Electronically FILED by Superior Court of California, County of Los Angeles on 05/22/2020 05:10 PM Sherri R.

Carter, Executive Officer/Clerk of Court, by C. Monroe,Deputy Clerk

20STCV19659
Assigned for all purposes to: Stanley Mosk Courthouse, Judicial Officer: Elaine Lu

1 Christopher Grivakes, State Bar No. 127994

Damion Robinson, State Bar No. 262573
2 AFFELD GRIVAKES LLP
2049 Century Park East, Suite 2460
3 Los Angeles, California 90067
Tel.: (310) 979-8700
4 Fax:(310) 979-8701
Email: cg@agzlaw.com
5
Attorneys for Plaintiff
6 MARK EDWARD PARTNERS
7

8
SUPERIOR COURT OF CALIFORNIA
9
COUNTY OF LOS ANGELES
10

11
MARK EDWARD PARTNERS, a New York Case No.
12 Limited Liability Company,
13 Plaintiff, COMPLAINT for:
14 v. 1. Breach of Contract;
2. Breach of Implied Covenant of Good
15 KRIS HAMBURGER, an individual; HUB Faith and Fair Dealing;
INTERNATIONAL INSURANCE 3. Breach of Fiduciary Duty;
16 SERVICES, INC., a California corporation; 4. Intentional Misrepresentation;
and DOES 1-10. 5. Misappropriation of Trade Secrets
17 (Civil Code §3426.1);
6. Quasi-contract.
18 Defendants.
DEMAND FOR JURY TRIAL
19

