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Cunningham Lindsey U.S., Inc. v. Bonnani

United States District Court, M.D. Pennsylvania

April 22, 2014

CUNNINGHAM LINDSEY U.S., INC. and CL ACQUISITIONS HOLDINGS LIMITED, Plaintiffs,
v.
PAT BONNANI, DALE FOHL, and VERICLAIM, INC., Defendants.

MEMORANDUM

CHRISTOPHER C. CONNER, Chief District Judge.

Presently pending before the court is the motion (Doc. 41) of Pat Bonanni ("Bonanni"), Dale Fohl ("Fohl"), and Vericlaim, Inc. ("Vericlaim"), collectively "defendants, " asking the court to dismiss counts II, III, V, VI, VII, VIII, and X of the complaint (Doc. 1) of Cunningham Lindsey U.S., Inc., and CL Acquisition Holdings Limited (collectively "Cunningham Lindsey"). For the reasons that follow, the court will grant in part and deny in part the defendants' motion.

I. Procedural History

Cunningham Lindsey commenced this matter with the filing of a ten-count complaint (Doc. 1) on October 8, 2013. Cunningham Lindsey alleges that two of its former employees, Pat Bonanni ("Bonanni") and Dale Fohl ("Fohl"), together with officers of Vericlaim, Inc., ("Vericlaim"), orchestrated and implemented a scheme to eliminate Cunningham Lindsey's regional presence by instigating a mass exodus of all Cunningham Lindsey employees at its Camp Hill, Pennsylvania, office during the late summer of 2013. (See Doc. 1 at ¶ 2). Specifically, Cunningham Lindsey asserts ten (10) claims: breach of contract against Bonanni and Fohl (Count I); breach of fiduciary duty against Bonanni and Fohl (Count II); aiding and abetting breach of fiduciary duty against all defendants (Count III); misappropriation and misuse of trade secrets and confidential information in violation of Pennsylvania's Uniform Trade Secrets Act, 12 PA. CONS. STAT. § 5301 et seq., against all defendants (Count IV); tortious interference with existing and prospective contractual and business relationships against all defendants (Count V); civil conspiracy against all defendants (Count VI); unfair competition against all defendants (Count VII); unjust enrichment against all defendants (Count VIII); violation of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030, against Bonanni and Fohl (Count IX); and breach of contract for failure to pay for preference shares of CL Holdings against Fohl (Count X).

Contemporaneously with the complaint, Cunningham Lindsey filed a motion for preliminary injunctive relief (Doc. 5), asking the court to enjoin defendants from virtually all direct and indirect competition with Cunningham Lindsey pending final resolution of this litigation. The parties fully briefed the motion (Docs. 9, 39, 44), and the court held a preliminary injunction hearing on October 31, 2013, taking evidence in the form of documentary exhibits and witness testimony. Thereafter, the parties submitted proposed findings of fact and conclusions of law (Docs. 54-55) and jointly submitted relevant exhibits and deposition transcripts. (Doc. 56). On November 19, 2013, the court issued a memorandum (Doc. 62) and order (Doc. 63) denying Cunningham Lindsey's request for a preliminary injunction, concluding that Cunningham Lindsey had failed to demonstrate continuing, irreparable harm, and that the appropriate resolution of its claims must await trial on the merits.

In the instant motion (Doc. 41), defendants seek dismissal of Counts II, III, V, VI, VII, VIII, and X of Cunningham Lindsey's complaint. The motion has been fully briefed (Docs. 42, 43, 53, 64) and is ripe for disposition.

II. Standard of Review

Federal notice and pleading rules require the complaint to provide "the defendant notice of what the... claim is and the grounds upon which it rests." Phillips, 515 F.3d at 232 (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555 (2007)). To test the sufficiency of the complaint in the face of a Rule 12(b)(6) motion, the court must conduct a three-step inquiry. See Santiago v. Warminster Twp. , 629 F.3d 121, 130-31 (3d Cir. 2010). In the first step, "the court must tak[e] note of the elements a plaintiff must plead to state a claim.'" Id . (quoting Ashcroft v. Iqbal , 556 U.S. 662, 675 (2009)). Next, the factual and legal elements of a claim should be separated; well-pleaded facts must be accepted as true, while legal conclusions may be disregarded. Id .; see also Fowler v. UPMC Shadyside , 578 F.3d 203, 210-11 (3d Cir. 2009). Once the well-pleaded factual allegations have been isolated, the court must determine whether they are sufficient to show a "plausible claim for relief." Iqbal , 556 U.S. at 679 (citing Twombly , 550 U.S. at 556); Twombly , 550 U.S. at 555 (requiring plaintiffs to allege facts sufficient to "raise a right to relief above the speculative level"). A claim "has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal , 556 U.S. at 678. When the complaint fails to present a prima facie case of liability, however, courts should generally grant leave to amend before dismissing a complaint. See Grayson v. Mayview State Hosp. , 293 F.3d 103, 108 (3d Cir. 2002); Shane v. Fauver , 213 F.3d 113, 116-17 (3d Cir. 2000).

III. Allegations of the Complaint

Cunningham Lindsey and Vericlaim are both in the business of claims adjustment and loss management for insurers and large self-insured clients. (Doc. 1 ¶ 14, 25). The two companies compete directly with one another. (Id.) Bonanni and Fohl both joined Cunningham Lindsey in January of 2011 after signing written offers of employment which included, inter alia, confidentiality[1] and employee non-solicitation[2] clauses. (Id. ¶¶ 36-38, 45-47). In their roles as executive general adjusters at Cunningham Lindsey's Camp Hill office, Bonanni and Fohl each had access to confidential documents. (Id. ¶¶ 41-42, 49). Additionally, in June of 2013, Fohl executed a subscription agreement wherein he agreed to purchase certain Cunningham Lindsey shares. (Id. ¶¶ 50-55; Ex. C). The subscription agreement contained broad non-competition, non-solicitation, non-hire, and confidentiality provisions. (Id.) The provisions prohibit Fohl from soliciting Cunningham Lindsey customers or employees for a period of six months after departing Cunningham Lindsey for any reason. (Id.)

On September 5, 2013, Bonanni, Fohl, and all other Cunningham Lindsey employees working at the Camp Hill office resigned simultaneously, without notice, and began working for Vericlaim. (Id. ¶¶ 2, 74-75, 77). According to Cunningham Lindsey's complaint, in the period leading up to this mass resignation, defendants prepared interim invoices for customers, accessed Cunningham Lindsey documents on company computers, downloaded documents to personal devices, scanned an unusually large number of documents, and deleted information from equipment. (Id. ¶¶ 62, 63-66, 71-72). Cunningham Lindsey also alleges that Vericlaim and the individual defendants communicated with Cunningham Lindsey clients before the mass resignation and caused clients to request transfer of their files to Vericlaim after the mass resignation. (Id. ¶¶ 83-86). Cunningham Lindsey alleges that this scheme was orchestrated by Vericlaim, together with Bonanni and Fohl, with the intent of crippling and dismantling its Camp Hill office. (Id. ¶ 5).

IV. Discussion

Defendants' motion to dismiss tests the sufficiency of several counts of Cunningham Lindsey's complaint. Defendants assert that Counts II, III, VI, VII, and VIII of Cunningham Lindsey's complaint are preempted by the Pennsylvania Uniform Trade Secrets Act ("PUTSA"), 12 PA. CONS. STAT. § 5301 et seq ., that Counts II, V, VI, and VII are barred by the gist of the action doctrine, and that Count X fails to state a claim for breach of contract because the ...


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