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Fleming v. Coverstone

June 25, 2009

HOYT A. FLEMING, PLAINTIFF,
v.
TOM COVERSTONE, DEFENDANT.



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

ORDER

The matters before the Court are the (1) Motion for Partial Summary Judgment that the January 22, 2008 Email Exchange is a Valid Contract (Doc. # 50), filed by Plaintiff Hoyt A. Fleming, (2) Motion for Attorney Fees pursuant to California Code of Civil Procedure section 425.16(c) (Doc. # 51), filed by Defendant Tom Coverstone, and (3) Motion to Dismiss for Lack of Jurisdiction (Doc. # 56), filed by Counter-Defendant Teresa A. Fleming.

Background

On February 22, 2008, Plaintiff Hoyt A. Fleming initiated this action by filing a complaint (Doc. # 1). On March 12, 2008, Plaintiff filed a first amended complaint, which alleged causes of action for breach of contract, defamation, and civil extortion. On June 18, 2008, Defendant filed a special motion to strike the first amended complaint's second and third causes of action pursuant to California's Anti-SLAPP statute, section 425.16(c) of the California Civil Code (Doc. # 11). On June 30, 2008, Plaintiff filed a motion to amend complaint (Docs. # 13, 14). The proposed second amended complaint alleged causes of action for breach of contract, defamation, and civil extortion. However, on July 16, 2008, Plaintiff filed a notice of withdrawal of the motion to amend regarding the defamation claim, which gave "notice that [Plaintiff] withdraws the motion to amend complaint regarding Count Two (defamation) of the proposed second amended complaint" (Doc. # 24).

On October 21, 2008, Plaintiff filed the "Second Amended Complaint for Breach of Contract and Extortion" ("SAC"), which is the operative pleading in this case (Doc. # 29). The SAC alleges causes of action for breach of contract, and extortion in violation of sections 518-527 of the California Penal Code. The SAC alleges that on January 22, 2008, Plaintiff sent Defendant an email that stated in part:

Tom,

This email confirms that I have agreed to sell and that you have agreed to purchase U.S. Patent No. 6,204,798, which has been reissued, Reissue Patent No. 039,038, Patent Application No. U.S. Patent No. 11/196,841, and Patent Application No. 11/924,352. The purchase price for the above patents and applications is one million dollars.

You and I will strive to close the sale by February 1, 2008. However, you and I will close the sale by February 15, 2008.

Both you and I understand that I will assign a 10% interest in the above patents and applications to Vineyard Boise, a church in Boise, Idaho, and that Vineyard Boise will then assign its 10% interest to you, or an entity that you designate. I will assign my 90% interest directly to you, or an entity that you designate. You will then immediately pay me $900,000 and you will then immediately pay Vineyard Boise $100,000.

You and I agree that you and/or your attorneys will draft the necessary agreements.

You agree to wire me ten thousand dollars tomorrow as a deposit on the purchase price. This deposit will not be refunded if the above sale is not completed by February 15, 2008. I agree to work with you and your attorneys to close the sale by February 15, 2008....

If you agree to the above, then please confirm via email.

Thank you, Hoyt Fleming SAC, ¶ 10.

The SAC alleges that on January 22, 2008, Defendant sent Plaintiff an email that stated in part:

Hoyt,

Agreed.

I will wire the $10,000.00 tomorrow to your account.

As we discussed on the phone just now, your wife Teresa will sign the assignment documents or whatever is needed....

Best regards, Tom Id., ¶ 11. The SAC alleges that "[t]he [January 22 Email Exchange] constitutes a binding and enforceable contract.... not merely an agreement to agree." Id., ¶ 12. The SAC alleges that on January 23, 2008, Defendant wired Plaintiff $10,000.00. Id., ¶ 13.

The SAC alleges that on February 15, 2008, Defendant sent Plaintiff an email which stated: "You mischaracterized your patents, the prior art and the file histories. You also did not disclose material facts relating to same.... Please send my $10,000 to the address below by February 20th. If you agree to return the $10,000, I will agree to release and waive my potential claims against you." Id., ¶ 19. The SAC alleges that on February 15, 2008, Plaintiff sent Defendant an email that stated: "Your position is you would like me to return your deposit even though you agreed that the deposit would not be refunded. My position is that you owe me specific performance." Id., ¶ 20. The SAC alleges that on February 15, 2008, Defendant sent Plaintiff another email which stated that "[t]here was not an agreement, there never was" because "[w]e did not agree on key material terms;" and that even if there was an agreement, "you committed fraud" in the inducement because you "materially misrepresented key facts relating to your patents and competing patents." Id., ¶21. The SAC alleges that Defendant threatened to publicly accuse Plaintiff of "serious ethics violations," including publicly accusing Plaintiff of an "illegal tax scam" unless ...


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