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Hoyt A. Fleming v. Tom Coverstone

August 22, 2011

HOYT A. FLEMING,
PLAINTIFF,
v.
TOM COVERSTONE, DEFENDANT. TOM COVERSTONE, COUNTERCLAIMANT,
v.
HOYT A. FLEMING; TERESA A. FLEMING; AND PARK, VAUGHAN & FLEMING, LLP, COUNTERDEFENDANTS.



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

ORDER

The matters before the Court are the Motion For Sanctions (ECF No. 227) and the Motion for Court's Review of Order Taxing Costs (ECF No. 231) filed by Plaintiff Hoyt A. Fleming.

I. Background

This action concerned a dispute over the sale of a Plaintiff's patent portfolio to Defendant. On February 28, 2008, Hoyt A. Fleming ("Fleming") initiated this action by filing a complaint against Tom Coverstone ("Coverstone"). (ECF No. 1). On October 21, 2008, Fleming filed his Second Amended Complaint ("SAC"). (ECF No. 29). On March 18, 2009, the Court granted Coverstone's Motion to Strike pursuant to California's anti-SLAPP (Strategic Litigation Against Public Participation) statute and struck the SAC's cause of action for extortion. (ECF No. 47). In the same order, the Court also denied Coverstone's Motion to Dismiss the SAC's cause of action for breach of contract, holding that the cause of action stated a claim. Id.

On April 20, 2009, Coverstone filed a First Amended Answer to Plaintiff's Second Amended Complaint which included counterclaims against Fleming for fraudulent misrepresentation and fraudulent concealment. (ECF No. 58). On June 25, 2009, the Court denied Fleming's Motion for Partial Summary Judgment seeking summary judgment on the grounds that emails exchanged on January 22, 2008 between Fleming and Coverstone constitute a valid contract. (ECF No. 77).

On July 28, 2009, the Court granted Fleming's Motion for Leave to File Third Amended Complaint ("TAC"). (ECF No. 83). On July 29, 2009, Fleming filed his TAC, which became the operative pleading in this case. (ECF No. 84). The TAC asserted one claim for breach of contract. Plaintiff alleged that he agreed to sell and Coverstone agreed to purchase U.S. Patent No. 6,204,798, Reissued Patent No. 039,038, Patent Application No. 11/196,841, and Patent Application No. 11/924,352. Id. The TAC alleged that Fleming sent an email to Coverstone on January 22, 2008 ("Plaintiff's January 22 email"), which stated:

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 desire my assistance on matters relating to the above patents and/or applications, you may retain me through my firm, Park, Vaughan, and Fleming. My hourly rate is $425 for non-testifying services, and $850 for testifying services.

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

Thank you, Hoyt Fleming Id. at 2-3. The TAC alleged that Coverstone responded via an email which contained the text of Fleming's email and stated:

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 ...


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