20

21

22

23

24

25

26

27

28
 1
PARTIES
2 1. Plaintiff Mark Edward Partners, LLC (“MEP” or “Plaintiff”) is a limited liability
3 company, formed under the laws of the State of New York and doing business in Los Angeles,
4 California.
5 2. Plaintiff is informed and believes that Defendant Kris Hamburger (“Hamburger”)
6 is an individual residing in Los Angeles County.
7 3. Plaintiff is informed and believes that Defendant HUB International Insurance
8 Services, Inc. (“HUB”) is a California corporation.
9 4. Plaintiff is unaware of the true names and capacities of Defendants DOES 1
10 through 10, inclusive, whether individual, corporate, associate, or otherwise, and therefore sues said
11 Defendants under such fictitious names. Plaintiff is informed and believes, and thereon alleges,
12 that each of the defendants named herein as a DOE is legally responsible for the acts,
13 occurrences and events alleged herein. Plaintiff will amend this Complaint to insert the true
14 names and capacities of said DOE defendants when that information has been ascertained.
15 5. Plaintiff is informed and believe that DOES 1-5 are alter egos of HUB, that there
16 is a unity of interest and identity amongst HUB and DOES 1-5, and that it would be unjust,
17 inequitable and promote a fraud if the acts and liabilities in question in this case were not
18 treated as those of all of the defendants collectively.
19 JURISDICTION AND VENUE
20 6. This Court has jurisdiction and venue over this action because, Plaintiff is
21 informed and believes, Hamburger entered into the contract In Los Angeles, California, agreed
22 to jurisdiction in Los Angeles, California; Defendants committed the acts alleged herein in Los
23 Angeles, California; and Defendants conduct business in Los Angeles, California.
24 FACTUAL ALLEGATIONS
25 A. Plaintiff Employed Hamburger As Its Executive Vice-President
26 7. MEP is an independent insurance brokerage licensed in all 50 states which had,
27 at all relevant times, approximately 35 employees.
28 8. In or about July 2019, MEP commenced discussions with Hamburger to employ
-2-
COMPLAINT
 1 him as its Executive Vice-President responsible for business production and day-to-day
2 management of Programs, i.e., accounts with multiple participants.
3 9. On August 7, 2019, Hamburger executed a written offer of employment from
4 MEP which set forth the terms of his employment as Plaintiff’s Executive Vice-President,
5 including a three-year term (“Letter Agreement”). A copy of the Letter Agreement is attached
6 hereto as Exhibit A. On August 17, 2019, Hamburger also executed a written agreement,
7 providing that during his employment by MEP he would not compete with Plaintiff, solicit its
8 customers, or use confidential information (“Confidentiality Agreement”). A copy of executed
9 Confidentiality Agreement is attached hereto as Exhibit B. The Letter Agreement and
10 Confidentiality Agreement are collectively referred to as the “Employment Contract.”
11 10. At all relevant times, MEP directed Hamburger in his work, allocated firm
12 resources to assist him, provided him with an office and office equipment, provided him with
13 an email account and business cards, paid for and processed his insurance licenses which
14 reflected his affiliation with MEP, paid for his expenses, and advanced him money against
15 commissions. At all relevant times, Hamburger held himself out as an employee of Plaintiff.
16 B. Plaintiff Was Broker Of Record For The Accounts
17 11. During his employment with MEP, Hamburger was responsible for the accounts
18 of Namdar Realty Group (“Namdar”), Middleneck Management (“Middleneck”), Henpeck
19 Management (“Henpeck”), and PetroAlpha Energy LLC (“PetroAlpha”) (collectively, the
20 “Accounts”). Each of these Accounts executed Broker of Record letters appointing MEP as
21 their insurance representative and producer of record.
22 12. As Broker of Record for the Accounts, MEP devoted substantial resources and
23 undertook substantial efforts with respect to the Accounts, including the day-to-day servicing
24 of existing programs; the gathering, updating, correcting and organizing of data for the
25 preparation of submissions; the preparation of submissions to underwriters; the presentation of
26 submissions to underwriters; and the negotiations with underwriters.
27 13. MEP allocated substantial company-wide resources to servicing the day-to-day
28 needs and insurance placements of the Accounts. Hamburger was responsible for overall
-3-
COMPLAINT
 1 management of the programs. Mark Freitas and Andrew Guerin of MEP performed
2 supervisory activities and coordinated resources. Robert Hass acted as the primary account
3 executive. Carl Spaulding was responsible for negotiations with insurance carriers. JC
4 Contreras was responsible for all claims. Vani Elana was responsible for processing day-to-
5 day service requests, completing submissions, and managing data. Kathryn Ingram provided
6 accounting support. William Cosgrove provided technical resources for the insurance
7 placements on the Petro-Alpha account.
8 C. Plaintiff Developed Confidential Information For The Accounts
9 14. In the course of servicing these accounts, MEP developed confidential and
10 proprietary information, including: (i) the insurance submissions and the data contained
