Mission Healthcare Services, LLC v. Battle Born Home Health, LLC

[5] 6 UNITED STATES DISTRICT COURT 7 DISTRICT OF NEVADA 8 * * * MISSION HEALTHCARE SERVICES, LLC, Case No. 3:22-cv-00333-LRH-CLB 9 a California limited liability company; and HEALTHY LIVING AT HOME–CARSON ORDER 10 CITY, LLC, a Nevada limited liability company, [11] Plaintiffs, [12] v. [13] BATTLE BORN HOME HEALTH, LLC, a 14 Nevada limited liability company; JESSICA CONNANT (CRISP), an individual; ANGEL 15 VASQUEZ BARNES, an individual; and JOSEPH BARNES, an individual, [16] Defendants. [17] 18 Before the Court are two motions to dismiss: one filed by Defendants Battle Born Home 19 Health, LLC (“BBHH”) and Jessica Connant (Crisp) (“Connant-Crisp”) (collectively, “Battle 20 Born”) (ECF No. 19), and one filed by Defendants Angel Vasquez Barnes and Joseph Barnes 21 (collectively, “Barnes”) (ECF No. 25). Battle Born’s motion is alternatively pled as a Motion for 22 More Definite Statement. See ECF No. 19. Plaintiffs Mission Healthcare Services, LLC (“MHS”) 23 and Healthy Living at Home – Carson City, LLC (“HLH Carson City”) (collectively, “Mission”) 24 filed a combined opposition response to the two motions. ECF No. 34. Battle Born and Barnes 25 separately replied to Mission’s combined opposition response. ECF Nos. 39, 42. Also before the 26 Court is Mission’s Motion for Leave to File Excess Pages as to the combined opposition response 27 it filed on November 11, 2022. ECF No. 33. Good cause appearing, the Court grants Mission’s 1 to dismiss all claims asserted against Barnes without prejudice. ECF No. 76. The Court granted 2 the stipulation on July 17, 2023. ECF No. 77. As a result of the Court’s order granting the 3 stipulation, the Court denies Barnes’ motion to dismiss as moot. For the reasons articulated herein, 4 the Court denies Battle Born’s motion. 5 I. BACKGROUND 6 This matter primarily, but not exclusively, involves misappropriation of trade secrets and 7 breach of contract claims that stem from the alleged actions of three former Mission employees. 8 Since the filing of the Complaint, Mission has dismissed all claims against Angel Vasquez Barnes 9 and Joshua Barnes, two of the three former Mission employees at issue. ECF No. 77. Therefore, 10 the only former Mission employee considered for purposes of the Complaint, the pending motion, 11 and its responsive briefings is Connant-Crisp.1 12 MHS is a California limited liability company with its principal place of business in San 13 Diego, California. ECF No. 1 at 2. MHS is in the business of providing home health and hospice 14 services throughout several western states including Arizona, California, Idaho, Nevada, Oregon, 15 Washington, and Utah. Id. at 3. The services MHS offers include skilled nursing, physical therapy, 16 occupational therapy, speech therapy, home health aides, medical social workers, end of life care 17 and hospice. Id. HLH Carson City is a Nevada limited liability company with its principal place 18 of business in Carson City, Nevada. Id. at 2. HLH Carson City provides health services to the 19 residents of Northern Nevada. Id. at 3. In 2021, MHS acquired HLH Carson City including its 20 assets, liabilities, contracts, and employees. Id. at 3. BBHH is a Nevada limited liability company 21 with its principal place of business in Carson City, Nevada. Id. at 2. According to Mission, BBHH [23] 24 1 The Court notes that Mission has pled most of its causes of action against Connant-Crisp, Angel Vasquez Barnes, and Joshua Barnes as the “Employee Defendants.” See generally, ECF No. 1. 25 Moreover, in its combined opposition response, Mission continuously refers to all three “Employee Defendants” when responding to Battle Born’s arguments and offering new arguments. See 26 generally, ECF No. 34. Because Mission has since dismissed Angel Vasquez Barnes and Joshua Barnes from this action, the Court was required to sift through and interpret Mission’s “Employee 27 Defendant” arguments as actually being against only Connant-Crisp. Thus, for the purposes of this 1 is a new healthcare company offering similar home health and hospice services throughout Carson 2 City, Minden, Gardnerville, and Dayton, Nevada. Id. at 6. 3 Connant-Crisp began working for HLH Carson City as an Administrator on July 7, 2016. 4 Id. at 12. According to Mission, Connant-Crisp signed different agreements as part of her 5 employment with HLH Carson City and, subsequently, Mission including: the Employee 6 Acknowledgment and Receipt of Healthy Living at Home Handbook (the “HLH Carson City 7 Handbook Acknowledgment”), the Healthy Living Network Employee Handbook (the “HLH 8 Carson City Handbook”), the Non-Disclosure and Assignment of Inventions Agreement (the 9 “HLH Carson City NDA”), the Code of Conduct (the “HLH Carson City Code of Conduct”), and 10 the Non-Disclosure and Confidentiality Agreement with Mission (the “Mission NDA”). Id. at 8, 11 12. Mission claims that these agreements contractually obligated Connant-Crisp in different ways. 12 Generally, Mission alleges that while Connant-Crisp was employed by Mission she (1) conspired 13 to form and operate BBHH using Mission’s trade secrets and confidential business information, 14 and (2) solicited and hired Mission employees, Referral Sources, and patients to BBHH. Id. at 12, 15 14. Upon discovery, Mission terminated Connant-Crisp; her final day of employment was January 16 19, 2022. Id. at 12, 14. 