Crabar/GBF, Inc. v. Wright

644 F.Supp.3d 513

CRABAR/GBF, INC., Plaintiff and counterclaim defendant, v. Mark WRIGHT and Wright Printing Co., Defendants and counterclaimants, and Mardra Sikora, Jamie Fredrickson, and Alexandra Kohlhaas, Defendants.

8:16-CV-537

United States District Court, D. Nebraska

Signed December 5, 2022

Patrick S. Cooper, Paul M. Shotkoski, Sarah L. McGill, Timothy J. Thalken, Fraser, Stryker Law Firm, Omaha, NE, for Plaintiff and Counterclaim Defendant.

Colin J. Bernard, Erin R. Robak, James D. Johnson, Mary L. Hewitt, Mathew T. Watson, McGill, Gotsdiner Law Firm, Omaha, NE, for Defendants and Counterclaimants, Defendants.

MEMORANDUM AND ORDER

John M. Gerrard, United States District Judge

This matter is before the Court on a host of motions, most pertinently the plaintiff's motion for partial summary judgment (filing 378) as to liability on some (but not all) of its claims, and the defendants' cross-motion for summary judgment (filing 382) as to the entirety of the plaintiff's complaint. The Court will deny the plaintiff's motion, and will for the most part deny the defendants' motion as well. This case will proceed to trial.

I. BACKGROUND

Defendant Mark Wright and his eponymous printing company, defendant Wright Printing Co., were before 2013 in the business of custom-printed folders, including multimedia folders and pocket folders, described as "a low cost, quick-turn around presentation folder manufacturer able to produce and ship many standard folders within 24 hours of the approved order." Filing 385 at 2-3.¹ Wright's folder business was located at an industrial facility Wright owned on I Street in southwest Omaha, that was leased by Wright Printing from another business entity. Filing 381 at 4.

In 2013, Wright sold the folder business to plaintiff Crabar/GBF, Inc. Filing 385 at 3. The sale included products distributed under several trade names: "Folder Express," which provided "custom-printed presentation, multimedia, pocket, and other folders, report covers, and related products for use by businesses and other commercial end-users"; "Progress Music Publications," which made promotional music folders and wall calendars for music stores that sold and rented instruments to school band and orchestra members; and "Progress Publications," which made school folders and planners for educational institutions. Filing 381 at 6.

The "Asset and Purchase Agreement" (the "Agreement") that consummated the sale contains several provisions about which the parties now disagree. See filing 302 at 62-104. In pertinent part, § 1.1 of the Agreement provided that the plaintiff was buying "all right and title to and interest in the Acquired Assets," separately defined to include:

All data, records, files, manuals, and other documentation related to the Acquired Assets and the operation of the Business, whether in electronic form or otherwise, including: (j) any and all customer lists, customer and prospect databases, customer sales information, information regarding customer printing requirements, job files, jackets, artwork, base negatives, job logs and other similar information regarding printing work performed for customers of the Business; (ii) all client, customer and supplier lists, telephone numbers and electronic mail addresses with respect to past, present or prospective clients, customers and suppliers of the Business....

Filing 302 at 63-64. The acquired assets also included Wright Printing's "Intellectual Property" and "[a]ll goodwill incident to the Business, including the value of the Names associated with the Business which are transferred to Purchaser hereunder and the value of good customer relations...." Filing 302 at 64-66. The "intellectual property" included Wright Printing's trademarks and "unpatented inventions, discoveries, specifications, data, processes, formulae, trade secrets, proprietary technical information or know-how, industrial models, confidential and technical information, manufacturing, engineering and technical drawings, product specifications and confidential business information." Filing 302 at 65. But the sale didn't include Wright Printing's "assets and properties which are used in the Affiliate Business and which are not located at the Omaha Facility," which referred to a separate printing and packaging operation of Wright Printing that wasn't part of the sale. Filing 302 at 63, 66.

As part of the sale, in § 5.1(c) of the Agreement, Wright Printing agreed that "[f]rom and after the closing date" the plaintiff would have all of Wright Printing's "Intellectual Property currently used in the Business" and that Wright Printing would not use any of the intellectual property except in performance of the Agreement. And in § 5.1(e), Wright Printing agreed that from and after the closing date, Wright Printing would not use any of its "Confidential Information" except in operating the "Affiliate Business." Filing 302 at 77. "Confidential Information" includes trade secrets and "information regarding the business of Seller, its manufacturing processes, methods of operation, products, financial data, sources of supply and customers." Filing 302 at 78.

