In this patent and trade-secret dispute between Safe Haven Wildlife Removal and Property Management Experts and Meridian Wildlife Services, the defendant tried to raise the stakes by inserting a number of business torts (including breach of fiduciary duty, tortious interference with contract and business expectancies, and business conspiracy) but the court dismissed these claims as time-barred and ordered that the case proceed only on the patent and trade-secret claims.
Those of you preparing for the Great Backyard Bird Count (which starts tomorrow!) and who spend much of your leisure time doing everything in your power to attract birds to your property may be surprised to hear that “bird removal” is big business. The plaintiff in this case, Safe Haven, “specializes in the safe, effective, and humane bird and wildlife removal solutions for facilities.” (See para. 19 of its Amended Complaint). Meridian, the defendant, describes itself as “an innovator and industry leader in [bird removal and wildlife management] services with extensive experience assisting commercial clients throughout the United States with interior bird removal, exterior bird population reduction, wildlife relocation, nest removal and full facility inspection services.” (See para. 9 of Meridian’s Answer). I guess it’s safe to assume these companies won’t be participating in the popular annual birding event.
Anyway, the basic facts of the case go something like this. Derek Tolley began working for Meridian in 2012, where he began his bird-removing career as a technician in Meridian’s bird removal and wildlife management work. He eventually branched out to a role that included developing and communicating with clients. In June 2013, Tolley founded his own bird-removal company (Safe Haven) but didn’t leave Meridian until April 2014. He was issued several patents for animal capture systems and assigned these patents to Safe Haven. According to Meridian, Tolley began soliciting Meridian’s existing and potential customers and using Meridian’s confidential and proprietary information to divert business to Safe Haven immediately after forming the new company. Safe Haven sued for patent infringement and Meridian counterclaimed with its own patent claim as well as additional claims for breach of fiduciary duty, tortious interference with contract and business expectancies, and business conspiracy.
The court dismissed Meridian’s claim for breach of fiduciary duty because it found the claim to be time-barred under the statute of limitations. The court determined that the cause of action for breach of fiduciary duty accrued at the time of the alleged breach, which the court determined to be in 2013, when Tolley allegedly began soliciting Meridian’s customers. The court found that the “discovery rule” of Virginia Code § 8.01-249 did not apply to claims for breach of fiduciary duty. The statute of limitations for breach of fiduciary duty is two
Turning to the tortious interference claim, the court held that this claim was time-barred as well. The statute of limitations for tortious interference accrued when the first measurable damage occurred, which Meridian alleged to be in 2013. Tortious interference claims must be brought within five years of the date they accrue. (See Dunlap v. Cottman Transmission Sys., LLC, 287 Va. 207 (2014)). The court rejected Meridian’s argument that the limitations period should be extended because it was experiencing ongoing, continuing harm, reasoning that “[s]ubsequent, compounding or aggravating damage—if attributable to the original instrumentality or human agency—does not restart a new limitation period for each increment of additional damage.” (See Forest Lakes Cmty. Ass’n, Inc. v. United Land Corp. of Am., 293 Va. 113 (2017)). Since the claim was not brought within the applicable statute of limitations period, it was dismissed.
Also too late was Meridian’s claim for statutory business conspiracy. The statute of limitations for business conspiracy in Virginia is five years. (See Va. Code § 8.01-243; Detrick v. Panalpina, Inc., 108 F.3d 529, 543 (4th Cir. 1997)). The period begins to run when the plaintiff suffers injury caused by the conspiracy. Again the court rejected the notion that allegations of “continuous harm” could extend the limitations period. Meridian alleged it first suffered injury from Tolley interfering with its contracts and expectancies in 2013 or 2014, so the claim was time-barred.
In finding these claims time-barred, the court also rejected the argument that the limitations period had been “tolled” by the provisions of Section 8.01-233(B). The general rule is that causes of action alleged in counterclaims are deemed brought as of the date the counterclaim is filed. Under 8.01-233(B), however, “[i]f the subject matter of the counterclaim…arises out of the same transaction or occurrence upon which the plaintiff’s claim is based, the statute of limitations with respect to [the counterclaim] shall be tolled by the commencement of the plaintiff’s action.” In this case, the court held that Meridian’s business-tort claims did not “arise out of” the same transaction and occurrence as Safe Haven’s patent-law claims.