17 On July 25, 2022, Mission filed its Complaint against BBHH and Connant-Crisp in this 18 Court. Id. at 1. The Complaint alleges fourteen causes of action, some against BBHH and Connant19 Crisp, and others solely against Connant-Crisp: (1) state misappropriation of trade secrets pursuant 20 to Nev. Rev. Stat. §§ 600A.010 et seq., against BBHH and Connant-Crisp; (2) federal 21 misappropriation of trade secrets pursuant to 18 U.S.C. §§ 1836 et seq., against BBHH and 22 Connant-Crisp; (3) breach of contract as to the HLH Carson City Handbook, against Connant23 Crisp; (4) breach of the covenant of good faith and fair dealing as to the HLH Carson City 24 Handbook, against Connant-Crisp; (5) breach of contract as to the HLH Carson City NDA, against 25 Connant-Crisp; (6) breach of the covenant of good faith and fair dealing as to the HLH Carson 26 City NDA, against Connant-Crisp; (7) breach of contract as to the HLH Carson City Code of 27 Conduct, against Connant-Crisp; (8) breach of the covenant of good faith and fair dealing as to the 1 NDA, against Connant-Crisp; (10) breach of the covenant of good faith and fair dealing as to the 2 Mission NDA, against Connant-Crisp; (11) unjust enrichment, against BBHH and Connant-Crisp; 3 (12) conspiracy, against Connant-Crisp; (13) breach of fiduciary duty, against Connant-Crisp; and 4 (14) intentional interference with contractual relations, against BBHH and Connant-Crisp.2 Id. at 5 16–34. On October 3, 2022, Battle Born filed its Motion to Dismiss (ECF No. 19) which is the 6 subject of this Order. The motion is addressed below and, when possible, similar claims are 7 addressed together. 8 II. LEGAL STANDARD 9 A party may seek the dismissal of a claim under Federal Rule of Civil Procedure 12(b)(6) 10 for “failure to state a claim upon which relief can be granted.” To survive a motion to dismiss, 11 enough facts must be pled “to state a claim to relief that [was] plausible on its face.” Bell Atl. Corp. 12 v. Twombly, 550 U.S. 544, 570 (2007); see also Fed. R. Civ. P. 8(a)(2) (requiring “a short and 13 plain statement of the claim showing that the pleader is entitled to relief”). The plausibility standard 14 requires the claimant to plead “factual content that allows the court to draw the reasonable 15 inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662 , 16 678 (2009). “The plausibility standard is not akin to a probability requirement, but it asks for more 17 than a sheer possibility that a defendant has acted unlawfully.” Id. at 678–79. Therefore, 18 “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory 19 statements, do not suffice.” Id. at 678 . The court discounts these allegations because “they do 20 nothing more than state a legal conclusion—even if that conclusion is cast in the form of a factual 21 allegation.” Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009). “In sum, for a [claim] to 22 survive a motion to dismiss, the non-conclusory ‘factual content,’ and reasonable inferences from 23 that content, must be plausibly suggestive of a claim entitling the plaintiff to relief.” Id. [25] 26 2 The Court notes that Mission’s Complaint incorrectly titles its thirteenth cause of action for breach of fiduciary duty and its fourteenth cause of action for intentional interference with contractual 27 relations as its “SIXTH CLAIM FOR RELIEF.” ECF No. 1 at 32, 33. For clarity, the Court will 1 “Although generally the scope of review on a motion to dismiss for failure to state a claim 2 is limited to the Complaint, a court may consider evidence on which the complaint necessarily 3 relies if: (1) the complaint refers to the document; (2) the document is central to the plaintiffs’ 4 claim; and (3) no party questions the authenticity of the copy attached to the 12(b)(6) motion.” 5 Daniels—Hall v. Nat'l Educ. Ass’n, 629 F.3d 992, 998 (9th Cir. 2010) (internal quotations and 6 citations omitted). The court may “treat such a document as ‘part of the complaint, and thus may 7 assume that its contents are true for purposes of a motion to dismiss under Rule 12(b)(6).’” Marder 8 v. Lopez, 450 F.3d 445, 448 (9th Cir. 2006) (quoting United States v. Ritchie, 342 F.3d 903 , 908 9 (9th Cir. 2003)). 10 III. DISCUSSION 11 A. Mission’s First and Second Causes of Action 12 In its Complaint, Mission’s first and second causes of action are against BBHH and 13 Connant-Crisp for state and federal misappropriation of trade secrets. ECF No. 1 at 16–20. In its 14 motion, Battle Born argues that Mission’s trade secret misappropriation claims should be 15 dismissed for similar reasons, including Mission’s failure to (1) identify existing trade secrets, and 16 (2) allege how BBHH and Connant-Crisp misappropriated the trade secrets through use, 17 disclosure, or nondisclosure. ECF No. 19 at 5–7. In response, Mission claims that the Complaint 18 adequately identifies existing trade secrets and alleges how BBHH and Connant-Crisp misused 19 them to solicit Mission’s customers, employees, and Referral Sources. ECF No. 34 at 24. Mission 20 further claims that it is not required to publicly plead the specifics of its trade secrets at this stage 21 of litigation. Id. at 20, 21. In reply, Battle Born alleges that Mission has failed to show how its 22 trade secrets are beyond general knowledge of the trade or of special persons who are skilled in 23 the trade. ECF No. 39 at 3. Battle Born also elaborates that Mission’s failure to identify its trade 24 secrets stems from the long non-exclusive list of possible trade secrets it provides which does not 25 meet the particularity standard required to identify trade secrets. Id. at 4. 