Riverside Acquisition Group LLC v. Vertis Holdings, Inc. (In re Vertis Holdings, Inc.)
Riverside Acquisition Group LLC v. Vertis Holdings, Inc. (In re Vertis Holdings, Inc.)
Opinion of the Court
OPINION
INTRODUCTION
Before the Court are two related motions. First, plaintiff filed a motion to amend the complaint to allow the assertion of 11 additional counts. Plaintiffs request to amend would substantially prejudice defendants, has occurred after undue delay and is a result of bad faith. Moreover, allowing plaintiff to amend the complaint would be futile as none of the additional counts satisfy the plausibility test under Bankruptcy Rule 7012(b)(6). Thus, the Court will deny the motion to amend.
Second, defendants filed two separate motions seeking summary judgment on the existing six counts of the complaint. As there are no genuine issues of material fact and defendants are entitled to judg
STATEMENT OF FACTS
There are a number of important terms and a roster of persons that must be identified to understand the issues before the Court.
I. Important Terms
Pitney Bowes’ Group 1 Software: Pit-ney Bowes’ Group 1 Software, such as, MailStream Plus, in most basic terms, “analyzes lists of many names and addresses to produce an optimized plan for mailing to achieve the best postage discount.”
Keeping in mind that I am neither a lawyer nor a sales person involved in actual contracts, my general understanding is that as a universal rule Pit-ney Bowes retained ownership of the software that we develop. And therefore when we enable a customer to use it, we license it to them for their use on a non exclusive basis.8
Single Pass Commingling or One Pass Commingling: A process under which a piece of mail has to run through the sorter only once (compared to a “Dual Pass or Two Pass System”).
Pitney Bowes Modified Two Pass Sortation or Modified Two Pass System: This is Pitney Bowes mechanism for providing “Single Pass Commingling.”
Pitney Bowes Custom Software (Modules): The Pitney Bowes Custom Software is also referred to as “Pdr-Driven
Pitney Bowes Software Patches: These patches, created and issued by Pitney Bowes, serve to “correct [software] logic ... including fixing a bug or defect or perhaps ... [to] enhance[e] its functionality.”
Programming Scripts (“Charlie’s Programs”): Charlie Saccarelli wrote the scripts, which were used by Com-Pak and later by RAG.
Mr. Glowny, the Pitney Bowes software engineer, explained the differences between the Pitney Bowes Software Patches for Pitney Bowes Custom Software and the Programming Scripts as follows:
There have been programming scripts written to surround or interact with these modules at both Com-Pak and 5 Digit Plus but I would use the word interact sparingly here. Keep in mind that 16 modules are precompiled software for which the source code is not provided to the customer. Therefore, the actual modules themselves are not readily capable of being altered [by the customer.]25
Mr. Saecarelli himself testified that it would be easy to create alternatives to the Charlie’s Programs as they are “not very sophisticated.”
5 Digit Programs created by Larry Zimmerman: Mr. Zimmermann created programs that allowed 5 Digit “to manage mail job pools and job schedules and automate the intake and processing of client data files for mail jobs.”
Mixed Mail Software: This term appears in RAG’s complaint. RAG alleges, “that Patricia Pizzutillo ... worked with the third-party vendor to develop the proprietary software to qualify mixed mail into a single pool_”
Monticello Software: Commercially available, third party software, that “reads maihdat files and performs data processing functions.”
Heavy Mail Program: “Heavy Mail refers to standard letters greater than 3.3 ounces and up to 3.5 ounces which when submitted to the post office incur additional postage charges above and beyond the ordinary standard mailer charges.”
Lettershop: A business that assembles materials into finished pieces of mail for large volume mailings and certifies them to the U.S. Postal Service.” Some letter-shops also offer commingling services.
Mail Commingling: A “process whereby a mailer can combine mail pieces on behalf of several different other businesses to create a consolidated mailing with the hope of yielding better postage savings in the combined mailing rather than several individual mailings.”
II. The Players
Com-Pak Services, Inc. (“Com-Pak”)— Com-Pak was a lettershop that also offered commingling services.
Riverside Acquisition Group LLC (“RAG” or “Plaintiff’) — RAG was formed specifically for the purpose of acquiring Com-Pak’s assets.
Debtor/Defendants Vertís Holdings, Inc., Vertís, Inc. and 5 Digit Plus, LLC— Vertís, Inc., a wholly owned subsidiary of Vertís Holdings, Inc., was one of the largest printing and direct marketing companies in the US. Vertís Holdings, Inc., through a subsidiary, jointly owned 5 Digit along with Clemmer, its founder and CEO.
Defendant Quad/Graphics Marketing, LLC (“Quad” and together with Debt- or/Defendants “Defendants”) — Quad, a global provider of print and media solutions as well as logistics services, purchased substantially all of the assets of Vertís and its subsidiaries, including the assets of 5 Digit, through a Section 363 asset sale. The Court approved the sale on December 6, 2012.
Pitney Bowes: Pitney Bowes is a manufacturer of mail sorting equipment.
The following Individuals were employed at Com-Pak, RAG and 5 Digit (the “Former Employees”)
Patricia Pizzutillo was the Mail Processing Manager at Com-Pak. She was subsequently employed with RAG, 5 Digit, and Quad.
Mark Beato: Production Manager at Com-Pak. He was then employed at RAG and 5 Digit. He later joined Clemmer’s new company, Firebird Presort.
Vincent Acerbo: Chief Operating Officer at Com-Pak. He was later employed at
Linda H. Oh: Client Service Manager at Com-Pak. She was later employed at RAG and then at 5 Digit. She then joined Firebird Presort, Clemmer’s new company.
Edward Guyon was Head of Information Technology and Facilities Manager at Com-Pak. He was then employed at RAG, 5 Digit, and later at Quad.
The following individuals worked at Com-Pak, but not at RAG
Donald Ray Clemmer: He was the Senior Vice President of Operations at Com-Pak. He formed 5 Digit in December of 2011. He was CEO and part owner of 5 Digit. Today, Clemmer is the owner of Firebird Presort, a new commingling company.
Tom McCaully: He was the CEO of Com-Pak. He never worked for RAG or 5 Digit.
Charlie Saccarelli : He worked for Com-Pak until September 2011 when he was laid off. He then provided consulting services to Com-Pak. He also provided consulting services 'to RAG until February 2013.
Other Individuals
Robert McDonald — CEO of RAG
Larry Zimmerman: He is a former employee of 5 Digit. Although he never worked at ComPak, he provided consulting services to it. Mr. Zimmerman was the author of the “Zimmerman Programs” for 5 Digit explained above.
David Glowny: Principal Engineer at Pit-ney Bowes. He develops Pitney Bowes software for mail processing.
Lisa Wurman: Ms. Wurman was employed with Vertís and later with Quad.
Donald Terkel: is a Quad employee.
Carlos Arias : is a Quad employee.
III. Procedural History
On March 15, 2012, RAG filed suit in New Jersey state court against 5 Digit, and some of the above mentioned individuals, including, Clemmer, Acerbo, Beato, Oh and Pizzutillo (the “State Action”) essentially alleging that they utilized Confidential Information, Trade Secrets and Intellectual Property of RAG. Upon Vertís, Inc.’s bankruptcy, 5 Digit was dismissed from the State Action
In October 2012, the Debtors filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code. Simultaneously with the filing of the petitions, the Debtors' filed a motion seeking an order authorizing and approving the sale of substantially all of Debtors’ assets to Quad.
The Court entered a Scheduling Order and fact discovery was set to close on September 2, 2013.
On June 17, 2014, Debtors/Defendants filed their motion for summary judgment.
IV. Factual History
Com-Pak opened for business in January of 2000 as a lettershop. It later added commingling services.
In December of 2011, Clemmer formed 5 Digit. 5 Digit only offered commingling services.
Clemmer and McCaulley kept in touch after Clemmer’s departure from Com-Pak in July of 2011. McCaulley, on more than one occasion, offered Clemmer advice and help in establishing 5 Digit.
I am there for you
Just ask
Best,
Tom
A. The Alleged Misconduct
On July 26, 2011, only a few days after
In an email, titled “The Team,” Clem-mer “describes all of their [prospective] jobs” at the yet-to-be-formed 5 Digit. In subsequent emails, Clemmer requested specific information as to his commingling business.
While still attending to their duties at Com-Pak and RAG, the Former Employees engaged in activities furthering Clem-mer’s goal of establishing a standalone commingling company. What follows is just a short list of many examples evidene-ing the efforts and the commitment of the Former Employees to assist Clemmer:
• Ms. Pizzutillo admits that she, beginning in July of 2011, communicated with Clemmer about creating a new commingling company,101 and that she discussed software and potential software requirements with him;102
• Mr. Clemmer testified that he communicated with Patricia Pizzutillo while she worked at RAG, about mail.dat files, and that he, as a result, received information on those files;103
• Mr. Clemmer testified that Mr. Acerbo, while he was presumably still employed at RAG, opened a bank account for 5 Digit,104 and worked on financial plans for 5 Digit;105
• Mr. Clemmer offered Ms. Pizzutillo a position with his new company in July 2011;106
• Mr. Guyon certified that he “was requested by Vincent Acerbo to advise the best type of external hard*604 drive for him to utilize in order for him to personally transfer files, documents and software from Com-Pak Services, Inc. and Riverside Acquisition Group LLC onto. I recommended an external hard drive manufactured by Western Digital;”107
• Ms. Pizzutillo received a laptop from Vertís to perform certain tests for Clemmer and to create a list of programs needed;108 including “home grown software programs developed by Com-Pak;109
• Ms. Pizzutillo admitted that she in fact performed those tests;110
• Clemmer testified that he had Vertís set up a FTP site Ms. Pizzutillo utilized for the tests for 5 Digit;111
• Clemmer admits that Ms. Pizzutillo responded to his email stating, “Ed supposedly has all Charlie’s programs. Probably need FTP capability also.”112
• Ms. Pizzutillo testified that she, contrary to standard procedures at Com-Pak, emailed electronic files to her personal email account;
• On May 23, Ms. Pizzutillo sent an email to Clemmer notifying him that she is “currently sending home the SOP and QC statements” and that she should have “probably just copied [her] whole drive;”113
• Ms. Pizzutillo admits that Acerbo asked her to instruct Saccarelli to move his programs on the Com-Pak network, so that she could access them;114
• Ms. Pizzutillo testified that Clemmer regularly emailed the Former Employees with requests and tasks he needed done;115
• Ms. Pizzutillo admits that she “downloaded a postal card from the postal website, a permit card” for 5 Digit;116
• Mr. Beato testified that Clemmer sent an email in July 2011, addressing each “team members’ function” at his new company;117
• There were email correspondences between Clemmer and Pizzutillo and others about “freight costs” and “history with RRD pricing;”
• Mr. Acerbo admitted that he obtained an EIN for 5 Digit without disclosing his assistance to Clemmer*605 to RAG;118
• Acerbo admitted that he sent home an email attaching the “Updated Commingling postage costs” document of RAG to his personal email account,119 which he, after his termination from RAG, did not return;120
• RAG alleges that Mr. Guyon and others moved the proprietary software, processes and confidential information around the Com-Pak computer system to provide easy access to remove such proprietary software, processes and confidential information from Com-Pak;121
• Ms. Oh testified that she observed emails Mr. Acerbo sent to Clemmer disclosing nonpublic customer information of Com-Pak;122
• There is further testimony that certain financial documents on 5 Digit servers and utilized by 5 Digit were exactly the same documents that were used at RAG;123
• Mr. Guyon testified that certain documents, such as expense reports, on 5 Digit servers looked (in terms of layout, not content) the same as the documents Com-Pak and RAG utilized;124
• Mr. Guyon also testified that certain software and information on Quad’s servers is the same as on 5 Digit servers, and that all information on 5 Digit servers was migrated to Quad.125
Tom McCaully, testified that he had no knowledge of the alleged misconduct by Clemmer or other former employees.
With respect to its “Intellectual Property” and to who “stole” what, RAG provided the following information:
Patricia Pizzutillo and Charlie Saccarelli personally stole RAG software, business information and intellectual property including Group One software and RAG related enhancements, RAG owned software modules compatible with Pitney*606 Bowes mail sorting machines and related patches.
Donald Clemmer transferred to Defendants business information in form of cost quotes for vantage sorters, patches to MSG data after mail stream plus software as well as RAG owned improvements and enhancements to Monticello software.
Vincent Acerbo stole and transferred to Defendants sale, freight RFP and client strategy information.
Lisa Wurman conspired with Clemmer and Sacearelli to receive a RAG owned mail.dat file on behalf of and for use within Vertís, such mail.dat file contains confidential and proprietary information owned by RAG.129
B. The “Intellectual Property” and “Confidential Information” at Issue
RAG asserts in its Complaint that the former employees of Com-Pak and RAG, while establishing 5 Digit with Clemmer, allegedly took RAG’s “Confidential Information” and/or “Intellectual Property”
In its Complaint, RAG defines “Intellectual Property as including: “in-house software to convert mail commingling equipment from dual pass to single pass” and proprietary software it developed with the third-party vendor “to qualify mixed mail into single pool, which are critical to the operations of Plaintiff.”
The property at issue was also addressed at several telephonic status conferences in which RAG’s counsel made the following statements to this Court:
Our response to their interrogatories, our responses to their request for production, all indicate and disclose specific pieces of software, specific pieces of information that we allege were taken. So, in terms of Mr. Stewart’s comments that we don’t know what the ‘items’ that have been misappropriated are, I disagree.136
*607 The home grown software is the key to this case.... We are talking about modifications in derivative works137 to software methods and processes that were owned originally by Riverside and that were taken from them and implemented in the 5 Digit process ... It’s the bucket that Mr. Sullivan described as the home grown software, that’s the special sauce in this case.138
However, when asked at his deposition whether the copying of the computer data would be all RAG is alleging, McDonald stated: “There may be information that didn’t specifically come from a computer or a server that’s included.”
The nature of the property came up again later during McDonald’s deposition when he was asked about “hard copy materials.” McDonald responded when asked about “what hard copy materials are we talking about,” that “[t]here are co-mingle presentations ... [and] one-price matrices that were developed on Excel.”
Q. And so this information that’s referred to, the co-mingling presentation, the matrices, the freight analysis, you said these are hard copy documents? Are they only kept in hard copy form?
A. No. They were done both ways.
Q. I just want to make sure we’re clear because I think earlier we talked about how we’re talking about copies of electronic information. So I just want to make sure there was not one hard copy customer list that was kept in a vault somewhere. That’s not what we are talking about, right?
