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Aginformationdata, LLC v. Integrated Solutions Group, Inc.

United States District Court, D. Minnesota

September 2, 2014

AgInformationData, LLC, Plaintiff,
v.
Integrated Solutions Group, Inc.; AgTrax Technologies, Inc.; AgWorks, Inc.; and AgWorks, LLC, Defendants.

Lindsay J. Sokolowski, Esq., Pamela Abbate-Datilo, Esq., and Ted C. Koshiol, Esq, Fredrikson & Byron, PA, counsel for Plaintiff.

Jon R. Dedon, Esq. and Mark A. Olthoff, Esq., Polsinelli Shughart PC; and Paul R. Dieseth, Esq., Anne M. Trimberger, Esq., and Shannon L. Bjorklund, Esq., Dorsey & Whitney LLP, counsel for Defendants Integrated Solutions Group, Inc. and AgTrax Technologies, Inc.

Peter M. Waldeck, Esq. and Timothy W. Waldeck, Esq., Waldeck Law Firm PA, counsel for Defendants AgWorks, Inc. and AgWorks, LLC.

MEMORANDUM OPINION AND ORDER

DONOVAN W. FRANK, District Judge.

INTRODUCTION

This matter is before the Court on the following cross-motions for summary judgment: AgWorks, Inc. and AgWorks, LLC's (together, "AgWorks") Motion for Summary Judgment (Doc. No. 100); Integrated Solutions Group, Inc. and AgTrax Technologies, Inc.'s (together, "AgTrax")[1] Motion for Summary Judgment (Doc. No. 107); and AgInformationData, LLC's ("Plaintiff" or "AgInfo") Motion for Partial Summary Judgment (Doc. No. 122). For the reasons set forth below, the Court grants in part and denies in part the motions.

BACKGROUND

Plaintiff is a two-person Minnesota company that creates technology products for agriculture, including software products that help agricultural companies with the "on the ground" aspects of their work, such as tracking trucks, managing a warehouse, and ensuring regulatory compliance. (Doc. No. 126 ("Abbate-Dattilo Aff.") ¶ 25, Ex. X ("Fiebelkorn Dep.") at 5-6; Abbate-Dattilo Aff. ¶ 2, Ex A ("Fiebelkorn Aff.") at ¶ 3.) Kent Fiebelkorn ("Fiebelkorn") is the President and owner of AgInfo. (Fiebelkorn Dep. at 6.) Plaintiff invented trax360, which is one of Plaintiff's agriculture-related software products.[2] ( Id. at 126, 273.) The trax360 is a technology package that allows distributors and agricultural retailers to label and track bulk or mobile assets with barcode labels and scanning equipment, and, particularly, to do so in a way that addresses Environmental Protection Agency ("EPA") regulations that took effect in 2011. ( Id. at 126.) Plaintiff began selling the trax360 in 2010. ( Id. at 175, 268.) The trax360 has subscription-based pricing and is internet or "cloud"-based to receive and transmit data in real time (known as "Solution as a Service"-based or "SaaS"-based). ( Id. at 157-58, 261.)

AgWorks, Inc. was an Iowa-based company that was a competitor of Plaintiff before it was sold. (Abbate-Dattilo Aff. ¶ 24, Ex. W ("Duhachek Dep.") at 56.) AgWorks, Inc. created agriculture-related software products for agribusiness retailers. ( See id. at 50, 56.) AgWorks, LLC purchased AgWorks, Inc. on January 17, 2012, and AgWorks, LLC continues to offer AgWorks, Inc.'s products. (Abbate-Dattilo Aff. ¶ 21, Ex. T.) AgWorks offers the AgTankTracker, which assists customers in complying with EPA regulations and allows customers to track the activities related to cleaning, filling, and moving mini-bulk chemical tanks. (Duhachek Dep. at 50.) AgWorks began developing the AgTankTracker in 2009. ( Id. ) AgWorks made the AgTankTracker available for beta purchase for the first time in 2010, with its first official sale in early 2011. ( Id. at 46.) The AgTankTracker utilizes a subscription-based payment system, a barcode labeling system to help identify assets, and a barcode scanner to transfer information to the system itself. ( Id. at 41, 43-45, 147-48.) AgWorks asserts that the AgTankTracker has functioned in largely the same way since beta testing. (Doc. No. 103 ("Waldeck Aff.") ¶ 5, Ex. 4 ("Hull Dep.") at 40-41.) Charles Jenkins, Director of Sales and Marketing for AgTrax, states that the subscription pricing system began "about the time the ownership [of AgWorks] changed hands, " in January of 2012. (Waldeck Aff. ¶ 4, Ex. 3 ("Jenkins Dep.") at 112.)

