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Givemepower Corp. v. Pace Compumetrics

March 23, 2007

GIVEMEPOWER CORPORATION, PLAINTIFF,
v.
PACE COMPUMETRICS, INC.; TERRY RESNICK; JODY RESNICK; RONALD S. BERG; AND RANDOLPH WILLIS, DEFENDANTS.



The opinion of the court was delivered by: Hayes, Judge

(Doc. # 5)

ORDER

The matter before the Court is Plaintiff's "Application for Temporary Restraining Order and Order to Show Cause Why Preliminary Injunction Should Not Issue" ("Application for TRO"). (Doc. # 5.)

I. Background

On January 25, 2007, Plaintiff filed its original Complaint against Defendant Pace Compumetrics, Inc. ("Pace"), alleging that the parties entered into a professional services agreement on December 13, 2006, whereby Pace engaged Plaintiff to provide drawings for buildings generated from Plaintiff's proprietary computer aided design and drafting ("CAD") software. Plaintiff alleged that as soon as Pace gained access to Plaintiff's software and contractor list, Pace solicited and hired contractors who were trained by and under contract with Plaintiff, terminated the agreement with Plaintiff, and continued using Plaintiff's CAD software. The original Complaint alleged the following causes of action: (1) copyright infringement; (2) breach of licensing agreement; (3) conversion; (4) breach of contract; (5) breach of the implied covenant of good faith and fair dealing; (6) interference with advantageous business relations; (7) fraudulent inducement; and (8) unfair competition (Cal. Bus. & Prof. Code §§ 17200, et seq.). The original Complaint's "Prayer for Relief" states in full:

Based on the foregoing, Plaintiff prays for money damages in an amount to be proven at trial and such other further relief as to this Court may be just, fair and equitable including, but not limited to pre and post-judgment interest and Plaintiff's costs of suit including reasonable attorney's fees incurred in connection with prosecuting this action. (Compl. at 10.)

On March 14, 2007, Pace filed a Motion to Dismiss, seeking the dismissal of the following causes of action: copyright infringement; breach of the implied covenant of good faith and fair dealing; interference with advantageous business relations; and unfair competition. (Doc. # 3.)

On March 16, 2007, Plaintiff filed its Application for TRO and "Verified First Amended Complaint" ("FAC"). (Doc. # 4 & 5.) The FAC again names Pace as a Defendant, but also adds four individuals as Defendants: Terry Resnick, CEO of Pace; Jody Resnick, President of Pace; Ronald S. Berg, Pace's attorney; and Randolph Willis, Senior Project Engineer for Pace. (FAC ¶¶ 3-6.) The factual allegations in the FAC are essentially the same as those in the original Complaint, although the FAC is more detailed, and the various agreements at issue are attached, and the FAC is verified by William Walton, the President and CEO of Plaintiff.

A. Allegations of the FAC

On December 13, 2006, Pace retained Plaintiff on a project (the "BAM project") to provide building floor plan drawings in CAD format (known as "Building Surveys") for 1,016 Bank of America building sites in Texas, Georgia, Tennessee, North Carolina, South Carolina and Kentucky, pursuant to a written "Agreement for Professional Services" ("Pace Agreement"). (FAC ¶¶ 12-13, Ex. 1.)*fn1 On January 1, 2007, the Pace Agreement was expanded to include an additional 640 building sites in Florida. (FAC ¶ 12.) In consideration for its services, Pace promised to pay Plaintiff approximately $1.337 million. (FAC ¶ 13.)

The Pace Agreement provides, in part, that "Pace reserves the right to terminate this Agreement at any time upon fourteen (14) day written notice to Consultant [i.e., Plaintiff], even though Consultant is not in default." (FAC, Ex. 1 § 17.)

The Pace Agreement further provides:

B. While this Agreement is in effect, and for a period of six (6) months following termination of this Agreement for any reason, both parties agree that they shall not hire, solicit, approach or encourage for the purpose of employing or engaging any of the other party's employees, consultants, contractors or subcontractors, without first obtaining the prior written consent of the other party.