26 State and federal law define and require similar elements for trade secret misappropriation 27 claims. In Nevada, a “trade secret” is defined as: information, including, without limitation, a formula, pattern, compilation, 1 program, device, method, technique, product, system, process, design, prototype, procedure, computer programming instruction or code that: (1) [d]erives 2 independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by the public or any other 3 persons who can obtain commercial or economic value from its disclosure or use; and (2) [i]s the subject of efforts that are reasonable under the circumstances to 4 maintain its secrecy. 5 Nev. Rev. Stat. § 600A.030(5). Nevada law requires a plaintiff bringing a trade secret 6 misappropriation claim to demonstrate the following: “(1) a valuable trade secret; (2) 7 misappropriation of the trade secret through use, disclosure, or nondisclosure of use of the trade 8 secret; and (3) the requirement that the misappropriation be wrongful because it was made in 9 breach of an express or implied contract or by a party with a duty not to disclose.” Frantz v. 10 Johnson, 999 P.2d 351, 358 (2000) (citations omitted); see also Nev. Rev. Stat. §§ 600A. et seq. 11 Federal statutory law defines a “trade secret” as: 12 all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, 13 formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, 14 compiled, or memorialized physically, electronically, graphically, photographically, or in writing if-- (A) the owner thereof has taken reasonable 15 measures to keep such information secret; and (B) the information derives independent economic value, actual or potential, from not being generally known 16 to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information[.] [18] 18 U.S.C. § 1839 (3). In order to state a claim for trade secret misappropriation under federal law, 19 a plaintiff must allege: (1) it possessed a valuable trade secret; (2) the defendant misappropriated 20 the trade secret through unlawful acquisition, use, or disclosure of the trade secret; and (3) the 21 misappropriation was made in breach of an express or implied contract or by a party with a duty 22 not to disclose. See Physician's Surrogacy, Inc. v. German, Case No. 17-cv-718-MMA, 2018 U.S. 23 Dist. LEXIS 16261 (S.D. Cal. Jan. 31, 2018); see also Switch Ltd. v. Fairfax, Case No. 2:17-cv24 02651-GMN-VCF, 2018 U.S. Dist. LEXIS 148818 (D. Nev. Aug. 30, 2018); 18 U.S.C. § 1839 . 25 Under these frameworks, the Court finds that Mission has adequately alleged its claims for 26 state and federal misappropriation of trade secrets. Although it may do so in more general terms, 27 Mission has claimed that its trade secrets are “techniques, strategies and information about Referral 1 include, but not be limited to, “data, formulas and processes related to strategic alliances and 2 relationships with vendors, Referral Sources, patients, employees and third parties, and including 3 without limitation, confidential techniques, strategies, and information about Referral Sources, 4 employees, and patients.” Id. at 7 . Finally, Mission also alleges that its trade secrets include 5 “information concerning project development and production, marketing plans and strategy, 6 business plans and projections, finances, operations, billing methods and client and contact lists or 7 other subject matter pertaining to any business of [Mission] or any of its clients as defined above.” [8] Id. at 10 . The trade secrets that Mission identifies it possesses fall within the state and federal 9 statutory definitions of “trade secret.” 10 More importantly, Mission provides facts that suggest it possesses valuable trade secrets, 11 that Connant-Crisp allegedly used and disclosed those trade secrets to third parties, and that her 12 alleged use or disclosure was wrongful because it was made in breach of her employment 13 obligations and her contractual duty not to disclose. Mission also adequately pleads that its trade 14 secrets are not generally known to the public, that they have independent economic value, and that 15 they are safeguarded and protected in order to gain and maintain a competitive advantage. Thus, 16 Mission has met the plausibility threshold for its two trade secret misappropriation claims. For 17 these reasons, the Court finds that Mission has adequately pled its trade secret misappropriation 18 claims. Mission has offered sufficient facts in the Complaint that suggest these claims are 19 plausible. Accordingly, the Court denies Battle Born’s motion to dismiss Mission’s first and 20 second causes of action for state and federal misappropriation of trade secrets. 21 B. Mission’s Third, Fifth, Seventh, and Ninth Causes of Action 22 Mission alleges four breach of contract claims against Connant-Crisp: Mission’s third 23 cause of action is for breach of the HLH Carson City Handbook; Mission’s fifth cause of action is 24 for breach of the HLH Carson City NDA; Mission’s seventh cause of action is for breach of the 25 HLH Carson City Code of Conduct; and Mission’s ninth cause of action is for breach of the 26 Mission NDA. ECF No. 1 at 20–29. Each of these alleged contracts and the parties’ arguments as 27 to dismissal are briefly described below. 