United States District Court, D. Oregon, Portland Division
F. McGrory, Jr. Kaley L. Fendall DAVIS WRIGHT TREMAINE, LLP
Attorneys for Plaintiff
Timothy J. Resch SAMUELS YOELIN KANTOR, LLP Attorney for
OPINION & ORDER
A. HERNÁNDEZ UNITED STATES DISTRICT JUDGE
Ness & Campbell Crane, Inc., brings three claims against
Defendant Kurt O. Kleppe. First, Plaintiff brings a breach of
contract claim for an alleged breach of the parties'
Shareholder Agreement. Second, Plaintiff brings two claims
for declaratory relief seeking a declaration and
determination of Defendant's breach of the Shareholder
Agreement as well as Plaintiff's rights and obligations
under the Shareholder Agreement, Redemption Agreement, and
Subordinated Promissory Note. Defendant moves to dismiss this
action under Federal Rule of Civil Procedure 12(b)(6). For
the reasons that follow, the Court denies in part and grants
in part Defendant's Motion to Dismiss.
is a former shareholder and Vice President of Plaintiff.
Notice of Removal, Ex. 1 Complaint (“Compl.”)
¶¶ 10, 12, ECF 1-1. Around the time of
Plaintiff's formation in August of 2008, Plaintiff and
Defendant entered into a Shareholder Agreement that governed
the terms of their relationship. Compl. ¶¶ 12, 14;
Compl. Ex. 1 at 1 (“Shareholder Agreement”). In
addition to providing terms for any sale of stock in the
event of an employee's voluntary termination, Shareholder
Agreement ¶ 6.2, Defendant agreed to abide by three
non-solicitation and non-competition provisions described in
sections 13.1(a)-(c) of the Shareholder Agreement
“during the 3 years following any sale of his
shares.” Compl. ¶ 12. Generally, Defendant agreed
(1) not to engage in any business that competes with
Plaintiff or provides services related to crane operation and
rental within a 300 mile radius of Portland, OR, and Seattle,
WA; (2) not to solicit business from any of Plaintiff's
customers, cause its customers to cease business with
Plaintiff, or cause its customers to change their
relationship with Plaintiff; and (3) not to solicit or induce
any employees to leave their employment with Plaintiff.
Compl. ¶¶ 12(a)-(c).
November 6, 2015, Defendant resigned from his position as
Vice President and entered into an agreement to sell his
shares of stock in the company to Defendant pursuant to the
terms of the Shareholder Agreement. Compl. ¶ 14. As part
of this sale, the parties entered into a Redemption Agreement
and Subordinated Promissory Note that governed the terms of
the redemption. Compl. ¶ 14. The agreements provide that
in exchange for Defendant's shares, Plaintiff would make
annual payments in the amount of $186, 928.26 between
September 30, 2016 and September 30, 2020. Compl. ¶ 14.
The Redemption Agreement also contains a release provision
and integration clause central to the present dispute:
5.2 Release by Company. Company, and each of
its successors, assigns, affiliates, officers, directors,
stockholders, agents, employees, consultants and attorneys
does hereby and forever release, discharge, and acquit
Stockholder and his successors assigns and spouse or domestic
partner, from and against any and all claims, damages,
liabilities, obligations, actions, and causes of action,
whether sounding in tort, contract, equity or otherwise,
whether known or unknown, whether suspected or unsuspected,
and whether arising directly in favor of Company, or by way
of assignment, subrogation, or indemnification held by
7.6 Entire Agreement; Modification. This
agreement constitutes the entire agreement among the parties,
and supersedes all prior agreements and understandings, oral
and written, with respect to its subject matter. No
modification or amendment of this Agreement will be effective
unless it is executed in writing by both parties.
Resch Decl., Ex. 1, ECF 5-1 (“Redemption
his resignation, Plaintiff alleges that Defendant went to
work as the general manager of N.W. Tower Crane, a crane
company in Des Moines, Washington, that had
“consistently contracted with [Plaintiff].”
Compl. ¶¶ 16-17. Since Defendant began working at
N.W. Tower Crane, Plaintiff alleges that “NW Tower
Crane has ceased contracting with Ness Campbell” and
began using the services of one of its primary competitors.
Compl. ¶ 18. Plaintiff further alleges that it has
“lost approximately 20 employees” to this same
competitor since Defendant began working for N.W. Tower
Crane. Compl. ¶ 20. Plaintiff alleges that the cause of
both the loss of N.W. Tower's business and its employee
are either directly or indirectly attributable to Defendant.
Compl. ¶¶ 19-20.
contends the actions above constitute a violation of the
Shareholder Agreement, Compl. ¶¶ 23-25, which it
claims survived Defendant's voluntary resignation in
2015. Compl. ¶ 15. Plaintiff accordingly filed this
action in Multnomah County on November 2, 2017. Notice of
Removal ¶ 1, ECF 1. Plaintiff seeks $2, 500, 000 in
damages related to its breach of contract claim as well as
declaratory relief, Compl. ¶¶ 25, 33, 41. Defendant
removed this action to Federal Court on November 21, 2017,
under this court's diversity jurisdiction, Notice of
Removal, ¶¶ 4-5, and subsequently filed the present
motion to dismiss, Def's Mot. Dismiss, ECF 4.
motion to dismiss under Federal Rule of Civil Procedure
12(b)(6) tests the sufficiency of the claims. Navarro v.
Block, 250 F.3d 729, 732 (9th Cir. 2001). “All
allegations of material fact are taken as true and construed
in the light most favorable to the nonmoving party.”
Am. Family Ass'n, Inc. v. City & Cnty. of
S.F., 277 F.3d 1114, 1120 (9th Cir. 2002). To survive a
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[, ]” meaning “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) (internal ...