Construction Managers, Inc. v. Amory
| Decision Date | 17 May 2019 |
| Docket Number | 18 CVS 1359 |
| Citation | 2019 NCBC 31 |
| Court | Superior Court of North Carolina |
| Parties | CONSTRUCTION MANAGERS, INC. OF GOLDSBORO; CONSTRUCTION MANAGERS, LLC; ACTS CONTRACTING, INC.; and ACTS INVESTMENTS, LLC, Plaintiffs, v. KEVIN D. AMORY, Defendant. |
Brooks, Pierce, McLendon, Humphrey & Leonard LLP by Gary S. Parsons, Eric M. David, and Shepard D. O'Connell for Plaintiffs Construction Managers, Inc. of Goldsboro Construction Managers, LLC, ACTS Contracting, Inc., and ACTS Investments, LLC.
Ellis & Winters, LLP by Jonathan D. Sasser and Michelle Liguori for Defendant Kevin D. Amory.
ORDER AND OPINION ON DEFENDANT'S MOTION TO DISMISS PLAINTIFFS' AMENDED COMPLAINT
THIS MATTER comes before the Court upon Defendant Kevin D Amory's ("Amory") Motion to Dismiss Plaintiffs' Amended Complaint. ("Motion", ECF No. 89.)
THE COURT, having thoroughly reviewed the Motion, the briefs filed in support of and in opposition to the Motion, the oral arguments of counsel, and other appropriate matters of record, concludes, in its discretion, that the Motion should be GRANTED, in part, and DENIED, in part.
1. The facts relevant to determination of the Motion are drawn from the Amended Complaint. ("Amended Complaint", ECF No. 78.)
2. Plaintiffs Construction Managers, Inc. of Goldsboro ("CMI"), Construction Managers, LLC ("CM, LLC"), ACTS Contracting, Inc., ("ACTS"), and ACTS Investments, LLC ("ACTS Investments"; collectively CMI, CM, LLC, ACTS, and ACTS Investments are "Plaintiffs") are affiliated North Carolina entities that are managed and operated from Wayne County, North Carolina. (ECF No. 78, at ¶¶ 1- 4, 15, 20-24.) Plaintiffs have common ownership, are highly integrated, and are controlled and managed by Sammy Sasser ("Sasser"), Robert Crenshaw ("Crenshaw"), and Justin Thorn ("Thorn"). (Id. at ¶¶ 6-8, 15, 20-24.) Amory worked for Plaintiffs CM, LLC and ACTS from April 2015 through June 2018. (Id. at ¶ 5.)
3. Since 2010, Plaintiffs have been engaged in the business of building, leasing, and managing small and mid-sized medical clinics for the United States Department of Veteran Affairs (the "VA"). (Id. at ¶ 15.) The clinics are called community-based outpatient clinics ("CBOC"). (Id.) The process by which Plaintiffs acquire work projects from the VA is known as the "design-to-build-to-lease process," which Plaintiffs describe as "technical, arcane, and laden with bureaucratic hurdles." (Id. at ¶ 17.) During this process, the VA first publicly identifies a city or town in which to locate a CBOC. (Id.) Potential bidders on the project then identify and arrange to acquire property on which to locate the VA clinic. (Id. at ¶ 18.) The property acquired must meet VA requirements. According to Plaintiffs, "[t]hese requirements are learned from past experiences, and many of them are unpublished and known only to companies that work in this area with the VA." (Id.) Next, after the VA approves a particular piece of property on which to locate a CBOC, the VA issues a request for lease proposal ("RLP") "seeking bids from lessors to have contractors build the clinic on the identified property and then, after the clinic is built, to lease the building to the VA." (Id. at ¶ 19.) The winning bidder then designs and builds the CBOC, leases it to the VA, and manages the property. (Id.) Plaintiffs have been selected a total of 13 times to design, build, and lease clinics for the VA. (Id. at ¶ 15.)