A. Not to the best of my knowledge.
Q. Okay. Nothing like that — that was only kept in hard copy form — that has gone missing?
A. I believe that probably everything exists in soft copy somewhere.142
RAG further testified that its “Confidential Information” and “Intellectual Property” is still available for its use today.
Q. The intellectual property that you claim was taken, is any of that unavailable to you today to use?
A. No
Q. So you’re actually continuing to use that intellectual property, correct?
A. That is correct.
Q. The confidential information, was any of that taken in such a way that it’s not available to you to use?
A. No, it’s certainly available to us.144
The Motion to Amend
RAG seeks leave to amend its Complaint to include eleven additional counts (as amended, the “Amended Complaint”). It
Federal Rule of Civil Procedure 15(a), made applicable to this proceeding by Fed. R. Bankr.P. 7015, provides that a court should “freely give leave [to amend a pleading] when justice so requires.”
In Foman v. Davis, the leading Supreme Court case reflecting this liberal standard,
In the absence of any apparent or declared reason — such as undue delay, bad faith or a dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by' virtue of allowance of the amendment, futility of the amendment, etc. — the leave sought should, as the rules require, be freely given.149
“Third Circuit courts have extrapolated five instances in which a court may deny leave to amend a complaint: (1) if delay in seeking amendment is undue; (2) if delay in seeking amendment is prejudicial to the opposing party; (3) if delay in seeking amendment is motivated by bad faith; (4) if the amendment is futile in that it fails to state a claim for which relief can be granted; or (5) if the movant does not provide a drafted amended complaint.”
While the existence of any one of those factors can warrant a denial of a motion to amend, courts in the Third Circuit have repeatedly stated, “prejudice to the non-moving party is the touchstone for the denial of an amendment.”
I. Substantial or Undue Prejudice
Defendants advance two main arguments as to why they would be unduly prejudiced if the Motion to Amend were granted. First, Quad contends, that the proposed Amended Complaint “significantly alter[s] the landscape of this litigation, forcing [it] to defend against novel theories of the case at an exceedingly late stage in the proceedings.”
In considering whether prejudice exists, “[courts] have considered whether allowing an amendment would result in additional discovery, cost, and preparation to defend against new facts or new theories.”
A. The Proposed Counts Constitute “New Legal Theories”
Plaintiff repeatedly states that the proposed claims are “based on the same facts as the original complaint.”
Quad asserts that adding the proposed claims would “significantly alter the landscape of this litigation.”
Plaintiff rejects the “new theory” arguments, describing them as “exaggerated.”
In Cornell & Co., Inc. v. Occupational Safety and Health Review Commission, the Third Circuit Court of Appeals, in holding that “the Commission abused its discretion in allowing the Secretary of Labor ... to amend twice,” found that the amendment “changed the legal and factual matters in dispute.”
The same conclusion can be drawn in the case sub 'judice. While RAG, in its original Complaint, primarily alleged a “taking” of its “Intellectual Property” and “Confidential Information,” the proposed claims focus primarily on interference with certain contractual relationships and prospective, allegedly lost, business opportunities. As such, the new claims constitute new legal theories “chang[ing] the legal and factual matters in dispute.”
Plaintiff s argument that the newly proposed claims are not “new,” because Plaintiff previously pled, and later abandoned some of them in the State Action, is misplaced. Although the claims might not have been “new” to Defendants in a sense that they were aware that RAG pursued them before, they constitute “new legal theories” for purposes of this action. As Defendants correctly point out, Plaintiff “defined the scope of this adversary proceeding through [its adversary] Complaint.”
B. The Need for Additional Discovery at This Stage in the Proceedings Would Be Prejudicial to Defendants
“Courts have denied a request for leave to amend when both discovery would need
In contrast, “courts have granted leave to amend when the non-moving party would suffer no prejudice because no new facts or additional discovery was required.”
For instance, in In re Mortgage Lenders Network, USA, Inc., Judge Walsh granted plaintiff s motion to amend although a trial date had already been set.
In In re Fleming Companies, Inc., the post-confirmation trust established under the debtors’ Chapter 11 plan sought leave to amend “to modify language in its turnover of property count and to add a new claim for breach of contract in violation of the automatic stay.”
The Defendants primarily assert that the new claims would require “additional, extensive discovery, and, thus, would substantially prejudice” them.
Plaintiff disagrees emphasizing that discovery resulted in the production of approximately 750,000 pages of documents and 18 witness depositions.
Plaintiff s position that no new discovery will be required is divorced from reality. In fact, substantial additional discovery will clearly be required to properly address the new claims and “new legal theories.” That additional discovery would rise to a “severe, [and] irremediable” level. Thus, the Court finds the need for additional discovery establishes prejudice in this case.
ll. Undue Delay
“It was only after briefing was completed on the summary judgment motion ... i.e., when the proverbial writing was on the wall — that Trans Video first expressed to Sony that it wanted to move to amend. ”
Plaintiff simply asserts “[tjhere is not undue delay here. There is no trial date scheduled, and discovery just recently closed on June 16, 2014.”
The Defendants argue that RAG’s Motion to Amend should be denied because RAG, among other things, failed to provide “any valid reason for not amending sooner.”
Although RAG is correct in citing Cure-ton for the proposition that delay alone is not sufficient to deny a motion to amend, Plaintiff did not read Cureton far enough. The Cureton court continued that, “at some point, the delay will become ‘undue,’ placing an unfair burden on the court, or will become prejudicial, placing an unfair burden on the opposing party.”
Other courts have reached similar conclusions. For instance in Lorenz v. CSX Corp., the Third Circuit, in affirming the District Court’s denial of plaintiff s motion to amend, found undue delay mainly because “most of the facts were available to plaintiff ... before she filed her original complaint ... [and because plaintiff] had numerous opportunities to correct any deficiencies in her ... claim but failed to take advantage of them.”
Similarly in Panetta v. SAP, plaintiff sought leave to amend to add two new counts, which were based on the same facts as the original complaint. The Third Circuit, in affirming the District Court’s denial of the motion, stated “we agree with the District Court that such claim was known to Panetta early on in this litigation because the cause of action arises out of the same set of facts as the breach of contract claim.”
Here, there has been. “undue delay.” RAG was aware of many of its new claims early in this litigation. RAG further repeatedly states that its proposed Amended Complaint is based on the same facts as its Complaint.
A. Plaintiff Must Provide a Valid Reason for Its Delay
Plaintiff asserts that it does not have to provide this Court with a reason as to why it did not seek an amendment earlier. However, courts regularly inquire about a movants’ reasons in determining whether there is undue delay.
For instance, Judge Walsh in In re Mortgage Lenders Network, USA, Inc., stated “[i]n assessing whether delay in amending is undue, courts focus on the
Similarly, in In re Fleming Companies, Inc., Judge Walrath declined to find undue delay in a case in which the movant offered an explanation for its delay.
In contrast, in In re Vision Metals, Inc., Judge Walrath found undue delay where the movant, fourteen months after its original complaint was filed and without offering a reason for its delay, sought leave to amend.
In Coventry v. U.S. Steel Corp., the Third Circuit Court of Appeals also indicated how important it is for a movant to provide a reason for not seeking an amendment earlier.
It is certainly not inconceivable to us that instances could occur in which the failure to make a timely motion to amend a complaint would place an unwarranted burden upon a trial court, or be prejudicial to the party opposing the motion. In such circumstances, however, the obligation of the trial court in its disposition of the motion is to articulate the imposition or prejudice caused by the delay, and to balance those concerns against the movant’s reason for delay in asserting the motion.208
As these cases illustrate, courts clearly expect a movant to explain why an amendment was not sought earlier. In fact, trials courts are even obligated to consider movants’ reasons in determining whether there is “undue delay.” This makes sense. RAG seems to suggest that litigants can come to court months or even years after the filing of an original pleading to seek an amendment without providing an explanation as to why the amendment was not sought earlier. This view, however, is misplaced as it would exceed the already “liberal pleading philosophy of the federal rules.”
Thus, Plaintiff is required to provide a valid reason for seeking an amendment nearly two years after the commencement of this adversary proceeding, especially considering that RAG filed its Motion to Amend after Defendants filed their motions for summary judgment.
B. Plaintiffs Reasons Provided for Its Delay Are Insufficient
In its reply, still arguing that no reason is required, RAG nevertheless provided
RAG’s asserted reasons are not convincing, especially not compared to the reasons movants provided in the above-mentioned cases. There, unsuccessful settlement discussions and changes in the law between the filing of the original pleading and the request to amend prompted movants to seek an amendment.
First, why would a contentious discovery process between the parties prevent RAG from filing an amended complaint? To the contrary, if the discovery process is already “torturous and contentious,” the parties should strive to conduct discovery only once and as completely and thoroughly as possible in order to minimize the risk of having to repeat such “torturous and contentious” discovery. For instance, 18 depositions were taken in this case. Defendants could have asked questions pertaining to all proposed counts while the witnesses were available.
Plaintiff s second reason is equally unconvincing. Plaintiff repeatedly asserts that the proposed “new” counts are based on the same facts as the Complaint. Although discovery can, of course, reveal more factual details even though the facts are generally known, Plaintiff should have pled these claims in its Complaint. The timing is also somewhat suspicious. While Plaintiff submits that fact discovery “just recently closed,” Defendants argue that the parties did not actively engage in fact discovery past February 2014.
RAG’s third reason is nothing more than a “last resort argument.” RAG’s intention “to save litigants from multiple amendments,” is not a valid reason for counsel not to seek, an amendment earlier. Also, courts regularly grant requests for second, even third amendments if they are necessary and appropriate. As mentioned, RAG also claims that it did not file its Motion to Amend earlier because of the heightened federal pleading standard, thereby admitting that it did not have sufficient factual content as to the claims to satisfy Twombly and Iqbal. Now it contends that it did not seek the amendment out of courtesy to other litigants whom it had such a “contentious and torturous” relationship with. Here, RAG seems to be indicating that it could have filed its Motion to Amend earlier, but refrained from doing so out of courtesy to other litigants. This does not make sense, espe-
As such, RAG has failed to provide a valid reason for a delay of this length. Thus, the delay is both undue and unjustified.
III. Bad Faith
RAG argues “[t]here is no bad faith here ... amending the Complaint at this point in the litigation will afford the parties a complete understanding of the relief requested ....”
“As with undue delay, in assessing bad faith, courts look to the reasons as to why a party did not seek to amend earlier.”
The Eleventh Circuit Court of Appeals faced a similar situation in Lowe’s Home Centers, Inc. v. Olin Corp., in which the court held “[i]t is not an abuse of discretion for a district court to deny a motion for leave to amend a complaint when such a motion is designed to avoid an impending adverse summary judgment.”
Apparently, after recognizing the likelihood of an adverse summary judgment ruling, Lowe’s attempt to amend its complaint to remove its negligent design and negligent supervision and training claims and to add two additional claims: (1) negligent misrepresentation and (2) fraud). The record in this case reveals that despite numerous scheduling orders and joint stipulations regarding deadlines, Lowe’s did not file its motion for leave to amend its first amended complaint until well after such deadlines had expired and not until over two months following the filing of Olin’s motion for summary judgment. In fact, Lowe’s did not file its motion for leave to amend until over a month had elapsed from the filing of its response to Olin’s motion for summary judgment.219
In addition, Quad claims that “RAG’s proposed amendment is in bad faith because it directly contravenes this Court’s Sale Order that [among other things] expressly finds that Quad is not a successor to any of the Debtors....”
RAG now recognizes that its claims are insufficient. RAG’s reasons for not seeking an amendment sooner are not convincing. The timing of its Motion to Amend is suspicious, and its argument that fact discovery just recently closed was, as Defendants contend, deceiving. As such, the
IV. Futility
Futility “means that the complaint, as amended, would fail to state a claim upon which relief could be granted.”
“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim [for] relief that is plausible on its face.’ ”
A. Successor Liability as to Defendant Quad
RAG, for the first time in this adversary proceeding, raised the issue of successor
Because this issue was raised in connection with the motions for summary judgment, it is fully addressed infra. In short, however, the Court find that Quad does not have successor liability as to the alleged tortious conduct of the Debtors.
B. The Proposed Claims
(i) Count VII (Violations Under New Jersey Computer Related Offense Act (“CROA”))
Quad argues that Plaintiff “does not plead any facts to suggest that Quad, specifically, acted purposefully and knowingly in any conduct in violation of CROA.”
Plaintiff disagrees and argues that “when read as a whole, the proposed Amended Complaint adequately states claims against Quad under the ... CROA. v .”
The Amended Complaint contains allegations supporting Plaintiffs claims of purpose and knowledge under CROA, or intent under CFAA. Plaintiff details communications between and among former employees of the Plaintiff during their employment, including Vincent Acerbo, Mark Beato, Linda H. Oh and Patricia Pizzutullo ... with Donald Clemmer, ... David Colatriano ... and other employees of Debtors evidencing a scheme to build a business to compete against Plaintiff.
The Amended Complaint specifically describes Quad’s role in these offenses. Mr. Beato, a former employee of Plaintiff, transitioned directly from employment from one of the Debtors to Quad. Further, the Amended Complaint details how data from 5 Digit’s computers and servers (which contained items improperly obtained from Riverside) was moved to Quad’s network.240
The Computer Related Offenses Act, N.J. Stat. Ann. Section 2A:38A-3, provides:'
A person or enterprise damaged in business or property as a result of any of the following actions may sue the actor*619 therefore in the Superior Court and may recover compensatory and punitive damages as the cost of the suit, including a reasonable attorney’s fee, costs of investigation and litigation.241
The term “actor” is not defined, however, courts have indicated, that “a plain reading of the statute supports the conclusion that the New Jersey legislature intended that the statute covered only those ‘actors’ who directly accessed the computer at issue.”
In a recent New Jersey case, the court faced a complaint in which the plaintiff alleged a claim under CROA against two entities.
Although Quad was in existence at the time of the alleged misconduct, it did not purchase Debtors’ assets until 2013. As such, it was not possible for Quad to exercise any kind of control over the individuals at the time of the alleged wrongdoing.
The same reasoning can be applied with respect to the Debtor/Defendants. Although Clemmer and other people at Ver-tís communicated and “worked with” Piz-zutillo, Acerbo and the other individuals to establish 5 Digit, Debtor/Defendants, at the time of the alleged wrongdoing, did not exercise control over them. In fact, most of the individuals were still employed by RAG. As such, Defendants cannot be held vicariously liable for the acts of the individuals. To the extent RAG argues that the misappropriation was ongoing after some of the individuals joined Vertis/5 Digit and later Quad, this argument fails as well as the time of “access” appears to be determinative for a claim under CROA.