11 therein relating to the Accounts; (ii) the identities of the underwriters who responded favorably
12 to the submissions; (iii) the identities of the wholesalers who were marketing the insurance
13 programs to underwriters; and (iv) the terms and conditions of the insurance policies available
14 to and selected by the Accounts (collectively, “Confidential Information”).
15 15. MEP was careful to protect the Confidential Information. All of its employees
16 were required to sign non-disclosure agreements similar to the one Hamburger signed,
17 prohibiting them from using or disclosing Confidential Information. MEP did not share the
18 Confidential Information with any third parties. Industry custom and practice is that
19 underwriters and wholesalers will regard broker submissions as confidential, and will require a
20 replacement broker to prepare a new submission using their own data.
21 Namdar-Middleneck
22 16. Namdar owns and operates various commercial real estate assets, including
23 shopping centers. Middleneck is a property management company owned by Namdar which
24 manages real estate assets. The Namdar-Middleneck insurance program includes 339
25 properties across the country with a total insured value in excess of $1.8 billion.
26 17. Commencing in late 2019, MEP developed confidential and proprietary
27 information in connection with the renewal submission and placement of the Namdar-
28 Middleneck account which was due to renew on or about April 9, 2020.
-4-
COMPLAINT
 1 18. The renewal process required updating the exposure information for the program
2 participants, which entailed a detailed review and update of all holdings of Namdar-
3 Middleneck and all subsidiaries requiring coverage. In addition, the loss information for
4 historical programs needed to be completely overhauled, a tedious process that required claims
5 professionals to go line by line through historical losses to eliminate the locations that were no
6 longer part of the portfolio and build a new loss run underwriters could use to help them with
7 their program pricing and overall evaluation of the risk.
8 19. Once the exposure and loss information were updated, MEP prepared detailed
9 underwriting submissions, including the updated data, specific coverage requirements desired
10 in the programs, effective dates, payment terms, and deductible options MEP sought to
11 negotiate on behalf of the client with the marketplace. Based on these submissions, MEP then
12 contacted underwriters and scheduled meetings to explain the risk to potential underwriters and
13 answer questions. After MEP receive preliminary quotes and indications of interest, MEP
14 continued to work with underwriters to refine their offers.
15 20. As of March 31, 2020, there were three underwriters negotiating for the Namdar-
16 Middleneck program.
17 Henpeck-Hollistar
18 21. Henpeck is a property management company which manages residential and
19 commercial properties. Henpeck is now known as Hollistar Principal Management
20 (“Hollistar”) (referred to herein as “Henpeck-Hollistar”). The Henpeck-Hollistar insurance
21 program includes 522 properties across the country with a total insured value of $6.9 billion.
22 22. The Henpeck program was initially due to renew on August 30, 2019. Almost
23 no work had been done to prepare the renewal submission before MEP’ appointment as Broker
24 of Record on August 7, 2019. MEP called on high-level relationships to obtain an extension of
25 the existing insurance program until September 30, 2019. However, the extension did not
26 provide nearly enough time to build a renewal submission.
27 23. Commencing in the Fall of 2019, MEP expended substantial effort and resources
28 to develop Confidential Information in connection with a new submission for the Henpeck-
-5-
COMPLAINT
 1 Hollister program. MEP compiled a schedule for over 500 locations doing flood mapping and
2 zoning, construction information and square footages, which information was required for
3 underwriters to properly underwrite the risk. Plaintiff utilized the services of a wholesale
4 broker, Risk Placement Services, Inc. (“RPS”), to market the insurance submission to
5 underwriters in London and domestic markets and facilities.
6 24. As of March 31, 2020, there were several underwriters negotiating for the
7 Henpeck-Hollistar program.
8 Petro-Alpha
9 25. Petro-Alpha is a private capital fund that lends money to oil and gas producers
10 with existing production and proven reserves. In 2019 and early 2020, MEP was developing a
11 credit insurance program to protect the capital investments.
12 26. MEP developed an insurance submission containing Confidential Information,
13 using underwriting data obtained from a data room provided by Petro-Alpha. On December
14 19, 2019, Hamburger wrote an email to MEP’ President Mark Freitas which states “Pursuant to
15 our conversation in London, in addition to mirroring the same sentiment with Andrew this
16 morning per your instructions, this is email is to confirm that Petro Alpha has ordered us to
17 bind coverage as soon as possible for their policy covering the initial tranche of 180MM. This
18 will commence eminently [sic] as they have already begun to find [sic] their first transaction in
19 this tranche. As you’re aware we believe this to be around 1.559MM in commission, prior to