1 In its Complaint, Mission claims that by signing the HLH Carson City Handbook (the 2 “Handbook”) on July 17, 2018, Connant-Crisp acknowledged she would have access to Mission’s 3 confidential information and that she had a duty to not disclose it. Id. at 8, 9 . Mission also claims 4 that the Handbook contractually obligated Connant-Crisp to treat any learned information as 5 private and privileged, even after her employment with Mission ended. Id. at 9 . According to 6 Mission, the Handbook also prohibited Connant-Crisp from soliciting employees. Id at 21. In its 7 motion, Battle Born contends that the Handbook is not a contract. ECF No. 19 at 7. Battle Born 8 further alleges that Mission merely recites the elements for breach of contract and offers no facts 9 showing breach or damages. Id. In response, Mission argues that it adequately pled all the elements 10 of a valid contract and breach of contract as to the Handbook. ECF No 34 at 25. 11 In its Complaint, Mission claims that Connant-Crisp signed the HLH Carson City NDA on 12 July 17, 2018, and the Mission NDA on November 19, 2021 (collectively, the “NDAs”). ECF No. 13 1 at 10–12. According to Mission, the NDAs contractually obligated Connant-Crisp in similar 14 ways: Connant-Crisp was to (1) hold Mission’s trade secrets and confidential business information 15 in strict confidence; (2) not disclose Mission’s trade secrets and confidential business information; 16 and (3) not use Mission’s trade secrets and confidential business information for the benefit of 17 anyone or any company other than Mission. Id. at 10, 12 . Mission further claims that the NDAs 18 obligated Connant-Crisp to return certain items to Mission after her employment ended. Id. As to 19 the HLH Carson City NDA, Mission also argues that it obligated Connant-Crisp not to solicit or 20 interfere with Mission’s business relationships, employees, and affiliates during and after 21 employment. Id. at 11 . In its motion, Battle Born argues that Mission only restates the elements 22 for breach of contract claims and provides no facts as to breach and damages of the NDAs. ECF 23 No. 19 at 8, 9. In response, Mission argues that it adequately pled the NDAs are contracts, that 24 Connant-Crisp breached the NDAs, and that Mission was damaged as a result. ECF No. 34 at 27, 25 28. In reply, Battle Born argues that Mission offers only labels and conclusions, not facts, as to 26 breach. ECF No. 39 at 6, 7. 27 In its Complaint, Mission alleges that by signing the HLH Carson City Code of Conduct 1 benefit by virtue of her employment with Mission; (2) disclose any financial and ownership 2 interest she had with existing customers, vendors, or competitors; (3) not use HLH Carson City’s 3 trade secrets or confidential business information for her benefit or the benefit of another; and (4) 4 report any known employee violation of the Code. ECF No. 1 at 11, 12. In its motion, Battle Born 5 argues that the Code is not a contract. ECF No. 19 at 9. Battle Born also argues that Mission 6 provides no facts from which breach could be inferred. Id. In response, Mission argues that the 7 Code is a valid contract and that all elements of breach of contract were adequately pled in the 8 Complaint. ECF No. 34 at 27, 28. In reply, Battle Born reiterates that the Code is not a contract, 9 and that Mission has not sufficiently shown a breach of contract is plausible. ECF No. 39 at 6–8. 10 In Nevada, a plaintiff must establish the following to prevail on a claim for breach of 11 contract: “(1) the existence of a valid contract, (2) that the plaintiff performed, (3) that the 12 defendant breached, and (4) that the breach caused the plaintiff damages.” Iliescu, Tr. of John 13 Iliescu, Jr. & Sonnia Iliescu 1992 Fam. Tr. v. Reg'l Transportation Comm'n of Washoe Cnty., 138 14 Nev. Adv. Op. 72 , 522 P.3d 453 , 458 (Nev. App. 2022) (citing Saini v. Int'l Game Tech., 434 F. 15 Supp. 2d 913, 919-20 (D. Nev. 2006)). “Absent a contract, there can be no claim for breach of 16 contract.” Rouse v. Wal-Mart Stores, Inc., 297 F. App'x 608, 609 (9th Cir. 2008) (citation omitted). 17 A valid and enforceable contract exists where there is “an offer and acceptance, meeting of the 18 minds, and consideration.” Certified Fire Prot. Inc. v. Precision Constr., 128 Nev. 371, 378, 19 (2012) (citing and quoting May v. Anderson, 121 Nev. 668, 672 (2005)). 20 The Court finds that Mission has adequately pled breach of contract claims as to the 21 Handbook, the NDAs, and the Code. First, Mission sufficiently alleges that the Handbook, the 22 NDAs, and the Code are valid contracts and, alternatively, it is certainly plausible that each of 23 these alleged contracts were incorporated into Connant-Crisp’s general employment contract. 24 Mission provides facts that support the existence of contracts here such as the specific dates 25 Connant-Crisp executed the agreements by signing them as part of her employment with Mission, 26 and her acknowledgement that she be bound by each of the agreements’ terms and obligations. 