Thus, allowing the assertion of a claim for violation of CROA would be futile. The Defendants do not constitute “actors” pursuant to the CROA and the Defendants can not be held vicariously liable.
(ii) Count VIII (Violations Under the Computer Fraud Act (“CFAA”))
Section 1030(a)(2)(c) of the CFAA “imposes liability upon any person who ‘intentionally accesses a computer without authorization or exceeds authorized access, and thereby obtains information from a
RAG’s CFAA claim fails for another reason. 18 U.S.C. Section 1030(g) provides that “any person who suffers damage or loss by reason of a violation of this section may maintain a civil action against the violator to obtain compensatory damages and injunctive relief or other equitable relief.”
The CFAA defines “damages” as “any impairment to the integrity or availability of data, a program, a system, or information.”
In addressing “loss” and whether it is compensable under the CFAA, one Pennsylvania district court has held, “Defendants ... are not claiming to have lost money because their computers were inoperable. Rather, they are claiming to have been denied potential business opportunities as a result of [the defendant’s] unauthorized access. This alleged loss of business opportunity is simply riot com-pensable under the CFAA.”
Here, Plaintiff alleges that:
[a]s a result of Debtors’ and Quad’s unauthorized access and use of the information contained within Plaintiffs computer system, it has suffered and will continue to suffer substantial losses exceeding $5,000 in responding to Debtors’ and/or Quad’s actions. And taking remedial steps to prevent their further actions pursuant to 18 U.S.C. Section 1030(a)(5)(B)® [sic].
In addition to being eonclusory, the loss claimed is not compensable under the CFAA. Plaintiff does not allege anywhere in its Amended Complaint that its computer system has been damaged as a result of Defendants’ alleged misconduct. Further, by stating “in responding to Debtors’ and/or Quad’s actions” and “taking remedial steps to prevent their further actions,” Plaintiff appears to be referring to damages similar to the ones the plaintiff alleged in Crown Coal, i.e., the denial of “potential business opportunities as a result of [Defendants’] unauthorized access.” As such, RAG does not claim any harm/ loss in connection with its computer system, its operations or any other loss com-pensable under CFAA.
Thus, asserting a claim for violation of the CFAA would be futile for two reasons: (1) the lack of an agency relationship at the time of the alleged wrongdoing; and (2) because the loss is not compensable under the CFAA.
Defendants assert that the New Jersey Trade Secret Act (T.S.A.) is inapplicable as it “became effective after the filing of this action” and because “the alleged acts of misappropriation ... began in 2011 and continued into 2012.”
Plaintiff disagrees arguing, “the exact timing of the misappropriation of Plaintiff’s trade secrets is a question to be resolved by the trier of fact.”
Defendants are wrong in stating that the T.S.A. “became effective after the filing of this action.” RAG commenced the adversary proceeding in December 2012. The T.S.A. became effective on January 5, 2012.
The New Jersey Trade Secrets Act provides that the following acts constitute misappropriation:
(1) Acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or
(2) Disclosure or use of a trade secret of another without express or implied consent of the trade secret owner by a person who:
(a) used improper means to acquire knowledge of the trade secret; or
(b) at the time of disclosure or use, knew or had reason to know that the knowledge of the trade secret was derived or acquired through improper means; or
(c)before a material change of position, knew or had reason to know that it was a trade secret and that knowledge of it had been acquired through improper means.
The T.S.A. defines “ ‘trade secret’ broadly as ‘information ... without regard to form” that has economic value as a result of not being known to others who might derive economic value from its use and that is the subject of reasonable efforts to maintain its secrecy.’ ”
However, the T.S.A. “does not apply to misappropriation occurring before the effective date,” which was January 5, 2012.
Thus, allowing assertion of a claim for violation for the NJ Trade Secret Act would be futile.
(iv) Count X (Trespass to Chattels)
In its proposed Amended Complaint, RAG alleges:
Debtors and/or Quad accessed and interfered with Plaintiff s computer system, programs, software, and Confidential and Proprietary Information without authorization. Debtors and/or Quad’s unauthorized access resulted in an interference with Plaintiffs exclusive possession of its computer system, programs, software, Confidential and Proprietary Information without authorization.260
Defendants respond that Plaintiff has failed to plead that it has been “temporarily deprived of the right to use or possess its property.”
Defendants are correct in stating that generally, under New Jersey law, a cognizable claim for trespass exists “when personal property, in the actual use of the owner, is injured or taken by a trespasser, so that the owner is deprived of the use of it.”
Plaintiff disagrees, however, citing to SCS Healthcare Mktg., LLC v. Allergan USA, Inc., a fairly recent New Jersey Superior Court case addressing, among other things, the difficulties in applying common law claims to the misappropriation of computer data.
Several commentators have indicated the appropriateness of asserting trespass to chattel claims in the context of unauthorized computer access. One reason that an action for trespass to chattels is favored is that unauthorized access to a computer does not deprive the owner of the value and/or use of the computer, as is typically required to sustain an action in conversion. Courts have been reluctant to find conversion where there is no tangible property taken. Trespass to chattels has been analogized to trespass to land in that an intrusion which is sufficient to interfere with the owner’s exclusive possession can give rise to a claim.264
The court held:
In the present case plaintiff alleges that defendants 1 access to its computer system was unauthorized and/or exceeded the scope of the access which plaintiff*623 had previously authorized. Hence, on its face, the court at this juncture is unable to conclude that plaintiffs Complaint fails to state a cause of action for trespass to chattels and accordingly the motion to dismiss Count 5 is denied.
New Jersey is a notice pleading state. In contrast, RAG has not pled sufficient facts to satisfy Twombly and Iqbal. RAG, merely alleges that the “unauthorized access resulted in an interference with Plaintiffs exclusive possession.” The Proposed Complaint is devoid of any facts regarding the “resulted interference.” Thus, allowing assertion of a claim for trespass to chattels would be futile.
v. Count XI—Intentional Interference with Contractual Relationships
Defendants ? argue that Plaintiff failed to allege several of the required elements for a claim for intentional interference with a contractual relationship.
Plaintiff rejects that it has to “identify a specific contract with a specific customer” in order to satisfy the pleading standard.
Under New Jersey law, the Plaintiff must allege “(1) the existence of a protected interest; (2) interference with malice, (3) a reasonable likelihood that the interference caused the loss of a prospective economic gain; and (4) the injury caused the damages.”
(a) The Existence of a Specific Interest and a Reasonable Likelihood that Interference Caused the Loss of a Prospective Gain
In order to properly plead the existence of a protected interest and a reasonable likelihood that interference caused the loss of a prospective gain under New Jersey law, a plaintiff must allege, among other things that “it had a reasonable expectation of economic benefit, that defendants had knowledge of that expectancy, and that defendants wrongfully and intentionally interfered with that expectancy.”
For example, the Mu Sigma I court dismissed a claim for tortious interference with contractual relations where plaintiff merely plead that “many of [its] clients were and are being contacted by Defendants, specifically through the use of information gleaned from [misappropriated materials] and as a result, a number of Mu Sigma’s clients, including a major warehouse club, terminated their relationships with Plaintiff due to the malicious influ
In Mu Sigma II, however, the court found that plaintiff cured the deficiencies by providing more factual content as to this claim. The court noted that “Plaintiff has identified ... certain of Plaintiffs protected economic clients and interests from whom the Founders attempted to solicit business by using ... ‘stolen’ proprietary information the Founders obtained while they were employed at Mu Sigma.”
Here, RAG alleges the following:
Through the actions described more fully above, Debtors and/or Quad interfered with Plaintiffs employee and client contractual relationships. Debtors and/or Quad acted with malice as they intentionally committed wrongful acts when interfering with Plaintiffs contractual relationships and did so without an excuse or justification.
As a result of Debtors and/or Quad’s intentional interference with Plaintiff s contractual relationships, Plaintiff sustained actual damages.277
In a preceding paragraph, RAG references its customers.
Paragraph 26 states the following:
[T]he Former Employees, working with Clemmer and others, actively solicited Plaintiffs customers on whom they called while employed by Plaintiff so that 5 Digit would have business with which to commence operations.
As in Mu Sigma I, RAG has failed to sufficiently plead the existence of a protected interest and a reasonable likelihood that the alleged misconduct caused the loss of a prospective economic gain. In fact, RAG pleads even less than the plaintiff in Mu Sigma I who at least mentioned one particular client in its complaint. RAG did not plead any information as to one particular client. As such, RAG has failed to plead sufficient facts as to “a reasonable expectation of economic benefit from [a] client.”
Nonetheless, RAG’s proposed Amended Complaint contains sufficient facts as to the alleged solicitation of Com-Pak’s. and RAG’s Former Employees. The proposed Amended Complaint provides many details as to how Clemmer “solicited” the former
(b) Loss or Damages
RAG merely states that “[a]s a result of Debtors’ and/or Quad’s intentional interference with Plaintiffs contractual relationships, Plaintiff sustained actual damages,”
(c) Malice
New Jersey courts have interpreted this requirement as “not a general ill-will towards the victim, but as intentional interference without justification or excuse.”
RAG argues that certain allegedly misappropriated proprietary information “gives Debtors an unfair economic advantage, as they know what they need to do on terms of pricing, in order to undercut Plaintiff and compete unfairly.”
For all the reasons above, the Court finds that assertion of a claim for intentional interference with contractual relationships would be futile as to all Defendants.
(vi) Proposed Count XII (Intentional Interference with Prospective Business Advantage)
Defendants contend that RAG failed to plead sufficient facts to prove that Defendants have “intentionally caused RAG to lose some specific economic benefit and'that without [their] actions RAG would likely have received that specific benefit.”
Plaintiff responds that it has met its burden. It specifically argues that the proposed Amended Complaint shows that “Plaintiff had an expectation of maintaining dominance in its competitive industry and its accompanying economic advantage, which were damaged by the machinations of these defendants.” RAG restates paragraphs 139 and 141:
Plaintiff alleges that it had a protectable right, both prospective contractual and economic advantages, and that it sustained damages due to the loss of a prospective contractual and economic gain from Debtors and/or Quad’s interference.
To properly state this claim, a plaintiff must allege “(1) the existence of a reasonable expectation of an economic advantage, (2) the interference was done intentionally and with malice; (8) absent the interference there was a reasonable probability that the plaintiff would have received the anticipated economic benefits; [and]
RAG has not provided sufficient facts as to this claim. As analyzed above, RAG did not plead any facts to support that it had a “reasonable expectation of an economic benefit” or that Defendants acted with malice. As such, RAG’s claim amounts to a “mere hope that [it] would have entered into some future arraignment” insufficient to survive a motion to dismiss and allowing assertion of a claim for intentional interference with contractual relationships would be futile.
(vii) Count XIII (Unfair Competition)
Defendant Quad argues that RAG’s claim is futile as it failed to plead facts that “distinguish its unfair competition claim from its claims for tortious interference.” Quad further asserts that RAG failed to specify any conduct on the part of Quad that would suggest Quad “itself did anything to misappropriate RAG’s information.”
Plaintiff disagrees asserting that its claim is not futile as the “unfair competition continued after the formation of 5 Digit, with knowledge of the Debtors, and after Quad purchased substantially all of the Debtors’ assets and employed certain of the Former Employees.”
In New Jersey, “[t]he common law tort of unfair competition historically has been considered a subspecies of the class of torts known as tortious interference with business or contractual relations.”
(a) Did RAG Plead Different Facts To Distinguish Its Proposed Unfair Competition Claim from Its Proposed Claims for Intentional Interference with Contractual and Prospective Business Relationships?
RAG’s claim for unfair competition is worded differently and contains additional facts. RAG adds that Debtors and/or Quad engaged in unfair competition by, among other things, [p]rovid[ing] financial incentives and benefits not available to other competing companies and took steps to prevent the disclosure of their noncompetitive agreements to the Plaintiff and other competing companies.” These allegations are not contained in the proposed counts for intentional interference with contractual or prospective business relationships. As such, RAG has pled facts that distinguish its claim for unfair competition from its claims for intentional interference with contractual and prospective business relationships.
(b) Did RAG Properly Plead This Claim?
In Mu Sigma I, the plaintiff sought relief for unfair competition in connection with the alleged misappropriation of its trade secrets.
The court dismissed the claim finding that “the crux of [plaintiffs] misappropriation claim turns on the direct taking of plaintiffs creative work by defendants ... [and] that plaintiff has not alleged that Defendants were directly involved with the taking of plaintiffs proprietary information.”
Here RAG has met its burden. In contrast to the plaintiff in Mu Sigma I, RAG alleges that “Defendants were directly involved with the taking of plaintiffs proprietary information.” For instance in paragraph 31 and 35 of the proposed Amended Complaint, RAG provides the following details:
Emails between and among Clemmer, the Former Employees and David Cola-triano, President and COO of Vertís, and various other of Debtors’ employees scheming to build a business to compete against Plaintiff. Emails between and among Clemmer, the Former Employees, David Colatriano and various other of Debtors’ employees attaching software code belonging to Plaintiff....294 Vertís supplied the laptop to Mr. Clem-mer. Mr Clemmer then provided the laptop to Mr. Acerbo to provide to Ms. Pizzutillo, so that Ms. Pizzutillo could perform required tests for Mr. Clem-mer.295
As in Mu Sigma II, Plaintiff has sufficiently pled that Defendants are utilizing RAG’s confidential information to unfairly compete with Plaintiff on behalf of, and with the knowledge of, Defendants “by alleging specific wrongful acts of Defendants, albeit through the actions of the [individuals].”
However, RAG has not met its burden with respect to Quad. Quad did not purchase the assets until January, 2013. The proposed Amended Complaint is devoid of any specific facts as to how and what information Quad utilized. This claim, as pled, is therefore similar to Mu Sigma I as it “boils down to bare assertions that [Quad] continue[s] to use Plaintiffs confidential business information.” For example, RAG states, “[t]he employment of Mr. Beato transitioned directly from 5 Digit to Quad.”
Thus, RAG’s claim for unfair competition is futile with respect to Quad, but properly pled as to Debtors/Defendants.
RAG alleges the following:
Debtors and/or Quad aided and abetted all of the actions described more fully above.
Debtors and/or Quad performed all of the wrongful acts described more fully above.
Debtors and/or Quad were aware of their role as part of an overall tortious activity at the time they provided assistance to the Former Employees and Donald Ray Clemmer.
Debtors and/or Quad knowingly and substantially assisted the principal violations described more fully above.
As a result of Debtors’ and/or Quad’s aiding and abetting, Plaintiff sustained damages.298
With respect to Quad, RAG argues that Quad has “encouraged, if not actively participated, in this misconduct ... through the purchase of substantially all of their assets.”
Under New Jersey law, “[a] claim for aiding and abetting ... requires proof of an underlying tort.”