20 any fees we may deem applicable for non placement services.”
21 D. Misappropriation of Confidential Information
22 27. In early 2020, while MEP was in the process of developing submissions for the
23 Accounts and Hamburger was still employed by MEP, Hamburger entered into a conspiracy
24 with HUB to move the Accounts to HUB.
25 28. Hamburger and HUB also agreed to acquire and use the Confidential
26 Information so that they could quickly bind coverage for the Accounts and generate
27 commissions for their own benefit and to the exclusion of MEP without having to recreate the
28 Confidential Information. On information and belief, as part of this conspiracy, HUB offered
-6-
COMPLAINT
 1 Hamburger a better deal than the 35% commission he had agreed to with MEP.
2 29. On or about March 31, 2020, in furtherance of the conspiracy and agreement,
3 Namdar appointed HUB as Broker of Record while Hamburger was a paid employee of MEP.
4 On information and belief, at or about the same time, similar authorizations were provided to
5 HUB on the Henpeck-Hollistar and Petro-Alpha accounts.
6 30. On or about March 31, 2020, MEP discovered that Hamburger was transitioning
7 the Accounts to HUB. On April 1, 2020, MEP terminated Hamburger for breach of his
8 fiduciary and contractual duties.
9 31. On information and belief, Hamburger and HUB secured coverage for all of the
10 Accounts using Confidential Information of MEP.
11 32. At all relevant times, HUB knew that Hamburger was employed as an Executive
12 Vice-President of MEP, and that while employed by MEP he was prohibited from competing
13 with Plaintiff, soliciting accounts for which Plaintiff was Broker of Record, and acquiring and
14 using the Confidential Information.
15 33. As a result of the foregoing conduct of Hamburger and HUB, Plaintiff suffered
16 harm in the form of lost commissions in an amount to be proven at trial, but in excess of
17 $3,000,000.
18 FIRST CAUSE OF ACTION
19 (Breach of Contract – Against Hamburger)
20 34. Plaintiff repeats and re-alleges the allegations contained in the preceding
21 paragraphs and incorporates them by reference as though fully set forth herein.
22 35. Plaintiff and Hamburger entered into the Letter Agreement and the
23 Confidentiality Agreement. These agreements required Hamburger, among other things, to
24 devote his full time best efforts to Plaintiff, not to compete with Plaintiff while still employed
25 by Plaintiff, not to solicit Plaintiff’s customers while still employed by Plaintiff, and not to use
26 the Confidential Information for other than legitimate business purposes of Plaintiff.
27 36. Plaintiff did all, or substantially all of the significant things that the contract
28 required it to do, or was excused from having to do those things.
-7-
COMPLAINT
 1 37. All conditions required for Hamburger’s performance had occurred.
2 38. Hamburger breached the contract by competing with Plaintiff while employed
3 by Plaintiff, soliciting the Accounts while employed by Plaintiff, and acquiring and using
4 Confidential Information of Plaintiff for purposes other than legitimate business of Plaintiff.
5 39. The breach of contract was a substantial factor in causing Plaintiff harm in an
6 amount to be proven at time of trial, but in excess of $3,000,000.
7 SECOND CAUSE OF ACTION
8 (Breach of Implied Covenant of Good Faith and Fair Dealing – Against Hamburger)
9 40. Plaintiff repeats and re-alleges the allegations contained in the preceding
10 paragraphs and incorporates them by reference as though fully set forth herein.
11 41. Plaintiff and Hamburger entered into the Employment Contract.
12 42. Plaintiff did all, or substantially all of the significant things that the contract
13 required it to do, or was excused from having to do those things.
14 43. All conditions required for Hamburger’s performance had occurred.
15 44. Hamburger unfairly interfered with Plaintiff’s right to receive the benefits of the
16 contract.
17 45. Plaintiff was harmed by Hamburger’s conduct in an amount to be proven at time
18 of trial, but in excess of $3,000,000.
19 THIRD CAUSE OF ACTION
20 (Breach of Fiduciary Duty – Against All Defendants)
21 46. Plaintiff repeats and re-alleges the allegations contained in the preceding
22 paragraphs and incorporates them by reference as though fully set forth herein.
23 47. As an Executive Vice President and employee of Plaintiff, Hamburger owed
24 Plaintiff a fiduciary duty of loyalty and care.
25 48. Hamburger breached his duty of loyalty and care by competing with Plaintiff
26 while employed by Plaintiff, soliciting the Accounts while employed by Plaintiff, and
27 acquiring and using Confidential Information, all for the benefit of himself and a competitor.
28 49. Plaintiff did not give consent to Hamburger’s actions.
-8-
COMPLAINT
 1 50. HUB conspired with and aided and abetted Hamburger, by agreeing to become
2 Broker of Record for the Accounts while Hamburger was employed by Plaintiff, becoming
3 Broker of Record for the Accounts while Hamburger was employed by Plaintiff, and by
4 acquiring and using the Confidential Information for its own benefit and to the detriment of
5 Plaintiff.
6 51. Plaintiff was harmed as a result of the breach of fiduciary duty.
7 52. Defendants’ actions were a substantial factor in causing Plaintiff’s harm.