27 Furthermore, Mission argues that Connant-Crisp’s continued employment provided sufficient 1 contract. Under the facts that Mission presents in its Complaint, it is plausible that the Handbook, 2 the NDAs, and the Code constitute valid contracts or extensions of her employment contract.3 3 The parties do not dispute whether Mission adequately alleges that it performed its duties 4 under the alleged contracts. However, the parties do contest whether Mission has adequately pled 5 breach. As to the issue of breach, Battle Born argues that Mission has failed to plausibly plead 6 breach on each alleged contractual claim due to its failure to adequately plead its trade secrets 7 misappropriation claims. ECF No. 19 at 7. According to Battle Born, if Mission has failed to 8 adequately plead its misappropriation of trade secrets claims then Mission cannot turn around and 9 argue that breach takes the form of inadequately pled misappropriation. Id. In this Order, the Court 10 found that Mission adequately pled its trade secret misappropriation claims to survive a motion to 11 dismiss. See Mission’s first and second causes of action discussion supra Section III.A. Moreover, 12 the Complaint also alleges that Connant-Crisp breached the four alleged contracts by disclosing 13 Mission’s confidential business information. ECF No. 1 at 24, 29. Battle Born’s breach argument 14 is not persuasive because (1) disclosing confidential business information is different from 15 misappropriating trade secrets, and (2) Mission has not failed to allege trade secret 16 misappropriation as Battle Born suggests. Thus, Mission has plausibly pled that Connant-Crisp 17 breached the Handbook, the NDAs, and the Code when she allegedly misappropriated its trade 18 secrets and disclosed and used Mission’s confidential business information. Finally, the Court also 19 finds that Mission provides sufficient facts as to damages. As to damages, Mission claims that it 20 was irreparably harmed because of Connant-Crisp’s breach through the loss of its confidential and 21 proprietary information and the solicitation of its Referral Sources, patients, and employees. 22 Taking all allegations in the Complaint as true, Mission has plausibly pled breach of 23 contract claims as to the Handbook, the NDAs, and the Code. Accordingly, the Court denies Battle 24 Born’s motion to dismiss Mission’s third, fifth, seventh, and ninth causes of action for breach of 25 contract. [26] 3 Mission and Battle Born dedicate a good portion of their motion briefings debating whether 27 Connant-Crisp’s continued employment is sufficient consideration for the formation of the 1 C. Mission’s Fourth, Sixth, Eighth, and Tenth Causes of Action 2 Mission alleges four breach of the covenant of good faith and fair dealing claims against 3 Connant-Crisp: Mission’s fourth cause of action is for breach of the covenant as to the Handbook; 4 Mission’s sixth cause of action is for breach of the covenant as to the HLH Carson City NDA; 5 Mission’s eighth cause of action is for breach of the covenant as to the Code; and Mission’s tenth 6 cause of action is for breach of the covenant as to the Mission NDA. ECF No. 1 at 22–30. Each of 7 these alleged covenants and the parties’ arguments as to dismissal are briefly described below. 8 In its Complaint, Mission alleges that the covenant of good faith and fair dealing arising 9 out of the Handbook required Connant-Crisp to act in a manner that would build up HLH Carson 10 City’s business and protect its economic advantages. ECF No. 1 at 22. Battle Born argues that 11 Mission provides no facts from which breach of the covenant could be inferred because the 12 Handbook is not a valid contract. ECF No. 19 at 8. In response, Mission argues Handbook is a 13 valid contract and that Connant-Crisp acted in bad faith when she allegedly misappropriated its 14 trade secrets and disclosed its confidential business information while she was an employee. ECF 15 No. 34 at 29, 30. 16 In its Complaint, Mission claims that the covenants arising out of the NDAs and the Code 17 required Connant-Crisp to establish a long-term employee base, increase referrals, fight off 18 competition, and protect HLH Carson City and Mission’s positions in the marketplace. ECF No. 19 1 at 25, 27, 29. In its motion, Battle Born argues that these three causes of action should be 20 dismissed for similar reasons. First, Battle Born argues that Mission fails to provide facts as to 21 breach of the covenant and damages. ECF No. 19 at 8, 9. As to the Code, Battle Born offers an 22 additional argument that the Code is not a contract and thus, no cause of action for breach of the 23 covenant is viable. Id. at 9. In response, Mission argues that it has adequately alleged the existence 24 of these three contracts and, even if the Court were to find the opposite, that an employment 25 relationship between Mission and Connant-Crisp existed giving rise to these good faith and fair 26 dealing claims. ECF No. 29 at 34. 