MCGRIFF INSURANCE SERVICES, INC.

v.

LITTLESTONE

This matter comes before the Court on review of defendants Eugene Littlestone (E. Littlestone), Caleb Littlestone (C. Littlestone), Douglas Fields (D. Fields), Michael Fields (M. Fields), and Alliant Insurance Services, Inc.’s (Alliant) Motion for Partial Dismissal Pursuant to Rule 12(B)(6) (Doc. #65) filed on September 14, 2021. Plaintiff filed a Response in Opposition (Doc. #69) on October 5, 2021.

I.

Under Federal Rule of Civil Procedure 8(a)(2), a Complaint must contain a “short and plain statement of the claim showing

Dawn Disch filed a separate motion. (Doc. #64.) that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). This obligation “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citation omitted). To survive dismissal, the factual allegations must be “plausible” and “must be enough to raise a right to relief above the speculative level.” Id. at 555. See also Edwards v. Prime Inc., 602 F. 3d 1276, 1291 (11th Cir. 2010). This requires “more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citations omitted). In deciding a Rule 12(b)(6) motion to dismiss, the Court must accept all factual allegations in a complaint as true and take them in the light most favorable to plaintiff, Erickson v. Pardus, 551 U.S. 89 (2007), but “[l]egal conclusions without adequate factual support are entitled to no assumption of truth,” Mamani v. Berzain, 654 F. 3d 1148, 1153 (11th Cir. 2011) (citations omitted). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678. “Factual allegations that are merely consistent with a defendant’s liability fall short of being facially plausible.” Chaparro v. Carnival Corp., 693 F. 3d 1333, 1337 (11th Cir. 2012) (citations omitted). Thus, the Court engages in a twostep approach: “When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Iqbal, 556 U.S. at 679.

II.

The Court previously summarized the general facts in the Second Amended Complaint (Doc. #53) as follows: In November 2009, E. Littlestone began his employment with McGriff, and he entered into an Employee Agreement on November 2, 2009. McGriff changed its name in 2018 to BB&T Insurance Services. During his 11-year tenure,

E. Littlestone worked as an insurance agent.

The Employment Agreement was amended on January 1, 2011 and January 8, 2018, but the confidentiality and non-solicitation provisions remained intact. (Id., ¶¶ 18-20.) . . . . Both E. Littlestone and Disch started working with Alliant, a direct competitor. (Id., ¶¶ 24-25, 27.) Alliant also solicited C. Littlestone, the son of E. Littlestone. The son does not have a written employment agreement with McGriff, and therefore E. Littlestone and Disch used him to indirectly solicit and take customers and employees from McGriff to Alliant. (Id., ¶ 30.) In June 2021, McGriff came into possession of information confirming that its clients were solicited by E. Littlestone and Disch. Plaintiff alleges that the solicitation is ongoing. (Id., ¶ 31.) In November 2009, D. Fields began his employment, and he signed an Employee Agreement on November 2, 2009. For most of his employment, McGriff was known as BB&T Insurance Services until the name change in 2018. During his 11-year tenure, D. Fields worked as an insurance agent. (Id., ¶¶ 32-33.) On January 10, 2018, the D. Fields Agreement was amended but the confidentiality or non- solicitation provisions remained intact. (Id., ¶ 34.) M. Fields began with McGriff, also known as BB&T Insurance Services, in May 2012, at which time he entered into an Employee Agreement. (Id., ¶¶ 37, 38.) On January 11, 2018, the Employment Agreement was amended but not as to confidentiality or non- solicitation provisions. [(Id., ¶] 39.) After departing McGriff, D. Fields and M. Fields began working for Alliant, and in June 2021, McGriff came into information confirming that its clients were solicited by D. Fields and M. Fields. (Id., ¶¶ 43, 46.) In June 2021, McGriff came into possession of information that D. Fields texted an employee to solicit them to leave McGriff and join Alliant, and that D. Fields and M. Fields disclosed their departure to McGriff's customers and clients weeks before informing McGriff to take their business to Alliant. (Id., ¶¶ 47, 48.) Count I alleges tortious interference with a breached contract against Alliant and Count V alleges tortious interference with an advantageous business relationship against E. Littlestone, C. Littlestone, Disch, D. Fields,

M. Fields, and Alliant. Count VI and Count VII

allege a breach of fiduciary duty against E. Littlestone (Count VI) and D. Fields (Count VII). Count III alleges a misappropriation of trade secrets in violation of 18 U.S.C. § 1836 and Count IV alleges a misappropriation of trade secrets under Florida law. Count XII seeks a declaratory judgment and Count XIII seeks injunctive relief. McGriff Ins. Servs., Inc. v. Littlestone, et al., No. 2:21-CV- 480-JES-NPM, 2021 WL 4272980, at *2 (M.D. Fla. Sept. 21, 2021).

III.

