Inter/Nat'l Rental Ins. Servs., Inc. v. Albrecht
| Decision Date | 27 February 2012 |
| Docket Number | CASE NO. 4:11-CV-00853 |
| Parties | INTER/NATIONAL RENTAL INSURANCE SERVICES, INC. d/b/a USI RENTAL SPECIALTIES Plaintiff, v. GERALD "GUS" ALBRECHT, Defendant. |
| Court | U.S. District Court — Eastern District of Texas |
Now before the Court are Plaintiff's Emergency Application for Temporary Restraining Order and Preliminary Injunction (Dkt. 10) and Defendant's Rule 12(b)(1) Motion to Dismiss (Dkt. 6). The Court held a hearing on February 22, 2012. At the hearing, both parties were represented by counsel. Having heard the arguments of counsel, the application and the record before the Court, the Court declines to dismiss this case and finds that a temporary restraining order is warranted.
This case involves a dispute over a covenant not to compete. Plaintiff Inter/National Rental Services, Inc. d/b/a USI Rental Specialties ("USI") seeks the entry of a temporary restraining order and preliminary injunction to enjoin Defendant Gerald "Gus" Albrecht ("Albrecht") from continuing to breach his covenant not to compete with respect to USI customers and prospective customers withwhom he had personal contact, for whom he provided services, or about whom he acquired confidential information.
USI is an insurance brokerage and consulting firm specializing in delivering risk management and insurance solutions to rental equipment operations. Albrecht was employed by USI from January 2003 to December 1, 2011, and, at the time of his resignation, held the position of Producer and Vice President. According to Plaintiff, Albrecht was responsible for, among other things, soliciting and providing services to rental industry prospects and customers, marketing insurance products offered by USI, and handling client contact on his assigned accounts. Plaintiff claims that Albrecht was the "face of USI" to the USI clients and prospective clients that he serviced and solicited, and USI invested in that relationship by providing Albrecht with the opportunity to develop goodwill for USI through his continued interactions with USI customers and prospects.
At the hearing, Plaintiff argued that, in order to perform his job, USI was required to - and did - provide Albrecht with access to its confidential and proprietary information, including highly confidential information concerning the underwriting guidelines and pricing structures associated with its rental insurance program. Plaintiff further alleges that during his employment with USI, Albrecht participated in confidential strategy communications concerning the products that he was selling, and acquired confidential information throughout these discussions. According to Plaintiff, Albrecht also acquired confidential information concerning the USI customers and prospects in his region, including customer preferences, needs, coverages, pricing, and expiration dates. Plaintiff seeks a temporary restraining order restraining Albrecht from violating the terms of his covenant not to compete.
Defendant has first argued that the Court lacks subject matter jurisdiction over Plaintiff's claims here. Specifically, Defendant has alleged that Plaintiff has failed to show an amount in controversy sufficient to confer diversity jurisdiction.
Diversity jurisdiction exists in federal district courts when the suit involves a controversy between citizens of different states and the amount in controversy exceeds $75,000, exclusive of interest and costs. 28 U.S.C. § 1332(a). "Dismissal of a diversity action for want of jurisdiction is justified only where it appears to a legal certainty that the plaintiff cannot recover the jurisdictional amount." Duderwicz v. Sweetwater Sav. Ass'n, 595 F.2d 1008, 1012 (5th Cir. 1979) (citing St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 288-89, 58 S. Ct. 586, 590, 82 L. Ed. 845 (1938); Burns v. Anderson, 502 F.2d 970 (5th Cir. 1974)) (emphasis added). "In making that determination the district court may look, not only to the face of the complaint, but to the proofs offered by the parties." U.S. Fire Ins. Co. v. Villegas, 242 F.3d 279, 283 (5th Cir. 2001). If the complaint states a proper amount in controversy, then should generally not dismiss the case for want of jurisdiction "unless it appears or is in some way shown that the amount stated in the complaint is not claimed 'in good faith.'" Nat'l Union Fire Ins. Co. v. Russell, 972 F.2d 628, 630 (5th Cir.1992) (quoting Horton v. Liberty Mut. Ins. Co., 367 U.S. 348, 353, 81 S. Ct. 1570, 6 L. Ed.2d 890 (1961)).
