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Dichard v. Morgan

United States District Court, D. New Hampshire

November 22, 2017

Michael Diehard
Robert Morgan, et al.

          J. Daniel Marr, Esq. Mark M. Whitney,


          Andrea K. Johnstone United States Magistrate Judge

         Plaintiff Michael Diehard brought this action in state court against defendants Robert Morgan, Laureen Morgan, James Morgan, and Jay-Mor Enterprises, Inc. ("Jay-Mor"), alleging counts stemming from the termination of Diehard's employment with Jay-Mor. Doc. no. 1-2. The defendants removed the matter here, and Jay-Mor asserted a counterclaim against Diehard alleging, among other things, that Diehard misappropriated Jay-Mor's trade secrets in violation of the Defend Trade Secrets Act of 2016, 18 U.S.C. § 1836, et seq. See doc. no. 3 at 6. Diehard moves for judgment on the pleadings on this trade secrets claim. Doc. no. 8. Jay-Mor objects. Doc. no. 10. For the reasons that follow, Diehard's motion is granted, albeit without prejudice to Jay-Mor filing an amended counterclaim within fourteen days of the issuance of this Order.

         Standard of Review

         "The standard of review of a motion for judgment on the pleadings under Federal Rule of Civil Procedure 12 (c) is the same as that for a motion to dismiss under Rule 12(b) (6) ." Marrero-Gutierrez v. Molina, 491 F.3d 1, 5 (1st Cir. 2007). The court must accept the factual allegations in the complaint as true, construe reasonable inferences in the plaintiff's favor, and "determine whether the factual allegations in the plaintiff's complaint set forth a plausible claim upon which relief may be granted." Foley v. Wells Fargo Bank, N.A., 772 F.3d 63, 71 (1st Cir. 2014) (citation and quotation marks omitted). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Analyzing plausibility is "a context-specific task" in which the court relies on its "judicial experience and common sense." Id. at 67 9.


         Accepting the factual allegations set forth in Jay-Mor's counterclaim as true, the relevant facts are as follows.

         Jay-Mor is a family-owned demolition contracting business located in Hudson, New Hampshire. See doc. no. 3, ¶ 6. Jay-Mor's services include demolition, site work, asbestos/hazardous materials removal, surveys, and equipment and truck rental. Id. ¶ 7. Jay-Mor offers its services in New Hampshire, Massachusetts, and Maine. See id. ¶ 8.

         Diehard is a former employee of Jay-Mor who represented Jay- Mor in a senior-level business development role. Id. ¶ 9. In exchange for his services, Jay-Mor provided Diehard with an "unusually generous compensation package, " which was memorialized in a contract dated September 9, 2014. Id. ¶ 10. Diehard was responsible for identifying and developing new business opportunities on behalf of Jay-Mor. Id. ¶ 12. As such, Diehard served Jay-Mor in a position of trust and confidence and had "unfettered" access to Jay-Mor's confidential business information. Id. ¶¶ 12-13.

         Like other businesses in Jay-Mor's industry, Jay-Mor relied on a variety of confidential business information. Id. ¶ 14. During Diehard's employment, much of Jay-Mor's confidential information was stored in files pertaining to jobs on which Jay-Mor was bidding. Id. These files included information on how Jay-Mor calculated its bids, cost data, overhead, and pricing-margin information, as well as "bid worksheets" containing Jay-Mor's method of bidding. Id. Jay-Mor asserts that all of this information was non-public and would be of tremendous value to competitors, prospective subcontractors, vendors, and suppliers. See id. ¶ 14.

         When he was employed with Jay-Mor, Diehard and other employees developed two large demolition project opportunities for Jay-Mor. Id. ¶ 16. One was located in Ayer, Massachusetts for the Pan Am Railway ("Pan Am project"). Id. The other was located in Nashua, New Hampshire for the Sacred Heart School ("Sacred Heart project").Id. The estimated potential revenue for both projects exceeded $1 million. Id.

         On or about March 2, 2017, Diehard tendered his resignation to Jay-Mor. Id. ¶ 20. In his resignation letter, Diehard specifically threatened to divert the revenue from the Pan Am and Sacred Heart projects to other demolition contractors to secure monies that he contended were owed to him by Jay-Mor. Id. ¶ 21.

         After Diehard resigned, Jay-Mor conducted an investigation and discovered that Diehard had absconded with the confidential project files for the Pan Am and Sacred Heart projects. Id. ¶ 22. Jay-Mor alleges, upon information and belief, that Diehard stole or improperly retained additional Jay-Mor confidential information and trade secrets when he departed. Id. ¶ 23. Jay-Mor later learned that Diehard offered the Pan Am project to other demolition contractors. Id. ¶ 24. Jay-Mor believes that Diehard is shopping the Pan Am and Sacred Heart projects to additional demolition contractors, and is seeking to tie his new employer into the deal in order to ensure that he is paid commission. See id. ¶ 25.

         Jay-Mor filed its trade secrets claim on the basis of these allegations. Jay-Mor specifically contends that Diehard absconded and willfully misappropriated Jay-Mor's trade secrets and confidential information, resulting in damages in ...

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