This claim is problematic for multiple reasons.
First, RAG seems to be alleging, at least in part, that Defendants aided and abetted their own conduct.
Second, to the extent RAG alleges that Defendants aided and abetted tortious conduct of the individuals/former employees involved in this case, the Court is not in the position to decide this issue. The individuals/former employees are not parties to this adversary proceeding. The claims addressed and evaluated thus far, are all claims brought against the Defendants as entities. There is no proof as to any underlying tort committed by any of the individuals involved in this case. For this reason alone, this claim fails.
Third, assuming Defendants aided and abetted the individuals in their “tortious activities,” the question is whether this assistance rose to the level of “substantial assistance.” Vertís provided a laptop to Ms. Pizzutillo to perform certain tests. The bulk of the alleged misconduct occurred prior to Clemmer establishing 5 Digit. In addition, RAG failed to plead sufficient facts as to what damages it sustained.
For all these reasons, RAG failed to properly plead a claim for aiding and abetting and allowing assertion of the claim would be futile.
(ix) Count XV (Civil Conspiracy)
In order to state a claim for civil conspiracy, a plaintiff must allege “a combination of two or more persons acting in concert to commit an unlawful act, or to commit a lawful act by unlawful means, the principal element of which is an agreement between the parties to inflict a wrong against or injury upon another, and an overt act that results in damage.”
Plaintiff alleges, among other things that “Debtors and/or Quad acted in concert with their employees, the Former Employees, Donald Ray Clemmer and other individuals to commit . unlawful and tortious acts.”
The claim would be dismissed as to Defendant Quad. Quad did not purchase the assets until 2013. As such, Quad never entered into any agreement with anyone to inflict injury upon RAG.
Thus, the claim for civil conspiracy is not properly pled as to Defendant Quad and would be futile. The claim is not futile with respect to the Debtor/Defendants, but only to the extent they conspired with former employees of RAG to unfairly compete with RAG prior to them joining 5 Digit.
(x) Count XVI (Common Law Misappropriation of Trade Secrets)
“The basic elements of a trade secrets claim under New Jersey law are: (1) the existence of a trade secret, (2) communicated in confidence by the plaintiff to the employee, (3) disclosed by the employee in breach of that confidence, (4) acquired by the competitor with knowledge of the breach of confidence, and (5) used by the competitor to the detriment of the plaintiff.”
Plaintiff has sufficiently pled the first four elements. The complaint, read as a whole, includes details as to the non-compete and confidentiality agreements many of the former employees entered into at RAG.
In Diversified Industries, Inc., the court faced a similarly pled claim for common law misappropriation of a trade secret under the Trade Secret Act, which as described above, requires many of the same elements.
RAG’s statement is similarly conclusory. Nowhere in the proposed Amended Complaint does RAG allege more facts as to what damages or detriments it suffered. As such, this claim is insufficiently pled as
Thus, allowing assertion of a claim for misappropriation of trade secrets would be futile as to all Defendants as RAG failed to plead sufficient facts as to what damages it suffered.
(xi) XVII (Common Law Misappropriation of Confidential and Proprietary Information)
Here, RAG merely pled, “Clem-mer, Debtors or Quad all used the Confidential and Proprietary information to Plaintiffs detriment, causing damages to Plaintiff.”
V. Conclusion
While courts are liberal in allowing amendments to complaints, there are exceptions. Factors the courts consider in deciding whether amendments should not be allowed are when doing so would unfairly prejudice defendants, the amendment is after an undue delay, plaintiff is acting in bad faith and/or allowing amendment would be futile. In this case, allowing RAG to assert the claims in the Amended Complaint against the Defendants would unfairly prejudice Defendants, the claims have been brought after undue delay and Plaintiff is acting in bad faith. Moreover, all of the claims (with two exceptions against the Debtors/Defendants)
Defendants’ Motions for Summary Judgment
The Debtor/Defendants and Quad have filed separate motions for summary judgment. In both cases Defendants seek summary judgment on all six counts of the Complaint: (1) Declaratory Judgment (Count I); (2) Conversion (Count II); (3) Common Law Aiding and Abetting of Conversion (Count III); (4) Replevin (Count IV); (5) Unjust Enrichment (Count V); and (6) Accounting (Claim VI).
Rule 56(c) of the Federal Rules of Civil Procedure, made applicable to adversary proceedings by Rule 7056 of the Federal Rules of Bankruptcy Procedure, mandates that summary judgment should be granted when the “pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and the movant is
Initially, “the burden of showing that no genuine issue of material fact exists rests ... on the moving party.”
The moving party must “put the ball in play, averring an absence of evidence, to support the nonmoving party’s case.”
Summary judgment is designed “to avoid trial or extensive discovery if facts are settled and [the] dispute turns on [an] issue of law.”
RAG, in its opposition to the motions for summary judgment, for the first time in this adversary proceeding, asserts that “Quad has successor liability for the alleged tortious conduct based upon the fact that the transaction between Quad and Vertís amounted to a consolidation or merger; Quad is a continuation of Vertís; and Quad undertook to do essentially the same activities Vertís performed.”
RAG’s late assertion of this argument is problematic* for a number of reasons. RAG does not address the Sale Order, which contains applicable provisions as to the issue of successor liability. Furthermore, after RAG asserts that “successor liability exists,” it delves right into an in-depth discussion of New Jersey state law completely ignoring applicable Third Circuit case law addressing successor liability in connection with bankruptcy law and 368 asset sales. Finally, the argument is made solely in the briefs and RAG does not actually assert successor liability in the Complaint.
A. The December 6, 2012 Hearing Transcript
RAG, relying .on certain statements the Court made during the December 6, 2012 Sale Hearing, asserts that “Quad cannot escape successor liability since Riverside’s Confidential Information and Intellectual Property were not part of the Acquired Assets (as that term is defined in the Sale Order).”
■ What follows is an excerpt from the hearing transcript containing the statements at issue.
MS. DARBY: ... I think the initial threshold issue that needs to be decided before this goes any further is whether or not Riverside’s property is indeed property of the estate.
THE COURT: It doesn’t. .It doesn’t need to be decided. Because if it’s not property of the estate, they can’t sell it. If it’s property of the estate they can sell it, okay. If it’s not property of the estate, you have damages claims against whoever uses something that belongs to you, whether it be the debtor or Quad. If it is property of the estate, I’m sorry, but too bad, you don’t have a property ownership interest in it, and they can sell it because it’s an asset free and clear, so it doesn’t matter one way or the other. I don’t have to decide who owns it.
THE COURT: At all. Only when you have to decide who owns it if Quad purports to somehow be able under this sale order to use property that doesn’t belong to the debtor and be insulated from damages, that’s the ■ only reason that I think I would have to decide it.
Later, Ms. Darby returned to the issue of ownership.
*634 MS. DARBY: Your Honor, just a couple of points,_But to one point that Mr. Madron just made. It is to say that an injunction was not granted because to say, and this is a sale of substantially all includes Riverside’s assets one thing of a use, Riverside’s concern, to allow the assets, which ostensively free and clear of everything, it is another thing.
THE COURT: You’re not listening, okay. They can’t sell it free and clear if they don’t own it.' If they own it, they can sell it free and clear. Okay. So the issue of ownership in no way impacts the free and clear issue. If they don’t own it, they purport to sell it, Quad uses it, and (indiscernible) against Quad. Okay. It’s you don’t know it, and the debtor sales it, and Quad uses it, you don’t have damages against Quad, it’s that simple....341
The Court overruled RAG’s objection, again emphasizing that Quad, in the event the property at issue is not part of the estate, might be subject to liability for using the property.
So the objection is overruled. The rights of the parties in connection with the underlying litigation are preserved. To the extent Quad is ultimately it turns out it’s using (indiscernible) it’s not entitled to (indiscernible), they may be subject to certain claims, I’m not going to decide that as I sit here today... ,342 The Court: So the problem I take it is that you claim that you own the property, and Quad is going to buy what purports to be the debtor’s property, and ultimately some court is going to decide that it, in fact, was not property of the estate and belongs to you, and as a result of course, Quad couldn’t buy it. You would then have a continuing claim against the debtor for whatever damage the debtor had prior to selling it, and you would then have a claim against Quad for damages, et cetera from being in possession of your property on a post sale basis. So I think where the rubber hits the road on this issue would be whether Quad can somehow buy your property free and clear of liens or they can’t, because it’s yours. However, if they purport to use it on a post petition basis, they would have — you will have been — you would incur damages and you would be able to assert them against Quad.343
Again, RAG simply asserts “Quad cannot escape successor liability since Riverside’s Confidential Information and Intellectual Property were not part of the Acquired Assets (as that term is defined in the Sale Order).” Quad argues that the Court’s comments during that hearing meant, that “any claims asserted against Quad could only be asserted, if at all, with respect to any unauthorized use of RAG’s property by Quad on a post-sale basis, consistent with the Court’s ruling in the Sale Order.”
Quad is correct. The hearing transcript clearly evidences that the Court did not decide “the ownership issue.” However, even assuming the property at issue was not part of the acquired assets, the Court’s statements made at the Sale Hearing do not indicate that Quad should be subject to successor liability. The Court repeatedly stated, that “you would then have a claim against Quad for damages, et cetera from being in possession of your property on a post sale basis.” There are no indications that the Court meant to impose successor
B. The Asset Purchase Agreement and the Sale Order with Respect to Successor Liability
Moreover, RAG ignores the applicable provisions of the Asset Purchase Agreement and the Sale Order. With respect to “successor liability,” the Asset Purchase Agreement between Vertís and Quad provides:
No Successor Liability: The Parties intend that, except where expressly prohibited under applicable Law, upon Closing, Buyer shall not be deemed to: (i) be the successor of any Seller, (ii) have, de facto, or otherwise, merged with or into any Seller, (iii) be a mere continuation or substantial continuation of any Seller or the enterprise(s) of any Seller, or (iv) be liable for any acts or omissions of any Seller in the conduct of the Business or arising under or related to the Acquired Assets other than set forth in this Agreement. Without limiting the generality of the foregoing, and except as otherwise provided in this Agreement, the Parties intend that Buyer shall not be liable for any bankruptcy claims, other claims, written notices, causes of action or Litigation against any Seller or any of any Seller’s predecessors or affiliates, and Buyer shall have no successor or vicarious liability of any kind or character whether known or unknown as of the Closing Date, whether now existing or hereafter arising, or whether fixed or contingent, with respect to the Business, the Acquired Assets, the Excluded Assets or the Excluded Liabilities or any other obligations of Sellers....345
On December 6, 2012, after the Sale Hearing, the Court entered an order which “authorized and approved the Debtors’ sale of substantially all of their assets ‘free and clear of all liens, claims, encumbrances and other interests’ to Quad pursuant to the terms of the Asset Purchase Agreement and its related amendments,, and without any liability to Quad on account of any successor or transferee liability of the Acquired Assets or the Business or the operation of the Acquired Assets or the Business prior to and including the Closing Date, in each case as defined and provided for in the Asset Purchase Agreement (the “Sale Order”).”
In pertinent parts, the Sale Order provides:
[Quad] is not a mere continuation of the Debtors or their estates, there is no continuity or common identity between [Quad] and any of the Debtors, and there is no continuity of enterprise between [Quad] and any of the Debtors. [Quad] is not holding itself out to the public as a continuation of any of the Debtors. [Quad] is not a successor to any of the Debtors or their estates and the Sale does not amount to a consolidation of merger, or de facto merger of [Quad] with or into any of the Debtors.
With respect to the Acquired Assets, the Sale Order, in pertinent part, provides:
[T]he Acquired Assets shall be sold free and clear of all interests, obligations, rights, encumbrances, pledges, liens ...., liabilities, ... judgments, ... debts, rights of recovery, ... restrictions, ... labor and employment rights and claims, ... claims based on ... products liability, tortious conduct, property damage, ... acts, or failures to act, ... in each case, of whatever kind, na*636 ture, or description in, against or with respect to any of the Acquired Assets, the Debtors, or the Business having arisen, existed, or accrued prior to and through the Closing Date, ... including claims or liabilities otherwise arising under doctrines of successor liability, de facto merger or substantial continuity or liabilities or obligations arising under any Law or Decree....347
At yet another part of the Sale Order, it states:
[Quad] shall not be liable for any Interests, claims or liabilities against the Debtors or any of its predecessors or affiliates, and [Quad] shall have no successor or vicarious liabilities of any kind or character, including, but not limited to, ... products liability, successor or transferee liability, labor law, de facto merger or substantial continuity, whether known or unknown as of and including the Closing Date, now existing or hereinaftér arising, whether asserted or unasserted, fixed or contingent, ... with respect to the Debtors or any obligations of the Debtors arising prior to and including the Closing Date....348 Upon the Closing Date ..., all persons or entities are hereby forever prohibited and permanently enjoined from commencing or continuing in any manner any action or other proceeding, whether in law or equity, in any judicial, administrative, arbitral, or other proceeding against [Quad], its successor or assigns, or the Acquired Assets, with respect to any (i) Interest arising under, out of, in connection with or in any way relating to the Debtors, [Quad], the Acquired Assets, the Business or the operation of the Acquired Assets or the Business prior to and including the Closing the Closing Date or (ii) successor or transferee liability, including, without limitation, the following actions: (a) commencing or continuing in any manner any action or other proceeding against [Quad], its successors or assigns, assets, or properties, ... or (e) commencing or continuing any action, in any manner or place, that does not comply r is inconsistent with the provisions of this Order or other orders of this Court_349 ■
RAG, not once, acknowledges these pertinent provisions. It merely, relying on New Jersey state law, asserts, among other things, that “[i]n New Jersey, successor liability is established if the successor purchaser continued with the predecessor’s product line and derived a benefit therefrom.”
C. Governing Third Circuit Law Regarding Successor Liability
RAG also ignores Third Circuit law with respect to successor liability. In In re Trans World Airlines, Inc., the Third Circuit held that “[t]o allow claimants to assert successor liability claims against [the purchaser] while limiting other creditors’ recourse to the proceeds of the asset sale would be inconsistent with the Bankruptcy Code’s priority scheme.”
D. RAG “Pled” Its Claim for Successor Liability in Its Opposition to Defendants’ Motions for Summary Judgment
RAG’s assertion of Quad’s successor liability appears only in Plaintiffs brief. The Complaint is devoid of any claim for successor liability against • Quad. In fact, RAG’s complaint merely asserts liability against Quad “should it come into possession” of RAG’s property.
Quad argues, “RAG cannot now assert in opposition to summary judgment a novel claim for successor liability ... it did not plead in its Complaint.”
