Alsco, Inc. v. Premier Outsourcing Plus, LLC

ALSCO, INC., Plaintiff, v. PREMIER OUTSOURCING PLUS, LLC, ROBERT PACITTI, KHALEIM DIXON,LUDOVICO ORIENTE and DRYCLEAN CENTRAL, Defendants.

Civil Action No. 19-1631-CFC

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE

July 22, 2020

REPORT AND RECOMMENDATION

In this case, Plaintiff Alsco, Inc. ("Plaintiff") brings Delaware state law contract and tort claims against Defendant Premier Outsourcing Plus, LLC ("Premier"), Robert Pacitti ("Pacitti"), Khaleim Dixon ("Dixon"), Ludovico Oriente ("Oriente") and Dryclean Central (collectively, "Defendants"). All Defendants except for Oriente (the "Moving Defendants") have moved the Court to dismiss Plaintiff's complaint for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6) ("Motion"). (D.I. 14) For the reasons set forth below, the Court recommends that the Moving Defendants' Motion be GRANTED-IN-PART and DENIED-IN-PART.

I. BACKGROUND

A. Factual Background

Plaintiff is a Nevada corporation with its headquarters in Salt Lake City, Utah. (D.I. 1 at ¶ 1) Plaintiff provides linen services by way of a regular system of pick-up and delivery to its customers, which include restaurants, bars, automobile repair shops, factories, hotels and hospitals. (Id. at ¶ 11) Plaintiff operates globally; within the United States alone, Plaintiff operates in at least 40 states through 81 branches and 99 depots. (Id. at ¶ 12) Relevant to this case are two of its branches—one located in New Castle, Delaware, and another located in Lanham, Maryland. (Id. at ¶¶ 13, 31)

Plaintiff maintains a hierarchy of labor across its locations. Among its employees are Route Sales Representatives ("RSRs"), who are delivery drivers and the primary contacts with Plaintiff's customers. (Id. at ¶ 15) One level up from RSRs are District Managers. (Id. at ¶ 16) District Managers manage the RSRs and also help with customer satisfaction. (Id.) The next level up are the Service Managers, who manage the RSRs and the District Managers. (Id. at ¶ 17) Finally, above Service Managers are General Managers, who are "responsible for overseeing all facets of a branch operation[,]" including customer service, products, pricing, budgeting, and team management. (Id. at ¶¶ 17-18)

Defendant Pacitti was General Manager of Plaintiff's New Castle branch from about January 2015 until his employment was terminated in November 2016. (Id. at ¶¶ 20-23) Defendant Dixon was a District Manager of Plaintiff's New Castle branch from June 2016 until his employment was terminated in March 2017. (Id. at ¶¶ 24, 29) Plaintiff alleges that both Pacitti and Dixon, through their employment with Plaintiff, had access to and knowledge of certain of Plaintiff's proprietary information, including, inter alia, "prospective and existing customer lists, customer pricing and discounts, customer preferences, and contract terms." (Id. at ¶¶ 22, 27)

Defendant Premier is also in the business of linens, and competes with Plaintiff's New Castle branch, by virtue of offering similar services in the same geographic area. (Id. at ¶¶ 52-53) Pacitti created and organized Premier in December 2016, and he runs Premier out of his home in Mullica Hill, New Jersey. (Id.) In March 2017, shortly after Dixon left Plaintiff, Pacittihired him to work at Premier. (Id. at ¶ 54) In August 2018, Premier's certificate of formation was amended to include Dixon as a new member of the limited liability company. (Id. at ¶ 55)

Defendant Oriente worked for Premier from 2013 through June 2019; at all relevant times relating to this case, he was employed as a General Manager at Plaintiff's Lanham branch. (Id. at ¶¶ 31-32, 36) Upon his hiring, Oriente signed a confidentiality agreement with Plaintiff. (Id. at ¶¶ 34-35; D.I. 19, ex. A)

Defendant Dryclean Central is a Delaware company located in Delaware. (D.I. 1 at ¶ 6) It is owned and operated by Nate Murray and Scott Hunter. (Id.)

The Complaint alleges that the Defendants engaged in four types of misconduct that harmed Plaintiff.

