United States District Court, N.D. California
ORDER CONVERTING MOTION TO DISMISS INTO MOTION FOR
SUMMARY JUDGMENT AND VACATING HEARING
WILLIAM ALSUP UNITED STATES DISTRICT JUDGE
misappropriation of trade secrets action, defendants move to
dismiss pro se plaintiff's complaint. For the
reasons set forth below, this order converts the motion to
dismiss into a motion for summary judgment and will require
plaintiff Champion Daniel Muthle (otherwise known as Daniel
Maree) founded and owns Adheat, Incorporated. Adheat
developed a proprietary and confidential geospatial analytics
technology platform. In April 2017, defendants Ryan Van Dyk
and Jun Meng, representing SAP.io Fund, L.P. (erroneously
referred to as SAP.io) had a conference call with plaintiff
to discuss a possible investment in Adheat. Plaintiff then
submitted a pitch deck detailing Adheat's technology to
defendants. A few months after the call with SAP, plaintiff
alleged in his complaint that “a virtually identical,
mirror-image platform was released into the marketplace by
Atlas.io” which is “clearly based on Adheat's
MVP schematics, business model, and cross industry
(horizontal SaaS) approach” (First Amd. Compl.
¶¶ 4-7). Nearly a year later, both parties signed a
settlement and release agreement. In the agreement, plaintiff
agreed to “irrevocably and forever settle, release, and
absolutely discharge SAP and its current affiliates and
related entities from any and all claims that could have been
brought, whether known or unknown” (Dkt. No. 12 at
2019, however, plaintiff commenced this action against
defendants Sap.io, SAP Global, SAP North America, Atlas.io,
Ryan Van Dyk, and Jun Meng in the Superior Court of
California for the County of Santa Clara (Dkt. No. 12 at 2).
Plaintiff's complaint alleges that defendants
misappropriated “confidential, proprietary, and trade
secret information” (First Amd. Compl. ¶ 14).
Plaintiff brings seven claims against defendants: (1)
violation of Defend Trade Secrets Act; (2) violation of
California Uniform Trade Secrets Act; (3) patent
infringement; (4) violation of California Business and
Professional Code Section 17200; (5) intentional interference
with advantageous economic relationships; (6) intentional
infliction of emotional distress; (7) breach of contract
(id. ¶¶ 16-22).
September 2019, defendants removed the lawsuit to the United
States District Court for the Northern District of California
(Dkt. No. 1). SAP, as the only named and served defendant,
consented to the removal (ibid.). Plaintiff opposes
(Dkt. No. 15). The following month, plaintiff filed a motion
in limine asking the court to dismiss the agreement (Dkt. No.
20). Defendants now move to dismiss the claims pursuant to
12(b)(6) (Dkt. No. 12).
should know better than to append supplementary documents to
their motion to dismiss. Defendants request judicial notice
of the settlement and release agreement (Dkt. No. 12 at 5).
Plaintiff's complaint, however, contains no reference to
the agreement. It is improper to take judicial notice of the
document in a motion to dismiss under Rule 12(b)(6). Rather,
it is appropriate for this Court to consider documents
outside the complaint in a motion for summary judgment.
the motion to dismiss turns upon facts outside the corners of
the complaint, Rule 12(d) provides that the motion should be
converted to a motion for summary judgment. Therefore, this
motion will be treated as a motion for summary judgment.
Under Rule 56(d), this order will give plaintiff the
opportunity to take discovery from defendants, if plaintiff
so wishes, to test the impacts of the agreement. In addition,
plaintiff may submit his own declaration under oath to
contest the validity of the settlement agreement, subject to
being deposed by defendants. Both sides are expected to
participate in the expedited discovery.
request for judicial notice is Denied.
Because defendants' motion to dismiss relies on evidence
outside the pleadings, pursuant to Rule 12(d), the motion is
converted into summary judgment under Rule 56. Expedited
discovery is ordered. Plaintiffs opposition will be due on
December 2, 2019. Defendants' reply will
be due within seven calendar days
thereafter. The hearing scheduled for November 7th is
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