C. Pace expressly agrees that notwithstanding any other provision of this Agreement, in the event of Pace's breach of Section 18(B) above, Consultant shall be entitled to injunctive and/or equitable relief, such relief to include monetary payment by Pace to Consultant equal to any and all amounts that Consultant would otherwise have been entitled to if Pace had not breached Section 18(B) above.

Sections 18(B) and 18(C) shall survive termination of this Agreement. (FAC, Ex. 1 § 18.) The Pace Agreement provides that it shall be governed and interpreted by California law. (FAC, Ex. 1 § 24.)

In preparation for deployment pursuant to the Pace Agreement, Plaintiff assembled a team of building surveyors from its proprietary database of prospective field technicians, and executed Independent Contractor Agreements with the BAM Project team members in December 2006. (FAC ¶ 17.) Plaintiff paid for the relocation, training and equipping of these team members during December 2006 and early January 2007, in preparation for the January 8, 2007 deployment of the team. (FAC ¶ 17.) Each of the Building Surveyors retained by Plaintiff for the BAM Project entered into Non-Disclosure Agreements and Independent Contractor Agreements with provisions intended to protect Plaintiff's proprietary information and business relationships and to provide for injunctive relief in the event of breach. (FAC ¶ 22, Exs. 3-6.)

Beginning in December 2006, and continuing to January 18, 2007, Plaintiff provided Defendants Jody Resnick and Terry Resnick with Plaintiff's proprietary database of existing and prospective field technicians and confidential business plans and processes developed by Plaintiff for the BAM Project. (FAC ¶ 25.) Plaintiff also paid for its business affiliate, Michael Axon, to fly to Houston from England to provide expert training on the use of Plaintiff's PowerCAD software to Pace representatives and to Plaintiff's BAM Project team. (FAC ¶ 26.)

On January 9, 2007, one day after deployment under the Pace Agreement, Pace began its "plan to hijack the [BAM] Project for themselves, and to cut Plaintiff out of the project altogether." (FAC ¶ 34.) On January 9, 2007, Pace's President, Defendant Jody Resnick, induced Plaintiff's lead contractor, Defendant Randolph Willis, as well as Mr. Axon, to work for Pace directly and terminate their relationships with Plaintiff. (FAC ¶ 27.) Pace also induced Mr. Axon to continue providing consulting services and to supply Pace with PowerCAD software for the BAM Project. (FAC ¶ 28.) Pace representatives, as well as Mr. Willis, then solicited and hired Plaintiff's entire team of Building Surveyors, consultants and other personnel from Plaintiff's proprietary database. (FAC ¶ 29.)

On January 18, 2007, Defendant Ronald Berg initiated a conference call with Plaintiff's entire BAM Project team, and told them that he was an attorney for Pace, that Plaintiff had breached the contract with Pace, that Pace had solicited each of them because of Plaintiff's breach of the contract, and that "all Independent Contractor Agreements with Plaintiff were 'null and void,' and of 'no force and effect.'" (FAC ¶ 31.) Mr. Berg and Ms. Resnick provided advice for how the Building Surveyors should "resign" from Plaintiff's employ, which they did on January 19, 2007. (FAC ¶ 31.)

On January 18, 2007, Pace notified Plaintiff that it wished to terminate the Pace Agreement "without cause" pursuant to Section 17's fourteen day notice provision. (FAC ¶ 32.) Pace then ceased performing its obligation under the Agreement, and "failed to pay all or any of the amounts due under the Pace Agreement for services performed by Plaintiff." (FAC ¶¶ 32-33.) Finally, between January 9, 2007 and January 18, 2007, Pace made the following "false and defamatory statements" to Wilfried Graebert, the President of Plaintiff's sister company and key supplier, GiveMePower, GmbH: that Plaintiff's CEO misrepresented, prior to entering the Agreement, that he had successfully managed ...


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