United States District Court, M.D. Florida, Tampa Division
THE HURRY FAMILY REVOCABLE TRUST, SCOTTSDALE CAPITAL ADVISORS CORPORATION, and ALPINE SECURITIES CORPORATION, Plaintiffs,
CHRISTOPHER FRANKEL, Defendant.
VIRGINIA M. HERNANDEZ COVINGTON UNITED STATES DISTRICT JUDGE
matter comes before the Court in consideration of Defendant
Christopher Frankel's Motion to Dismiss All Counts of
Plaintiffs' Second Amended Complaint (Doc. # 68), filed
on May 24, 2019. Plaintiffs the Hurry Family Revocable Trust,
Scottsdale Capital Advisors Corporation, and Alpine
Securities Corporation responded on June 7, 2019 (Doc. # 71),
and the Court held oral argument on July 2, 2019. For the
reasons that follow and those stated during oral argument,
the Motion is denied.
Cayman Securities Clearing and Trading LTD, the Hurry Family
Revocable Trust, Scottsdale Capital Advisors Corporation, and
Alpine Securities Corporation initiated this action against
Frankel on November 21, 2018. (Doc. # 1). The initial
complaint alleged five counts: (1) breach of contract
involving a nondisclosure agreement; (2) violations of the
Defend Trade Secrets Act (DTSA); (3) violations of the
Florida Uniform Trade Secret Act (FUTSA); (4) violations of
the Florida Deceptive and Unfair Trade Practices Act
(FDUTPA); and (5) common law unfair competition.
(Id. at ¶¶ 28-65).
counts relate to the same underlying facts - Plaintiffs
allege that Frankel, a former CEO and consultant to Alpine
Securities, misappropriated confidential information (trade
secrets) from Plaintiffs after the parties' business
relationship ended. (Id. at ¶¶ 11-20).
Frankel allegedly did so to “solicit capital, establish
banking relations, recruit Plaintiffs' clients, and
compete with Plaintiffs' businesses [by] . . . mak[ing] a
bid for a broker-dealer in Chicago.” (Id. at
filed an amended complaint on February 26, 2019, after
learning during discovery that the parties had entered into a
second nondisclosure agreement that superseded the original
nondisclosure agreement. (Doc. # 37). The amended complaint
alleged five counts: (1) breach of contract involving the
original nondisclosure agreement between Cayman Securities,
the Hurry Trust, and Frankel; (2) breach of contract
involving the second nondisclosure agreement between Alpine
Securities, Scottsdale Capital, and Frankel; (3) violations
of the DTSA; (4) violations of the FUTSA; and (5) violations
of the FDUTPA. (Id. at 6-11). Plaintiffs dropped the
common law unfair competition count in the amended complaint.
Court dismissed the amended complaint after hearing oral
argument and determining that Plaintiffs failed to plead
sufficient facts to provide Frankel with notice of the trade
secrets he allegedly misappropriated. (Doc. # 47). The Court
also ruled that the FUTSA claim preempted the FDUTPA claim as
alleged because both claims were based upon the same set of
underlying factual allegations - that Frankel unlawfully used
Plaintiffs' trade secrets after misappropriating
materials containing those secrets. (Id.).
Securities subsequently dropped all counts and the remaining
Plaintiffs filed a second amended complaint alleging four
counts: (1) breach of the original nondisclosure agreement
between the Hurry Trust and Frankel; (2) breach of the second
nondisclosure agreement between Alpine Securities, Scottsdale
Capital, and Frankel; (3) violations of the DTSA; and (4)
violations of the FUTSA. (Doc. # 61 at ¶¶ 32-64).
As a basis for those claims, Plaintiffs identify more than
fifteen specific documents containing trade secrets that
Frankel allegedly misappropriated by forwarding materials
from his work email account to his personal email account.
(Id.). Frankel subsequently filed this Motion to
Dismiss All Counts of Plaintiffs' Second Amended
Complaint on May 24, 2019. (Doc. # 68). The Hurry Trust,
Scottsdale Capital, and Alpine Securities have responded,
(Doc. # 71), and the Motion is now ripe.
argues that all counts in the second amended complaint should
be dismissed under Federal Rule of Civil Procedure 12(b)(6)
for two reasons. First, Plaintiffs “failed to identify
how and when Frankel misappropriated their allegedly
confidential information.” (Doc. # 68 at 2). Second,
Plaintiffs' “conclusory allegations upon
information and belief do not meet the plausibility
requirement for statutory and contractual claims based on
misappropriation.” (Id. at 5). Frankel also
argues that, even if the Court does not dismiss the DTSA
count, “there is no factual support for
[Plaintiffs'] allegations that [Plaintiffs] are entitled
to exemplary damages” under the DTSA. (Id. at
the second amended complaint includes four counts, each count
is predicated on a finding that Frankel misappropriated
Plaintiffs' confidential information/trade secrets. (Doc.
# 61 at ¶¶ 32-64). The same analysis is used when
considering both statutory and contractual claims for
misappropriation of trade secrets. See Am. Registry, LLC
v. Hanaw (Am. Registry I), No.
2:13-cv-352-FtM-29UAM, 2013 WL 6332971, at *2-4 (M.D. Fla.
Dec. 5, 2013)(dismissing both contractual and statutory
claims alleging misappropriation of trade secrets because
“the [statutory] allegations suffer from the same
deficiencies as the previous [breach of contract]
Plaintiffs' Alleged Failure to Identify How and When
Frankel Misappropriated Protected Information
state a claim for trade secret misappropriation under the
FUTSA, a plaintiff must allege: (1) it possessed secret
information and took reasonable steps to protect its secrecy;
and (2) the secret it possessed was misappropriated, either
by one who knew or had reason to know that the secret was
improperly obtained or by one who used improper means to
obtain it. Audiology Distrib., LLC v. Simmons, No.
8:12-cv-02427-JDW-AEP, 2014 WL 12620835, at *1 (M.D. Fla.
Jan. 8, 2014). Courts in the Eleventh Circuit will not
dismiss a complaint alleging misappropriation of trade
secrets when the alleged trade secrets are identified with
sufficient particularity “to put [a defendant] on
notice as to what material formed the basis for [the]
claims.” DynCorp Int'l v. AAR Airlift Grp.,
Inc., 664 Fed.Appx. 844, 849-50 (11th Cir. 2016). Still,
the complaint must contain factual allegations, taken as
true, to show that the misappropriated information
constitutes a trade secret within the meaning of the FUTSA.
Id. at 850.
asserts that Plaintiffs “have not met
DynCorp's requirement of specifically
identifying how and when the information was
misappropriated.” (Doc. # 68 at 6). However, that
assertion misconstrues the holding in DynCorp. The
court did not hold that a plaintiff must allege a specific
time period when the defendant divulged the trade secrets,
the people to whom the defendant divulged it, or the manner
in which the defendant stored the materials. While those
allegations may be pled to ...