Luke Richey v. Metaxpert LLC ( 2010 )

FILED
NOT FOR PUBLICATION DEC 28 2010
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
LUKE RICHEY, JENNIFER RICHEY, No. 10-35459
husband and wife,
D.C. No. 2:10-cv-00020-LRS
Plaintiff-counter-defendant -
Appellee,
MEMORANDUM*
v.
METAXPERT LLC, a Washington limited
liability company; et al.,
Defendants-counter-claimants
- Appellants,
and
CHARLES MANNING; et al.,
Defendants,
v.
GRAVITY JACK, INC.,
Third-party-defendant -
Appellee.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Appeal from the United States District Court
for the Eastern District of Washington
Lonny R. Suko, Chief District Judge, Presiding
Argued and Submitted December 10, 2010
Seattle, Washington
Before: BEEZER, O’SCANNLAIN, and PAEZ, Circuit Judges.
Appellants (collectively “Manning”) challenge the district court’s denial of
preliminary injunctive relief against: (1) Appellees (collectively “Richey”)
designing smart phone gaming software, and (2) Richey’s continued control of a
RentACoder.com account. We have jurisdiction to review the district court’s order
pursuant to 28 U.S.C. § 1292(a)(1).1 We review the district court’s grant or denial
of a preliminary injunction for abuse of discretion. Southwest Voter Registration
Educ. Project v. Shelley, 344 F.3d 914, 918 (9th Cir. 2003) (en banc). For the
reasons set forth below, we conclude that the district court did not abuse its
1
The district court’s order was titled “Order on
Defendants/Counterclaimants’ Motion for Temporary Restraining Order.”
Temporary restraining orders are not appealable, but “[i]t is the essence of the
order, not its moniker, that determines [the court’s] jurisdiction.” Bennett v.
Medtronic, Inc., 285 F.3d 801, 804 (9th Cir. 2002). The essence of the district
court’s order in this case is not that of a temporary restraining order because it is
unlimited in temporal scope and was entered after adversarial processes. Id.Therefore, we treat the order as a preliminary injunction over which we have
jurisdiction.
2
discretion in denying the requested preliminary injunctive relief. We therefore
affirm.
1. Manning first argues that the district court abused its discretion by not
entering a preliminary injunction enjoining Richey from designing smart phone
gaming software. Before Richey started working for Manning’s company, he
signed an employment contract which included a non-competition agreement
stating that he would not compete with Manning in “the computer gaming
business” for a two-year period following his departure from Manning’s company.
The parties did not define the term “computer gaming business” in the non-
competition agreement. After Richey left Manning’s company, he started
designing software for smart phone games.
Manning argues that a smart phone is a “computer” within the meaning of
the non-competition agreement and that Richey is violating the terms of the non-
competition agreement. Richey argues that the term “computer” does not include
smart phones. The district court concluded that the term “computer gaming
business” is ambiguous and that the issue is therefore “appropriately resolved by
the finder of fact upon further hearing at trial.” Richey v. Metaxpert, LLC, 2010
WL 1608887, *2 (E.D. Wash. 2010).
3
“A contract provision is ambiguous when its terms are uncertain or when its
terms are capable of being understood as having more than one meaning.” Mayer
v. Pierce County Med. Bureau, Inc., 909 P.2d 1323, 1326 (Wash. Ct. App. 1996).
Under Washington law, if a court cannot resolve the ambiguity through the
objective manifestation theory or the context rule, then the meaning of the
ambiguous provision is a question of fact to be determined by the trier of fact. See
BNC Mortgage, Inc. v. Tax Pros, Inc., 46 P.3d 812, 819-20 (Wash. Ct. App. 2002).
Here, we agree with the district court that the term “computer gaming
business”—without any further definition by the parties in their 2007
agreement—is “capable of being understood as having more than one meaning.”
Mayer, 909 P.2d at 1326. Indeed, the term “computer” itself is ambiguous in light
of the objectively blurry line between personal computers and devices like smart
phones which can perform many of the same functions—including the capability to
support games—but remain popularly understood as distinct devices. Because
these terms are ambiguous and their meaning must be decided by the trier of fact,
the district court did not abuse its discretion when it denied Manning preliminary
injunctive relief on the ground that he failed to meet his burden to demonstrate a
likelihood of success on the merits.
4
2. Manning also argues that he is entitled to ownership of a
RentACoder.com account that Richey currently controls. Manning urges us to
conclude that the district court abused its discretion in declining to require Richey
to surrender the account to him. When Richey started working for Manning’s
company, they agreed that if Richey’s employment terminated within less than two
years, Manning would transfer the RentACoder.com account to Richey. The
agreement conditions the transfer on the execution of a release containing certain
enumerated terms. Manning argues that Richey was terminated after more than
two years, and that even if he was terminated within two years, Richey did not sign
the release. Manning argues that he therefore has no obligation to transfer the
account to Richey. Richey maintains he was terminated after less than two years
and that he tried to execute such a release, only to be rebuffed by Manning.
The district court concluded that the “evidence is conflicting and incomplete
as to the date of termination of Richey’s employment . . . and the current
ownership of the original RentACoder account.” Richey, 2010 WL 1608887, *2.
Our review of the record comports with the district court’s conclusions. There is
significant evidence suggesting that Richey was terminated within two years of
entering the agreement. It is also unclear whether Richey or Manning is to blame
for the fact that Richey did not sign the necessary release. Accordingly, Manning
5
failed to meet his burden to demonstrate a likelihood of success on the merits, and
the district court did not abuse its discretion in concluding the same and denying
relief.
AFFIRMED.
6