Active Release Techniques, LLC v. Xtomic, LLC

Citations

• 2017 COA 14
• 413 P.3d 210

Syllabus

Temporary Restraining Order—Preliminary Injunction—Motion for Directed Verdict—Abuse of Process. Plaintiffs (collectively, ART) provided training, seminars, and business support software for healthcare professionals specializing in \active release techniques.\ ART's owner hired Xtomic, LLC to manage ART's information technology (IT) services and provide IT support. Years later, a co-owner of Xtomic and a former employee of ART, among others, formed Select Seminar Services, LLC to market seminar training for a different soft tissue technique than that offered by ART, using software programs that Xtomic had developed, including a program that ART also used. ART petitioned for a temporary restraining order and preliminary injunction and asserted several claims. Xtomic asserted counterclaims, including, as relevant here, a claim for abuse of process. Xtomic argued that ART had an ulterior motive to use the lawsuit as a means to harass Xtomic and run it out of business. ART moved for a directed verdict, which the court denied, relying primarily on (1) ART's settlement with the former employee (2) ART's reputation for filing lawsuits to control the behavior of former associates and business partners and (3) letters that ART sent to numerous individuals who were not directly involved in the litigation to preserve various documents. A jury found in favor of Xtomic. On appeal, ART contended that the trial court erred by denying its motion for a directed verdict on Xtomic's abuse of process counterclaim. The abuse of process tort was developed as a remedy for the filing of what could be a meritorious action that is manipulated to obtain an improper advantage unrelated to the substance of the action. Abuse of process focuses not on the alleged wrongdoer's motivations or intentions, but on whether the legal system was used for its intended purpose. Here, ART's settlement with the former employee was not evidence of abuse of process because the settlement was used as intended, t