27 A claim for breach of the implied covenant of good faith and fair dealing is established 1 breached its duty of good faith and fair dealing by acting in a manner unfaithful to the purpose of 2 the contract; and (3) the plaintiff's justified expectations under the contract were denied.” H&H 3 Pharms., LLC v. Chattem Chemicals, Inc., Case No. 2-16-CV-02148-GMN-VCF, 2020 WL 4 376648, at *6 (D. Nev. Jan. 23, 2020) (citations omitted). In Nevada, every contract imposes the 5 duty of good faith and fair dealing upon the contracting parties. See APCO Constr., Inc. v. Helix 6 Elec. of Nevada, LLC, 138 Nev. Adv. Op. 31 , 53 (2022) (citing A.C. Shaw Constr., Inc. v. Washoe 7 County, 105 Nev. 913, 914 (1989); see also Hilton Hotels, 109 Nev. at 1046. Therefore, a contract 8 must exist for a breach of the implied duty of good faith and fair dealing claim just as one must 9 exist for a breach of contract claim. See Rouse, 297 F. App'x at 609 n.1 (affirming the district 10 court’s grant of summary judgment for defendant on plaintiff’s breach of contract and breach of 11 the covenant of good faith and fair dealing claims because there was no valid contract). 12 The Court finds that Mission adequately pled its claims for breach of the covenant of good 13 faith and fair dealing. First, in this Order, the Court found that the Handbook, the NDAs, and the 14 Code are plausibly contracts or alternatively incorporated into Connant-Crisp’s general 15 employment contract. See Mission’s third, fifth, seventh, and ninth causes of action discussion 16 supra Section III.B. Therefore, Mission has adequately pled contracts existed between the parties 17 and that covenants of good faith and fair dealing were imparted on Connant-Crisp. See Consol. 18 Generator-Nevada, Inc. v. Cummins Engine Co., 114 Nev. 1304, 1311 (1998) (“An implied 19 covenant of good faith and fair dealing is recognized in every contract under Nevada law”). 20 Moreover, Mission adequately pled that Connant-Crisp breached those covenants by acting 21 in a manner unfaithful to the purposes and obligations of the Handbook, the NDAs and the Code. 22 Connant-Crisp’s alleged breaches via misappropriation and disclosure go against the spirit of the 23 four agreements because she allegedly used Mission’s trade secrets and confidential business 24 information for her own benefit and the benefit of BBHH, entities other than her employer. Mission 25 also offers facts that suggest Connant-Crisp failed to notify Mission of her own non-compliance 26 with the agreements and her alleged personal and financial interests in BBHH. 27 Finally, Mission also plausibly pled that its own expectations under the Handbook, the 1 in all Mission-employee contracts including the Mission NDA that the employee act in a manner 2 consistent with the parties’ intent so Mission can realize the benefit of its bargain including 3 building Mission up, increasing business, fighting off competition, and protecting Mission’s 4 position in the market. ECF No. 1 at 29. Connant-Crisp’s alleged recruitment of Mission 5 employees away from Mission is a plausible denial of Mission’s expectations under the Mission 6 NDA. The Complaint offers other facts that plausibly suggest Mission’s expectations were denied 7 under the Handbook, the HLH Carson City NDA, and the Code as well. 8 For these reasons, the Court finds that Mission has plausibly pled its breach of the 9 covenant of good faith and fair dealing claims as to the Handbook, the NDAs, and the Code. 10 Accordingly, the Court denies Battle Born’s motion to dismiss Mission’s fourth, sixth, eighth, and 11 tenth causes of action for breach of the covenant. 12 D. Mission’s Eleventh Cause of Action 13 In its Complaint, Mission’s eleventh cause of action alleges that Connant-Crisp and BBHH 14 were unjustly enriched due the benefit they retained through alleged trade secret misappropriation 15 and confidential business information disclosure. ECF No. 1 at 30, 31. In its motion, Battle Born 16 alleges that Mission has no claim for unjust enrichment because Mission failed to provide a 17 sufficient description of the property that Connant-Crisp and BBHH unjustly retained, and because 18 all Mission’s other causes of action are based on the existence of contracts and a cause of action 19 for unjust enrichment is unavailable when there is a contract. ECF No. 19 at 10. In response, 20 Mission argues that Federal Rule of Civil Procedure 8 allows Mission to state as many separate 21 claims for relief as it desires, regardless of consistency. ECF No. 34 at 31. 22 “Unjust enrichment occurs whenever a person has and retains a benefit which in equity and 23 good conscience belongs to another.” Soebbing v. Carpet Barn, Inc., 109 Nev. 78, 82 (1993) (citing 24 Unionamerica Mortgage & Equity Trust v. McDonald, 97 Nev. 210, 212 (1981)). Unjust 25 enrichment occurs where “the plaintiff confers a benefit on the defendant, the defendant 26 appreciates such benefit, and there is acceptance and retention by the defendant of such benefit 27 under circumstances such that it would be inequitable for him to retain the benefit without payment 1 of the value thereof.” Certified Fire, 128 Nev. at 381 (citations and quotations omitted). A plaintiff 2 bringing an unjust enrichment claim “must establish each element of unjust enrichment.” Id. 3 The Court finds that Mission plausibly pled each element of unjust enrichment to survive 4 a motion to dismiss. According to the Complaint, Connant-Crisp had access to and a duty to keep 5 confidential Mission’s trade secrets and confidential business information due to her position and 6 her duties of employment. Mission alleges that she disclosed and used those trade secrets and that 7 information for her benefit and the benefit of BBHH while employed by and being paid by 8 Mission. More specifically, Mission claims that Connant-Crisp and BBHH appreciated this benefit 9 when it allegedly used the trade secrets and information to launch BBHH and to solicit and hire 10 Mission’s patients, employees, and Referral Sources. Because Connant-Crisp allegedly used 11 Mission’s trade secrets and business information despite alleged contractual obligations that such 12 information only be used for Mission’s benefit, the Court finds that Mission plausibly pled that it 13 would be inequitable for Connant-Crisp and BBHH to retain that benefit without repayment. 