Courts have repeatedly rejected plaintiffs’ successor liability claims in cases in which plaintiffs raised the theory in a brief rather than in a complaint. For instance in Network Enters., Inc. v. APBA Offshore Prods., Inc., the plaintiff, for the first time in a brief, “alleged” successor liability.
% * *
Pursuant to the Sale Order, applicable Third Circuit case law, and the Court’s statements made during the Sale Hearing, it is clear that RAG’s assertion that there is successor liability as to Quad for the alleged tortious acts of the Debtors that occurred prior to the asset sale is without merit. Moreover, there is no apparent reason why RAG did not plead a claim for successor liability in its Complaint. Thus, the Court finds that RAG did not properly plead a claim for successor liability.
II. RAG’s Common Law Conversion Claim (Count II)
Plaintiff alleges that Defendants “have improperly and unlawfully exercised dominion and control over some or all of the Confidential Information and Intellectual Property ... [and] have converted [it].”
Plaintiff responds claiming that Defendants “erroneously contend that Riverside is solely claiming that intangible property was converted.”
Under New Jersey law, a plaintiff in order to succeed on a conversion claim must prove the following: “(1) Defendants wrongfully exercised dominion or control-over Plaintiffs property; (2) the property was taken without authorization; and (3) the property was taken to the exclusion of the owner’s rights to it.”
A. The Nature of the Property at Issue
New Jersey courts have repeatedly held that one cannot convert intangible property.
Plaintiff has not specified any tangible property over which Defendants exercised wrongful control. While Plaintiff alleges that Defendants are in possession of its client lists, pricing information and the like, these are not considered tangible objects for the purposes of conversion.368
Therefore, RAG’s argument that its claim is based in part on tangible property, i.e., “customer lists, customers’ ordering habits, merchandising plans, projections/product strategies, pricing methods and mark up structures,” must fail as a matter of law.
In addition, there is ample evidence that Defendants sent this “tangible property” via email, thus as a “soft copy” in electronic format. For instance, Ms. Oh admitted that she recognized from emails Mr. Acer-bo sent to Mr. Clemmer, that he attached certain recapping invoices he received during the course of his employment with Com-Pak, and that certain customer information and ordering habits were disclosed. Therefore, as in Mu Sigma I, this Court finds that the items listed as “tangible” are not tangible for the purposes of conversion.
However, the Court’s inquiry does not end here. Plaintiff, in its opposition to
• Mr. McDonald specifically described some of these hard copy materials to be, ‘... co-mingle presentations. There were one-price matrices were developed on Excel. There were freight analysis by carrier, there were RFPs where the information was being — we were in the process of working on those RFPS.’ ”370
• The fact that Mr. McDonald stated that all materials were kept in hard and soft copy.371
• The fact that “Ms. Pizzutillo admits she readied a postal card, a tangible item, for permits with the United States Post office ...” for 5 Digit and Clemmer while employed by RAG.”372
• Testimony from Mr. Guyon who had “observed in Mr. Acerbo’s office the hard drive which he had utilized to transfer files, documents and software from Com-Pak Services, Inc. and/or Riverside.”373
None of these facts establish more than a “scintilla” of evidence. There is ample evidence in support of Defendants’ argument that the property is intangible in nature and, thus, cannot form the basis of a conversion claim under New Jersey law.
• RAG’s counsel made the following statement to this Court:
Our response to their interrogatories, our responses to their request for production, all indicate and disclose specific pieces of software, specific pieces of information that we allege were taken. So, in terms of Mr. Stewart’s comments that we don’t know what the ‘items’ that have been misappropriated are, I disagree.374
The home grown software is the key to this case.... We are talking about modifications in derivative works375 to software methods and processes that were owned originally by Riverside and that were taken from them and implemented in the 5 Digit process ... It’s the bucket that Mr. Sullivan described as the home grown software, that’s the special sauce in this case.376
• The following testimony of RAG’s Corporate Representative:
Q. Okay. My understanding of RAG’s allegations in this lawsuit is that one or more individuals copied confidential information and/or intellectual property from RAG’s computers and provided that copy to a competitor. Is that accurate?
A. Yes.
*640 Q. I just want to make sure we’re clear because I think earlier we talked about how we’re talking about copies of electronic information. So I just want to make sure there was not one hard copy customer list that was kept in a vault somewhere. That’s not what we are talking about, right?
A. Not to the best of my knowledge.
Q. Okay. Nothing like that — that was only kept in hard copy form — that has gone missing?
A. I believe that probably everything exists in soft copy somewhere.
• Acerbo admitted that he sent home an email attaching the “Updated Commingling postage costs” document of RAG to his personal email account,377 which he, after his termination from RAG, did not return;378
• Mr. Guyon set up FTP sites for Com-Pak Services employees to transfer files from Com-Pak into the FTP servers; to provide access to software and processes from Com-Pak;379
• Ms. Oh testified that she observed emails Mr. Acerbo sent to Clemmer disclosing non-public customer information of Com-Pak;380
• There is further testimony that certain financial documents on 5 Digit servers were exactly the same documents that were used at RAG.381
In addition, how does a postal card, Ms. Pizzutillo readied on behalf of 5 Digit during her employment at RAG, become tangible property of RAG? Because Ms. Pizzutillo worked at RAG while she obtained the card? This is insufficient evidence.
RAG also mentioned hard copies of “one-price matrices developed on Excel ... [and] freight analysis by carrier.” These are not tangible for purposes of conversion similar to customer lists and other proprietary information as described above. The reference to “documents” also constitutes, if at all, a mere scintilla of evidence. With, respect to these “documents” discovery revealed that they were sent via email, as such in electronic form. For example, Mr. Guyon certified that he “was requested by Vincent Acerbo to advise the best type of external hard drive for him to utilize in order for him to personally transfer files, documents and software from Com-Pak Services, Inc. and Riverside Acquisition Group LLC onto. I recommended an external hard drive manufactured by Western Digital.”
The record is devoid of any evidence beyond a mere “scintilla” that any of the Defendants took physical, tangible items that would constitute tangible property for purposes of conversion. Thus, there is no genuine issue of material fact with regard to the nature of the property. The record contains sufficient evidence for a “reasonable jury [or a judge in a bench trial] to find in Plaintiffs favor after trial.”
B. Does RAG Own the Property at Issue?
Defendants argue that RAG’s conversion claim must also fail because “as confirmed
The Court agrees and disagrees. The record contains sufficient evidence establishing that most of the software at issúe is not RAG’s property. In fact, RAG has admitted that it licensed most of the software from third parties such as Pitney Bowes. However, the record contains sufficient evidence showing RAG’s ownership of certain proprietary information, such as customer lists, pricing lists and other proprietary information. The record also contains sufficient facts to establish RAG’s ownership of the Charlie’s Programs. Mr. Saccarelli wrote these programs for Com-Pak while employed at or while he provided consulting services for Com-Pak.
Thus, RAG has met its burden with regard to the ownership of the Charlie’s Programs and certain proprietary information such as customer lists (nonetheless, as stated above, this property is not tangible).
C. Is RAG Still in Possession of the Property at Issue?
In order to succeed on a conversion claim, however, a plaintiff must further prove that the property was taken to the exclusion of the owner’s rights to it.
Q. The intellectual property that you claim was taken, is any of that unavailable to you today to use?
A. No
Q. So you’re actually continuing to use that intellectual property, correct?
A. That is correct.
Q. The confidential information, was any of that taken in such a way that it’s not available to you to use?
A. No, it’s certainly available to us.386
RAG, in its opposition, for the first time, shifts the focus to some allegedly not returned “documents” on Mr. Acerbo’s hard drive to argue that RAG is deprived of at least some of its property.
Defendants, accuse RAG of “blatantly ignoring [Guyon’s] deposition,” during which he admitted, he never looked on the external hard drive.
The Court agrees with Defendants. Guyon’s admission that he, in fact, never looked at the hard drive defeats RAG’s argument that it is deprived of at least some allegedly not returned property.
“Judges are not like pigs, hunting for ’ truffles buried in briefs.”391
In its Complaint, RAG alleges:
Debtors and Quad, should it come into possession of the Confidential Information and Intellectual Property by virtue of the proposed sale, have improperly and unlawfully exercised dominion and control over some or all ... [of the property].392
Debtors and Quad have converted some or all of the Confidential Information and Intellectual Property and are liable to Plaintiff for damages for such wrongful acts in an amount to be determined at trial.393
.In its opposition brief, RAG does not point this Court to any evidence as to Quad’s possession and/or use of its property. In fact, RAG merely addresses that “there is a genuine issue of material fact that Debtor/Defendants are liable for conversion and replevin ...”
With respect to Quad’s alleged possession and use of RAG’s Intellectual Property and Confidential Information, the record contained the following:
• Quad did not receive Charlie’s Programs as a result of its purchase of all of Debtors assets.396
• Quad also licensed Group 1 Software prior to the purchase of Debtors’ assets.397 After it acquired the assets, it did not renew 5 Digit’s license; it instead continued with its original license.398
• 5 Digit separately purchased and operated Pitney Bowes sorters, but different models than Com-Pak. Quad, as a result of the purchase of substantially all of the Debtors’ assets, operates the Pitney Bowe sorters 5 Digit previously operated.399
Quad is simply not in possession of RAG’s property, intangible or not.
The property at issue is not tangible and, thus not subject to conversion. Moreover, while RAG owns certain of the subject property, RAG was never deprived of the property. The elements of conversion are simply not met. Based on the foregoing, the Court will grant both motions for
III. Aiding and Abetting Conversion (Count III)
Plaintiff argues that “the evidence demonstrates that Debtor was (i) aware of its role in an overall tortious activity when it provided assistance to Clemmer and the Team members in the establishment of 5 Digit Plus and (ii) Debtor knowingly and substantially assisted in the conversion of Riverside’s property.”
As discussed above, RAG’s conversion claim cannot survive summary judgment. As one cannot be guilty of aiding and abetting a claim that doesn’t exist the Court will grant Defendants’ motions for summary judgment on Court III for aiding and abetting conversion.
IV. Replevin (Count IV)
Under New Jersey law, in order to succeed on a replevin claim, a plaintiff must demonstrate that it seeks the “recovery of goods.”
V. Unjust Enrichment and Imposition of Resulting or Constructive Trust (Count V)
“New Jersey does not recognize unjust enrichment as an independent tort cause of action.”
In Jurista, the court dismissed an unjust enrichment claim where the plaintiff brought several other tort claims based on the same facts holding that “[w]here a plaintiff asserts an unjust enrichment cause of action along with [other] tort claims and there appear to be no allegations that the plaintiff expected or anticipated remuneration from the defendant, the unjust enrichment claim should be dismissed.”
RAG alleges the following:
As a result of Debtors’ and/or Quad’s failure to return the Confidential Information and Intellectual Property despite Plaintiffs demand and the New Jersey Litigation, Debtors and/or Quad have enjoyed and/or will enjoy the use and benefit of the Confidential Information and Intellectual Property and the proceeds derived by each of them therefrom.
Debtors and/or Quad continue or will have the use and benefit of the Confidential Information and Intellectual Property and the proceeds derived by each of them therefrom.
*644 Under the circumstances, it would be inequitable for Debtors and/or Quad to retain the benefit of the Confidential Information and Intellectual Property-land the proceeds therefrom) in its possession.
Plaintiff is entitled to the imposition of a resulting or constructive trust on the Confidential Information and Intellectual Property in Debtors’ and/or Quad’s possession and the proceeds derived therefrom in favor of Plaintiff, which holds all right, title and interest thereto.
As in Jurista, RAG’s complaint is devoid of any information as to an expected remuneration. Since RAG asserts this claim along other tort claims, the Court will grant Defendants’ motions for summary judgment on Court V for unjust enrichment.
VI. Declaratory Judgment Claim (Count I)
Debtor/Defendants argue that this claim is moot, as “there is absolutely no evidence that Defendants are in possession of anything that arguably belonged to RAG, because Defendants sold its relevant assets to Quad pursuant to this Court’s order.”
RAG, invoking Fed. R. Civ.P. 8(a)(2), argues it has sufficiently alleged facts that are the bases for many other claims, including Trespass to Chattels; violations under the New Jersey Computer Related Offenses Act and others.
Defendants take further issue with accusing RAG for seeking “to ‘back door’ what appear to be at least eight new causes of action by claiming they were all along, but just under the guise of RAG’s declaratory judgment claim.”
RAG’s claim for a declaratory judgment is moot. As explained in detail in connection with the conversion claim, RAG failed to provide sufficient facts beyond a mere scintilla as to Quad’s possession/use of RAG’s property. With respect to Debt- or/Defendants, RAG has failed to raise a genuine issue of material fact with respect to whether Debtor/Defendants remain in possession of any of RAG’s property after the sale of its assets to Quad. Thus, the Court will grant Defendants’ motions for summary judgment on Count I for declaratory judgment.
VII.. Accounting (Count VI)
Under New Jersey law, “the party seeking to obtain an accounting must establish: (1) a fiduciary or trust relationship; (2) the complicated [complex] nature of the character of the account; and (3) the need of discovery.”
[T]he issues necessary to be determined, in order to arrive at a just conclusion, are so numerous, and dependent upon such a variety of evidence, or of evidence of such a technical character, as that is substantially impossible for a jury, retir*645 ing in the ordinary way to a jury room and obliged to carry all of the oral evidence in their memories, to come, at one session, to anything like just and proper conclusion.411
RAG argues that this matter is complex and that more discovery is needed to “determine the magnitude of the harm imparted on it by Debtor/Defendant and Quad.”
Defendants call this logic “incomprehensible.” The Court agrees and will grant Defendants’ motions for summary judgment on Count VI for an accounting,
As set forth above, there is no genuine issue of material fact and Defendants' are entitled to summary judgment on all six counts of the Complaint.
CONCLUSION
For the foregoing reasons, the Court will deny the Plaintiff s Motion to Amend and will grant the Defendants’ Motions for Summary Judgment. An Order will be issued.
. Declaration of Kevin T. Sullivan in Support of Defendant Quad/Graphics Marketing LLC’s Motion for Summary Judgment on All Counts (Adv.D.1.237) ("Sullivan Decl.”) at Exh. X (Deposition of David Glowny, Dec. 10, 2013, 24:9-24, 25:15-21, 25:19-26:6) (."Glowny Depo.”).
. Sullivan Decl. at Exh. X (Glowny Depo.) at 26:3-6.
. Sullivan Decl. at Exh. D (Deposition of Robert McDonald, Oct. 3, 2013, 101:2-13, 130:23-131:7) ("McDonald Depo.”).
