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Exner v. First Command Financial Services, Inc.

United States District Court, N.D. Texas, Fort Worth Division

July 3, 2019

JOACHIM (JOHN) W. EXNER, ET AL., Plaintiffs,
v.
FIRST COMMAND FINANCIAL SERVICES, INC., ET AL., Defendants.

          MEMORANDUM OPINION AND ORDER

          JOHN MCBRYDE UNITED STATES DISTRICT JUDGE.

         Came on for consideration the motion of defendants, First Command Financial Services, Inc., First Command Financial Planning, Inc., First Command Advisory Services, Inc.[1], First Command Insurance Services, Inc., and First Command Bank, [2] to partially dismiss. The court, having considered the motion, the response of plaintiffs, Joachim (John) W. Exner ("John"), Claudia Exner ("Claudia"), Exner, Inc. ("El"), and Exner & Associates, Inc. ("EAI"), the reply, the record, and applicable authorities, finds that the motion should be granted in part.

         I.

         Plaintiffs' Claims

         On March 27, 2019, plaintiffs filed their original complaint in the United States District Court for the Eastern District of Virginia, Alexandra Division. Doc.[3] 1. On April 12, 2019, they filed their first amended complaint. Doc. 6. In it, plaintiffs allege:

         John and Claudia are married and reside in Virginia. Doc. 6, ¶ 11. John is a financial advisor and owner of El and EAI. Id. Claudia is also a registered financial advisor and owner of EAI. Id. & ¶ 12. El is the registered owner of eight copyrights, one trademark, and a collection of works entitled "The Consistent Client Experience" ("CCE"), and other intellectual property works. Id. ¶¶ 13, 19. Plaintiffs are engaged in the business of financial planning for active and retired military veterans and their families. Id. ¶ 14. A fundamental aspect of their business is the development and use of trade and business secrets, including copyrighted materials. Id.

         In September 2 010, John entered into an agreement with defendants to serve as an independent contractor. Id. ¶ 15. As part of John's relationship with defendants, he was required to submit to them copyrighted works for review and approval.[4] Id. ¶ 20. In July 2013, John submitted to plaintiffs part of a copyrighted work and was advised that he would not be permitted to use it unless the copyright notice was removed. Id. ¶ 22. John refused to do so. Id. Subsequently, defendants revised the agreement with independent contractors as of December 1, 2014, to include a provision on ownership of intellectual property. Id. ¶ 25, John refused to sign the agreement. Id. ¶ 26. On March 27, 2017, defendants terminated John and Claudia, stating that their association would end April 26, 2017. Id. ¶¶ 28, 29.

         On March 27, 2017, defendants seized seven computers and related equipment belonging to John and his team. They copied hard drives and gained access to personal information, deleting contacts and numbers from personal devices. Id. ¶ 33. Defendants refused to return confidential information despite demand therefor. Id. ¶¶ 34-36.

         Plaintiffs assert a number of causes of action as follows: federal copyright infringement asserted by EAI and El (Count I), trade secret misappropriation under the Defend Trade Secrets Act, 18 U.S.C. § 1836 ("DTSA") asserted by EAI and El (Count II), violation of federal computer crimes act, 18 U.S.C. § 1030, asserted by John, Claudia, and EAI (Count III), breach of contract and implied covenant of good faith and fair dealing by John and Claudia (Count IV), tortious interference with contracts and business relations by all plaintiffs (Count V), defamation by John and Claudia (Count VI), declaratory relief by all plaintiffs (Count VII), and unpaid wages by John and Claudia (Count VIII).

         II. Grounds of the Motion

         Defendants maintain that the claims for declaratory relief by all plaintiffs and copyright infringement, DTSA, and breach of covenant of good faith and fair dealing by EAI must be dismissed. They allege that the declaratory relief claims are moot; EAI does not own the copyrights or trade secrets at issue; and, Texas does not recognize a covenant of good faith and fair dealing in the independent contractor context.

         III. Standards of Review

         A. Rule 12(b)(1)

         Dismissal of a case is proper under Rule 12(b)(1) of the Federal Rules of Civil Procedure when the court lacks the statutory or constitutional power to adjudicate the case. Home Builders Ass'n of Miss., Inc. v. City of Madison, Miss., 143 F.3d 1006, 1010 (5th Cir. 1998). When considering a motion to dismiss for lack of subject matter jurisdiction, the court construes the allegations of the complaint favorably to the pleader. Spector v. L Q Motor Inns, Inc., 517 P.2d 278, 281 (5th Cir. 1975). However, the court is not limited to a consideration of the allegations of the complaint in deciding whether subject matter jurisdiction exists. Williamson v. Tucker, 645 F.2d 404, 413 (5th Cir. 1981). The court may consider conflicting evidence and decide for itself the factual issues that determine jurisdiction. Id. Because of the limited nature of federal court jurisdiction, there is a presumption against its existence. See Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 374 (1978); McNutt v. General Motors ...


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