 14 3.1. To prevail on a claim of tortious interference with a business 15 expectancy, Tankmax must prove five elements: (1) the existence of a valid 16 contractual relationship or business expectancy; (2) Mr. Duran had knowledge of 17 that relationship; (3) an intentional interference inducing or causing a breach or 18 termination of the relationship or expectancy; (4) Mr. Duran interfered for an 19 improper purpose or used improper means; and (5) resultant damage. Moore v. 20 Commercial Aircraft Interiors, LLC, 168 Wash.App. 502, 508-09 (2012). 21 3.2. Only after Tankmax establishes the five elements of the tort does the 22 burden shift to Mr. Duran and AGS to show, as an affirmative defense, that their 23 interference was either privileged or justified. Pleas v. City of Seattle, 112 Wash.2d 24 794, 804 (1989). 25 3.3. The evidence is insufficient regarding whether Mr. Duran acted for an 26 improper purpose or used improper means. All acts taken by Mr. Duran after he 27 resigned from Tankmax were legitimate acts of competition between business 28 competitors. 1 3.4. The allegations that Mr. Duran acted improperly before he resigned 2 from Tankmax by contacting Tankmax’s existing customers were not proven by a 3 preponderance of the evidence. 4 3.5. The claim for tortious interference with a business expectancy was not 5 proven by a preponderance of the evidence. 6 4. Unjust Enrichment 7 4.1. Unjust enrichment is the method of recovery for the value of the 8 benefit retained absent any contractual relationship because notions of fairness and 9 justice require it. Young v. Young, 164 Wash.2d 477, 483 (2008). In such situations 10 a quasi-contract is said to exist between the parties. Id. (citation omitted). 11 4.2. To show unjust enrichment Tankmax must prove three elements: (1) 12 Mr. Duran received a benefit, (2) the received benefit is at Tankmax’s expense, 13 and (3) the circumstances made it unjust for Mr. Duran and AGS to retain the 14 benefit without payment. Id. 15 4.3. Mr. Duran did not act in an unjust manner when he contacted 16 Tankmax’s customers after he resigned his employment with Tankmax. These 17 contacts were legitimate acts of competition between business competitors. 18 4.4. Tankmax did not prove its claim of unjust enrichment by a 19 preponderance of the evidence. 20 5. Breach of Fiduciary Duty/ Loyalty 21 5.1. To establish a claim for breach of fiduciary duty/loyalty, Tankmax 22 must prove: (1) existence of a duty owed; (2) breach of that duty; (3) resulting 23 injury, and (4) that the claimed breach proximately caused the injury. Miller v. U.S. 24 Bank of Wash. N.A., 72 Wash.App. 416, 426 (1994). Whether an individual owes a 25 legal duty is a question of law, whereas breach of a legal duty is generally a 26 question of fact. Lodis v. Corbis Holdings, Inc., 172 Wash.App. 835, 859 (2013). 27 5.2. During the period of employment, an employee has a duty to refrain 28 from soliciting customers for a rival business or to act in direct competition with 1 his or her employer's business. Kieburtz v. Assoc’s v. Rehn, 68 Wash.App. 260, 2 265 (1992). 3 5.3. Tankmax failed to show that Mr. Duran had a fiduciary duty to it. 4 5.4. Although Mr. Duran had a duty of loyalty to Tankmax while he was 5 employed by Tankmax, the facts are disputed and inconclusive whether Mr. Duran 6 breached that duty prior to terminating his employment with Tankmax. 7 5.5. The claim for breach of a duty of loyalty was not proven by a 8 preponderance of the evidence. 9 6. Conversion 10 6.1. A conversion claim under Washington law requires proof by a 11 preponderance of the evidence that Mr. Duran, without lawful justification, 12 willfully interfered with, and thereby deprived Tankmax, of its right to a chattel, or 13 personal property. Davenport v. Wash. Educ. Ass’n, 147 Wash.App. 704, 721 14 (2008). 15 6.2. The evidence is disputed and inconclusive whether Mr. Duran 16 deprived Tankmax of personal property without lawful justification. 17 6.3. Tankmax failed to prove its claim for conversion by a preponderance 18 of the evidence. 19 7. Computer Fraud and Abuse Act, 18 U.S.C. § 1030 20 7.1. To bring an action successfully under 18 U.S.C. § 1030(g) based on a 21 violation of 18 U.S.C. § 1030(a)(2), Tankmax must show Mr. Duran: (1) 22 intentionally accessed a computer, (2) without authorization or exceeding 23 authorized access, and that Mr. Duran (3) thereby obtained information (4) from 24 any protected computer (if the conduct involved an interstate or foreign 25 communication), and (5) there was loss to one or more persons during any one- 26 year period aggregating at least $5,000 in value. 27 7.2. To bring an action successfully under § 1030(g) based on a violation 28 of § 1030(a)(4), Tankmax must show that Mr. Duran: (1) accessed a protected 1 computer (2) without authorization or exceeding such authorization that was 2 granted (3) knowingly and with intent to defraud, and thereby (4) furthered the 3 intended fraud and obtained anything of value, causing (5) a loss to one or more 4 persons during any one-year period aggregating at least $5,000 in value. LVRC 5 Holdings, LLC v. Brekka, 581 F.3d 1127, 1133 (9th Cir. 2009). 6 7.3. An employer gives an employee “authorization” to access a company 7 computer when the employer gives the employee permission to use it. On the other 8 hand, the term “exceeds authorized access” means to access a computer with 9 authorization and to use such access to obtain or alter information in the computer 10 that the accesser is not entitled so to obtain or alter. 18 U.S.C. § 1030(e)(6). Thus, 11 an individual who is authorized to use a computer for certain purposes but goes 12 beyond those limitations is considered by the CFAA as someone who has 13 “exceeded authorized access.” LVRC Holdings, LLC, 581 F.3d at 1133. Therefore, 14 an employee can violate employer-placed limits on accessing information stored 15 on the computer and still have authorization to access that computer. Id. 16 7.4. A person uses a computer “without authorization” under §§ 17 1030(a)(2) and (4) when the person has not received permission to use the 18 computer for any purpose (such as when a hacker accesses someone’s computer 19 without permission), or when the employer has rescinded permission to access the 20 computer and the defendant uses the computer anyway. Id. 21 7.5. There is no evidence that Mr. Duran acted with the intent to defraud 22 Tankmax. 23 7.6. There is no evidence that Mr. Duran used his cell phone without 24 authorization. 25 7.7. Tankmax’s claim for violation of 18 U.S.C. § 1030 is not proven by a 26 preponderance of the evidence. 27 // 28 // 1 Accordingly, IT IS HEREBY ORDERED: 1. The Clerk of Court is directed to enter judgment in favor of Defendants and against Tankmax. IT IS SO ORDERED. The Clerk of the Court is hereby directed to file this 5|| Order, provide copies to counsel, and close the file. DATED this 23rd day of July 2024.

8 9 10 Shockey ec toar 12 Stanley A. Bastian 3 Chief United States District Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 FINDINGS OF FACT AND CONCLUSIONS OF LAW ~ 18