Defendants seek to dismiss Count I to the extent that it applies to plaintiff’s customer relationships. Defendants seek dismissal of Counts III and IV for misappropriation of trade secrets and Counts VI and VII for breach of fiduciary duty in their entirety. Defendants also seek dismissal of Count V for tortious interference with advantageous business relationships for failure to identify any clients or groups of clients with whom defendants interfered. Counts I & V – Tortious Interference “The elements of tortious interference with a business relationship are (1) the existence of a business relationship (2) knowledge of the relationship on the part of the defendant; (3) an intentional and unjustified interference with the relationship by the defendant; and (4) damage to the plaintiff as a result of the breach of the relationship.” Ethan Allen, Inc. v. Georgetown Manor, Inc., 647 So. 2d 812, 814 (Fla. 1994) (citation omitted). “As a general rule, an action for tortious interference with a business relationship requires a business relationship evidenced by an actual and identifiable understanding or agreement which in all probability would have been completed if the defendant had not interfered.” Id., at 815. “In considering the element of causation, Florida courts have held that the plaintiff must plead and prove that the defendant manifested a specific intent to interfere with the business relationship.” [ ] Thus, even if the defendant is aware of the existing business relationship, the defendant will not be liable for tortious interference with that relationship unless there is evidence that the defendant intended to procure a breach of the contract.” Chicago Title Ins. Co. v. Alday-Donalson Title Co. of

Fla., Inc., 832 So. 2d 810, 814 (Fla. 2d DCA 2002) (internal citation omitted). “One does not induce another to commit a breach of contract with a third person under the rule stated in this Section when he merely enters into an agreement with the other with knowledge that the other cannot perform both it and his contract with the third person.” Martin Petroleum Corp. v. Amerada Hess Corp., 769 So. 2d 1105, 1107 (Fla. 4th DCA 2000) (quoting Restatement (Second) of Torts § 766 cmt. n (1977)). In Count I, plaintiff alleges that E. Littlestone, D. Fields, and M. Fields breached the restrictive covenants in their Employment Agreements at the direction of and for the benefit of Alliant. (Doc. #53, ¶ 53.) Plaintiff alleges that Alliant knew or should have known that of the Employment Agreements, yet Alliant intentionally and knowingly interfered with plaintiff’s business and contractual relations with its clients. Plaintiff alleges that Alliant induced the individual defendants to breach their Employment Agreements by knowingly maintaining the benefit of plaintiff’s trade secrets and by facilitating defendants to steal clients. (Id., ¶¶ 55-56.) Plaintiff alleges that Alliant continues to knowingly possess, derive a benefit form, and use converted customers and information obtained by the individual defendants in violation of their Employment Agreements. (Id., ¶ 57.) Plaintiff alleges damages stemming from the tortious interference. (Id., p. 17.)

In the motion, “Defendants vehemently deny that Alliant tortiously interfered with the Individual Defendants’ employment agreements with McGriff, but do not contest that McGriff has sufficiently pled those claims as required at this stage of the litigation. This motion is limited to the tortious interference with contract claims based on McGriff’s contracts with its customers.” (Doc. #65, p. 7.) In response, plaintiff clarifies that no such claim is presented in Count I, only in Count V. (Doc. 69, p. 3.) Therefore, the motion is denied as moot as to Count

I.

To show tortious interference with an advantageous business relationship “requires (1) the existence of an advantageous business relationship under which the plaintiff has legal rights, (2) an intentional and unjustified interference with that relationship by the defendant, and (3) damage to the plaintiff as a result of the breach of the business relationship.” Lake Gateway Motor Inn, Inc. v. Matt's Sunshine Gift Shops, Inc., 361 So. 2d 769, 771 (Fla. 4th DCA 1978). In Count V, plaintiff alleges that Alliant and the individual defendants tortiously interfered with plaintiff’s advantageous business relationship with its clients. (Doc. #53, ¶¶ 94-95.) Plaintiff alleges that Alliant knew of the relationship through the individual defendants and together used plaintiff’s confidential information to interfere with it. (Id., ¶ 97.)

Specifically, plaintiff alleges that C. Littlestone aided and assisted E. Littlestone and another employee to violate their agreements with plaintiff and to secure other employees and customers to join Alliant. (Id., ¶ 98.) Plaintiff alleges damages because of the tortious interference. (Id., ¶ 99.) Defendant Alliant argues that Count V should be dismissed because plaintiff has failed to identify “with precision” the advantageous business relationships that were interfered with. The individual defendants argue that the claim is preempted by the FUTSA claim to the extent they are based on the use of confidential information. (Doc. #65, p. 18-19.) Plaintiff responds that clients are clearly limited to those being serviced by the

