United States District Court, D. Delaware
Chen, Captain Cook, Hawaii. Pro Se Plaintiff.
Patrick Newell, Esquire, and David Bolton, Esquire, Connolly
Gallagher LLP, Wilmington, Delaware. Counsel for Defendant
Godfroy, Huntsville, Alabama. Pro Se Defendant.
ANDREWS, U.P. DISTRICT JUDGE:
Ed Ite Chen, who appears pro se, filed this action
on May 24, 2016. (D.I. 1). Plaintiff asserts jurisdiction by
reason of a federal question under 28 U.S.C. § 1331 and
diversity of citizenship of the parties under 28 U.S.C.
§ 1332. Defendants Ricardo Sagrera and Thomas Godfroy
move to dismiss the Complaint pursuant to Rules 9 and
12(b)(1), (2), (3), (5), and (6) of the Federal Rules of
Civil Procedure. (D.I. 13, 35). Plaintiff opposes. (D.I.
21, 25). Plaintiff moves to submit newly discovered evidence.
(D.I. 48). Defendant Sagrera opposes. (D.I. 51). The motions
have been briefed by the parties.
Complaint raises claims of breach of fiduciary duty, common
law fraud, computer fraud, and tortious interference with
prospective business relationships. (D.I. 1). As alleged,
Plaintiff's claims arise out of his status as a
shareholder and founder of Viceroy Chemical, Inc. and the
actions of Defendants Sagrera and Godfroy. (Id. at
p.4). Sagrera is described as the sole director and
incorporator of Viceroy Chemical and, from 2014 to the
present, the treasurer and secretary of Viceroy
Chemical. Godfroy is described as a NASA contractor
and, from June 2014 to May 2015, a director and the chief
executive officer of Viceroy Chemical. (Id. at
9, 2012, Plaintiff signed a memorandum of understanding
("MOU") in New York that provided for the creation
of a new entity, ultimately named Viceroy Chemical, Inc., and
which gave him special financial, voting, veto, and patent or
other intellectual work product reversion rights.
(Id. at pp.5, 7, 19 at Ex. 3). Plaintiff alleges the
MOU that established Viceroy Chemical and his rights as set
forth therein give him a unique position in the company and
give him standing to sue as an individual as opposed to
bringing a derivative action. (Id. at p. 19). In
addition to Plaintiff, the MOU is signed by Sagrera for
Riarma Investments and John T. Preston for Continuum Energy
Tech. ("CET"). (Id. at p. 9, Ex. 3 at
pp.38-44). The MOU provides that it shall be interpreted and
construed under the laws of the State of New York, exclusive
of its conflicts of law provisions, as if it were between and
among New York residents entered into and to be performed
entirely within New York. (Id. at Ex. 3 at p.43). It
provides for dispute resolution through binding arbitration
in New York and, if adequate remedies are not available at
arbitration, the parties consent to the jurisdiction of
courts located in New York. (Id.). Viceroy Chemical,
Inc. was incorporated in the State of Delaware on June 12,
2012. (Id. at Ex. 4 at p.47).
August 2012, Sagrera began a subtle and escalating campaign
of intimidation and harassment "which culminated with
Sagrera and his confederates sapping Viceroy of its capital,
circulating forged documents among board members while hiding
them from [Plaintiff]" and refusing to provide "the
new general counsel of Viceroy Chemical with the allegedly
executed documents." (Id. at pp.8-9). This
occurred when Plaintiffs signature from the MOU was cut and
pasted into the signature blocks of several other documents
including a nondisclosure invention assignment agreement, an
employment agreement, a Viceroy Chemical shareholder
agreement,  and an amended incorporation document sent
to the Delaware Secretary of State. (Id. at pp.9-14,
Ex. 4). The documents were prepared by Lowenstein Sandler,
LLP ("Lowenstein Sandler"), a law firm retained by
Sagrera. (Id. at pp.9, 12). Plaintiff alleges that
Sagrera and Lowenstein Sandler transmitted a document to the
Delaware Secretary of State without Plaintiffs permission.
(Id. at p. 12). Plaintiff never authorized Godfroy,
Sagrera, or Lowenstein Sandler to use his signature or to
authorize any corporate actions on his behalf. (Id.
at p. 10). Plaintiff alleges that the documents were never
finalized, no individual has original copies of the
contracts, no one has a signature page with everyone's
signature, and no one from Viceroy Chemical has been able to
produce signed physical copies of the documents.
(Id. at pp. 11 -12).
learned his signature had been forged in May 2014, August
2014, and May 2015, through emails that originated with
Sagrera and were forwarded to Plaintiff. (Id. at p.