14 Battle Born argues that Mission’s unjust enrichment claim is precluded by Nev. Rev. Stat. 15 §§ 600A, et seq. (“UTSA”), because the claim is based on Connant-Crisp’s alleged 16 misappropriation of trade secrets and UTSA displaces conflicting tort, restitutionary, and other 17 civil remedies for trade secret misappropriation.4 ECF No. 19 at 10, 11. Mission argues that these 18 claims are not precluded because UTSA does not provide a blanket preemption for all claims 19 arising out of factual circumstances that involve trade secrets. ECF No. 34 at 31. Furthermore, 20 Mission argues that it has adequately pled theories apart from its trade secret misappropriation 21 theory on which it bases its unjust enrichment claim. Id. 22 While Battle Born is correct that UTSA displaces conflicting tort, restitutionary, and other 23 civil remedies based on a single factual episode of misappropriation of trade secrets, the Court 24 finds that Mission has offered additional theories apart from trade secret misappropriation on 25 which this claim rests. In any event, the Court finds that more factual development is needed here [26] 4 Battle Born offers the same UTSA argument for the displacement and dismissal of Mission’s 27 twelfth claim for conspiracy, thirteenth claim for breach of fiduciary duty, and fourteenth claim for 1 before precluding claims under UTSA. It is majorly unknown if Mission’s trade secret 2 misappropriation claims and its unjust enrichment claim truly conflict with one another. Both are 3 viable theories of recovery, but currently there is only potential conflict between them. Discovery 4 in this Case will reveal the extent to which these claims actually conflict and whether they are 5 based entirely on the same misappropriation theory under the same misappropriation facts. See 6 Nev. Rev. Stat. § 600A.090(1) (“[T]his chapter displaces conflicting tort, restitutionary, and other 7 law of this state providing civil remedies for misappropriation of a trade secret”) (emphasis added). 8 Currently, the Court is not well-positioned to determine the extent to which these claims conflict. 9 Therefore, the Court will not use UTSA to displace Mission’s unjust enrichment. 10 For these reasons, the Court finds that Mission has plausibly pled its claim for unjust 11 enrichment. Accordingly, the Court denies Battle Born’s motion to dismiss Mission’s eleventh 12 cause of action. 13 E. Mission’s Twelfth Cause of Action 14 In its Complaint, Mission’s twelfth cause of action alleges conspiracy against Connant15 Crisp. ECF No. 1 at 31. More specifically, Mission claims that Connant-Crisp planned and agreed 16 to use, disclose, publish, or copy Mission’s trade secrets and confidential business information for 17 the benefit of BBHH. Id. In its motion, Battle Born argues that Mission failed to allege sufficient 18 facts as to any agreement to conspire. ECF No. 19 at 11. Battle Born also reiterates its argument 19 that this conspiracy claim is precluded under UTSA. Id. In response, Mission argues that it 20 sufficiently alleged Connant-Crisp formed and carried out a plan to use Mission’s trade secrets 21 and confidential business information unlawfully and for BBHH’s benefit. ECF No. 34 at 32. In 22 reply, Battle Born argues that this claim should be dismissed because the “unlawful objective” 23 pled by Mission is based on the other causes of actions in the Complaint that Mission has 24 inadequately pled. ECF No. 39 at 10. 25 In Nevada, a “conspiracy” is defined as “an agreement between two or more persons for 26 an unlawful purpose.” Washington v. State, 132 Nev. 655 , 663 (2016) (citation omitted). 27 Moreover, an actionable conspiracy consists of “a combination of two or more persons who, by 1 another, and damage results from the act or acts.” Hilton Hotels Corp. v. Butch Lewis Prods., Inc., [2] 109 Nev. 1043, 1048 (1993) (citing and quoting Sutherland v. Gross, 105 Nev. 192, 196 (1989)). 3 The Court finds that Mission has plausibly pled conspiracy. The Complaint expressly 4 alleges that Connant-Crisp and other individuals planned to “use, disclose, publish, or copy” 5 Mission’s trade secrets and confidential business information to harm Mission. Mission contends 6 that the alleged plan was in violation of and in breach of the contractual obligations and duties that 7 Connant-Crisp owed to Mission as a Mission employee, and by extension the law. Again, the Court 8 finds that Mission offers adequate facts that support its damages argument. Moreover, for the 9 reasons previously articulated, UTSA does not displace this viable theory of recovery because it 10 is unknown whether these claims concretely conflict. See Mission’s eleventh cause of action 11 discussion supra Section III.D. For these reasons, the Court finds that Mission adequately pled 12 conspiracy. Accordingly, the Court denies Battle Born’s motion to dismiss Mission’s twelfth cause 13 of action for conspiracy. 