Section 7.1 of the Agreement also contained 2-year non-compete, non-solicitation, and non-disclosure provisions applicable to Mark Wright and Wright Printing. Filing 302 at 84-86. And § 8.5 of the Agreement provided that "[t]he representations, warranties, covenants and agreements of the Parties shall survive the Closing for a period of two (2) years." Filing 302 at 91.

The Agreement closed on September 30, 2013. Filing 385 at 3. The plaintiff does not deny that after closing, it made changes to production and its sales declined (although the parties sharply dispute the cause of some or all of that decline). Filing 385 at 4. For production, the plaintiff continued to use the I Street facility, leased from Wright. Filing 385 at 4. The plaintiff leased the facility for a one-year term starting on the closing date, subject to a one-year extension that the plaintiff exercised, extending the lease through September 30, 2015. Filing 385 at 4.

In the meantime, at least according to the plaintiff, Wright Printing was preparing to reenter the folder business. Wright's daughter, defendant Mardra Sikora—who was employed by Wright Printing—purchased the domain name "pocketfoldersfast.com" in 2014 and told Wright, in January 2015, that she had it. Filing 381 at 8; see filing 401-3 at 25-26. Among other things, Wright and Sikora kept customer lists for Folder Express and Progress Publications, including sales information. Filing 381 at 13-14. Wright also retained financial information that had been included in the sale to the plaintiff. Filing 381 at 14, 17. And Wright Printing either retained or reacquired steel-cut die information that would allow it to duplicate the folder products it had previously made that were now being made by the plaintiff. Filing 381 at 16-17.

When the plaintiff purchased the folder business it retained some of Wright Printing's employees, including defendants Alexandra Kohlhaas (who worked as a graphic artist, then a prepress manager) and Jamie Frederickson (who worked as a prepress manager). Filing 381 at 18; filing 385 at 3. Kohlhaas returned to Wright Printing in May 2016, and Fredrickson returned in "early 2016." Filing 381 at 18. When she left, Kohlhaas kept a hard drive from the plaintiff including die templates, which she then transferred to Wright Printing. Filing 381 at 19. Fredrickson helped her do it. Filing 381 at 19.

As the September 30, 2015 expiration date for the I Street facility lease was approaching, the plaintiff and Wright were unable to agree on an extension. Filing 385 at 4. Eventually, Wright agreed to extend the lease only until December 31, 2015. Filing 385. In exchange, the plaintiff and Wright Printing entered into the "Release and Waiver Agreement" (the "Release"), effective June 25, 2015, which also contains several disputed provisions. Filing 385 at 5; see filing 302 at 107-14. In relevant part, the Release provides that the "representations and warranties" referred to in § 8.5 of the Agreement were terminated immediately. Filing 302 at 107-08. And "all indemnification and other obligations of performance" of Wright Printing under the Agreement were immediately terminated, as were the plaintiff's "rights to seek any recourse or remedy in relation thereto." Filing 302 at 108. That said, the Release did preserve the restrictive covenants found in § 7.1. Filing 302 at 108.

In December 2015, the plaintiff moved its folder business to a facility in Kansas. Filing 385 at 5. In 2016, Wright Printing— relying at least in part on information the plaintiff argues was confidential—relaunched its folder business, offering a range of products similar or identical to the plaintiff's products. See filing 381 at 7-13. Wright Printing's "Pocket Folders Fast" is, the plaintiff says, analogous to the plaintiff's "Folder Express," and Wright Printing's "Bandfolder Press" is analogous to the plaintiff's "Progress Music." See filing 381 at 7.

The plaintiff's operative complaint, as relevant, asserts several theories of recovery against the defendants:

(a) Breach of the Agreement, against Wright Printing.

(b) Violation of the Nebraska Trade Secrets Act, against all defendants.

(c) Tortious interference with business relationships, against all defendants.

(d) Federal trademark infringement in violation of the Lanham Act, against Wright Printing.

(e) Federal unfair competition in violation of the Lanham Act, against Wright Printing.

(f) State common-law unfair competition, against Wright Printing.

(g) Violation of the Nebraska Uniform Deceptive Trade Practices Act, against Wright Printing.

(h) Fraud, against Wright and Wright Printing.

(i) Breach of the non-disparagement clause of the Release, against Wright and Wright Printing.

(j) Violation of the federal Defend Trade Secrets Act of 2016, against all defendants.

(k) Breach

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