Business & Practice

Cable Company, Attorney Founder Must Face Trade-Secret Suit

Oct. 8, 2019, 6:10 PM

A clash between competing cable companies and their founders over trade secrets, legal malpractice, and other issues can proceed after a federal court in Utah rejected a bid to toss the case.

Fiberwave Technologies LLC and its founder, attorney Paul Christensen, continue to face a suit by Vicidiem Inc., Christensen’s former employer. Vicidiem alleges Christensen and Fiberwave poached its customers.

Vicidiem’s claims, revolving around Christensen’s conduct while serving as Vicidiem’s chief operating officer and attorney and also afterwards, at Fiberwave, can proceed, the U.S. District Court for the District of Utah ruled.

Christensen represented Vicidiem and its founder, Craig Hutchinson, as a part-time attorney before joining the company, according to the court. When he became full-time COO, he allegedly drafted his own service agreement, which provided a minimum salary and equity in the company. He also allegedly didn’t advise Vicidiem to examine the agreement with the help of independent counsel.

Christensen provided legal advice while he worked there, the company says. He made mistakes, including writing an erroneous contract term that cost Vicidiem $300,000, the company alleges.

Vicidiem terminated Christensen’s employment in March 2019. Christensen allegedly formed Fiberwave days later and took three Vicidiem engineers with him. He allegedly contacted Viciem customers and vendors.

Vicidiem and Hutchinson brought numerous claims against Christensen and Fiberwave, and sought a declaratory judgment that Christensen’s employment contract is void or unenforceable.

Vicidiem sufficiently pleaded all its claims, the court said. It stated a claim for fraudulent or negligent nondisclosure by alleging Christensen drew up a contract giving himself an equity share without recommending outside review, and laid the basis for a potential finding that the contract is void or can’t be enforced, the court said.

It adequately alleged legal malpractice, the court said. And in alleging Christensen, as Vicidiem’s attorney, engaged in self-dealing and failed to disclose information, the company plausibly alleged a breach of fiduciary duty.

Vicidiem also sufficiently alleged Christensen and Fiberwave violated trade-secrets laws and tortiously interfered with its business relationships, Judge Dee Benson said.

Anderson & Karrenberg represent Vicidiem.

Call & Jensen and Christensen & Jensen PC represented Christensen and Fiberwave.

The case is Vicidiem, Inc. v. Christensen, 2019 BL 384002, D. Utah, No. 2:19-CV-358-DB, 10/7/19.

To contact the reporter on this story: Martina Barash in Washington at mbarash@bloomberglaw.com

To contact the editors responsible for this story: Jo-el J. Meyer at jmeyer@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com

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