AgTrax Technologies, Inc. is an agribusiness software solution company located in Hutchinson, Kansas, and is a division of Defendant Integrated Solutions Group, Inc. (d/b/a AgTrax Technologies). (Waldeck Aff. ¶ 6, Ex. 5 ("Hobbs Dep.") at 13-15.)

In 2011, AgTrax began searching for a partner who developed agriculture-related software solutions such as the AgTankTracker and trax360 to meet client needs and to address the upcoming 2011 EPA regulatory changes. (Jenkins Dep. at 24-26, 33-35, 139-48.) AgTrax did not have the capacity to develop such products in-house. ( Id. at 148.) Jenkins was in charge of finding such a partner. ( Id. 24-25, 34.)

AgTrax reached out to Plaintiff and AgWorks, among others, seeking information about their products. ( Id. at 36.) AgTrax met with AgWorks between June and September of 2011. ( Id. at 54.) AgWorks demonstrated their products to AgTrax, highlighting the AgTankTracker via an online meeting titled "AgTankTracker Meeting" with AgTrax executives on July 29, 2011. ( Id. at 63-68.) Plaintiff presented its products at AgTrax headquarters on August 8, 2011. (Fiebelkorn Dep. at 28.)

Before the August 8, 2011 meeting, Plaintiff presented AgTrax with a Non-Disclosure Agreement ("NDA") relating to the protection of confidential and proprietary information. (Abbate-Dattilo Aff. ¶ 7, Ex. F.) Jenkins e-mailed Fiebelkorn stating that AgTrax would sign the NDA if the length of time was changed from three years to two years. (Abbate-Dattilo Aff. ¶ 8, Ex. G.) AgTrax President Gary Hobbs signed the NDA on behalf of AgTrax on August 3, 2011 and Fiebelkorn signed the NDA for Plaintiff ("AgTrax-AgInfo NDA"). (Abbate-Dattilo Aff. ¶ 7, Ex. F.)

At the August 8, 2011 meeting, Plaintiff presented its products and business plans over a two- to four-hour period to seven AgTrax employees, including the Director of Marketing and Sales, the Director of Operations, the Director of Development, the Director of Quality Control, the Director of Customer Services, and Jenkins. (Jenkins Dep. ¶ 159.) Hobbs states he was present at the meeting for approximately forty-five minutes. (Hobbs Dep. at 58-59.) Fiebelkorn presented a PowerPoint and presented specifically on details associated with trax360, including information about its chemical calculator, barcode capabilities, selling strategy, product development in tandem with the EPA, and subscription-based pricing. (Abbate-Dattilo Aff. ¶ 6, Ex. E.)

After the meeting, Fiebelkorn claims that he and Jenkins held an extended private meeting discussing the presentation in greater detail and discussing Fiebelkorn's business strategies. (Fiebelkorn Dep. at 41.) Fiebelkorn testifies that Jenkins asked a number of questions about reselling Plaintiff's products and about Plaintiff's pricing strategies. ( Id. at 14-16, 41-43; Abbate-Dattilo Aff. ¶ 9, Ex. H.) Jenkins denies that such a meeting took place. (Jenkins Dep. at 169.) Fiebelkorn also asserts that Jenkins asked Fiebelkorn if the company was for sale, and Fiebelkorn stated that it was not. ( Id. at 170.) AgTrax informed Plaintiff that it was considering buying other companies at that time. (Fiebelkorn Dep. at 16.)

