The opinion of the court was delivered by: Hon. Dana M. Sabraw United States District Judge
ORDER DENYING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT*fn1 [Docket No. 7]
This case came on for hearing on Defendants' motion for summary judgment on September 24, 2010. John Alessio appeared on behalf of Plaintiff, John Fuchs appeared on behalf of the moving Defendants, and Amelia Yurch appeared on behalf of Defendant MiraCosta College. After reviewing the parties' briefs and hearing oral argument from counsel, the Court denies the motion.
Plaintiff Applied Professional Training, Inc. ("APT") is engaged in education and technical training for the communications and electric power industries. (Compl. at 2.) Defendants Cawley, Uribe, Glenn and Aydelott are former employees of APT, and Defendant Price was formerly an independent contractor for APT. Cawley was employed as an Instructor and Course Developer and Price was Development Director for Plaintiff's Solar, Wind and Renewable Energy Department. Cawley, Uribe and Price all left APT in April 2009. Glenn, who was employed as a sales representative, left APT on December 28, 2009. Aydelott, who was employed as a sales and marketing representative, left APT on April 2, 2010.
After terminating their relationships with APT, each of the individual Defendants began working at Defendant Teleskills. Teleskills offers educational courses in the telecommunications industry, and is a direct competitor of APT. Teleskills was the brainchild of Cawley and Uribe, who decided to start Teleskills while they were still employed at APT. (Decl. of Thomas Cawley in Supp. of Mot. ("Cawley Decl.") ¶ 8.) Although these Defendants formed the idea of starting Teleskills while employed at APT, Cawley states Teleskills did not do any business until after he and Uribe left APT in April 2009. (Id.)
After leaving APT in April 2009, a dispute arose between APT and Price. Price alleged that APT owed him certain commissions pursuant to their agreement, and APT alleged that Price was violating his obligations to protect APT's trade secrets and proprietary information. (Decl. of John R. Fuchs in Supp. of Mot. ("Fuchs Decl."), Ex. 1.) APT also alleged that Price was making false and misleading statements about APT. (Id.)
At the same time, APT's President Steve Blume was in contact with Teleskills's new client, MiraCosta College, which was preparing to offer a new green energy class with the help of Teleskills. Blume informed MiraCosta that the instructor for the course was a former employee of APT, and that the materials for the course were in violation of APT's copyrights. (Id.) He also stated that Cawley, Uribe and Price were in violation of a non-compete clause in their respective agreements with APT. (Id.) These accusations quickly became part of the dispute between Price and APT. (Fuchs Decl., Ex. 2.)
Over the next month, the parties attempted to resolve the dispute informally. (Fuchs Decl., Ex. 3.) However, Price refused to sign a Settlement and General Release Agreement drafted by Blume. (Id.) Price claimed the Agreement was "one-sided[,]" and insisted that Uribe, Cawley and Teleskills be included in any such Agreement. (Id.) Thereafter, Blume terminated the services of his counsel, and began dealing directly with Defendants' current counsel, Mr. Fuchs. (Fuchs Decl., Ex. 4.)
Shortly thereafter, Blume, Cawley, Uribe and Price executed a Settlement Agreement and Mutual Reciprocal Release ("Release"). Mr. Fuchs drafted the Release, which provides for APT to pay Price $10,000, "less amounts previously paid but plus the sum of $3,000, representing Price's legal fees incurred in this dispute, as payment in full for the settlement of the dispute." (Fuchs Decl., Ex. 5.) The Release was executed on June 11, 2009.
On June 29, 2010, APT filed the present case against Defendants. APT alleges claims for (1) copyright infringement against MiraCosta, Teleskills, Price, Cawley and Uribe, (2) trade secret misappropriation and (3) conversion against Teleskills, Price, Cawley, Uribe, Glenn and Aydelott, (4) breach of contract and (5) breach of confidence/loyalty against Defendants Glenn and Aydelott and (6) unfair competition and (7) conspiracy against all Defendants. In response to the Complaint, Defendants Teleskills, Price, Cawley, Uribe, Glenn and Aydelott filed the present motion. Defendant MiraCosta College has also filed a motion to dismiss, which is scheduled for hearing on November 19, 2010.
Defendants argue the Release operates as a bar to all of Plaintiff's claims, and they are therefore entitled to summary judgment. Plaintiff asserts there are genuine issues of material fact that require denial of the motion.
Summary judgment is appropriate if there is no genuine issue as to any material fact, and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). The moving party has the initial burden of demonstrating that summary judgment is proper. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). The moving party must identify the pleadings, depositions, affidavits, or other evidence that it "believes demonstrates the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). "A material issue of fact is one that affects the outcome of the ...