8 53. Plaintiff has been damaged in an amount to be proven at the time of trial, but in
9 excess of $3,000,000.
10 54. Plaintiff is entitled to recover punitive damages against Defendants because they
11 acted with fraud, oppression, or malice. HUB’s actions were authorized, approved or ratified
12 by an officer, director or managing agent.
13 FOURTH CAUSE OF ACTION
14 (Intentional Misrepresentation – Against Hamburger)
15 55. Plaintiff repeats and re-alleges the allegations contained in the preceding
16 paragraphs and incorporates them by reference as though fully set forth herein.
17 56. Hamburger represented in the Employment Contract that he would remain with
18 Plaintiff for three years, would not compete with Plaintiff, would not solicit the Accounts, and
19 would not acquire and use Confidential Information.
20 57. Hamburger’s representations were false. He intended to obtain an advance from
21 Plaintiff, and have Plaintiff devote substantial resources to preparing the submissions, while at
22 the same time looking for a sweeter deal from another broker so he could transfer the Accounts
23 and keep his advances.
24 58. Hamburger intended for Plaintiff to rely on his representations to induce it to
25 enter into the Employment Contract and devote substantial resources to the Accounts.
26 59. Plaintiff was harmed as a result of Hamburger’s misrepresentations.
27 60. Hamburger’s misrepresentations were a substantial factor in causing Plaintiff to
28 suffer harm in an amount to be proven at trial, but in excess of $3,000,000.
-9-
COMPLAINT
 1 61. Plaintiff is entitled to punitive damages since Hamburger acted with oppression,
2 fraud and malice.
3 FIFTH CAUSE OF ACTION
4 (Misappropriation of Trade Secrets – Against All Defendants)
5 62. Plaintiff repeats and re-alleges the allegations contained in the preceding
6 paragraphs and incorporates them by reference as though fully set forth herein.
7 63. Plaintiff developed Confidential Information, consisting of the following:
8 (i) The insurance submissions and the data contained therein relating to the
9 Accounts, including but not limited to updated loss information, new loss run information,
10 flood mapping and zoning, construction information and square footages, specific coverage
11 requirements, effective dates, payment terms, deductible options;
12 (ii) The identities of the underwriters who responded favorably to the
13 submissions to the marketplace;
14 (iii) The identities of the wholesalers who were marketing the insurance
15 programs to underwriters; and
16 (iv) The terms and conditions of the insurance policies negotiated for the
17 Accounts.
18 64. The Confidential Information constituted trade secrets at the time of the
19 misappropriation.
20 65. Defendants improperly acquired and used the trade secrets for their own benefit
21 and without compensation to Plaintiff in order to secure the Accounts to themselves and to
22 negotiate and bind coverage on behalf of the Accounts.
23 66. Defendants’ acquisition and use of the trade secrets was a substantial factor in
24 causing harm to Plaintiff, and unjust enrichment to Defendants, in an amount to be proven at
25 trial, but in excess of $3,000,000.
26 67. Plaintiff is entitled to recover punitive damages against Defendants because they
27 acted with willfully and maliciously. HUB’s actions were authorized, approved or ratified by
28 an officer, director or managing agent.
- 10 -
COMPLAINT
 1 SIXTH CAUSE OF ACTION
2 (Quasi-Contract – Against All Defendants)
3 68. Plaintiff repeats and re-alleges the allegations contained in the preceding
4 paragraphs and incorporates them by reference as though fully set forth herein.
5 69. Plaintiff conferred a benefit on Defendants by developing the Confidential
6 Information which Defendants used to finalize the placement of the insurance for the Accounts.
7 70. Defendants had knowledge of the benefit.
8 71. Defendants accepted or retained the benefit conferred.
9 72. The circumstances are such that it is unjust for the Defendants to retain the
10 benefit without compensating Plaintiff.
11 73. Plaintiff should be compensated in an amount to be proven at the time of trial,
12 but in excess of $3,000,000.
13 PRAYER FOR RELIEF
14 WHEREFORE, Plaintiff prays for judgment against Defendants as follows:
15 1. On All Causes Of Action: For compensatory damages in an amount according to
16 proof, but in excess of $3 million; prejudgment interest at the maximum legal rate; legal costs as
17 provided by law; and any other and further relief as the Court may deem just and proper;
18 2. On The Third, Fourth And Fifth Causes Of Action: For punitive damages.
19 3. On The Fifth Cause of Action: For an injunction against any further use of
20 Plaintiff’s Confidential Information and for attorney’s fees based on Defendants’ willful
21 misappropriation pursuant to Civil Code § 3426.4
22

23 DATED: May 22, 2020 AFFELD GRIVAKES LLP

24
By: Christopher Grivakes
25 Christopher Grivakes

26 Attorneys for plaintiff MARK EDWARD

PARTNERS
27

28
- 11 -
COMPLAINT
 1
JURY TRIAL DEMANDED
2
Plaintiff demands trial by jury of all issues so triable.
3

4
DATED: May 22, 2020 AFFELD GRIVAKES LLP
5

6 By: Christopher Grivakes

Christopher Grivakes
7
Attorneys for plaintiff MARK EDWARD
8 PARTNERS
9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28
- 12 -
COMPLAINT