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Rich Products Corporation v. Bluemke

United States District Court, W.D. New York

January 15, 2015



WILLIAM M. SKRETNY, Chief District Judge.


Plaintiff Rich Products Corporation commenced this diversity action in January 2013 seeking damages and injunctive relief for, among other things, intentional interference with contract and unfair competition allegedly resulting from Defendant Darifair Foods, Inc. ("Darifair") employing Plaintiff's former employee, Defendant David Bluemke. Presently before this Court are Plaintiff's motion for partial summary judgment on its first and fifth causes of action and Defendants' cross-motion for summary judgment dismissing the Complaint. The Court finds these matters fully briefed and oral argument unnecessary. For the reasons that follow, Plaintiff's motion is denied and Defendants' cross-motion is granted.


In 1993, Defendant Bluemke was an investor and owner of Ultra Cream Products, LLC, a joint venture between Cream Products, a company owned by Bluemke's family, and Ultra Products, LLC, for the manufacture, promotion, and marketing of aseptic dairy and nondairy coffee creamers. (Defs' Statement of Facts ¶¶ 4, 6, Docket No. 65 ("Defs' Stmt"), Pl's Responding Statement of Facts ¶¶ 4, 6 ("Pl's Res'g Stmt").) Cream Products was acquired by Morningstar Foods, Inc. ("Morningstar"), in 1996, at which time Bluemke became a consultant for the latter corporation. (Defs' Stmt ¶ 7; Pl's Res'g Stmt ¶ 7.) Plaintiff entered into a licensing agreement with Morningstar in September 1998 which granted Plaintiff the right to utilize Morningstar's technology, intellectual property rights, and confidential information. (Defs' Stmt ¶ 8; Pl's Res'g Stmt ¶ 8.)

Plaintiff hired Defendant David Bluemke in November 1998, at which time Bluemke signed an agreement that contained the following confidentiality provision:

6. I recognize that in my position with [Plaintiff], I will be exposed to information which Rich considers to be confidential and proprietary. To protect [Plaintiff's] interest in this information, I agree as follows:
(a) All knowledge and information which I have obtained, or which I may hereafter obtain, during the course of my employment with [Plaintiff], with respect to the business, equipment, products, methods of manufacture, specifications, or research and development projects of [Plaintiff], are secret and confidential.
(b) I will not, either directly or indirectly, during my employment or at any time after my employment with Rich, use for myself or other or divulge or convey to others any confidential information, knowledge, or data of [Plaintiff] or that of third parties obtained by me during the period of employment with [Plaintiff].

(Compl Ex A, Docket No. 1 at 21; Defs' Stmt ¶ 11; Pl's Res'g Stmt ¶ 11.)

In June 2003, while Defendant Bluemke was still employed by Plaintiff, Plaintiff entered into an Asset Purchase Agreement with Morningstar. (Defs' Stmt ¶ 13; Pl's Res'g Stmt ¶ 13.) As listed in that agreement, the intellectual property assets sold to Plaintiff consisted of a single trademark and the licenses contained in the prior licensing agreement between Plaintiff and Morningstar "to the extent that it relates" to a single, different trademark. (Joseph Aff Ex G, Docket No. 71 at 13 (Schedule 2.18, filed under seal).)

In August 2012, Defendant Bluemke applied for a sales manager position with Defendant Darifair, and upon receiving an offer, he informed Plaintiff of his intention to leave. (Defs' Stmt ¶ 13; Pl's Res'g Stmt ¶ 13.) Plaintiff sent correspondence to both Bluemke and Darifair notifying each of Plaintiff's intent to enforce the confidentiality and non-compete provisions contained in the Confidentiality Agreement, and expressing the belief that it would not be possible for Bluemke to work for Darifair without violating these provisions. (Defs' Stmt ¶¶ 20-21; Pl's Res'g Stmt ¶ 20-21.) Defendants disagreed, and Bluemke began his employment with Darifair. (Compl Ex D.)

Plaintiff commenced the instant action in January 2013. Seven causes of action are asserted in the Complaint: (1) intentional interference with contract against Defendant Darifair; (2) intentional interference with ongoing and prospective business relations against Defendant Darifair; (3) a claim for damages under a quantum meruit theory against Defendant Darifair; (4) unfair competition against both Defendants; (5) breach of contract against Defendant Bluemke; (6) breach of restrictive covenant against Defendant Bluemke; and (7) breach of fiduciary duty against Defendant Bluemke. Following this Court's denial of Defendants' motion to dismiss the Complaint for lack of personal jurisdiction or transfer the action, the parties' filed their respective motions for summary judgment. Plaintiff has moved for summary judgment in its ...

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