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IVS Group, Inc. v. The All American Silo Company, LLC

United States District Court, S.D. West Virginia, Charleston

May 14, 2019

IVS GROUP, INC., and INDUSTRIAL SILOSOURCE, INC., Plaintiffs/Counterdefendants,
v.
THE ALL AMERICAN SILO COMPANY, LLC, Defendant/Counterclaimants.

          MEMORANDUM OPINION AND ORDER

          John T. Copenhaver, Jr. Senior United States District Judge

         Pending is plaintiffs' motion to voluntarily dismiss their claims against the defendant without prejudice, filed October 14, 2018.

         I. Background

         Plaintiffs IVS Group, Inc. (“IVS”) and Industrial Silosource, Inc. (“ISS”) are West Virginia corporations. Am. Compl., ECF No. 33, at ¶¶ 2-3. ISS is a division of IVS engaged in the business of cleaning, inspecting, repairing and retrofitting industrial silos in various industries for customers throughout the United States. Id. ¶¶ 3, 9. ISS claims to have unique systems in place to improve customer relations, train employees and perform its duties which enable it to be successful in a particularly competitive market. See Id. ¶ 11. ISS purports to protect this “proprietary information and trade secrets” by requiring employees to sign confidentiality agreements. Id. ¶ 12.

         In September 2017, the plaintiffs initiated three separate lawsuits against defendant All American Silo Company, LLC (“All American”), an Ohio limited liability company, and individual defendants who were previously employed by plaintiffs. The plaintiffs brought actions against C.J. Piggott and All-American in the Circuit Court of Wood County, West Virginia on September 14, 2017, against Melvin Miller and All American in this court on September 21, 2017, and against Diane Wingrove, Lincoln Echard and All American in this court on September 27, 2017. In each lawsuit, the plaintiffs asserted claims against the individual defendants for breach of contract, tortious interference with business relations, misappropriation and use of confidential information and trade secrets, and civil conspiracy. Similarly, against All American, the plaintiffs asserted claims for tortious interference with contract, tortious interference with business relations, misappropriation and use of confidential information and trade secrets, and civil conspiracy in each of the three suits. See Pls.' Mem. Supp. Mot. Dismissal (“Pls.' Mem.”), ECF No. 81, at 2; Def.'s Resp. Opp'n Pls.' Mot. (“Def.'s Resp.”), ECF No. 88, at 2.

         Each defendant denied the allegations in the complaints and each asserted a counterclaim against plaintiffs for bringing misappropriation of trade secrets claims in bad faith in violation of the West Virginia Uniform Trade Secrets Act, W.Va. Code §§ 47-22-1 et seq. Plaintiffs responded by denying these counterclaims in their answers. Pls.' Mem., ECF No. 81, at 2; Def.'s Resp., ECF No. 88, at 2-3.

         On March 16, 2018, plaintiffs and Ms. Piggott agreed, by stipulation pursuant to Rule 41(a)(1) and (c), to voluntarily dismiss the claims and counterclaim filed in the state court case with prejudice; and plaintiffs and All American stipulated in that same case to the dismissal of the plaintiffs' claims and the counterclaim without prejudice. ECF No. 88-4, at 2.

         By stipulation of the parties, the action against Mr. Miller and All American were consolidated with the one against Ms. Wingrove, Mr. Echard and All American into the present action on March 26, 2018. ECF No. 30. On April 5, 2018, the court, pursuant to agreement between the parties, granted plaintiffs leave to amend the complaint to remove the causes of action against defendants alleging misappropriation and use of confidential information and trade secrets and to consolidate the allegations against all defendants into a single pleading. ECF Nos. 31-32. Defendants Wingrove, Miller and All American filed answers in response to plaintiffs' amended complaint and again asserted counterclaims in which they alleged that the trade secrets claims in the original complaints were brought in bad faith. ECF Nos. 39-41.

         By stipulation of voluntary dismissal filed April 18, 2018, the parties dismissed, without prejudice, plaintiffs' claims against Mr. Echard and Mr. Echard's counterclaims against plaintiffs. ECF No. 38. This dismissal was due largely to the fact that Mr. Echard had ceased working for All American and returned to work for ISS. Pls.' Reply, ECF No. 91, at 4.

         Further, after receiving responses to written discovery, the plaintiffs sought to pursue claims in arbitration against Michael Curry, a former owner of ISS and current owner of All American. See Id. 1, 4. The plaintiffs submitted to Mr. Curry their notice of intent to arbitrate and statement of a claim on October 16, 2018. ECF No. 91-5, at 12.

         On August 10, 2018, the plaintiffs proposed, by an email to opposing counsel, the voluntary dismissal of claims against All American without prejudice and against Mr. Miller and Ms. Wingrove with prejudice. ECF No. 91-6, at 1. Defendant's counsel responded on August 17, 2018 and refused to agree to the dismissal of plaintiffs' claims against All American, unless it was with prejudice. ECF No. 91-8, at 1-3. All American also made several additional conditions for voluntary dismissal, including requests for the transfer of internet domain names from plaintiffs to All American and that plaintiffs pay All American's attorneys' fees. Id. The plaintiffs replied by letter dated October 3, 2018, stating that they were unwilling to accommodate All American's requests. ECF No. 91-10, at 1-2.[1]

         On October 10, 2018, plaintiffs claim that an email from All American communicated to them that it would not agree to voluntary dismissal. See Pls.' Reply, ECF No. 91, at 9; ECF No. 85-7, at 1. On the same date, the parties filed a stipulation of voluntary dismissal wherein the plaintiffs' claims against Mr. Miller and Ms. Wingrove, and their respective counterclaims against the plaintiffs, were dismissed with prejudice. ECF No. 77.

         The only remaining claims are those asserted by the plaintiffs against All American and All American's counterclaim against the plaintiffs. All American moved for judgment on the pleadings on October 11, 2018, a motion to which plaintiffs have since responded and All American has replied. The plaintiffs filed the instant motion to voluntarily dismiss without prejudice pursuant to Federal Rule of Civil Procedure 41(a)(2) on October 14, 2018, to which All American has responded[2] and plaintiffs have replied.

         As a result of All American allegedly noticing several depositions without first conferring with plaintiffs' counsel as to time and place, plaintiffs filed, on October 17, 2018, a motion for protective order to stay discovery until the court ruled on the plaintiffs' motion to voluntarily dismiss without prejudice, filed three days earlier, and/or All American's motion for judgment on the pleadings. Pls.' Mem. Supp. Mot. Protective Order, ECF No. 83, at 3-6. All American responded in opposition to the motion to stay.

         After a hearing held before the court on October 22, 2018, the court issued an order granting plaintiffs' motion for a protective order insofar as it extended, among other deadlines, the discovery close date from November 5, 2018 until November 26, 2018, to accommodate plaintiffs' counsel in the taking of depositions in this matter. ECF No. 86.

         Subsequent to the hearing for protective order, the court permitted multiple extensions of deadlines. In its January 25, 2019 order provisionally granting the plaintiffs' unopposed motion to seal certain exhibits they planned to attach to their motion for summary judgment, the court set a dispositive motions deadline of January 30, 2019. ECF No. 132, at 1-2.

         On January 30, 2019, the parties filed cross motions for summary judgment only on All American's ...


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