. Sullivan Decl. at Exh. Z (Deposition of Patricia Pizzutillo, Feb. 11, 2014, 331:3-7) (Piz-zutillo, Feb. 11, 2014 Depo.”). Ms. Pizzutillo states that 5 Digit "bought” the Group One software. However, I think she meant that 5 Digit licensed the software. Pursuant to Pit-ney Bowes, it does license its products to the customers. See Sullivan Decl. at Exh. X (Glowny Depo.) at 26:3-6.
. Sullivan Decl. Exh. CC (Deposition of Parti-da Pizzutillo, Jan. 31, 2014, 73:17-25) ("Piz-zutillo, Jan. 31, 2014 Depo.”).
. Sullivan Decl. Exh. BB (Deposition of Carlos Arias, testifying on behalf of Quad pursuant to Fed. R. Civ. P. 30(b)(6), Apr. 28, 2014, 116:12-117:10, 145:10-24) ("Arias Depo”).
. Sullivan Decl. Exh. BB (Arias Depo.) at 116:12-117:10, 145:10-24; Sullivan Decl. Ex. L (Deposition of Donald S. Terkel, Feb. 4, 2014, 137:2-8) (“Terkel Depo”); Sullivan Deck Ex. CC (Pizzutillo, Jan. 31, 2014, Depo.) at 73:17-25.
. Sullivan Decl. at Exh. X (Glowny Depo.) at 19:16.
. Sullivan Decl. at Exh. X (Glowny Depo.) at 50:7-18.
. Sullivan Decl. at Exh. X (Glowny Depo.) at 51:7-11; Sullivan Decl. at Exh. Z (Pizzutillo Feb. 11, 2014 Depo.) at 306:10-14.
. Sullivan Decl. at Exh. X (Glowny Depo.) at 60:9-60:25, 28:22-29:11, 54:25-55:16.
. Sullivan Decl. at Exh. X (Glowny Depo.) at 39:9-17, 46:10-47:7); Sullivan Decl. Ex. CC (Pizzutillo, Jan. 31, 2014, Depo.) at 39:15— 40:1; Sullivan Decl. Exh. I (Deposition of Donald Ray Qemmer, Jr., Oct. 8.2013, 62:3-17) ("Clemmer Depo.); Debtor/Defendants' Suggestions in Support of Their Motion for Summary Judgment on All Counts (Adv.D.I. 224) (‘'Debtor/Defendants’ Memorandum in Support of Summary Judgment”) Exh. 19 (Pintey Bowes Sales & Maintenance Agreement and Master License Agreement); Exh. 20 (Declaration of Donald Ray Qemmer) ¶ 9.
. Sullivan Decl. Exh. CC (Pizzutillo, Jan. 31, 2014, Depo.) at 73:19-25; Sullivan Decl. Exh. BB (Arias Depo.) at 116:12-117:17, 124:14-125:3; Sullivan Decl. Exh. JJ (Arias Dep. Ex. CA-4); Sullivan Decl. Exh. KK (Arias Dep. Ex. CA-5) at 4.
. Sullivan Decl. at Exh. X (Glowny Depo.) at 46:10-47:4.
. Sullivan Decl. at Exh. X (Glowny Depo.) at 56:1-19, 57:4-60:5.
. Sullivan Decl. at Exh. X (Glowny Depo.) at 59:10-60:5.
. Sullivan Decl. at Exh. X (Glowny Depo.) at 60:2-5.
. Sullivan Decl. at Exh. X (Glowny Depo.) at 60:6-61:3).
. Sullivan Decl. at Exh. X (Glowny Depo.) 56:20-22, 58:17-25.
. Sullivan Decl. at Exh. MM (Deposition of Charles Saccarelli, Dec. 18, 2013, 15:4-22, 20:19-24, 52:21-54:23, 95:4-96:2; RAG Depo. at 143:9-25) ("Saccarelli Depo”). ‘
. Sullivan Decl. at Exh. MM ("Saccarelli Depo") at 96:3-11.
. Sullivan Decl. at Exh. D (Deposition of Robert McDonald, Oct. 3, 2013, 143:9-25; 230:5-13); Sullivan Decl. at Exh. MM (Deposition of Charles Saccarelli, Dec. 18, 2013, 15:4-22, 60:5-8, 87:23-88:2, 90:2-9, 218:19-24; Sullivan Decl. at Exh. X (Deposition of David Glowny, Dec. 10, 2013, 61:4-25, 66:7-25, 68:8-15).
. Sullivan Decl. at Exh. X (Glowny Depo.) at 66:7-25; Sullivan Decl. at Exh. MM (Saccar-elli Depo.) at 86:17-88:2, 99:2-101:2, 222:18-225:14).
. Sullivan Deck at Exh. MM (Saecarelli Depo.) at 86:17-88:2, 99:2-101:2, 222:18-225:14.
. Sullivan Deck at Exh. X (Glowny Depo.) at 61:18-25.
. Sullivan Deck at Exh. MM (Saecarelli Depo.) at 96:20-97:12.
. Sullivan Deck at Exh. MM (Saecarelli Depo.) at 90:6-17.
. Sullivan Deck at Exh. NN (Deposition of Larry Zimmerman, Jan. 7, 2014, 79:22-80:22, 86:9-22, 89:2-12, 90:4-15, 104:15-17, 121:24-122:16, 123:20-124:13, 125:16-126:3, 127:6-16, 131:2-10) ("Zimmerman Depo”).
. Sullivan Deck Exh. BB (Arias Depo.) at 102:4-20, 103:22-107:24, 169:15-171:4, 188:23-189:19, 191:13-192:14, 224:19-227:4); Sullivan Deck Exh. LL [Arias Depo. Ex. CA-4]; Sullivan Deck Ex. KK [Arias Dep. Ex. CA-5] at 6-7.
. Memorandum of Law in Support of Defendant Quad/Graphics Marketing, LLC’s Motion for Summary Judgment Motion (Adv.D.1.236) ("Quad’s Memorandum in Support of Summary Judgment”) at 32 (citing Sullivan Deck at Exh. NN (Zimmerman Depo.) at 50:24-53:24); Sullivan Deck Ex. BB (Arias Depo.) at 102:4-20, 103:22-107:24, 148:20-149:20, 152:23-155:10); Sullivan Deck Ex. KK (Arias Depo. Ex. CA-5) at 5-7.
. Sullivan Deck at Exh. NN (Zimmerman Depo.) at 53:12-19, 87:11-89:2, 90:4-91:20; Sullivan Deck at Exh. MM (Saecarelli Depo.) at 108:14-109:2; Sullivan Deck Ex. BB (Arias Depo.) at 218:21-221:13.
. Verified Complaint (Adv.D.I.l) ("Complaint”) at ¶ 25.
. Sullivan Deck at Exh. D (McDonald Depo.) at 67:2-71:9, 129:5-130:2.
. Sullivan Decl. at Exh. X (Glowny' Depo.), at 16:21-17:1, 36:1-3, 87:14-16, 147:8-13, 240:2-241:21.
. Sullivan Decl. at Exh. X (Glowny Depo.) at 209:2-7; Sullivan Decl. at Exh. S (Deposition of Thomas H. McCaully, Sept. 26, 2013, 19:8— 12) (“McCaully Depo.’’).
. Sullivan Decl. at Exh. S (McCaully Depo.) at 140:12-141:4.
. Sullivan Decl. at Exh. S (McCaully Depo.) at 140:17-23.
. Sullivan Decl. at Exh. S (McCaully Depo.) at 145:17-146:17.
. Sullivan Decl. at Exh. D (McDonald Depo.) at 101:2-13.
. Sullivan Decl. at Exh. CC (Pizzutillo, Jan. 1, 2014 Depo.) at 39:15-40:24; Sullivan Decl. Ex. II (Monticello Software Perpetual License Agreement for Computer Software Products).
. Sullivan Decl. at Exh. X (Glowny Depo.) at 234:7-21; Sullivan Decl. at Exh. Z (Pizzutillo, Feb. li, 2014, Depo.) at 390:1-391:4.
. Sullivan Decl. at Exh. Z (Pizzutillo, Feb. 11, 2014, Depo.) at 390:1-391:4.
. Sullivan Decl. at Exh. X (Glowny Depo., Dec. 10, 2013, 20-21:21-26.
. Sullivan Decl. at Exh. R (McCaully, Sept. 27, 2013, Depo.) at 25:12-16.
. Sullivan Decl. at Exh. D (McDonald Depo.) at 26:19-25.
. Sullivan Decl. at Exh. D (McDonald Depo.) at 25:4-27:3.
. Sullivan Decl. at Exh. D (McDonald Depo.) at'25:12-15.
. Sullivan Decl. at Exh. D (McDonald Depo.) at 26:4-27:3.
. For details regarding this transaction, see Sullivan Decl. at Exh. D (McDonald Depo.) at 26:14-38:7.
. Sullivan Decl. at Exh. I (Clemmer Depo.) at 61:1-15.
. Sullivan Decl. at Exh. I (Clemmer Depo.) at 247:20-24; Sullivan Decl. Ex. J (Certification of Defendant Donald Ray Clemmer, Jr., Ex. 47) ¶¶ 11, 16.
. Sullivan Decl. Ex. G [Asset Purchase Agreement].
. Sullivan Decl. at Exh. L (Terkel Depo.) at 33:10-35:21.
. Sullivan Decl. at Exh. X (Glowny Depo.) at 21:18-22:23:5.
. Sullivan Decl. at Exh. Y (Deposition of Lisa A. Wurman, Nov. 14, 2013, 126:14-127:17) (“Wurman Depo.”).
. Sullivan Decl. at Exh. X (Glowny Depo.) at 16:24-20:19, 21:18-22:15.
. Declaration of Anthony L. Meóla In Support of Riverside Acquisition Group LLC d/b/a Com-Pak Services, Inc.’s Memorandum of Law in Opposition to Debtor Defendants Vertís Holdings, Inc.’s, Vertís, Inc.'s, and 5 Digit Plus, LIC’s and Defendant Quad/Graphics Marketing, LLC’s Motions for Summary Judgment on All Counts (Adv.D.1.251) ("Meóla Decl.”) Ex. B (Deposition of Patricia Pizzutil-lo, Jan. 31, 2014, 13:7-25:6).
. Meóla Decl. Ex. E (Certification of Edward Guyon) at ¶¶ 2, 3, 28, 29.
. Sullivan Decl. at Exh. MM (Saccarelli Depo.) at 12:12-16, 17:5-21, 18:23-20:18, 98:13-99:1.
. Sullivan Decl. at Exh. MM (Saccarelli Depo.) at 18:12-22.
. Sullivan Decl. at Exh. NN (Zimmerman Depo.) at 50:24-53:24.
. Quad’s Memorandum in Support of Summary Judgment at 19.
. D.I. 16, 76. .
. D.I. 412.
.D.I. 425.
. Adv. D.I. 1.
. D.I. 25.
. Adv. D.I.s 78, 138, 163
. Adv. D.I. 230.
. Adv. D.I. 223, 224.
. Adv. D.I. 235, 236.
. Adv. D.I. 258.
. Adv. D.I. 252.
. Adv. D.I. 254, 258.
. Adv. D.I. 272, 273, 278, 280.
. Debtor/Defendants’ Suggestions in Support of Their Motion for Summary Judgment on All Counts ('‘Debtor/Defendants' Memorandum in Support of Summary Judgment") Ex. 10 (McCaully Depo.) at 24:8-25:10.
. Debtor/Defendants' Memorandum in Support of Summary Judgment Ex. 13 (Saccarelli Depo.) at 77:16-78:9, Ex. 14 (Deposition of Edward Guyon, Jan. 8, 2014, 130:8-11) ("Guyon Depo.").
. Debtor/Defendants’ Memorandum in Support of Summary Judgment Ex. 10 (McCaully Sept. 26, 2013 Depo.) at 57:4-8, 117:12-19, 118:6-24.
. Debtor/Defendants’ Memorandum in Support of Summary Judgment Ex. 10 (McCaully Sept. 26, 2013 Depo.) at 76:7-13, 77:15-78:5.
. Debtor/Defendants’ Memorandum in Support of Summary Judgment Ex. 10 (McCaully Sept. 26, 2013 Depo.) at 85:24 — 86:6.
. Debtor/Defendants’ Memorandum in Support of Summary Judgment Ex. 10 (McCaully Sept. 26, 2013 Depo.) at 88:16-21.
. Debtor/Defendants’ Memorandum in Support of Summary Judgment Ex. 10 (McCaully Sept. 26, 2013 Depo.) at 156:11-157:13; Debtor/Defendants' Memorandum in Support of Summary Judgment Ex. 9 (McDonald Depo.) at 198:13-18.
. Sullivan Decl. at Exh. D (McDonald Depo.) at 25:12-15.
. Sullivan Decl. at Exh. D (McDonald Depo.) at 25:22-26:3, 26:8-18.
. Debtor/Defendants’ Memorandum in Support of Summary Judgment Ex. 9 (McDonald Depo.) at 284:13-18.
. Sullivan Decl. at Exh. I (Clemmer Depo.) at 247:20-24; Sullivan Decl. Ex. J (Clemmer Depo. Ex. 47 (Certification of Defendant Donald Ray Clemmer)) ¶¶ 11, 16.
. Debtor/Defendants’ Memorandum in Support of Summary Judgment Ex. 19 (Pitney Bowes Sales and Maintenance Agreement); Ex. 21 (Clemmer Depo.) at 62:3-17; Ex. 14 (Guyon Depo.) at 139:10-140:9; 141:3-142:9.
. Debtor/Defendants' Memorandum in Support of Summary Judgment Exh. 14 (Guyon Depo.) at 140:10-20.
. Debtor/Defendants’ Memorandum in Support of Summary Judgment Exh. 27 (copies of emails).
. Debtor/Defendants’ Memorandum in Support of Summary Judgment Exh. 27 (copies of emails).
. Debtor/Defendants’ Memorandum in Support of Summary Judgment Exh. 27 (copies of emails).
. Debtor/Defendants’ Memorandum in Support of Summary Judgment Exh. Ex. 28 (additional emails).
. Debtor/Defendants’ Memorandum in Support of Summary Judgment Exh. 21 (Clem-mer Depo.) at 59:7-12).
. Meóla Decl. Ex. N (McCaully, Sept. 27, 2013, Depo.) at 61:23-62:3.
. Meóla Decl. Exh. N (McCaully, Sept. 27, 2013 Depo.) at 56:2-62:6.
. Meóla Decl. Exh. C (Deposition of Donald Ray Clemmer, Jr., Oct. 8, 2013, 203:6-25); Meóla Decl. Ex. N (Deposition of Thomas H. McCaully, Sept. 27, 2013, 43:15-23; 44:3-24, 45:19-25, 46:1-25, 47:1-25).