Here, both Plaintiff's original and amended complaints allege an amount in controversy in excess of $75,000. See Dkt. 1 at ¶6 and Dkt. 15 at ¶9. And, Plaintiff claims that the revenue stream at issue exceeds $400,000 per year. The Court finds that it has jurisdiction of this matter and that, on the face of Plaintiff's complaint, the amount in controversy is met. See Hartford Ins. Grp. v.Lou-Con Inc., 293 F.3d 908, 910 (5th Cir. 2002) (). Therefore, Defendant's Rule 12(b)(1) Motion to Dismiss (Dkt. 6) should be denied.
Finding that it has jurisdiction, the Court turns to Plaintiff's request for injunctive relief.
Under Rule 65 of the Federal Rules of Civil Procedure, "[e]very order granting an injunction and every restraining order shall set forth the reasons for its issuance; shall be specific in terms; shall describe in reasonable detail ... the act or acts sought to be restrained...." FED. R. CIV. P. 65(d). Plaintiffs seeking injunctive relief must show:
Nichols v. Alcatel USA, Inc., 532 F.3d 364, 372 (5th Cir. 2008). The party seeking an injunction carries the burden of persuasion on all four requirements. Lake Charles Diesel, Inc. v. Gen. Motors Corp., 328 F.3d 192, 196 (5th Cir. 2003).
USI has presented sufficient evidence to show that, in exchange for providing Albrecht with its confidential information and the opportunity to develop goodwill on behalf of USI, USI and Albrecht entered into an Employment Agreement that, among other things, prohibits Albrecht fromcompeting with USI in certain respects for a period of two years following the termination of his employment with USI. Plaintiff has also alleged that, shortly after Albrecht resigned his employment with USI, USI notified Albrecht that it was waiving certain provisions of his restrictive covenants, and would limit enforcement of his covenant not to compete to clients and prospects with whom he had personal contact, to whom he provided services, or about whom he received confidential information during his employment with USI.
Albrecht contends that USI has unilaterally reformed the agreement picking and choosing what provisions it desires to enforce. If the agreement is enforceable, then the Court has the duty to reform the agreement. See TEX. BUS & COM. CODE §15.51 (c). He also contends that many of the customers USI wants to prohibit him from contacting were his customers prior to joining USI. Every contract in restraint of trade is unlawful. See TEX. BUS & COM. CODE §15.05(a). Yet, a covenant not to compete is enforceable if it is ancillary to or part of an otherwise enforceable agreement at the time the agreement is made to the extent that it contains limitations as to time, geographical area, and scope of activity to be restrained that is necessary to protect the goodwill or other business interest of the promisee. TEX. BUS & COM. CODE §15.50(a).
Covenants that place limits on former employees' professional mobility or restrict their solicitation of the former employers' customers and employees are restraints on trade and are governed by the Act. See DeSantis v. Wackenhut Corp., 793 S.W.2d 670, 681-82 (Tex. 1990); Miller Paper Co. v. Roberts Paper Co., 901 S.W.2d 593, 599-600 (Tex. App. - Amarillo 1995, no writ) ( that non-solicitation covenants prevent the employee from soliciting customers of the employer and effectively restrict competition); see also Guy Carpenter & Co. v. Provenzale, 334 F.3d 459, 464-65 (5th Cir. 2003) (); Rimkus Consulting Grp., Inc. v. Cammarata, 255 F.R.D. 417, 438-39 (S.D. Tex. 2008) (). Agreements not to disclose trade secrets and confidential information are not expressly governed by the Act. See, e.g., CRC-Evans Pipeline Int'l, Inc. v. Myers, 927 S.W.2d 259, 265 (Tex. App. - Houston [1st Dist.] 1996, no writ); Zep Mfg. Co. v. Harthcock, 824 S.W.2d 654, 663 (Tex. App. - Dallas 1992, no writ); see also Olander v. Compass Bank, 172 F. Supp.2d 846, 852 (S.D. Tex. 2001).
USI presented evidence that Albrecht is engaged in ongoing communications with at least one USI customer with whom he had personal contact and about whom he received confidential information while at USI, and attempting to transfer that account to Jenkins Insurance Group, his current employer and a competitor of USI. USI asserts that Albrecht's conduct poses an imminent and irreparable threat to USI for which no adequate remedy at law...
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