Hydrogen Master Rights, Ltd. v. Weston
228 F. Supp. 3d 320
D. Del.2017Background
- Plaintiffs (Le Souef and Mohanty) and defendant Coats were partners who used Hydrogen Master Rights, Ltd. (HMR) to purchase hydrogen technology from sellers (including Manos and Significan entities) via a December 12, 2011 Purchase Agreement.
- After the purchase, Dean Weston claimed he had been disclosed or otherwise acquired rights/knowledge of the secret formula; plaintiffs allege Sellers (and later Weston and Coats) breached representations that no third party held rights or had the formula.
- Plaintiffs and Sellers entered a tolling agreement (May 3, 2012), later extended and expiring April 1, 2013. Plaintiffs notified Sellers of alleged breaches by letters in March 2012.
- Disputes spawned parallel litigation (including a Michigan action by Weston). Manos filed affidavits in other suits; plaintiffs filed this complaint on June 22, 2016 asserting 32 counts against Manos, Weston, Coats, IBKE (Wyo.), and others.
- Defendants moved to dismiss under Rule 12(b)(6) and for partial summary judgment on statute-of-limitations grounds; the court granted some motions and denied others, dismissing Counts 1–9 as time-barred against Manos and resolving multiple contract, tort, and statutory claims as explained below.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Counts 1–9 (contract/tort claims vs. Manos) are time-barred | Plaintiffs: tolling (fraudulent concealment) and Count 1 falls under 20-year §8106(c) if contract specifies a period | Manos: 3-year limitations (10 Del. C. §8106(a)); no contract accrual provision extending to 20 years; plaintiffs had notice in March 2012 | Held: Summary judgment for Manos on Counts 1–9 — three-year statute applies and tolled only until March 2012; suit filed too late. |
| Whether §8106(c) 20-year exception applies to Purchase Agreement (Count 1) | Plaintiffs: contract survival/cure provisions amount to a specified period under §8106(c) | Manos: Agreement lacks an express accrual period; cure clause insufficient to show intent to extend limitations | Held: §8106(c) does not apply; three-year limitations controls. |
| Whether Counts against Weston for breach of Purchase Agreement and implied covenant (Counts 1 & 3) survive Rule 12(b)(6) | Plaintiffs: Weston breached forum clause and confidentiality and thus breached contract and implied covenant | Weston: factual defenses and procedural arguments; forum clause remedy is specific performance; confidentiality conduct arguable lawful | Held: Count 1 (breach of Purchase Agreement) survives (jury/briefing needed); Count 3 (implied covenant) dismissed with prejudice where contract expressly addresses confidentiality. |
| Breach of Mutual Cooperation Agreement (Counts 10–12) | HMR: Weston violated confidentiality and other obligations | Weston: pleadings lack factual specificity and damages | Held: Count 10 (breach) dismissed without prejudice for failure to plead damages; Count 11 (promissory estoppel) dismissed without prejudice; Count 12 mostly dismissed with prejudice where contract covers the conduct, but claim based on extortion survives. |
| Claims vs. Coats re: recordings, fiduciary duty, fraud, conversion, replevin, trade secrets (Counts 13–21,25) | Plaintiffs: Coats misused confidential recordings, received improper commissions, and aided fraud/veil-piercing allegations support claims | Coats: challenges ownership of recordings, pleading specificity about payments, and limitations | Held: Many claims (breach fiduciary, contract, fraud, negligent misrep., nondisclosure, promissory estoppel) survive dismissal; conversion and replevin dismissed without prejudice (plaintiffs seek intangible information, not tangible recordings); unjust enrichment dismissed without prejudice for vagueness; statute-of-limitations defenses deferred. |
| Federal DTSA and state trade-secret claims (Counts 23–25) | Plaintiffs: DTSA and state trade-secret claims for misuse/disclosure of recordings and hydrogen tech | Defendants: DTSA requires nexus to interstate commerce and acts after May 11, 2016; state-law challenges differ by defendant | Held: DTSA claims (Counts 23–24) dismissed without prejudice for failure to allege interstate-commerce nexus and acts after DTSA effective date; state-law trade-secret claim (Count 25) survives against multiple defendants for further factual development. |
| Civil extortion, invasion of privacy, IIED, abuse of process, conspiracy, aiding/abetting, indemnification (Counts 26–32) | Plaintiffs: allegations of threats, misuse of recordings, extreme conduct, misuse of process, concerted wrongdoing, and contractual indemnity | Defendants: argue failure to plead damages, lack of predicate acts, or failure to plead required elements | Held: Extortion (Count 26) and abuse of process (Count 29) dismissed without prejudice for insufficient pleading of damages/irregular act; invasion of privacy (intrusion) and IIED survive dismissal; conspiracy, aiding and abetting, and indemnification survive dismissal (some predicate issues reserved). |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for pleadings)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (complaint must contain factual matter permitting plausible inference of liability)
- Anderson v. Liberty Lobby, 477 U.S. 242 (1986) (summary judgment requires no genuine dispute of material fact)
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (moving party's burden at summary judgment; nonmoving must show genuine issue)
- Reeves v. Sanderson Plumbing Prods., 530 U.S. 133 (2000) (court must draw all reasonable inferences for nonmoving party on summary judgment)
- Nemec v. Shrader, 991 A.2d 1120 (Del. 2010) (elements of unjust enrichment under Delaware law)
- Delle Donne & Assocs., LLP v. Millar Elevator Serv. Co., 840 A.2d 1244 (Del. 2004) (indemnification and limits on implying indemnity where contract exists)
- Vichi v. Koninklijke Philips Elec., N.V., 85 A.3d 725 (Del. Ch. 2014) (Delaware statute-of-limitations authority cited for analogous torts)