Meyer Grp. v. Rayborn

695 F.Supp.3d 39

The MEYER GROUP, LTD., and William J. Meyer, Plaintiffs, v. James M. RAYBORN, et al., Defendants.

Civil Action No. 19-1945 (ABJ)

United States District Court, District of Columbia

Signed September 29, 2023

Michael Kay Ross, Serine Consolino, Branden D. Lewiston, T. Esther Silberstein, Pro Hac Vice, Aegis Law Group LLP, Washington, DC, Jillian Leslie, Washington, DC, for Plaintiffs.

Denise Marie Clark, Clark Law Group, PLLC, Washington, DC, for Defendant James M. Rayborn.

Glenn C. Etelson, Lane Hornfeck, William Bernard Schroeder, Shulman, Rogers, Gandal, Pordy & Ecker, P.A., Potomac, MD, for Defendant Broad Street Realty, LLC.

MEMORANDUM OPINION

AMY BERMAN JACKSON, United States District Judge

Plaintiff The Meyer Group Ltd. ("TMG") is a commercial real estate brokerage firm founded in 1994 by plaintiff William Meyer. Defs.' Joint Statement of Material Facts Not in Genuine Dispute [Dkt. # 56-1] ("Defs.' SOF") ¶¶ 15, 16; Pls.' Resp. to Defs.' SOF [Dkt. # 60-2] ("Pls.' Resp. SOF") ¶¶ 15, 16. Defendant James M. Rayborn is a real estate salesperson and a former employee of TMG. Defs.' SOF ¶¶ 17-18; Pls.' Resp. SOF ¶¶ 17-18. At TMG, Rayborn's primary responsibilities were to "develop leads for potential business." Defs.' SOF ¶ 18; Pls.' Resp. SOF ¶ 18. In May of 2018, Rayborn's status changed from that of employee to independent contractor under the terms of a written agreement. Defs.' SOF ¶¶ 29-30; Pls.' Resp. SOF ¶¶ 29-30.

In January of 2019, TMG terminated Rayborn's contract, and he began working for Broad Street Realty, another real estate brokerage firm. Pls.' Statement of Material Facts [Dkt. # 60-1] ("Pls.' SOF") ¶ 35; Defs.' Resp. to Pls.' SOF [Dkt. # 66-1] ("Defs.' Resp. SOF") ¶ 35; Am. Compl. [Dkt. # 39] ¶ 11. Plaintiffs allege that Rayborn misappropriated TMG's confidential client information, disclosed it to Broad Street Realty, and persuaded TMG's clients to terminate their contracts with TMG and move to Broad Street. Am. Compl. ¶ 24.

On June 28, 2019, plaintiff TMG filed a complaint in this Court against Rayborn and Broad Street, alleging violations of the federal Defend Trade Secrets Act, 18 U.S.C. § 1836 et seq. and the D.C. Uniform Trade Secrets Act, D.C. Code § 36-403 and § 36-404. Compl. [Dkt. # 1] ¶¶ 34-49. It also alleged that defendants tortiously interfered with TMG's contracts with its clients, and that Rayborn breached his employment agreement. Compl. ¶¶ 24-33. In response to defense motions, the Court allowed Count I, the breach of contract claim, to move forward to the extent that it was based on the provision prohibiting the misappropriation and disclosure of confidential information, Meyer Grp., Ltd. v. Rayborn, 2020 WL 5763631, at *8 (D.D.C. Sept. 28, 2020) [Dkt. # 17]. Count II, the tortious interference claim, was dismissed without prejudice, while Counts III and IV, the trade secret claims, survived. Id. at *4, *7. A lengthy and contentious period of discovery ensued.

On April 19, 2021, plaintiffs filed an amended complaint bringing the same four counts, adding Meyer as a plaintiff, and amending the tortious interference claim. Am. Compl. ¶¶ 1, 40-49. Plaintiffs also added a defamation claim against Rayborn for his alleged statements to clients that Meyer was retiring when he in fact had no plans to do so. Am. Compl. ¶ 66-73. On November 30, 2021, defendants filed a joint motion for summary judgment. Defs'. Joint Mot. for Summ. J. [Dkt. # 56] ("Mot."). On January 13, 2022, plaintiffs opposed the motion, and filed a cross-motion for partial summary judgment as to liability on Count I, the breach of contract claim against Rayborn. Pls.' Opp. to Mot. and Cross-Mot. for Partial Summ. J. [Dkt. # 61] ("Opp."). The matter is fully briefed. See Defs.' Reply Mem. to Opp. and Opp. to Pls.' Cross-Mot. for Partial Summ. J. [Dkt. # 65] ("Defs.' Reply"); Pls.' Reply in Supp. of Pls.' Cross-Mot. for Partial Summ. J. [Dkt. # 68].

The question before the Court now is whether, after engaging in extensive discovery, the plaintiffs have come forward with undisputed evidence to support the particular legal claims they have advanced. Because plaintiffs have met their burden of showing that there is no genuine issue of material fact on the question of whether Rayborn breached his Independent Contractor Agreement with TMG in connection with the eleven former TMG clients for which Rayborn produced canvas cards in discovery, plaintiffs are entitled to partial summary judgment as to liability on their breach of contract claim. And while defendants' motion for summary judgment with respect to the defamation claim will be granted, numerous issues of fact preclude summary judgment on the remaining counts. Therefore, for the reasons to be detailed below, the Court will grant plaintiffs' motion for partial summary judgment on Count I with respect to the eleven former TMG clients for which Rayborn produced canvas cards in discovery; deny defendants' motion for summary judgment on Counts I, II, III, and IV; and grant defendants' motion for summary judgment as to Count V.