Littlestones and the Fields while they were employed with plaintiff and the group is not unidentifiable. (Doc. #69, p. 7.) The Court agrees with this statement. Plaintiff argues that the claim is not preempted because it is based on interference with client relationships by violation of non-solicitation provisions. (Id., p. 9.) The Court finds that plaintiff has stated a plausible claim for tortious interference in Count V. The Florida Uniform Trade Secrets Act (FUTSA) sections “displace conflicting tort, restitutory, and other law of this state providing civil remedies for misappropriation of a trade secret.” Fla. Stat. § 688.008(1). It does not preempt other civil remedies that are not based upon misappropriation of a trade secret. Fla. Stat. § 688.008(2)(b). In this case, plaintiff makes allegations about the solicitation of other employees within Count V, which is distinct from misappropriation of clients lists. The motion is granted to the extent it relies on confidential client information, cf. Allegiance Healthcare Corp. v. Coleman, 232 F. Supp. 2d 1329, 1336 (S.D. Fla. 2002) (“Plaintiff has not identified any material distinction between the wrongdoing alleged in the trade secret claim and that alleged in the unfair competition claim.”), and otherwise denied. Counts III & IV – Trade Secrets Plaintiff alleges a violation of the Defend Trade Secrets Act (DTSA) and the Florida Uniform Trade Secrets Act (FUTSA). “DTSA and FUTSA can be analyzed together.” Freedom Med., Inc. v. Sewpersaud, 469 F. Supp. 3d 1269, 1275 n.6 (M.D. Fla. 2020), order clarified, No. 6:20-CV-771-ORL-37GJK, 2020 WL 3487642 (M.D. Fla. June 25, 2020). “An owner of a trade secret that is misappropriated may bring a civil action under this subsection if the trade secret is related to a product or service used in, or

The Court notes that separate counts are presented alleging a breach of non-solicitation covenants in the Employment Agreement in Counts VIII, IX, X, and XI. intended for use in, interstate or foreign commerce.” 18 U.S.C. § 1836. A trade secret means all “all forms and types of financial, business, scientific, technical, economic, or engineering information,” that the owner takes “reasonable measures to keep” secret and the information “derives independent economic value” that is not “readily ascertainable through proper means”. 18 U.S.C. § 1839(3). See also Fla. Stat. § 688.002(4). Misappropriation is the “(A) acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or (B) disclosure or use of a trade secret of another without express or implied consent by a person”. 18 U.S.C. § 1839(5); Fla. Stat. § 688.002(2). The term “improper means” includes by breach or inducement of a breach of a duty to maintain secrecy. 18 U.S.C. § 1839(6).

Fields, who was also a Senior Vice President. (Id., ¶¶ 109-113.) Plaintiff additionally allege that D. Fields negotiated salary and bonus packages for plaintiff’s employees prior to his resignation to entice plaintiff’s employees to join him at Alliant. (Id., ¶ 114.) Defendants argue that the Employment Agreements for E. Littlestone and D. Fields identify them as mere ‘business insurance agents’, and the parties disclaimed any and all fiduciary duties outside the agreements. (Doc. #65, pp. 14-15.) Defendants argue that the claims of breach of fiduciary duty based on the misappropriation of trade secrets are preempted by FUTSA. (Doc. 65, p. 17.)

“A fiduciary relationship exists when one is under a duty to act, or give advice, for the benefit of another upon matters within the scope of that relation.” [Crusselle v. Mong, 59 So. 3d 1178, 1181 (Fla. 5th DCA 2011) (citing Doe v. Evans, 814 So. 2d 370, 374 (Fla. 2002)). “An implied fiduciary relationship will lie when there is a degree of dependency on one side and an undertaking on the other side to protect and/or benefit the dependent party.” Id. (quoting Masztal v. City of Miami, 971 So. 2d 803, 809 (Fla. 3d DCA 2007)). “‘The relation and duties involved need not be legal; they may be moral, social, domestic or personal.’” Evans, 814 So. 2d at 374 (quoting Quinn v. Phipps, 93 Fla. 805, 113 So. 419, 421 (1927)). “‘If a relation of trust and confidence exists between the parties (that is to say, where confidence is reposed by one party and a trust accepted by the other, or where confidence has been acquired and abused), that is sufficient as a predicate for relief.’” Id. (emphasis removed) (quoting Quinn, 113 So. at 421). Reuss v. Orlando Health, Inc., 140 F. Supp. 3d 1299, 1304 (M.D. Fla. 2015). Whether a fiduciary duty exists is a fact issue that must be resolved by the jury. Crusselle v. Mong, 59 So. 3d 1178, 1181 (Fla. 5th DCA 2011). For purposes of a motion to dismiss, a plausible claim has been stated. However, the claims appear to be preempted by FUTSA to the extent that the claims rely on the confidential client information. There are allegations referencing solicitation, but this is also the basis for the claims stated in Counts VIII and X as to E. Littlestone and D. Fields. Therefore, the motion to dismiss is granted as to Counts VI and VII to the extent that the fiduciary duties are alleged to be connected to keeping client information secret, and otherwise denied. Accordingly, it is now ORDERED: 1. Defendant’s Motion to Dismiss (Doc. #65) is GRANTED IN PART AND DENIED IN PART as to the Second Amended Complaint. The motion is denied as moot as to Count I, granted to the extent that it relies on confidential information in Count V and otherwise denied, granted without prejudice as to Counts III and IV, granted to the extent that the fiduciary duties are alleged to be connected to keeping client information secret in Counts VI and VII, and otherwise denied. 2. Defendants’ Motion for Leave to File a Reply (Doc. #71) is DENIED as moot. DONE AND ORDERED at Fort Myers, Florida, this 12th day of October 2021.

—— VHA) Z~ DH

JOHN E. STEELE

SHMIOR UNITED STATES DISTRICT JUDGE

Copies: Parties of record