4. Plaintiffs consider themselves experts in the VA design-build-to-lease process and "have organized themselves, in substantial part, to be highly successful in the VA CBOC bidding and leasing process." (Id. at ¶ 20.) Plaintiff CM, LLC manages CMI. (Id. at ¶ 24.) Plaintiff CMI is the corporate entity that deals with, submits proposals to, and contracts with the VA. (Id. at ¶ 21.) Plaintiff ACTS signs construction contracts for Plaintiffs' CBOC projects. (Id. at ¶ 22.) Plaintiff ACTS Investments is a part-owner of the entities that hold the leases for various completed CBOCs. (Id. at ¶ 23.)
5. CMI identifies the CMI Process-"a proprietary analytical formula and process for assessing and managing all aspects of the VA's 'design-build-to-lease' program, from land acquisition to design-build to property management"-as its primary trade secret. (Id. at ¶¶ 25-26.) According to Plaintiffs, the CMI Process "is a comprehensive and proprietary set of formulas, financial spreadsheets, design drawings, property criteria, and property management guidelines . . . ." (Id. at ¶ 32.) Plaintiffs consider both the CMI process as a whole, and its constituent parts, to be trade secrets. (Id. at ¶ 26.)
6. The aspects of the CMI Process that Plaintiffs allege to be trade secrets, include:
7. In addition to the components listed above, Plaintiffs allege that their Quickbook files are trade secrets that are part of the CMI Process. Plaintiffs' Quickbook files contain detailed bank account information, private financial information about Plaintiffs and Plaintiffs' employees, and the various financial data that goes into CMI's pricing and bidding documents. Plaintiffs contend that these Quickbook files "are like the Rosetta Stone to the CMI Process, allowing anyone with access to them to re-create, down to the penny, how Plaintiffs are able to successfully bid for and operate VA CBOCs across the country." (Id. at ¶ 29.)
8. Plaintiffs state that the CMI Process is the product of years of work and experience, and that "if stolen, the CMI Process would allow the thief to immediately compete with CMI without any of the investment of time and money that Plaintiffs have committed since 2010 to get to this point." (Id. at ¶ 32.)
9. Most of Plaintiff's confidential and trade secret information, including the CMI Process, is in electronic form. CMI protects its electronic data by storing it on a password-secured cloud account ("the Box Account"). (Id. at ¶ 36.) Access to files in the Box Account is limited to employees with a specific business need to access the files. (Id.) Additionally, the Box Account allows company managers to track and log every time any company file was accessed, copied, or moved. (Id. at ¶ 41.)
10. With respect to its confidential information kept in paper form, CMI holds any paper files in its office, which is locked at night and which is not generally open to the public. Further, it is a company policy that paper files are not taken out of the office, unless Sasser specifically approves. (Id. at ¶ 35.)
11. CMI also attempts to protect its confidential information when submitting bids to the VA by "insisting that the VA keep the financial information included in the bid confidential to the full extent allowed by law." (Id. at ¶ 39.) Based on this policy, "when the VA has been asked to publicly disclose such information, it has redacted the sensitive information from all documents." (Id.)
12. Amory was employed by CM, LLC from April 7, 2015 through approximately April 2017. Then, from April 2017 through June 5, 2018, Amory was employed by ACTS as the Vice President. (Id. at ¶ 5.) During his employment, Amory acquired a 25% ownership interest in ACTS and in ACTS Investments and was a manager of ACTS Investments. (Id.)
13. While employed by CM, LLC and ACTS, Amory had substantial accounting and bookkeeping responsibilities and also acted as a project manager for certain of CMI's CBOC projects. (Id. at ¶¶ 81, 82.)
14. Plaintiffs allege that "Sasser, Crenshaw, and Thorn reposed trust in Amory and granted him broad access to Plaintiffs' files because he was a project manager with substantial bookkeeping responsibilities for the companies." (Id. at ¶ 37.) Amory, however, was "frequently reminded [ ] of the need to maintain the security of Plaintiffs' electronic data" and was once refused the authority to take a laptop with Plaintiffs' Quickbook files home because Sasser believed allowing an employee to have company data in their home or car without proper security measures created a security risk. (Id. at ¶ 38.)
15. On June 5, 2018, Amory resigned from his employment with ACTS to take a job with BridgePoint Civil, LLC ("BridgePoint"), located in Goldsboro, North Carolina. (Id. at ¶ 12.) BridgePoint, which describes itself as a "turnkey site development company," is part of an affiliated group of companies...
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