14 F. Mission’s Thirteenth Cause of Action 15 In its Complaint, Mission’s thirteenth cause of action alleges that Connant-Crisp owed 16 Mission a fiduciary duty of loyalty to act in the Mission’s best interest, not steal Mission’s trade 17 secrets and confidential business information, and not take advantage of business opportunities 18 that belong to Mission. ECF No. 1 at 32. In its motion, Battle Born argues that Mission alleges no 19 specific facts to show breach of duty or damages. ECF No. 19 at 12. Battle Born again argues that 20 this claim is precluded under UTSA. Id. In response, Mission argues that employees owe fiduciary 21 duties to their employers. ECF No. 34 at 33, 34. In reply, Battle Born argues that the Complaint 22 provides “nothing more than legal conclusions” and that Mission only offers vague accusations of 23 breach. ECF No. 39 at 11. 24 “A claim for breach of fiduciary duty customarily has three elements: (1) existence of a 25 fiduciary duty, (2) breach of the duty, and (3) damages as a result of the breach.” Guzman v. 26 Johnson, 137 Nev. 126, 132 (2021). The Court finds that Mission has plausibly pled each required 27 element for breach of fiduciary duty. First, Mission alleges that Connant-Crisp owed Mission a 1 offers six possible theories of breach including Connant-Crisp’s alleged formation, launch, and 2 operation of Battle Born while she was still employed by Mission. Third, Mission alleges that it 3 suffered damages directly and proximately caused by the various theories of Connant-Crisp’s 4 breach. As to Battle Born’s UTSA preclusion argument, the Court finds that this cause of action 5 is not yet precluded under UTSA for similar reasons already stated herein. See Mission’s eleventh 6 cause of action discussion supra Section III.D. For these reasons, Mission has plausibly pled its 7 thirteenth cause of action against Connant-Crisp for breach of fiduciary duty. Accordingly, the 8 Court denies Battle Born’s motion to dismiss Mission’s thirteenth cause of action. 9 G. Mission’s Fourteenth Cause of Action 10 In its Complaint, Mission’s fourteenth cause of action alleges that Connant-Crisp and 11 BBHH intentionally interfered with its existing contractual business, employment, and Referral 12 Source relationships. ECF No. 1 at 34. In its motion, Battle Born argues that Mission simply recites 13 the elements of an intentional interference claim and offers no facts to suggest plausibility. ECF 14 No. 19 at 12. Battle Born also argues this claim is precluded by UTSA. Id. Mission argues that it 15 has sufficiently pled this cause of action. ECF No. 34 at 35. 16 To establish a claim for intentional interference with contractual relations, a plaintiff must 17 show: “(1) a valid and existing contract; (2) the defendant's knowledge of the contract; (3) 18 intentional acts intended or designed to disrupt the contractual relationship; (4) actual disruption 19 of the contract; and (5) resulting damage.” Sutherland, 105 Nev. at 196 (citation omitted). The 20 Court finds that Mission has adequately pled a cause of action for intentional interference with 21 contractual relations. First, Mission states that it inherited all of HLH Carson City’s business and 22 employee contracts when it acquired the entity. Next, Mission pleads that Connant-Crisp and 23 BBHH knew of these contracts, much like Connant-Crisp knew of the contracts she was a party to 24 and those she learned of in her key administrative position. Third, it is entirely plausible that 25 Connant-Crisp and BBHH intentionally acted to disrupt Mission’s pre-existing contractual 26 relationships, particularly the ones it had with the employees Connant-Crisp and BBHH attempted 27 to solicit. For example, Mission alleges that Connant-Crisp specifically “spoke ill of Mission and 1 || at 5. Fourth, Mission has plausibly pled that Connant-Crisp disrupted some of its pre-existing 2 || contracts such as those with its employees and contractors. Finally, Mission adequately pled 3 || damages resulting from Connant-Crisp and BBHH’s interference such as lost profits and lost 4 || benefits from the interrupted contracts. As to Battle Born’s UTSA preclusion claim, the Court 5 || finds that this cause of action is not precluded for similar reasons already stated herein. See 6 || Mission’s eleventh cause of action discussion supra Section III.D. 7 For these reasons, Mission has plausibly pled its fourteenth cause of action against 8 || Connant-Crisp and BBHH for intentional interference with contractual relations. Accordingly, the 9 || Court denies Battle Born’s motion to dismiss Mission’s fourteenth cause of action. 10 || IV. CONCLUSION 11 IT IS THEREFORE ORDERED that Battle Born’s Motion to Dismiss (ECF No. 19) is 12 || DENIED. 13 IT IS FURTHER ORDERED that Bames’ Motion to Dismiss (ECF No. 25) is DENIED 14 || as moot. 15 IT IS FURTHER ORDERED that Mission’s Motion for Leave to File Excess Pages as to 16 || the combined opposition response it filed on November 11, 2022 (ECF No. 33), is GRANTED 17 || nunc pro tunc. 18 IT IS SO ORDERED. 19 DATED this 25" day of August, 2023. / | . [20] 21 LARRYR.HICKS UNITED STATES DISTRICT JUDGE [28] 1°