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Aversan USA, Inc. v. Jones

June 23, 2009

AVERSAN USA, INC., A NEW JERSEY CORPORATION, PLAINTIFF,
v.
STEVEN R. JONES, AN INDIVIDUAL; MERHAWIT MELLSE, AN INDIVIDUAL; AND DOES 1-10, DEFENDANTS.



The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge

MEMORANDUM AND ORDER

On January 14, 2009, Plaintiff Aversan USA, Inc. ("Aversan") filed this action against Defendants, Steven R. Jones ("Jones") and Merhawit Mellse ("Mellse") (collectively referred to as "Defendants"), alleging eight causes of action. Presently before the Court is Defendants' Motion to Dismiss Plaintiff's claims for 1) Interference with Contractual Relations; 2) Interference with Prospective Economic Advantage Against Jones; 3) Breach of Duty of Loyalty Against Defendants; and 4) Violation of California Business and Professions Code §§ 17200 et seq. pursuant to Federal Rule of Civil Procedure 12(b)(6).*fn1 For the reasons set forth below, the Defendants' Motion to Dismiss is DENIED.

BACKGROUND*fn2

According to Plaintiff's Complaint, Aversan is a premier solution provider of on-site and off-site software engineering services. Aversan recruits and trains engineering professionals to perform services for its customers and clients of its customers. In particular, engineering professionals recruited by Aversan receive training with Dimension Software, a program that provides individualized, custom services to Aversan customers and their clients. Over the years, Aversan has developed several proprietary scripts for use with the Dimension Software (the "Aversan Application"). Aversan teaches its employees and independent contractors how to write the Aversan Application to provide individualized services on specific projects.

One customer Aversan contracts with is Ambire Consulting, Inc., ("Ambire"), a domestic technology company offering consulting, management and outsourcing services. Pursuant to the ongoing agreements between Aversan and Ambire, Ambire pays Aversan for each hour of work performed by Aversan's engineering professionals for Ambire's clients. In turn, Aversan pays its engineering professionals a portion of this hourly rate, bears the cost of all expenses incurred by the engineering professionals, and retains the remaining sum paid to it by Ambire as profit.

In 2004, Aversan recruited Jones as an independent contractor to provide engineering services to Aversan's existing and potential customers. Mellse was recruited in the same capacity the following year. Aversan trained both Jones and Mellse how to write proprietary scripts for the Aversion Application. On or about February 15, 2007, Jones and Aversan agreed to modify their working relationship from principal/independent contractor to employer/employee. On or about March 2, 2007, Mellse also agreed to modify her contract with Aversan from principal/independent contractor to employer/employee.

In or about January 2007, Aversan assigned Mellse to work for the California Public Employees' Retirement System ("CalPERS"), a customer of Aversan's client Ambire. In or about September 2007, Aversan also gave Jones a CalPERS assignment. As part of the compensation provided to Jones, Aversan, among other things, acquired an apartment lease at Capitol Towers & Villas in Sacramento, California, for Jones' benefit. While assigned to CalPERS, Aversan claims that both Jones and Mellse wrote individualized, customer-specific scripts using the proprietary information provided by Aversan for use on the Dimension Software program.

On or about October 26, 2008, Jones indicated that he wanted to terminate his employment with Aversan and demanded a higher salary. The parties underwent negotiations. Aversan alleges that Jones was negotiating a similar arrangement with Ambire at the same time. On or about November 1, 2008, Jones terminated his employment with Aversan immediately.

On or about December 6, 2008, Mellse also quit. Aversan alleges that since terminating their employment with Aversan, Defendants have continued to perform the same engineering services at CalPERS as consultants of Ambire using the Aversan Application.

Aversan also contends that Defendants prevented Aversan from participating in and profiting from its agreements with Ambire, that Defendants started working directly with Ambire prior to terminating their employment with Aversan, that Jones intended to take over Aversan's operations with CalPERS and other Aversan customers, and that Defendants have falsely represented to CalPERS that they continue to work for Aversan. Further, despite paying rent for November 2008 for the apartment unit occupied by Jones, Jones allegedly encouraged and convinced Capitol Towers & Villas to terminate its lease with Aversan and re-let the same apartment unit to Jones directly.

STANDARD

On a motion to dismiss for failure to state a claim under Rule 12(b)(6), all allegations of material fact must be accepted as true and construed in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). Federal Rule of Civil Procedure 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief," in order to "give the defendant fair notice of what the... claim is and the grounds upon which it rests." Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed. 2d 80 (1957).

While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the "grounds" of his "entitlement to relief" requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 554-56, 127 S.Ct. 1955, 167 L.Ed. 2d 929 (2007) (internal citations and quotations omitted). Factual allegations must be enough to raise a right to relief above the speculative level. Id. at 555 (citing 5 C. Wright & A. Miller, Federal Practice and Procedure ยง 1216, pp. 235-236 (3d ...


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