Brown & Brown, Inc. v. Cola

745 F. Supp. 2d 588, 2010 U.S. Dist. LEXIS 106167, 2010 WL 3928589
CourtDistrict Court, E.D. Pennsylvania
DecidedOctober 4, 2010
DocketCivil Action 10-3898
StatusPublished
Cited by66 cases

This text of 745 F. Supp. 2d 588 (Brown & Brown, Inc. v. Cola) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brown & Brown, Inc. v. Cola, 745 F. Supp. 2d 588, 2010 U.S. Dist. LEXIS 106167, 2010 WL 3928589 (E.D. Pa. 2010).

Opinion

MEMORANDUM AND ORDER

RONALD L. BUCKWALTER, Senior District Judge.

Currently pending before the Court are: (1) Defendant Ryan Tola’s Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2); and (2) Defendants Robert Cola, Ryan Tola, and Doyle Alliance Group’s (collectively “all Defendants”) Motion to Dismiss the Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). For the following reasons, Defendant Tola’s Motion to Dismiss is denied and the Motion by all Defendants to Dismiss is granted in part and denied in part.

I. FACTUAL BACKGROUND

According to the facts set forth in the Complaint, Plaintiff Brown & Brown, Inc. (“Brown & Brown”) is a national insurance brokerage and service company. (Compl. ¶ 13.) Brown & Brown and its subsidiaries, including Brown & Brown of Pennsylvania, Inc. (“Brown-PA”) based in Pennsylvania, and Grinspec, Inc. (“Grinspec”) based in New Jersey (collectively “Plaintiffs”), offer a broad range of insurance and reinsurance products and services, as well as risk management, third-party administration, insurance consulting, and other insurance-related services to both the public and private sectors. (Id. ¶¶ 13, 15.) One of the most important ways that Plaintiffs invest in their critical client relationships is through the training and development of their brokers and producers, who are provided with detailed confidential and proprietary information about Plaintiffs’ insurance services, business strategies, pricing, and customers. (Id. ¶ 17.) According to the Complaint, were such information to be acquired by a competitor, Plaintiffs would suffer an unfair competitive disadvantage and would face severe damage to their business operations. (Id. ¶ 18.) The obligation of brokers and producers to safeguard Plaintiffs’ business interests and confidences is detailed in an Employee Handbook and by individual Employment Agreements, both of which prohibit employees from soliciting or accepting business from clients of Brown & Brown and its subsidiaries, from recruiting or soliciting employees to leave Brown & Brown and its subsidiaries, and from using or disclosing confidential or proprietary information of Brown & Brown and its subsidiaries. (Id. ¶ 19.)

A. Brown & Brown Acquires Doyle Consulting Group, Inc.

As part of its ongoing strategy to acquire smaller, vibrant insurance brokers with potential for growth, Brown & Brown, in 2003, identified a network of related businesses in Pennsylvania and New Jersey as potential partners. (Id. ¶¶ 20-21.) One particular brokerage business — Doyle Consulting Group, Inc. and Doyle Consulting Group of New Jersey, Inc. (collectively “Doyle Consulting”) — was owned by Francis Doyle and Kevin Muffin. Following preliminary discussions, Brown & Brown and Doyle Consulting executed an Asset Purchase Agreement through which Brown & Brown and Brown-PA acquired the assets of Doyle Consulting. (Id. ¶ 22.) Doyle Consulting’s shareholders, Doyle and Muffin, were signatories to this Agreement. (Id. ¶ 23.) Plaintiffs purchased the full range of Doyle Consulting’s assets, including, among other things, Doyle Consulting’s current book of business, tangible personal property, seller contracts, governmental authorizations, records, intangible property such as intellectual property, claims against third parties, and good will. (Id. ¶¶ 24-25.) Plaintiffs’ purchase of in *598 tellectual property assets from Doyle Consulting included all trademarks and trade names, together with all derivatives of such trademarks and trade names. (Id. ¶ 27.) The Asset Purchase Agreement required Doyle Consulting, Doyle, and Mullin to immediately cease using the corporate name “Doyle Consulting” and any other trademarks or trade names, and all derivatives thereof, in their business dealings. (Id. ¶ 28.) In consideration for these assets, Brown & Brown agreed to pay Doyle Consulting an amount in excess of seventeen million dollars. (Id. ¶ 26.) The Asset Purchase Agreement deal closed on February 1, 2004. (Id. ¶ 22.)

After the closing, Francis Doyle joined Brown-PA as its new executive vice president, and several other former Doyle Consulting employees were hired by Brown-PA. (Id. ¶ 31.) All customers and accounts of Doyle Consulting became customers and accounts of Brown & Brown and its subsidiaries. (Id.) Brown & Brown and Brown-PA continued to use the name “Doyle Consulting” as a service mark in dealings with customers, employees, and the industry in general. (Id. ¶ 32.) Indeed, numerous previous employees of Doyle Consulting, including Defendants Robert Cola and Ryan Tola, used and/or continue to use the internet domain name “@doyleeonsultinggroup” or its derivative “@dcgbenefits.eom” in e-mails sent in the ordinary course of performing and/or selling insurance services for Plaintiffs. (Id. ¶ 33.) As a result, customers and others to whom such e-mail communications are directed associate the name “Doyle Consulting” as a service mark affiliated with Brown & Brown and Brown-PA. (Id. ¶ 35.)

B. Plaintiffs’ Hiring of Robert Cola

Prior to February 2004, Defendant Robert Cola was an employee and key broker for Doyle Consulting. (Id. ¶ 36.) On February 1, 2004, Cola entered into a written employment agreement with Brown-PA (“Cola Employment Agreement”), which contained a non-solicitation of customers provision prohibiting him from directly or indirectly soliciting or inducing any existing or prospective customers of Brown & Brown and Brown-PA, or any of their affiliates, both during his employment with Brown-PA and for twenty-four months after the termination of his employment. (Id. ¶¶ 37-38.) This provision did not prevent Cola from working for a competitor, so long as he did not solicit or accept business from Plaintiffs’ customers and he advised any prospective future employers of his contractual non-solicitation obligations. (Id. ¶¶ 40-41.) In addition, Cola expressly agreed not to use or disclose any confidential proprietary information of Brown & Brown or its affiliates both during or after his employment with Brown-PA. Such information included customer lists; insurance carriers; accounts and prospect lists; policy forms and/or rating information; expiration dates; information on risk characteristics; information concerning insurance markets for large or unusual risks; business, selling, and customers strategies and plans; and customer specifications, such as preferences, practices, idiosyncrasies, pricing mínimums and máximums, usual needs, time constraints, names, and addresses. (Id.

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745 F. Supp. 2d 588, 2010 U.S. Dist. LEXIS 106167, 2010 WL 3928589, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brown-brown-inc-v-cola-paed-2010.