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Cen Com Inc. v. Numerex Corp.

United States District Court, W.D. Washington, Seattle

May 17, 2018

CEN COM INC., a Washington corporation d/b/a American Digital Monitoring, Plaintiff,
v.
NUMEREX CORP., a Pennsylvania corporation; NEXTALARM, LLC, a Georgia limited liability corporation, and DOES 1-10, Defendants.

          ORDER GRANTING IN PART MOTION TO DISMISS

          RICARDO S. MARTINEZ, CHIEF UNITED STATES DISTRICT JUDGE.

         I. INTRODUCTION

         This matter comes before the Court on Defendants' Motion to Dismiss Plaintiff's Amended Complaint. Dkt. #76. Defendants argue that Plaintiff's claims for breach of contract, negligence, fraud, misrepresentation, conversion, unjust enrichment, aiding and abetting, vicarious liability, civil conspiracy, and violations of Washington's Consumer Protection Act (“CPA”), must be dismissed because they are displaced by Washington's Uniform Trade Secrets Act (“UTSA”). Id. Plaintiff opposes the motion, asserting that its claims are not displaced by the UTSA because it no longer asserts a trade secret misappropriation claim, and because its claims are factually independent and well-pled in any event. Dkt. #91. For the reasons set forth below, the Court GRANTS IN PART Defendants' Motion to Dismiss.

         II. BACKGROUND

         This breach of contract/trade secret matter was removed to this Court on April 11, 2017. Dkt. #1. According to the initial Complaint, Defendant NextAlarm, LLC (“NextAlarm”) and Plaintiff Cen Com, Inc. (“Cen Com”) are businesses in the alarm-monitoring industry. Dkt. #1-2 at ¶ ¶ 1.1 and 1.2. The parties worked together for several years. Id. at ¶ 4.4. That business relationship allowed Cen Com to monitor NextAlarm accounts and respond to signals from those accounts to summon the appropriate first responders. Id. Cen Com contends that while providing those services, its employees learned that NextAlarm lacked crucial and commercially valuable information/data regarding NextAlarm customers. See ¶ ¶ 4.6-4.7. Cen Com allegedly acquired that missing information/data while providing services for NextAlarm. Id. When NextAlarm notified Cen Com that Cen Com's services would no longer be needed, Cen Com offered to sell that data to NextAlarm, but a sale never materialized. Instead, the parties entered into a deal whereby Cen Com agreed to act solely as an intermediary by forwarding NextAlarm signals to a new vendor whose live operators would dispatch emergency services or contact customers as needed. Id. at ¶ 4.8 and Ex. A thereto. The agreement required NextAlarm to use reasonable efforts to ensure that the new vendor did not use Cen Com's data for improper purposes. Id. and ¶ 4.10.

         On March 7, 2018, this Court granted Defendants' Motion for Judgment on the pleadings. Dkt. #60. The Court determined that Plaintiff's Claims 1-9 and 11 were displaced by the UTSA. Id. The Court left Plaintiff's claim for Vicarious Liability, recognizing that was a general theory of liability rather than a separate claim. Thus, the only remaining claim for litigation was one for trade secret misappropriation. Id. The Court then granted Plaintiff leave to amend.

         On March 27, 2018, Plaintiff filed its Amended Complaint. Dkt. #73. Plaintiff continues to allege that:

defendant Numerex Corp., and its subsidiary NextAlarm, LLC, knowingly and willfully, in violation of its legal and contractual duties, independently, and together with a non-party, Amcest Corporation, improperly accessed, took, used, and gained the benefit of confidential, proprietary, and valuable data from and owned by the plaintiff Cen Com, Inc., including but not limited to Cen Com's trade secret information, subscriber data, and other valuable, proprietary data.

Dkt. #73 at ¶ ¶ 1.1 and 4.1. Based on these allegations, inter alia, Plaintiff now asserts ten claims against Defendants, including claims for breach of contract, negligence, fraud/misrepresentation, negligent misrepresentation, conversion, violation of Washington's CPA, unjust enrichment, aiding and abetting, civil conspiracy and vicarious liability. Id. at ¶ ¶ 5.1-14.2. It no longer asserts a claim for trade secret misappropriation under the UTSA.

         III. DISCUSSION

         A. Legal Standard for Motions to Dismiss

         On a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 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). However, the court is not required to accept as true a “legal conclusion couched as a factual allegation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). The Complaint “must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Id. at 678. This requirement is met when the plaintiff “pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. Absent facial plausibility, Plaintiffs' claims must be dismissed. Twombly, 550 U.S. at 570.

         Though the Court limits its Rule 12(b)(6) review to allegations of material fact set forth in the Complaint, the Court may consider documents of which it has taken judicial notice. See FRE 201; Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007). Here, the Court has taken judicial notice of a contract between the parties, which was attached to, and incorporated by reference in, the Amended Complaint. Dkt. #73, Ex. A; FRE 201; Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001).

         B. ...


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