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Loumac Distributors - U.S. LBM, LLC v. Luongo

United States District Court, M.D. Florida, Fort Myers Division

September 12, 2019

LOUMAC DISTRIBUTORS - U.S. LBM, LLC, a Delaware Limited Liability Company, Plaintiff,
v.
LOUIS LUONGO, III, ALL GLASS & WINDOWS, LLC, DIRECT WINDOW & DOOR SUPPLY, INC. and AGW SRQ, INC., Defendants.

          OPINION AND ORDER [1]

          Sheri Polster Chappell, Judge

         This matter comes before the Court on Defendants All Glass & Windows LLC, Direct Window & Door Supply Inc., and AGW SRQ Inc.'s Partial Motion to Dismiss Count IV (Doc. 63) filed on July 24, 2019.[2] Plaintiff filed a Response in Opposition (Doc. 71) and Defendants replied (Doc. 74). For the reasons below, the Motion is granted in part and denied in part with leave to amend.

         BACKGROUND

         This action arises from an employment relationship gone sour. These facts are based on the Amended Complaint (Doc. 52), which the Court must accept as true at this stage of litigation: LouMac Distributors - U.S. LBM, LLC (“LouMac”) is a leading building material distributor in Southwest Florida, which is a highly competitive industry. LouMac's success depends largely on its trade secrets and proprietary and confidential information, as well as the relationships and good will is has developed with customers, suppliers, and vendors. Louis Luongo, III was formerly employed by LouMac as Executive Sales Manager pursuant to an Employment Agreement that contains restrictive covenants. In his position, Luongo was entrusted with LouMac's trade secrets and confidential and proprietary information. In addition, Luongo was one of the previous owners of LouMac Distributors, Inc., and one of the original majority founders of that corporation. That corporation's assets were purchased by Plaintiff in September 2015 pursuant to an Asset Purchase Agreement (“APA”), which also contains restrictive covenants.

         LouMac terminated Luongo's employment as an Executive Sales Manager on February 12, 2018. Thereafter, Luongo went to work for Direct Window, All Glass, and/or AGW SRQ, Inc. (hereinafter “Defendants”), and breached his duties to LouMac by misappropriating and using LouMac's trade secrets and confidential and proprietary information with which he was entrusted. Upon information and belief, after leaving LouMac, Luongo immediately began secretly diverting business from LouMac to Defendants in breach of the employment agreement and APA. And Defendants encouraged and facilitated Luongo and conspired with Luongo to hide their relationship from LouMac in the market. This activity caused irreparable harm and damages to LouMac and significantly damaged LouMac's ability to compete in the Southwest Florida market.

         Plaintiff has filed a seven-count Amended Complaint (Doc. 52) but only one count is at issue here - Count IV for conversion against all Defendants. Defendants have answered all the other counts. (Docs. 56, 57).

         STANDARD OF REVIEW

         Federal Rule of Civil Procedure 12(b)(6) allows a defendant to move to dismiss a pleading for “failure to state a claim upon which relief may be granted.” Fed.R.Civ.P. 12(b)(6). “To survive a motion to dismiss [under Rule 12(b)(6)], a complaint must contain factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Although this pleading standard “does not require ‘detailed factual allegations,' . . . it demands more than an unadorned the defendant-unlawfully-harmed-me accusation.” Id.(quoting Twombly, 550 U.S. at 555). The pleading must contain “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555.

         When deciding a Rule 12(b)(6) motion, a court must accept well-pleaded allegations of a complaint as true, but it is not bound to accept legal conclusions couched as facts. Iqbal, 556 U.S. at 678. And “where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged- but it has not ‘show[n]'- ‘that the plaintiff is entitled to relief.'” Id. (quoting Fed.R.Civ.P. 8(a)(2)). If a plaintiff has not “nudged [his] claims across the line from conceivable to plausible, ” the complaint fails to state claim. Twombly, 550 U.S. at 570.

         DISCUSSION

         A. Failure to State a Claim

          “Under Florida law, the elements of conversion are (1) an act of dominion wrongfully asserted; (2) over another's property; and (3) inconsistent with his ownership therein.” Joe Hand Promotions, Inc. v. Creative Entm't, LLC, 978 F.Supp.2d 1236, 1241 (M.D. Fla. 2013). Defendants argue that Count IV never alleges that Defendants wrongfully asserted such dominion and control over LouMac's trade secrets and confidential proprietary information, only that Luongo did so. Plaintiff responds that its allegations are sufficient (with no citation to authority) because it alleges that Defendants “knowingly accepted the benefits of Luongo's wrongful conduct” and “directly encouraged, participated in, and induced Luongo's breach of his legal obligations to LouMac. . . .” (Doc. 52 at ¶ 3).

         Even so, Plaintiff does not allege that Defendants asserted dominion and control over LouMac's property, only that they accepted the benefits and participated in Luongo's wrongful conduct. The Court will not read facts into the Amended Complaint that are not specifically alleged, and thus, the Court will dismiss Count IV without prejudice and allow Plaintiff to amend. The Court further notes that Plaintiff alleges that “[a]fter this lawsuit was served, Direct Window, All Glass, and AGW notified LouMac that their relationship with Luongo had been formally terminated and that Luongo no longer had any relationship with Direct Window, All Glass, or AGW.” (Doc. 52 at ¶ 33). Therefore, the Court questions whether Defendants would even still be in possession of any of Plaintiff's property that it should be required to return. Plaintiff should clarify this if it choses to file a second amended complaint.

         B. ...


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