Techint Solutions Grp., LLC v. Sasnett

TECHINT SOLUTIONS GROUP, LLC, Plaintiff, v. BRANDON SASNETT, et al., Defendants.

Civil Action No. 5:18-cv-00037

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF VIRGINIA HARRISONBURG DIVISION

June 26, 2019

By: Elizabeth K. Dillon United States District Judge

MEMORANDUM OPINION

Pending before the court is defendant Scott Crino's motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). (Dkt. No. 131.)¹ In it, he seeks dismissal of all four counts against him: Count II—a claim for tortious interference; Count IV—a conspiracy claim; Count V—aiding and abetting breach of fiduciary duty; and Count VI—a separate count of injunctive relief. For the reasons discussed herein, the court will deny the motion to dismiss.

I. BACKGROUND

The court will dispense with a detailed description of the facts alleged in the amended complaint. Instead, important relevant facts will be discussed in context below. In broad terms, though, the amended complaint asserts claims by TechINT Solutions Group, LLC against its former employee and previous part owner, Brandon Sasnett, and against the CEO of Red Six, Crino, who was allegedly involved in hiring Sasnett to work for Red Six. Red Six, a former customer and allegedly now a competitor of TechINT's, was initially named as a defendant, butwas dismissed by prior order of the court in order to preserve the court's subject-matter jurisdiction, which is premised on diversity.

Shortly after Sasnett's hiring by Red Six, TechINT advised Crino that Sasnett had a Services Agreement that barred him, for a term of two years after his employment with TechINT ended, from providing the same services TechINT provided to its actual clients and certain prospective clients and also barred him from soliciting TechINT employees. Even after Crino learned of that agreement and received a copy of it, Red Six continued to employ Sasnett. According to the amended complaint, Sasnett, while employed with Red Six, is performing the same services he performed for TechINT, in violation of the restrictive covenants in his Services Agreement. This includes performing services for a number of TechINT clients or former clients. Lastly, TechINT alleges that Sasnett, on behalf of Red Six and again in violation of his Services Agreement, solicited another TechINT employee, Archie Stafford, who abruptly left TechINT and began working for Red Six.²

The claims in the amended complaint are:

Count I: a breach of contract claim for breach of the Services Agreement (against Sasnett only);

Count II: tortious interference with contract and business expectancies (against Sasnett and Crino);

Count III: conversion (against Sasnett only);

Count IV: conspiracy (against Sasnett and Crino);

Count V: breach of fiduciary duty and aiding and abetting breach of fiduciary duty (against Sasnett and Crino); and

Count VI: injunctive relief enforcing the terms of Sasnett's Services Agreement and ordering all defendants to "cease any further unlawful activity."

(Am. Compl., Dkt. No. 120.) Additional relevant facts will be discussed in context.

II. DISCUSSION

A. Legal Standards for a Motion to Dismiss Pursuant to Rule 12(b)(6)

A motion to dismiss under Rule 12(b)(6) challenges the legal sufficiency of a plaintiff's complaint to determine whether it has properly stated a claim. Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). To survive a Rule 12(b)(6) motion to dismiss, a complaint must contain "sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678. To survive a motion to dismiss, the complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief" and sufficient "[f]actual allegations . . . to raise a right to relief above the speculative level . . . ." Twombly, 550 U.S. at 555 (internal quotation marks omitted). Therefore, the complaint must "allege facts sufficient to state all the elements of [the] claim." Bass v. E.I. Dupont de Nemours & Co., 324 F.3d 761, 765 (4th Cir. 2003). Although "a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations," a pleading that merely offers "labels and conclusions" or "a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555.

B. Count II: Tortious Interference with Contract and Business Expectancies

Crino first asserts that the amended complaint fails to state a claim for tortious interference with contract and business expectancies in Count II. To state such a claim under Virginia law, TechINT must plausibly allege: (1) the existence of a valid contractual relationship or business expectancy; (2) knowledge of the relationship or expectancy on the part of Crino; (3)intentional interference including or causing the breach of termination of the relationship or expectancy; and (4) resulting damages to TechINT. See Int'l Union, United Mine Workers of Am. v. Covenant Coal Corp., 977 F.2d 895, 899 (4th Cir. 1992).

