United States District Court, E.D. Virginia, Norfolk Division
MEMORANDUM OPINION AND ORDER
G. DOUMAR, UNITCD STATES DISTRICT JUDGE
matter comes before the Court on a Motion to Dismiss and Stay
Amended Complaint filed by defendants David Catanzaro, Chris
Catanzaro, HookCam, LLC, and Kuulei Holdings, Inc.
(collectively, "Defendants"). In such motion,
Defendants asks the Court to dismiss Counts I and V of the
Amended Complaint for failure to state a claim ("Motion
to Dismiss") and to stay all remaining claims pending
the outcome of a related state action ("Motion to
Stay"). ECF No. 22. For the reasons stated herein,
Defendants' Motion to Dismiss is GRANTED
as to Count I and DENIED as to Count V; and
Defendants' Motion to Stay is DENIED.
action arises from a dispute between business partners. On
October 19, 2017, Rudy Mician ("Mician")
individually and derivatively on behalf of Pacific Systems
Solutions, LLC ("PSS") (collectively,
"Plaintiffs") filed a complaint against David
Catanzaro ("D.C."), Chris Catanzaro
("C.C."), HookCam, LLC, and Kuulei Holdings, Inc.
("Kuulei") alleging patent infringement, trademark
infringement, accounting, breach of contract, civil
conspiracy, misappropriation of trade secrets, and
conversion. ECF No. 1. On January 5, 2018, Defendants moved
to dismiss several counts of Plaintiffs' complaint and
moved to stay the remaining counts pending the outcome of a
related state action. ECF No. 19. On January 19, 2018, in
lieu of a response, Plaintiffs filed an amended complaint
("Am. Compl."), which asserts the following claims:
• Count I - derivative action by Mician on behalf of PSS
alleging direct and willful patent infringement against D.C.,
C.C., and HookCam, LLC;
• Count II - derivative action by Mician on behalf of
PSS alleging trademark infringement against D.C., C.C., and
• Count III - action for accounting by Mician against
• Count IV - breach of contract claim by Mician, both
individually and derivatively on behalf of PSS, against
• Count V - civil conspiracy claim by Mician, both
individually and derivatively on behalf of PSS, against D.C.
and C.C.; and
• Count VI - derivative action by Mician on behalf of
PSS for damages under the Virginia Uniform Trade Secrets Act
against D.C, C.C., and HookCam, LLC.
Am. Compl., ECF No. 20.
February 2, 2018, Defendants moved to dismiss Counts I and V
of the amended complaint for failure to state a claim and
moved to stay the remaining counts pending the outcome of a
related state action. ECF No. 22; see also
Memorandum in Support ("Def. Mem."), ECF No. 23. On
February 16, 2018, Plaintiffs filed a response in opposition
to Defendants' motion ("Resp."). ECF No. 24. On
February 22, 2018, Defendants filed their reply. ECF No. 25.
Defendants' Motion to Dismiss and Stay, ECF No. 22, is
now before the Court.
summary of the relevant facts alleged in Plaintiffs'
amended complaint follows.
Mician is a citizen and resident of Florida. Am. Compl.
¶ 1. Plaintiff PSS is a Hawaii limited liability company
with its principal place of business in Hawaii. Id.
¶ 2. At all times relevant to the amended complaint,
Mician and defendant Kuulei have been the only members of
PSS. Id. ¶ 6. Defendant Kuulei is a Hawaii
corporation owned by defendant D.C. Id. ¶¶
c, 6. Kuulei is listed as the manager of PSS in PSS's
Operating Agreement, but subsequent filings with the
Secretary of State of Hawaii identify D.C. as the sole
manager of PSS. Id. ¶ 6, n.2. Defendant
HookCam, LLC is a Virginia limited liability company with its
principal place of business in Henrico County, Virginia.
Id. ¶ 5. Defendants D.C. and C.C. are both
citizens and residents of Virginia and the only members of
HookCam, LLC, each owning 50% of the company. Id.
¶¶ 3, 4, 17.
Patented Crane Camera System
its principals have worked toward the development of a video
system for use by operators of large construction cranes.
Id. ¶ 7. The goal of such video system is to
provide a televised image from the perspective of the
crane's hook, which is often obscured from the
operator's view when working on a construction site.
Id. In furtherance of these efforts, PSS obtained a
patent, U.S. Patent No. 7, 656, 459 B2, entitled "Crane
Hook and Trolley Camera System, " which issued on
February 2, 2010 ("PSS Patent"). Id.
¶ 8. A copy of the PSS Patent is attached to the amended
complaint as Exhibit A. PSS also obtained the trademark
"HookCam, " which was registered with the United
States Patent and Trademark Office on or about May 24, 2016,
under registration number 4963471 ("PSS
Trademark"). A copy of the PSS Trademark is attached to
amended complaint as Exhibit B.
Role at PSS
the inception of PSS, Mician provided services for PSS,
including, without limitation, assembly of HookCam parts,
installation services, and warranty work. Id. ¶
10. At all relevant times, Mician was paid a nominal salary
by or on behalf of PSS for such services. Id. ¶
12. However, such salary payments to Mician dwindled in
amount, and in late 2014, they ceased without explanation.
Id. ¶ 13. Mician received no compensation from
PSS for the year 2015. Id. In late 2015, Mician made
a demand for an accounting for PSS from D.C., but no
accounting was forthcoming. Id. ¶ 14. In March,
2016, Mician quit his salaried position with PSS.
Id. ¶ 15. According to Mician, he remained a
member of PSS and continued to demand an accounting.
Id. Around this same time, D.C. moved the operations
of PSS from Hawaii to Virginia over the objections of Mician.
Id. ¶ 16.
about July 27, 2016, D.C. formed HookCam, LLC. Id.
¶¶ 5, 17. D.C. and C.C. are the only members of
HookCam, each owning 50% of the company. Id. ¶
17. The PSS Patent and PSS Trademark were never assigned or
transferred to D.C, C.C, or HookCam, LLC. Id. ¶
19. Nevertheless, "from and after the formation of
HookCam, [LLC, ]" D.C. and C.C have manufactured and
installed the PSS patented crane camera system for customers
of PSS and others using HookCam, LLC Id.
¶¶ 18, 26. D.C, C.C, and HookCam, LLC also
"actively engaged in utilizing and duplicating the PSS
Trademark in connection with the manufacture and sale of a
crane camera system bearing the PSS Trademark."
Id. ¶ 36.
DEFENDANTS' MOTION TO DISMISS
first part of their motion, Defendants move to dismiss Count
I (patent infringement) and Count V (civil conspiracy) of the
amended complaint pursuant to Rule 12(b)(6) of the Federal
Rules of Civil Procedure ("Rule 12(b)(6)") for
failure to state a claim.