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Richard Paris, An Individual v. Carbon Bio-Engineers Inc.

July 9, 2012

RICHARD PARIS, AN INDIVIDUAL,
PLAINTIFF,
v.
CARBON BIO-ENGINEERS INC., A HAWAII CORPORATION; MICHAEL LURVEY, AN INDIVIDUAL, AND DOES 1- 10, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: J. Michael Seabright United States District Judge

ORDER GRANTING PLAINTIFF RICHARD PARIS' MOTION TO DISMISS COUNTERCLAIM, FILED APRIL 9, 2012

I. INTRODUCTION

On March 12, 2012, Plaintiff Richard Paris ("Plaintiff") filed this diversity action against Defendants Carbon Bio-Engineers Inc. ("CBE") and Michael Lurvey ("Lurvey") (collectively, "Defendants"). Plaintiff asserts claims for breach of contract, breach of fiduciary duty, and unjust enrichment based on his allegedly unlawful discharge as Chief Executive Officer ("CEO") of CBE, a company in the business of developing and marketing a "green" technology for waste disposal. On April 9, 2012, Defendants filed an Answer and Counterclaim, which asserts that Plaintiff misrepresented his educational and business qualifications and was unable to carry out his duties as CEO.

Currently before the court is Plaintiff's Motion to Dismiss the Counterclaim for failure to comply with Federal Rules of Civil Procedure 8, 9(b), and 12(b)(6). Based on the following, the court finds that Defendants have failed to assert plausible claims for relief against Plaintiff and therefore GRANTS Plaintiff's Motion to Dismiss, with leave for CBE to file an Amended Counterclaim.

II. BACKGROUND

On March 12, 2012, Plaintiff filed his Complaint asserting the following factual allegations:*fn1

In 2009, Plaintiff entered into a contract to assist Lurvey in forming CBE, a company that would develop and exploit certain "green" technology using a Lurvey-developed system called the Thermal Conversion of Organic Material System (the "TCOM System"). Doc. No. 1, Compl. ¶ 11. The parties formed CBE, and on October 23, 2009, Plaintiff entered into a contract with CBE making him CEO. Id. ¶ 13. On February 12, 2010, Lurvey transferred ownership in the TCOM System to CBE and entered into a Consulting Agreement whereby he agreed to work exclusively for, and not compete with, CBE. Id. ¶¶ 13-14.

In the fall of 2011, Plaintiff was in the final stages of bringing in several large customers to CBE when Lurvey began to obstruct these deals and attempt to transfer the rights to the TCOM system to another company for his own benefit. Id. ¶¶ 15-19. When Plaintiff raised Lurvey's misconduct with CBE's Board, it refused to take any action and ultimately terminated Plaintiff without paying his salary or offering him stock options as required under his employment contract. Id. ¶¶ 20-30. Based on these allegations, Plaintiff asserts claims for breach of contract, breach of fiduciary duty, and unjust enrichment.

On April 9, 2012, Defendants filed a Counterclaim, which includes the following factual allegations:

(1) In applying for and obtaining employment with Defendants Plaintiff Paris materially misrepresented his educational and business qualifications and experience knowing and intending that the Defendants would rely and did rely upon those misrepresentations to their detriment and injury;

(2) Plaintiff Paris breached his fiduciary duties and obligations to Defendants by applying for and assuming employment responsibilities after failing to accurately and honestly provide his educational and business qualifications to the Defendants;

(3) Due to his lack of sufficient educational and business qualifications Plaintiff Paris failed and refused and was incapable of carrying out the responsibilities of his employment to the detriment and injury of Defendants.

Doc. No. 7-1, Counterclaim ¶¶ 1-3.

On April 27, 2012, Plaintiff filed his Motion to Dismiss Counterclaim. Defendants filed an Opposition on June 22, 2012, and Plaintiff filed a Reply on July 2, 2012. Pursuant to Local Rule 7.2(d), the ...


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