Crino offers only one argument for dismissal of Count II. Specifically, he argues that dismissal is proper because the amended complaint does not assert that he was acting as anything other than Red Six's CEO. (Mem. Supp. Mot. Dismiss 7, Dkt. No. 132.) From this, he posits that TechINT has failed "to allege sufficient facts to establish that Crino, in his individual capacity, intentionally interfered with TechINT's contracts." Id.

The fact that Crino was acting as Red Six's CEO, however, does not insulate him from personal liability. It is well-established in Virginia that an agent acting within the scope of his employment can nonetheless be liable for his own torts. VanBuren v. Grubb, 733 S.E.2d 919, 923 (Va. 2012) ("It has long been settled in Virginia that employer and employees are deemed to be jointly liable and jointly suable for the employee's wrongful act.") Thus, this argument is of no assistance to Crino and does not require the dismissal of Count II.

C. Count IV: Conspiracy

In Count IV, TechINT alleges violations of the Virginia Business Conspiracy Act, Virginia Code §§ 18.2-499 and 500. To recover under those statutes against Crino, TechINT must prove, by clear and convincing evidence, that: (1) Crino conspired with at least one other person to harm TechINT; (2) at least one co-conspirator acted with legal malice toward TechINT; and (3) the conspiratorial actions of Crino and one or more of the other co-conspirators caused TechINT to suffer damages. See Multi-channel TV Cable Co. v. Charlottesville Quality Cable Operating Co., 108 F.3d 522, 526, 527 (4th Cir. 1997); see alsoAllen Realty Corp. v. Holbert, 318 S.E.2d 592, 596 (Va. 1984); Va. Vermiculite, Ltd. v. W.R. Grace & Co.-Conn., 144 F. Supp. 2d 558, 601 (W.D. Va. 2001).

Crino argues that the business conspiracy claim must be dismissed for two independent reasons: (1) Crino, Red Six, Sasnett, and Archie Stafford cannot conspire because they are all part of the same corporation and therefore protected by the intracorporate immunity doctrine; and (2) the allegations against Crino individually are too vague and conclusory to support a conspiracy claim. The court finds both of these arguments wanting at this stage of the case.

First, with regard to the intracorporate immunity doctrine, it is true that a single entity generally cannot conspire with itself. ePlus Tech, Inc. v. Aboud, 313 F.3d 166, 179 (4th Cir. 2002) ("[U]nder the intracorporate immunity doctrine, acts of corporate agents are acts of the corporation itself, and corporate employees cannot conspire with each other or with the corporation."). So, to the extent certain allegations in the complaint occurred while the alleged co-conspirators were all working for Red Six and within the scope of their employment for Red Six, they cannot have conspired.

But some of the amended complaint's allegations do not fall within those parameters. Instead, as TechINT correctly notes, the amended complaint plausibly alleges that Sasnett and Crino began conspiring before Red Six hired Sasnett (Am. Compl. ¶¶ 33-34) and plausibly alleges that while at Red Six, Sasnett conspired further with Stafford before Red Six hired him (Id. ¶¶ 43, 54). Most specifically, the amended complaint alleges that in the month or so preceding Sasnett's resignation, he and Crino were interacting with regard to services being provided by TechINT to Red Six, including preparations to provide services under a purchase order from Red Six. Then, the day before he resigned, "Sasnett inquired with Crino about potential employment with Red Six" [and] "Crino informed Sasnett that Red Six would'absolutely' be interested in employing Sasnett." (Id. ¶ 33.) Additionally, less than one week after Sasnett started working for Red Six (whether as an independent contractor or an employee), Red Six cancelled the purchase order that it had with TechINT. As noted, Sasnett had been working with Red Six and with Crino on the services to be provided under that purchase order, and TechINT alleges that "Red Six has employed or engaged Sasnett to provide the UAS services previously provided by TechINT." (Id. ¶¶ 34, 36.) Since "joining Red Six, Sasnett has provided competitive services to at least eight clients of TechINT in violation of his Services Agreement." (Id. ¶ 41.) The "reasonable inferences" from all of these facts, taken together, render it plausible that any conspiracy began before Sasnett was hired.

Crino's second argument as to the conspiracy count is similarly infirm. He contends that the allegations in the complaint are too bald and conclusory to satisfy Iqbal and Twombly because they allege a...