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Workman Securities v Philip Roy

Workman Securities v Philip Roy

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Published by Seth Leventhal

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Published by: Seth Leventhal on Jan 12, 2010
Copyright:Attribution Non-commercial


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WORKMAN SECURITIESCORPORATION, a Minnesota corporation,and ROBERT VOLLBRECHT, a Minnesotaresident,Plaintiffs,v.PHILLIP ROY FINANCIAL SERVICES,LLC, a Florida limited liability company, andPHILLIP ROY FINANCIALCONSULTANTS, LLC, a Florida limitedliability company,Defendants.Case No. 09-CV-1723 (PJS/JSM)MEMORANDUM OPINION AND ORDERGRANTING MOTION TO DISMISSChristopher P. Parrington, Benjamin R. Skjold, and Ryan P. Myers, SKJOLDBARTHEL, P.A., for plaintiffs.Douglas L. Elsass and Adam A. Gillette, FRUTH, JAMISON & ELSASS, PLLC,for defendants.Plaintiffs Workman Securities Corporation (“Workman”) and Robert Vollbrecht bringthis declaratory-judgment action against defendants Phillip Roy Financial Services, LLC(“Phillip Services”) and Phillip Roy Financial Consultants, LLC (“Phillip Consultants”). (TheCourt will sometimes refer to the two defendants together as “Phillip Roy.”) This matter isbefore the Court on Phillip Roy’s motion to dismiss for lack of personal jurisdiction. Phillip Royalso argues that, even if the Court does have jurisdiction, the Court should abstain fromexercising that jurisdiction under
 Brillhart v. Excess Insurance Co. of America
, 316 U.S. 491(1942). Finally, Phillip Roy contends that, if the Court denies its motion to dismiss, the Courtshould transfer this case to the United States District Court for the Middle District of Florida.For the reasons that follow, the Court grants Phillip Roy’s motion to dismiss for lack of personal
Case 0:09-cv-01723-PJS-JSM Document 29 Filed 01/11/10 Page 1 of 12
The complaint incorrectly alleges that Phillip Services is a Florida limited-liabilitycompany.
Gillette Aff. Ex. 3, Sept. 11, 2009 [hereinafter “First Gillette Aff.”] (printout fromthe Florida State Department’s website indicating that Phillip Services is a foreign LLCincorporated in Delaware).
Leonard initially worked for Phillip Roy’s predecessor, Phil & Associates. Compl. ¶ 12.All references to Phillip Roy are intended to include its predecessors.-2- jurisdiction, rendering moot Phillip Roy’s arguments about
abstention and transfer of venue.I. BACKGROUNDWorkman, a Minnesota corporation with its principal place of business in Minnesota, is asecurities brokerage and dealership company. Compl. ¶¶ 1, 7. Vollbrecht, a resident of Minnesota, is the president of Workman. Compl. ¶ 2; Vollbrecht Aff. ¶ 1. Phillip Services, aDelaware limited-liability company, sells insurance and financial-planning services.
Compl. ¶ 9; Wasserman Aff. ¶ 3. Phillip Consultants, a Florida limited-liability company, is thewholesale division for Phillip Services’ retirement investments. Compl. ¶¶ 4, 10. Both PhillipServices and Phillip Consultants have their principal place of business in Sarasota, Florida.Compl. ¶¶ 3-4. For several years, Phillip Roy and Workman had an informal arrangement underwhich the companies’ agents helped to sell each other’s products. Vollbrecht Aff. ¶¶ 4-5, 7-8.This action arises out of the relationship between Workman and a sales representativenamed John Leonard, who is a resident of Florida. Compl. ¶ 12. Leonard worked as a salesrepresentative for Phillip Roy in Florida.
In 2004, Leonard and Phillip Roy entered into anagreement under which Leonard agreed to maintain the confidentiality of certain customer lists,trade secrets, and proprietary information. Compl. ¶ 14 & Ex. A. The confidentiality agreementbetween Phillip Roy and Leonard is governed by Florida law. Compl. Ex. A ¶ 6.
Case 0:09-cv-01723-PJS-JSM Document 29 Filed 01/11/10 Page 2 of 12
-3-At some point — the complaint does not say exactly when — Leonard became aregistered representative of Workman. Compl. ¶ 19. While working for Workman in Florida,Leonard received client referrals from Phillip Roy. Compl. ¶ 20. Leonard’s work for Workmanangered Phillip Wasserman, the president and sole member of both Phillip Services and PhillipConsultants. Wasserman apparently concluded that, in the course of representing Workman,Leonard was violating his confidentiality agreement with Phillip Roy.In early 2009, Wasserman contacted Workman on several occasions — sometimesthrough profanity-laced e-mails — and demanded that Workman terminate its affiliation withLeonard. Compl. ¶¶ 27-28; Wasserman Decl. ¶¶ 2-3, Oct. 29, 2009. When Workman failed todo so, Wasserman threatened litigation and demanded money from Workman. Vollbrecht Aff. ¶¶ 10-11, 13-14 & Exs. B, D. Wasserman also sent an e-mail to a customer of Workman in June2009; in that e-mail, Wasserman accused Leonard of fraud and alleged that Workman “had [beensued in] many class action suits because of the full lack of liquidity.” Vollbrecht Aff. Ex. E.When the customer asked Wasserman not to contact him again, Wasserman responded that “[t]henext contact wil[l] be a supeona [sic] from our attorney.” Vollbrecht Aff. Ex. E.On July 2, 2009, Wasserman sent an e-mail to Leonard and attached a copy of acomplaint that Wasserman said would soon be filed in a Florida state court. In that draftcomplaint, Phillip Roy sought recovery for various business torts and breaches of contract fromWorkman, Vollbrecht, Leonard, and two other individuals. Compl. ¶ 31 & Ex. B. A few daysafter learning of the draft complaint, Workman preemptively filed this lawsuit seeking adeclaration that it had not violated either the Minnesota or Florida Trade Secrets Act and that ithad not tortiously interfered with any of Phillip Roy’s contracts. On the same day that Workman
Case 0:09-cv-01723-PJS-JSM Document 29 Filed 01/11/10 Page 3 of 12

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