. Meóla Decl. Exh. N (McCaully Depo., Sept. 27, 2013 Depo.) at 61:13-62:3.
. Meóla Decl. Exh. B (Pizzutillo Depo. at 136:17-137:13.
. Meóla Decl. Exh. B (Pizzutillo Depo. at 136:17-137:13.
. Meóla Decl. Exh. C (Clemmer Depo. at 219:1-227:25.
. Meóla Deel. Exh. B (Pizzutillo Depo.) at 44:21-45:23.
. Meóla Decl. Exh. B (Pizzutillo Depo.) at 176-179, 194-196).
. Meóla Decl. Exh. C (Clemmer Depo.) at 121:15:19.
. Meóla Decl. Exh. C (Clemmer Depo.) at 122:20-24.
. Meóla Decl. Exh. C (Clemmer Depo.) at 156:2-22; 228:5-24, 229:1-4.
. Meóla Decl. Exh. B (Deposition of Patricia Pizzutillo, Jan. 31, 2014, 61:19-25).
. Meóla Dec, Exh. E (Certification of Edward Guyon) at ¶ 26.
. Meóla Decl. Exh. C (Deposition of Donald Ray Clemmer, Jr., Oct. 8, 2013, 129:10-15).
. Meóla Decl. Exh. C (Deposition of Donald Ray Clemmer, Jr., Oct. 8, 2013, 133:5-25; 134:1-21; 135:1-25, 136:1-4).
. Meóla Decl. Exh. B (Deposition of Patricia Pizzutillo, Jan. 31, 2014, 69:11-70:13).
. Meóla Decl. Ex. C (Deposition of Donald Ray Clemmer, Jr., Oct. 8, 2013, 138:3-11, 14-16).
. Meóla Decl. Ex. C (Deposition of Donald Ray Clemmer, Jr., Oct. 8, 2013, 136:5-8).
. Meóla Decl. Ex. B (Pizzutillo, Jan. 31, 2014, Depo.) at 94:8-19; see also at 100:18-23.
. Meóla Decl. Ex. B (Pizzutillo, Jan. 31, 2014, Depo.) at 104:14-107:5).
. Meola Decl. Ex. B (Pizzutillo, Jan. 31, 2014, Depo.) at 68:17-19; see Meola Decl. Ex. H (Deposition of Mark Beato, Jr., Feb. 11, 2014, 177-194 for more examples about email correspondences) ("Beato Depo.'').
. Meóla Decl. Ex. B (Pizzutillo, Jan. 31, 2014, Depo.) at 364:13-365:10.
. Meóla Decl. Ex. H (Beato Depo.) at 140:25-141:3.
. Meóla Decl. Ex. I (Acerbo Depo.) at 31:8— 15.
. Meóla Decl. Ex. I (Acerbo Depo.) at 42:16-43:18.
. Meóla Decl. Ex. I (Acerbo Depo.) at 48:8-10.
. Meóla Decl. Ex. E (Certification of Edward Guyon) at ¶ 22.
. Meóla Decl. Ex. K (Deposition of Linda H. Oh, March 12, 2014, 261:5-18; 262:1-22) ("Oh Depo.).
. Meóla Decl. Ex. L (Guyon Depo.) at 117:7-118:1-14.
. Meóla Dec. Ex. L (Guyon Depo.) at 157:20-161:16, 188:13-24; 189:2-9, 190:1-7.
. Meóla Dec. Ex. L (Guyon Depo.) at 287:7-15; 294:21-296:1-4.
. Debtor/Defendants' Memorandum of Law in Support of 'Summary Judgment Ex. 10 (McCaulley Sept. 26, 2013 Depo.) at 161:2-20.
. Debtor/Defendants' Memorandum of Law in Support of Summary Judgment Ex. 10 (McCaulley Sept. 26, 2013 Depo.) at 161:20-24.
. Debtor/Defendants' Memorandum of Law in Support of Summary Judgment Ex. 11 (McCaulley Sept. 27, 2013 Depo.) at 151:17— 152:3.
. Sullivan Decl. Ex. V (RAG’s Supplemental Answers to Debtors’ First Set of Interrogatories) No. 11.
. Sullivan Decl. Ex. D (McDonald Depo.), at 12:22-13:4.
. Complaint at ¶¶ 21-26.
. Complaint at ¶ 25.
. Complaint at ¶ 24.
. Complaint at ¶ 25
. Sullivan Deck Ex. W (Riverside Acquisition Group LLC d/b/a/ COM-PAK Services Answers to Debtors’ First Set of Interrogatories), at 3 and 4.
. Debtor/Defendants’ Reply Suggestions in Support of Their Motion for Summary Judgment on all Counts ("Debtor/Defendants’ Reply”) at 15 (citing Transcript of Telephonic Status Conference Before the Honorable Christopher S. Sontchi United Stated Bankruptcy Judge)(September 18, 2014) (D.1.124) Exh. 1 at 14:23-15:4).
. This is a term used in copyright law.
. Meóla Decl. Ex. 36 (Transcript of Telephonic Status Conference Before the Honorable Christopher S. Sontchi United Stated Bankruptcy Judge)(April 15, 2014) at 13:3-22.
. Sullivan Decl. Ex. D (McDonald Depo.) at 13:16-24.
. Sullivan Decl. Ex. D (McDonald Depo.) at 92:23-93:2.
. Sullivan Decl. Ex. D (McDonald Depo.) at 92:23-93:2.
. Sullivan Decl. Ex. D (McDonald Depo.) at ' 93:22-94:15.
. Sullivan Decl. Ex. D (McDonald Depo.) at 220:25-221:3; 220:18-24, 248:11-15.
. Sullivan Decl. Ex. D (McDonald Depo.) at 220:18-221:3.
. Fed. R. Civ. P. 15(a).
. Winer Family Trust v. Queen, 503 F.3d 319, 331 (3d Cir. 2007); Coventry v. U.S. Steel Corp., 856 F.2d 514, 518-19 (3d Cir. 1988) (citing Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962)).
. Boileau v. Bethlehem Steel Corp., 730 F.2d 929, 938 (3d Cir. 1984); see also Long v. Wilson, 393 F.3d 390, 400 (3d Cir. 2004) ("We have held that motions to amend pleadings should be liberally granted.”); Adams v. Gould, Inc., 739 F.2d 858, 864 (3d Cir. 1984) ("Fed. R. Civ. P. 15 embodies the liberal pleading philosophy of the federal rules.”).
. Mortgage Lenders Network USA, Inc. v. Wells Fargo Bank (In re Mortgage Lenders Network, USA, Inc.), 395 B.R. 871, 876 (Bankr.D.Del. 2008).
. 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962).
. In re Mortgage Lenders Network, USA, Inc., 395 B.R. 871, 876 (citing Cureton v. Nat’l Collegiate Athletic Ass’n, 252 F.3d 267, 272-73 (3d Cir. 2001)).
. Heyl & Patterson Int’l, Inc. v. F.D. Rich Housing of the Virgin Islands, Inc., 663 F.2d 419, 425 (3d Cir. 1981).
. Lorenz v. CSX Corp., 1 F.3d 1406, 1414 (3d Cir. 1993) (citing Heyl & Patterson. Int'l Inc. v. F.D. Rich Housing of the Virgin Islands, Inc., 663 F.2d 419, 425 (3d Cir. 1981)).
. Defendant Quad/Graphics Marketing, LLC's Memorandum of Law in Opposition to Plaintiffs Motion for Leave to File First Amended Verified Complaint ("Quad’s Opposition”) at 13.
. Debtor/Defendants’ Opposition to Plaintiffs Motion for Leave to Amend its Complaint (“Debtor/Defendants' Opposition”) at 9; Quad’s Opposition at 14 — 16.
. Cureton v. Nat’l Collegiate Athletic Ass’n, 252 F.3d 267, 273 (3d Cir. 2001).
. Riverside Acquisition Group LLC d/b/al Com-Pak Services’ Motion for Leave to File First Amended Verified Complaint ("Motion to Amend”) at 4 (“Riverside seeks leave to amend its Complaint to include the following additional counts based on facts previously pled in the Complaint.”); see also, Riverside Acquisition Group LLC d/b/a/ Com-Pak Services, Inc. 's Reply to Defendant Quad/Graphics Marketing, LLC's Memorandum of Law in Opposition to Plaintiffs Motion for Leave to File First Amended Verified Complaint ("RAG's Reply to Quad's Opposition") at 7.
. Quad's Opposition at 13.
. Quad’s Opposition at 13.
. Quad's Opposition at 13.
. id. at 14.
. RAG's Reply to Quad's Opposition at 5.
. Riverside Acquisition Group LLC djh/a Com-Pak Services, Inc.’s Reply to Debtor/Defendants’ Opposition to Plaintiffs Motion for Leave to Amend its Complaint (“RAG’s Reply to Debtor/Defendants' Opposition”) at 6.
. Id.
. 573 F.2d 820, 824 (3rd Cir. 1978).
. Id. at 821-22.
. Id. at 822.
. Id.
. Id. at 824.
. Debtor/Defendants’ Opposition at 10.
. In re Mortgage Lenders Network, USA, Inc., 395 B.R. at 878 (citations omitted).
. Id. (citations omitted).
. Id. (citing Usery v. Marquette Cement Manufacturing Co., 568 F.2d 902 (2d Cir. 1977)).
. Id. at 879 (citing Dole v. Arco Chemical, Co., 921 F.2d 484, 488 (3d Cir. 1990)).
. 395 B.R. 871 (Bankr.D.Del. 2008).
. Id. at 875.
. Id. at 878.
. Id.
. Id. at 879.
. 323 B.R. 144, 147 (Bankr.D.Del. 2005).
. Id. at 148.
. Id.
. Id. at 149.
. Quad’s Opposition'at 6.
. Debtor/Defendants’ Opposition at 10.
. Id. at 11.
. Id. at 7.
. Motion to Amend at 7.
. Debtor/Defendants’ Opposition at 1 (citing Trans Video Elecs., Ltd. v. Sony Elecs., Inc., 278 F.R.D. 505, 510 (N.D.Cal. 2011)).
. RAG’s Motion to Amend at 5.
. RAG's Motion to Amend at 5-6.
. Debtor/Defendants’ Opposition at 6.
. Quad’s Opposition at 15.
This Court’s Second Amended Scheduling Order set the close of fact discovery for January 10, 2014. By that point, Defendants' respective document productions totaling more than 750,000 pages altogether were complete, and the parties had taken 13 fact depositions. This Court’s Third Amended Scheduling Order extended fact discovery one month past January 10, to February 10, solely for the limited purpose of allowing two additional depositions per party. RAG subsequently deposed two witnesses — Patricia Pizzutillo and Don Terkel, a Quad corporate representative under Rule 30(b)(6) — and Defendants deposed none. The only fact discovery that occurred in this Action beyond those two depositions was the April 28 deposition of Mr. Arias.... Other than Mr. Arias’ deposition, fact discovery in this Action has, for all intents and purposes, been largely closed for as much as six months before the June 16, 2014 hearing and more than seven months before RAG files its Motion to Amend.
. RAG’s Reply to Quad’s Opposition at 8.
. RAG’s Reply to Quad's Opposition at 8 (citing Cureton v. National Collegiate Athletic Ass’n, 252 F.3d 267, 273 (3d Cir. 2001).
. Cureton, 252 F.3d at 273 (citation omitted).
. Id. (citation omitted).
. Cureton, 252 F.3d at 273.
. 1 F.3d 1406, 1414 (3d Cir. 1996).
. 294 Fed.Appx. 715, 716 (3d Cir. 2008). '
. In re Mortgage Lenders Network, USA, Inc., 395 B.R. at 876 (citation omitted).
. Id. at 877.
. Id. at 878.
. In re Fleming Companies, Inc., 323 B.R. at 149.
. Id.
. In re Vision Metals, Inc., 311 B.R. 692, 702 (Bankr.D.Del. 2004).
. Id.
. 856 F.2d 514, 520 (3d Cir. 1988).
. Id.
. Adams v. Gould, Inc., 739 F.2d 858, 864 (3d Cir. 1984).
. RAG's Reply to Quad's Opposition at 9— 11.
. RAG’s Reply to Quad’s Opposition at 9.
. See supra note 196.
. Debtor/Defendants’ Memorandum in Support of Summary Judgment at 1.
. Motion to Amend at 6, 7.
. Debtor/Defendants’ Opposition at 6.
. In re Mortgage Lenders Network, USA, Inc., 395 B.R. at 879 (citation omitted).
. See supra note 196.
. 313 F.3d 1307, 1314 (11th Cir. 2002).
. Id.
. Quad's Opposition at 17.
. Great Western Mining & Mineral Co. v. Fox Rothschild LLP, 615 F.3d 159, 175 (3d Cir. 2010) (citations omitted).
. Id. at 175 (Citation omitted).
. In re Troll Communications, LLC, 385 B.R. 110, 116 (Bankr.D.Del. 2008).
. Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)).
. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90, abrogated on other grounds by, Harlow v. Fitzgerald, 457 U.S. 800, 814-15, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982); see also Rosener v. Majestic Mgmt., Inc. (In re OODC, LLC), 321 B.R. 128, 134 (Bankr.D.Del. 2005).
. Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009).
. Id.
. Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (citing Bell Atlantic v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)).
. Twombly, 550 U.S. at 562, 127 S.Ct. 1955.
. In re USDigital, Inc., 443 B.R. 22, 34 (Bankr.D.Del. 2011).
. Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009).
. Id.
. Id. at 211.
. Riverside Acquisition Group LLC d/blal Com-Pak Services, Inc. 's Memorandum of Law in Opposition to Debtor Defendants Vertís Holdings, Inc. ’s, Vertís, Inc. 's and 5 Digit Plus, LLC’s and Defendant Quad/Graphics Marketing, LLC’s Respective Motions for Summary ludgment on all Counts ("RAG’s Opposition to Summary Judgment") at 60.
. RAG’s Opposition to Summary Judgment at 60.
.233 Debtor/Defendants’ Opposition n. 9. Debtor/Defendants did not address "futility” in their brief. However, they "incorporate by reference the futility arguments raised by Defendant Quad in opposition to RAG’s Motion.”
. Quad's Opposition at 19.
. Quad’s Opposition at 20.
. RAG’s Reply to Quad’s Opposition at 13.
. RAG’s Reply to Quad’s Opposition at 13-14.
. PNC Mortgage v. Superior Mortgage Corp., Case No. 09-5084, 2012 WL 627995, *4 (E.D.Pa. Feb. 27, 2012).
. Id.