BACKGROUND

Rayborn joined TMG in 1994 as a real estate salesperson specializing in tenant representation. Defs.' SOF ¶ 17; Pls.' Resp. SOF ¶ 17; Am. Compl. ¶ 9. His responsibilities included cold-calling prospective clients. Pls.' SOF ¶ 20; Defs.' Resp. SOF ¶ 20.

Rayborn arrived at TMG with a set of index cards that he had created to track his leads at a prior firm. Defs.' SOF ¶ 19; Pls.' Resp. SOF ¶ 19. He continued to maintain and organize TMG's client information on a set of handwritten index cards, which he and Meyer referred to as "canvas cards." Pls.' SOF ¶ 20; Defs.' Resp. SOF ¶ 20.

Meyer was aware of the cards and what information they contained. Defs.' SOF ¶ 22; Pls.' Resp. SOF ¶ 22. Indeed, TMG custom-ordered blank index cards imprinted with TMG's name and logo specifically for Rayborn to use for this purpose. Pls.' SOF ¶¶ 25-26, Defs.' Resp. SOF ¶¶ 25-26. The cards also contained fields to record information such as names, titles, and phone numbers of company contacts, lease expiration dates, and a tenant's square footage. Pls.' SOF ¶ 26, citing Ex. 4 to Opp. [Dkt. # 59-4] (sealed); Defs.' Resp. SOF ¶ 26; see, e.g., Ex. 36 to Opp. [Dkt. # 59-36] (sealed). Rayborn used the canvas cards to record information collected when cold calling "both potential and past TMG clients." Pls.' SOF ¶ 20; Defs.' Resp. SOF ¶ 20.

The cold calls were not Rayborn's only means of gathering information: Rayborn also obtained information about tenants from Costar (a subscription database), the Haines directory, and client business cards. Defs.' SOF ¶¶ 45, 87, 88; Pls.' Resp. SOF ¶¶ 45, 87, 88. But Rayborn's own emails to other TMG employees reflect the importance of the cards:

On July 14, 2015, Rayborn sent an email to Jessica D'Abbraccio, a TMG assistant, stating that he "needs more canvass [sic] cards (keeps the lights on)"

On August 3, 2015, Rayborn sent an email to D'Abbraccio with the subject line, "highest importance ever," stating, "I am almost out of canvas [sic] cards . . . I obviously use them to cold call . . . 1. If I don't have them 2. I can't cold call. 3. The company Bill and I don't make money 4. We are f***** !!!!!!!!!!!!!!!!!!!!!!"

On May 12, 2016, Rayborn sent an email to D'Abbraccio stating, "IF I RUN OUT OF CANCASS [SIC] CARDS THE COMPANY SHUTS DOWN AND NO ONE MAKES ANY MONEY!!!!!!!"

On May 13, 2016, Rayborn sent an email to both to D'Abbraccio and Meyer, stating that without canvas cards, "I can't and won't work next week . . . I have nothing to write on and need them to canvas . . . the company is shut down."

On May 16, 2016, Rayborn sent an email to D'Abbraccio stating that the canvas cards "pay your salary and keep the company running."

On December 13, 2016, Rayborn sent an email to D'Abbraccio describing the canvas cards as "what keeps the doors open."

See Pls.' SOF ¶¶ 58-63; Defs.' Resp. SOF ¶¶ 58-63; Ex. 28 to Opp. [Dkt. # 59-28] (sealed); Ex. 29 to Opp. [Dkt. # 59-29] (sealed); Ex. 30 to Opp. [Dkt. # 59-30] (sealed); Ex. 31 to Opp. [Dkt. # 59-31] (sealed); Ex. 32 to Opp. [Dkt. # 59-32] (sealed); Ex. 33 to Opp. [Dkt. # 59-33] (sealed).

In May 2018, Meyer terminated Rayborn's employment with TMG. Defs.' SOF ¶ 25; Pls.' Resp. SOF ¶ 25.¹ "About a week later," Meyer invited Rayborn back to return to TMG under a different arrangement. Defs.' SOF ¶ 27; Pls.' Resp. SOF ¶ 27. On May 29, 2018, Rayborn signed an Independent Contractor Agreement ("ICA") with TMG. Defs.' SOF ¶ 30; Pls.' Resp. SOF ¶ 30; see also ICA, Ex. B to Pl. TMG's Mem. in Opp. to Defs.' Mot. to Dismiss [Dkt. # 13-4] ("ICA").

Section 6 of the ICA was entitled, "Confidentiality." ICA ¶ 6. The first paragraph of that section expressly recognized that in the course of the contractual relationship, Rayborn could acquire:

information which could include, in whole or in part, information concerning TMG's clients and prospective clients, the identity of clients and prospective customers, identity of key purchasing personnel in the employ of customers and prospective clients, TMG's manuals, client lists, canvas cards, formulae, processes, methods, ideas, improvement, inventions or other confidential or proprietary information belonging to TMG or relating to TMG's business or affairs (collectively referred to herein as the "Confidential Information").

ICA ¶ 6(a) (emphasis added). Paragraph 6(a) goes on to state:

Contractor agrees that (i) the Confidential Information is the property of TMG; (ii) the use, misappropriation or disclosure of the Confidential Information would constitute a breach of trust and could cause irreparable injury to TMG; and (iii) it is essential to the protection of TMG's goodwill and to the maintenance of TMG's competitive position that the Confidential Information be kept secret and Contractor agrees not to disclose the Confidential Information to others or use the Confidential Information to his own advantage or the advantage of others.

ICA ¶ 6(a); Defs.' ...