Defendants e.Digital Corporation, William Blakeley, and Fred Falk (collectively “e.Digital” or “Defendants”), by and through their counsel, hereby submit this memorandum of points and authorities in support of their Motion for Summary Judgment on digEcor’s Third Claim for Relief —Breach of the Duty of Good Faith and Fair Dealing.

In its Order and Memorandum Decision, dated April 2, 2009, (Docket #326), the Court denied digEcor’s motion for summary judgment on its claim of breach of the duty of good faith and fair dealing, holding that “as a matter of law e.Digital had no implied duty to refrain from competing with DigEcor while the digEplayer 5500 were not yet delivered.” (Order and Memorandum Decision at 5.) The Court then stated that “[b]ecause digEcor’s claim cannot prevail as a matter of law, the court will entertain a motion by e.Digital for summary judgment in its favor on the claim for breach of the duty of good faith and fair dealing under the Third Claim for digEcor’s operative complaint.” (Id.) e.Digital hereby moves for summary judgment on digEcor’s Third Claim for the reasons stated in the Order and Memorandum Decision.

The Court is fully empowered to rule on this motion on the record before it.1 No purpose is furthered by repeating herein the fully-developed factual record from the parties’ extensive prior briefing.2 In any event, inasmuch as digEcor has the burden of persuasion at trial, e.Digital may satisfy its burden as the moving party simply by pointing out to the Court a lack of evidence on an essential element of digEcor’s claim – in this case, the existence of an implied duty of non-competition under the Purchase Order – rather than setting forth undisputed facts negating such a duty.3 To the extent necessary, however, e.Digital also incorporates its factual statements from its recent briefing on the summary judgment motions for the purposes of this motion only.4

Based on that record, digEcor itself argued that “[t]he specific, relevant factual issues relating to digEcor’s claim [as to an alleged implied duty of non-competition under the duty of good faith and fair dealing] are undisputed, and the Court can rule on this issue as a matter of law.5

The Court’s ruling in its Order and Memorandum Decision that “as a matter of law e.Digital had no implied duty to refrain from competing with digEcor” entitles e.Digital to summary judgment on digEcor’s claim for breach of the implied duty of good faith and fair dealing. Without belaboring the point, the implied covenant of good faith and fair dealing “cannot be construed … to establish new, independent rights or duties not agreed upon by the parties.”6 The Purchase Order did not contain an express covenant not to compete. In addition, as the Court noted, “there is no language in the [Purchase Order] itself that could reasonably be read to imply that e.Digital agreed to refrain from marketing its own competing product while it had not yet delivered the digEplayer 5500s.”7 Finally, the Court correctly determined there is no evidence as to the relationship of the parties and the course of dealing between the parties of the implied covenant not to compete alleged by digEcor.8 Thus, e.Digital is entitled to judgment as a matter of law on this claim based on the record before the Court.

DATED this 7th day of April, 2009.

RAY QUINNEY & NEBEKER P.C.

\s\ Ryan B. Bell

Samuel C. Straight

Ryan B. Bell

Attorneys for Defendants