14). On May 28, 2014, Lowenstein Sandler sent Plaintiff and
Viceroy Chemical's then general counsel, David Pernas, a
set of contracts with Plaintiff's signature, and
indicated Plaintiff had electronically signed and sent the
documents from his email account. (Id. at pp.15,
17). Plaintiff did not send the documents and they did not
originate from his computer. (Id.). Plaintiff was
unaware that the shareholder agreement, invention assignment
agreement, and the employment agreement were signed and
finalized and were the governing documents until Lowenstein
Sandler sent the documents on May 30, 2014. (Id. at
pp.16). At the time, Viceroy Chemical directors had been
working on a set of governing documents with Pemas who was
unable to secure the directors' signatures. (Id.
at p. 16). Although Plaintiff never agreed to a final version
of the shareholder agreement, Sagrera presented different
versions of a signature page as electronically signed by
Plaintiff. (Id.). The shareholder agreement names
the stockholders as Plaintiff, Roger W. Kirby, Harold Edgar,
Viceroy Ventures, Inc., and CET. (D.I. 15-2 at Ex. C).
Plaintiff alleges Sagrera threatened him after he informed
Sagrera of the forged signatures. (Id. at pp.14, 17,
at Ex. 9 p.76).
in May 2014, Sagrera was reappointed to CET's contractual
board seat and Godfroy was appointed director and CEO of
Viceroy Chemical by Sagrera and his affiliate, CET.
(Id. at pp.7-8.) Two out of the three directors for
Viceroy Chemical shared this relationship with CET and voted
as a bloc, thus controlling the three member board of
directors and Viceroy Chemical's outstanding shares.
(Id. at p.8). On July 30, 2014, Godfroy sent an
email to Viceroy Chemical shareholders advising the board had
met the previous day on an emergency basis, and was
presenting a rescue financing proposal to the shareholders
because Viceroy Chemical's cash had been completely
depleted and it was need of an immediate capital infusion.
(D.I. 1 at Ex. 21). The email provided the general terms of
the rescue financing. (Id.). Plaintiff states,
"after breaching his fiduciary duties, Sagrera diluted
Chen of his shares, and became the majority shareholder of
the company giving him additional fiduciary duties to
minority shareholders." (Id. at p.8).
2014, Plaintiff met with oil executives to discuss technology
that was never part of Viceroy Chemical's contemplated
inventions in the contribution agreement and the MOU.
(Id. at p.30). The potential investors began their
due diligence and, at this time, Sagrera produced documents
forged by Lowenstein Sandler that cast into question all
intellectual property produced by Chen. (Id.).
Sagrera and Godfroy made a written demand to Plaintiff to
cease and desist from seeking investors. (Id. at
pp.17, 31; Ex. 16 at p.86). Plaintiff alleges the inventions
were outside the scope of the contribution agreement and MOU,
and Sagrera interfered with Plaintiffs prospective business
relationship when he told third parties that Plaintiff was
precluded from discussing any of his inventions with
investors due to contractual agreements. (Id. at
August 2014, Sagrera produced the email allegedly sent by
Plaintiff with the signature pages. (Id. at p. 15).
Plaintiff asked Godfroy, who at the time was the CEO and
director of Viceroy Chemical, to obtain the original emails
from Sagrera. (Id. at p.15). Godfroy told Plaintiff
that Sagrera had left the country in September 2014 and
refused to tell Plaintiff if Sagrera had returned from
abroad. (Id. at pp.15-16).
Count One, Plaintiff alleges that Sagrera breached his
fiduciary duties when he: (1) committed fraud and forgery;
(2) participated in violations of federal law (i.e.,
Computer Fraud and Abuse Act, 18 U.S.C. §§
1030(a)(4) and (b)); (3) submitted misleading and fraudulent
contracts to New York courts; (4) threatened Plaintiff; (5)
diluted the value of Plaintiffs (and all other
shareholders') shares by 98 percent and increased his
equity position to that of a majority shareholder when
Sagrera claimed the new discounted valuation was fair; (6)
tortiously interfered with Plaintiff's prospective
business relationship with investors; (7) failed to
investigate Plaintiff's complaints of fraud and claimed
the discounted valuation was fair because Plaintiff refused
to cooperate with Sagrera and overlook the forgery and fraud;
(8) refused to produce emails that Plaintiff requested; and
(9) presented fraudulent documents as original and valid
legal documents. (Id. at pp. 19-21).
alleges that Godfroy breached his fiduciary duties when he:
(1) refused to investigate fraud and forgery and covered up
Sagrera's actions; (2) voted on and participated in an
emergency financing round which was actually a scheme to
dilute Plaintiffs shares by 98 percent in valuation and that
advanced his own equity position in the company; and (3)
advised Plaintiff he would be liable for trying to find
investors for his invention. (Id. at pp.21-22).
Count Two, Plaintiff alleges that Sagrera engaged in common
law fraud when he: (1) failed to provide Plaintiff with hard
copies of contracts purportedly signed by Plaintiff; (2)
failed to inform Plaintiff that he purportedly signed
contracts; (3) provided Plaintiff with an amended submission
to the Delaware Secretary of State signed by Sagrera, but
actually submitted the document as signed by Plaintiff; (4)
coordinated in submitting documents with Plaintiff's