On August 9, 2011, AgTrax signed an NDA with AgWorks ("Defendants' NDA"). Defendants' NDA was the same as the AgInfo-AgTrax NDA, except for the names of the parties and the governing law. (Abbate-Dattilo Aff. ¶ 11, Ex. J.) The parties dispute who drafted Defendants' NDA. Hobbs asserts that AgWorks drafted Defendants' NDA and AgWorks asserts that they did not. (Hobbs Dep. at 37; Abbate-Dattilo Aff. ¶ 13, Ex. L.) Plaintiff contends that AgTrax used the Plaintiff-drafted AgTrax-AgInfo NDA.

Plaintiff and AgTrax did not communicate after the August 8, 2011 meeting. Fiebelkorn attempted to call Jenkins a few days after the meeting, and hearing no response, e-mailed Jenkins on August 25, 2011. (Fiebelkorn Dep. at 72-75; Abbate-Dattilo Aff. ¶ 10, Ex. I.) Fiebelkorn again received no response to his e-mail. ( Id. )

On October 12, 2011, AgTrax issued a press release stating that it was entering into a marketing agreement with AgWorks. (Abbate-Dattilo Aff. ¶ 3, Ex. B.) AgTrax and AgWorks entered into two separate marketing agreements. (Waldeck Aff. ¶ 3, Ex. 2 ("Martin Dep.") at 100.) Defendants entered into the first marking agreement on September 16, 2011, which allows AgTrax to collect a commission on AgWorks's sales of the AgTankTracker to AgTrax customers ("Agreement 1"). (Abbate-Dattilo Aff. ¶ 16, Ex. O.) AgWorks and AgTrax entered into a second marketing agreement in February 2012 ("Agreement 2"), which was substantially similar to Agreement 1, but included different pricing. (Abbate-Dattilo Aff. ¶ 20, Ex. S.)

In its Amended Complaint, Plaintiff asserts the following claims: (1) Breach of NDA (Non-Disclosure Provision) against AgTrax; (2) Breach of NDA (Non-Use Provision) against AgTrax; (3) Breach of NDA (Non-Competition Provision) against AgTrax; (4) Misappropriation against AgTrax; (5) Violations of the Minnesota Uniform Trade Secrets Act ("MUTSA") against AgTrax; (6) Tortious Interference with Contract against AgWorks; (7) Unfair Competition against all Defendants; and (8) Unjust Enrichment against all Defendants. (Doc. No. 51 ¶¶ 57-110.)

AgTrax seeks summary judgment on all claims against it-Counts One through Five, Seven and Eight. (Doc. No. 107.) AgWorks seeks summary judgment on all claims against it-Counts Six through Eight. (Doc. No. 100.) Plaintiff also seeks partial summary judgment, but solely on Counts Three, Six, and Seven, and argues that genuine issues of material fact exist with respect to the remaining Counts. ( See Doc. No. 122.)

DISCUSSION

I. Legal Standard

Summary judgment is proper if there are no disputed issues of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The Court must view the evidence and the inferences that may be reasonably drawn from the evidence in the light most favorable to the nonmoving party. Enter. Bank v. Magna Bank of Mo., 92 F.3d 743, 747 (8th Cir. 1996). However, as the Supreme Court has stated, "[s]ummary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed to secure the just, speedy, and inexpensive determination of every action.'" Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 327 (1986) (quoting Fed.R.Civ.P. 1).

The moving party bears the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Enter. Bank, 92 F.3d at 747. The nonmoving party must demonstrate the existence of specific facts in the record that create a genuine issue for trial. Krenik v. Cnty. of Le Sueur, 47 F.3d 953, 957 (8th Cir. 1995). A party opposing a properly supported motion for summary judgment "may not rest upon the mere allegations or denials of his pleading, but must set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986).

II. Breach of NDA (Non-Disclosure Provision) against AgTrax and Breach of NDA (Non-Use Provision) against AgTrax

To state a claim for breach of contract, a plaintiff must establish: (1) formation of a contract; (2) performance of conditions precedent by the plaintiff; and (3) breach by the defendant. See Thomas B. Olson & Assoc., P.A. v. Leffert, Jay & Polglaze, ...


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