First, the Complaint alleges that Premier allegedly poached a number of Plaintiff's customers or prospective customers. Premier did so through Pacitti and Dixon, who are alleged to have: (1) as to "at least seven former Alsco customers" solicited the customers based on prior relationships they had with those customers; and (2) as to "at least five more customers" have obtained those customers by using Plaintiff's proprietary information. (Id. at ¶¶ 59-62)

Second, the Complaint alleges that in March 2019, Dixon stole one of Plaintiff's linen hampers from a customer in the Philadelphia area. (Id. at ¶ 64) Plaintiff alleges that Premier uses these stolen goods its business. (Id. at ¶¶ 64, 66) It also alleges that Defendants have similarly stolen other goods and property from Plaintiff to use in Premier's business, including laundry bins, hampers, floor mats, linens, towels, napkins, aprons and more. (Id. at ¶ 65) Defendants are alleged to have laundered some of this stolen product at the Lanham branch with Oriente's help. (Id. at ¶ 67)

Third, Plaintiff alleges that Oriente, while working as the General Manager of the Lanham branch, created a fictitious customer account "and misrepresented to [Plaintiff] that this account was to launder customer[-]owned goods ('COGS')." (Id. at ¶ 69) But, in actuality, Plaintiff was laundering Plaintiff's own linens that Defendants had converted to Premier's use. (Id. at ¶¶ 69-70) Due to the use of this fraudulent account, Plaintiff performed this work at an "extreme discount" rate of 75% and then Premier put the linens back in service for itself and its customers. (Id.)

Fourth, the Complaint alleges that Dryclean Central has been using Plaintiff's property without its consent. (Id. at ¶¶ 37-38, 43) More specifically, Dryclean Central has been: (1) laundering Plaintiff's textiles and floormats on behalf of Premier, which Premier then delivers to its own customers and (2) using Plaintiff's property in its own establishment, including, inter alia, its floor mats, without its consent. (Id. at ¶¶ 39, 41-42) These products were all clearly marked with Plaintiff's label or other indicia of its ownership, though Defendants have attempted to alter the products to remove those indicia. (Id. at ¶¶ 40, 44)

Additional facts relevant to resolution of this Motion will be set out in Section III below.

B. Procedural Background

Plaintiff filed this lawsuit in August 2019. (D.I. 1) Moving Defendants filed their Motion on November 15, 2019. (D.I. 14) Briefing on the Motion was completed on December 16, 2019, (D.I. 21), and the Motion was referred to the Court for resolution by United States District Judge Colm F. Connolly on December 20, 2019, (D.I. 24).

II. LEGAL STANDARD

In order to state a claim for relief pursuant to Federal Rule of Civil Procedure 8, the pleading must contain "a short and plain statement of the claim showing that the pleader isentitled to relief[.]" Fed. R. Civ. P. 8(a)(2). However, pursuant to Federal Rule of Civil Procedure 9(b), to the extent that a complaint alleges fraud or mistake, the pleading must "state with particularity" such claims. Fed. R. Civ. P. 9(b).

When presented with a Rule 12(b)(6) motion to dismiss for failure to state a claim, a court conducts a two-part analysis. Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). First, the court separates the factual and legal elements of a claim, accepting all of the complaint's well-pleaded facts as true, but disregarding any legal conclusions. Id. at 210-11. Second, the court determines whether the facts alleged in the complaint are sufficient to show that the plaintiff has a "'plausible claim for relief.'" Id. at 211 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)). "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. In assessing the plausibility of a claim, the court must "'accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief.'" Fowler, 578 F.3d at 210 (quoting Phillips v. Cty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008)).

III. DISCUSSION

In the Complaint, Plaintiff alleges 15 causes of action. (D.I. 1) Moving Defendants have moved to dismiss eight of those claims as to them: the Third Cause of Action for breach of fiduciary duty—agent, which is brought against Pacitti, Oriente, and Dixon, (id. at ¶¶ 91-99); the Fifth Cause of Action for breach of the duty of loyalty—agent, which is brought against Pacitti, Oriente, and Dixon, (id. at ¶¶ 107-15); the Seventh Cause of Action for breach of the duty of loyalty—agent, which is brought against Pacitti, Oriente, and Dixon, (id. at ¶¶ 123-31); the NinthCause of Action for aiding and abetting fraud, which is brought against Pacitti, Dixon, and Premier, (id. at ¶¶ 140-44); the Tenth Cause of Action for tortious interference with business and contractual relations, which is brought against Pacitti, Dixon, and Premier, (id. at ¶¶ 145-56); the Eleventh Cause of Action for tortious interference with prospective business opportunities, which is brought against Premier, Pacitti, Dixon and Oriente, (id. at ¶¶ 157-66); the Thirteenth Cause of Action for civil conspiracy, which is brought against all Defendants, (id. at ¶¶ 173-79), and the Fourteenth Cause of Action for unjust enrichment, which is brought against all Defendants, (id. at ¶¶ 180-86). (D.I. 15 at 1) The parties do not dispute that Delaware law applies to all claims. (D.I. 15 at 6; D.I. 20 at 2) Below, the Court will address the parties' arguments in the order in which they were addressed in Moving Defendants' opening brief.

A. Breach of Fiduciary Duty (Third, Fifth and Seventh Causes of Action)

In its Third, Fifth, and Seventh Causes of Action, Plaintiff...