. Mu Sigma, Inc. v. Affine, Inc., Case No. 12-1323, 2013 WL 3772724 (D.N.J. July 17, 2013) [hereinafter Mu Sigma I],
. Id. at *9.
. Id. at *10 (citation omitted).
. Id. ("At that time, the Founders were employees of Mu Sigma, and AL and AAC were not yet in existence. Thus, it logically follows that Defendants cannot be held vicariously liable for the alleged intentional acts of the Founders when the corporate defendants in fact did not exist.”).
. Mat *6.
. Mat *9.
. Trading Partners Collaboration, LLC v. Kantor, 09-0823, 2009 WL 1653130, *6 (D.N.J. 2009) (citation omitted).
. PNC Mortgage v. Superior Mortgage Corp., Case No. 09-5084, 2012 WL 627995, *3 (E.D.Pa. Feb. 27, 2012). (citing 18 U.S.C. Section 1030(e)(8)).
. Id. (citing 18 U.S.C. Section 1030(e)(ll)).
. See id. at *3 (citing Crown Coal & Coke Co. v. Compass Point Res., LLC, No. 07-1208, 2009 WL 1806659 (W.D. Pa. June 23, 2009).
. RAG's Reply to Quad’s Opposition at 15.
. Mu Sigma I, at *8.
. StrikeForce Technologies, Inc. v. WhiteSky, Inc., Case No. 13-1895, 2013 WL 3508835, *8 (D.N.J. July 11, 2013) (quoting N.J.S.A. 56:15-3).
.Id.
. Mu Sigma I at *8 (citing Trade Secrets Act of 2010, ch. 161, NJ. Laws 780 (2012)).
. Id. at *8.
. Id.
. Proposed Amended Complaint at ¶¶ 129, 130.
. Quad’s Opposition at 22.
. Arcand v. Brother Intern. Corp., 673 F.Supp.2d 282, 312 (D.N.J. 2009) (citation omitted).
. 2012 WL 6565713, *7 (NJ.Super.Ch. Dec. 7, 2012).
. Id. (citing Rowe, N.J. Business Litigation (2d ed.), Section 16-5:2, at 420-421 (2006) (citations omitted).
. Quad's Opposition at 23.
. Id.
. RAG's Reply to Debtor/Defendants’ Opposition at 18.
. Proposed Amended Complaint at ¶¶ 19, 133.
. id.
. Mu Sigma I at *4 (citation omitted).
. Id.
. Id. at *5.
. Id.
. Id.
. Mu Sigma, Inc. v. Affine, Inc., 2014 WL 1217961, at *5 (D.N.J. March 24, 2014) [hereinafter Mu Sigma II],
. Id.
. Proposed Amended Complaint at ¶¶ 133— 135.
. See e.g., Proposed Amended Complaint at ¶¶ 19-23.
. Id. at ¶ 135.
. Mu Sigma I, at *4 (citation omitted).
. Id. citation omitted).
. Proposed Amended Complaint at ¶ 24.
. Mu Sigma I, at *3.
. Id.
. RAG’s Reply to Quad's Opposition at 19.
. Diversified Industries, Inc. v. Vinyl Trends, Inc., 2014 WL 1767471, at *6 (D.N.J. 2014) (citation omitted).
. Id.
. Mu Sigma I, at *7.
. Id. at *1.
. Id.
. Id. at *8.
. Id.
. Mu Sigma II, at *6.
. Proposed Amended Complaint at ¶ 31.
. Id. at ¶ 35.
. Proposed Amended Complaint at ¶ 57.
,Id. at ¶ 76.
. Id., at ¶¶ 148-152.
. RAG’s Reply to Quad’s Opposition at 20 citing Proposed Amended Complaint at ¶ 74 (“In January 2013, the Debtors and Quad closed the sale of substantially all of Debtors' assets.”).
. Quad’s Opposition at 26.
. Id.
. State of N.J., Dep't of Treasury, Div. of Inv. Ex rel. McCormac v. Qwest Commc’ns Int’l, Inc., 387 N.J.Super. 469, 904 A.2d 775, 784 (Ct.App.Div. 2006).
. Id. at 782.
. Proposed Amended Complaint at ¶ 148 (“Debtors and/or Quad aided and abetted all of the actions described more fully above.”).
. Lawrence J. Del Rossi & Joshua D. Rin-schler, Aiding and Abetting Your Own Conduct, N.J.L.J. (2012), http://www.drinkerbiddle. com/resources/publications/2010/aiding-and-abetting-your-own-conduct — an-awkward-theory-of-personal-liability-for-supervisory-employees-under-the-new-jersey-law-against-discrimination.
. Id. (citation omitted).
. Mu Sigma II, at *6 (citation omitted).
. Id.
. Id.
. Mu Sigma I, at *6 (citation omitted).
. Proposed Amended Complaint at ¶ 156.
.. The plaintiff in Mu Sigma II made similar allegations. There, the court held that because plaintiff alleged that "Al and AAC [the two defendants] have conspired with the founders to interfere with Plaintiff’s prospective economic advantage and contractual relations, ... and because the wrongful actions of the Founders are taken in their official capacity on behalf of Defendants,” that the alleged acts cannot form the basis of a conspiracy claim.
. Trading Partners Collaboration, LLC v. Kantor, 09-0823, 2009 WL 1653130, *8 (D.NJ. 2009) (citation omitted).
. Id. (citation omitted).
. See, e.g., Proposed Amended Complaint at ¶ 19.
.Id. at ¶ 164.
. Diversified Industries, Inc., 2014 WL 1767471, at *8.
. Id.
. Id.
. Quad’s Opposition at 28 (citing Mu Sigma I).
. Proposed Amended Complaint at ¶ 170.
. Proposed Counts XIII and XV.
.For those claims that are not futile the Motion to Amend can nonetheless be denied on the bases of unfair prejudice, undue delay and Plaintiffs bad faith discussed above.
. Fed. R. Civ. P. 56.
. Brockstedt v. Sussex Cnty. Council, 794 F.Supp.2d 489, 498 (D.Del. 2011) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)).
. Wilson v. Mr. Tee’s, 855 F.Supp. 679, 681 (D.N.J. 1994) (quoting Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir. 1976), cert. denied, 429 U.S. 1038, 97 S.Ct. 732, 50 L.Ed.2d 748, 50 L.Ed. 748 (1977).
. Id. at 681 (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986)).
. Celotex Corp., 477 U.S. at 325, 106 S.Ct. 2548.
. Wilson v. Mr. Tee's, 855 F.Supp. at 681 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202; see also Mesnick v. General Electric Co., 950 F.2d 816, 822 (1st Cir. 1991), cert. denied, 504 U.S. 985, 112 S.Ct. 2965, 119 L.Ed.2d 586 (1992)).
. Id. (citation omitted).
. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
. Elmer v. Tenneco Resins, Inc., 698 F.Supp. 535, 538 (D.Del. 1988) (citing Anderson, 477 U.S. at 247-48, 106 S.Ct. 2505.).
. El v. Se. Pa. Transp. Auth. (SEPTA), 479 F.3d 232, 238 (3d Cir. 2007).
. 11-56 MOORE’S FEDERAL PRACTICE, § 56.02 (Matthew Bender 3d ed.)
. Wilson, 855 F.Supp. at 681 (citation omitted).
. Id. (citing Anderson, 477 U.S. at 249, 106 S.Ct. 2505).
. RAG's Opposition to Summary Judgment at 60.
. Id. at 61.
. RAG’s Opposition to Summary Judgment at 61.
. Quad’s Reply at 9.
. Hearing Transcript (D.I.436) at 55-56.
. Id. at 63.
. Id. at 45.
. Quad's Reply at 10.
. Sullivan Deck Ex. G [Asset Purchase Agreement] at Section 9(d).
. Quad’s Reply at 4-5.
. Id. at 11-13.
. Id. at 26-27.
. Id. at 28-29 (emphasis added):
. RAG’s Opposition to Summary Judgment at 60 (quoting Saez v. Corrugated Paper Machinery Co., Inc., 302 N.J.Super. 545, 695 A.2d 740 (App.Div. 1977).
. RAG’s Reply at 13.
. 322 F.3d 283, 292 (3d. Cir. 2003).
. No. 13-10334, 2014 WL 3542133, at *4 (Bankr.D.Del. July 17, 2014).
. Id. at *4.
. See RAG's Verified Complaint (D.I.l) ("Complaint”) at ¶¶ 39, 41, 54, 62.
. Quad's Reply at 15.
. Id. at 17.
. No. 01 Civ. 11765, 2002 WL 31050846, at *7 (S.D.N.Y. Sept. 12, 2002).
. Id. at *6.
. Complaint at ¶¶ 41, 42
. Debtor/Defendants Memorandum in Support of Summary Judgment at 31. Defendants also argue that Plaintiff's state law claims are preempted by federal copyright law. Because the Court finds Plaintiff's claims deficient under state law it need not address the preemption issue.
. RAG's Opposition to Summary Judgment at 67.
. Complaint at ¶ 24.
. Debtor/Defendants Memorandum in Support of Summary Judgment at 35 (citing Jurista v. Amerinox Processing, Inc., 492 B.R. 707, 753 (D.N.J. 2013)).
. See, e.g., Cameco, Inc. v. Gedicke, 299 N.J.Super. 203, 217, 690 A.2d 1051 (N.J.Super.Ct.App.Div. 1997); see also StrikeForce Techs., Inc. v. WhiteSky, Inc., 2013 WL 3508835, *8 (D.N.J. 2013).
. Id.
. Mu Sigma I, at *11.
.Id. (citation omitted).
. Id. at 70.
. Sullivan Decl. Ex. D (McDonald Depo.) at 92:25-93:6.
.' Sullivan Deck Ex. D (McDonald Depo.) at 92:25-93:6.
PLEASE NOTE: RAG cites to Meóla Deck Ex. W at 93:9-14, but did not include the proper pages. This happened more than once in this case.
. Meóla Deck Ex. B (Pizzutillo, January 31, 2014, Depo.) at 364-65, 371-74.
. Meóla Deck Ex. E (Certification of Edward Guyon) ¶¶ 26, 27.
. Debtor/Defendants' Reply at 15 (citing Meóla Deck, at 14:23-15:4).
. This is a term used in copyright law.
. Debtor/Defendants' Memorandum in Support of Summary Judgment Exh. 36 (Hearing Transcript) at 13:3-22.
. Meóla Decl. Ex. I (Acerbo Depo.) at 42:16-43:18.
. Meóla Decl. Ex. I (Acerbo Depo.) at 48:8-10.
. Meóla Decl. Ex. E (Certification of Edward Guyon) at ¶ 22.
. Meóla Decl. at Ex. K (Oh Depo.) at 261:8-18; 262:1-22.
. Meóla Decl. Ex. L (Guyon Depo.) at 117:7-118:1-14.
. Meóla Decl. Ex. E (Certification of Edward Guyon) at ¶ 26.
. Quad’s Memorandum in Support of Summary Judgment at 42.
. See Jurista v. Amerinox Processing, Inc., 492 B.R. 707, 753 (D.N.J. 2013).
. Sullivan Decl. Ex. D (Deposition of Robert McDonald, Oct. 3, 2013, 220:25-221:3; 220:18-24, 248:11-15).
. Sullivan Decl. Ex. D (Deposition of Robert McDonald, Oct. 3, 2013, 220:18-221:3).
. RAG's Opposition at 71.
. RAG’s Opposition at 71.
. Meóla Decl. Ex. E (Certification of Edward Guyon) at ¶ 26.
. Debtor/Defendants’ Reply at Exh. 49 (Guyon Depo.) at 154: 6-20, 154:8-13.
. Debtor/Defendants’ Reply at 1 (citing Boomer v. Lewis, 541 Fed.Appx. 186, 191 (3d Cir. 2013) (quoting U.S. v. Dunkel, 927 F.2d 955, 956 (7th Cir. 1991)).
. Complaint at ¶ 41.
. Complaint at ¶ 42.
. RAG’s Opposition at 65.
. Id. at 67.
. Sullivan Decl. Ex. BB (Arias Depo. at 102:4-20, 103:22-107:24, 169:15-171:4, 188:23-189:19, 191:13-192:14, 224:19-227:4); Sullivan Decl. Ex LL [Arias Depo. Ex. CA-4]; Sullivan Decl. Ex. KK [Arias Dep. Ex. CA-5] at 6-7.
. Sullivan Decl. Exh. BB (Deposition of Carlos Arias, testifying on behalf of Quad pursuant to Fed. R. Civ. P. 30(b)(6), Apr. 28, 2014, 116:12-117:10, 145:10-24) ("Arias Depo.”).
. Sullivan Decl. Exh. BB (Arias Depo.) at 116:12-117:10, 145:10-24; Sullivan Decl. Ex. L (Deposition of Donald S. Terkel, Feb. 4, 2014, 137:2-8) ("Terkel Depo”); Sullivan Decl. Ex. CC (Pizzutillo, Jan. 31, 2014, Depo.) at 73:17-25.
. Quad’s Memorandum in Support of Summary Judgment at 17 Sullivan Decl. Ex. Y (Wuman Depo.).
. RAG’s Opposition at 74.
. Pursuant to N.J.S.A. 2B:50-1, "a person seeking recovery of goods wrongly held by another may bring an action for replevin ... If the person establishes the cause of action, the court shall enter an order granting possession.”
. See, e.g., Castro v. NYT Television, 370 N.J.Super. 282, 851 A.2d 88, 98 (App.Div. 2004)); see also Jurista v. Amerinox Processing, Inc., 492 B.R. 707, 754-55 (D.N.J. 2013).
. Debtor/Defendants’ Reply at 25.
. Jurista v. Amerinox Processing, Inc., 492 B.R. 707, 754-55 (D.N.J. 2013).
. Debtor/Defendant’s Reply at 33.
. Quad’s Reply at 35.
. RAG’s Opposition at 86.
. Quad’s Reply at 36.
. Debtor/Defendants’ Reply 33.
. In re U.S. Mortg. Corp., 491 B.R. 642, 670 (Bankr.D.N.J. 2013) (citation omitted).
. Borough of Kenilworth v. Graceland Mem’l Park Ass’n, 124 N.J. Eq. 35, 199 A. 716, 718 (N.J.Ch.Div. 1938).
. RAG’s Opposition at 91.
. Id., at 90.
. Id.
. Id.
Reference
- Full Case Name
- IN RE: VERTIS HOLDINGS, INC., Debtors. Riverside Acquisition Group LLC d/b/a Com-Pak Services v. Vertis Holdings, Inc., Vertis, Inc., 5 Digit Plus, LLC, and, Quad/Graphics Marketing, LLC
- Cited By
- 4 cases
- Status
- Published