Caliber Home Loans Inc v. CrossCountry Mortgage LLC

• Court: District Court, W.D. Washington
• Decided: March 30, 2023
• Docket: 2:22-cv-00616
• Status: Unknown

Opinion

The Honorable Richard A. Jones 1

8 UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WASHINGTON 9 AT SEATTLE

CALIBER HOME LOANS, INC., 11 CASE NO. 2:22-cv-00616-RAJ 12 Plaintiff, v. 13 ORDER 14 CROSSCOUNTRY MORTGAGE, LLC,

15 Defendant. 16 17 18 This matter comes before the Court on Defendant CrossCountry’s motion to 19 dismiss Plaintiff’s complaint. Dkt. # 12. Having considered the submissions of the 20 parties, the relevant portions of the record, and the applicable law, the Court finds that 21 oral argument is unnecessary. For the reasons below, Defendant’s motion to dismiss is 22 GRANTED in part and DENIED in part. 23

25 26 1 I. BACKGROUND 2 Plaintiff Caliber Home Loans, Inc. (“Plaintiff” or “Caliber”) is a Texas-based 3 mortgage brokerage firm. Dkt. # 1 (Complaint) ¶ 5. Plaintiff employs loan originators 4 around the country to sell residential mortgage services to borrowers. Id. ¶ 6. Defendant 5 CrossCountry, LLC (“Defendant” or “CrossCountry”) is an Ohio-based retail mortgage 6 lender and a competitor of Plaintiff. Id. ¶¶ 7-8. 7 Plaintiff alleges that, in an unusually short period of time, Defendant hired over 80 8 employees from Plaintiff who worked in various offices in cities in Washington, Oregon, 9 Texas, Florida, Tennessee, and California. Id. ¶ 13. These individuals had been employed 10 as Branch Managers, Sales Managers, Loan Consultants, and Support Staff for Caliber. 11 Id. Plaintiff also alleges that several more employees plan to depart Caliber to join Cross 12 Country. Id. ¶ 14. 13 Specifically, Plaintiff alleges that CrossCountry put into action a “Master Plan” to 14 raid Plaintiff’s employees and confidential information. Defendant is alleged to have 15 started off their plan by hiring Texas-based Sales Managers Jeannie Martin-Smith and 16 Kathleen Hays early 2021. Id. ¶ 20. From there, Defendant hired eight more Caliber 17 employees before the close of 2021, seven of whom were based in Washington. Id. ¶¶ 21- 18 22. 19 Plaintiffs allege that the “Master Plan” was explained in a December 3, 2021 email 20 sent from Mark Everts’s1 personal email address (evertsmark@gmail.com) to his work 21 email address (mark.everts@caliberhomeloans.com). In the email, Everts wrote of 22 potentially moving from Caliber to CrossCountry, staffing his new office with “at least 4 23 to 8 top producers,” and grooming other high-producing employees for future 24 management roles. Id. ¶ 25, Ex. A (Everts Email). He specifically identified Caliber 25

26 1 At the time, Mark Everts was a Seattle Branch/Sales Manager. 1 employees Hans Illingworth and Michelle Muqtadir as “connections.” Id. As to Muqtadir, 2 Everts explained that she was reluctant to leave her job, but noted that she was “loyal to 3 [Everts] and would for sure jump if she knew [Everts] was on board.” Id. Everts appeared 4 to be directing his thoughts toward someone named Scott, writing that he was “[t]alking 5 turkey with you here Scott.” Id. Everts then asked Scott to keep the information that 6 followed confidential. Id. Everts noted that he had sufficient funds saved for retirement, 7 but was “excited” about this new opportunity. Id. Essentially, Everts indicated that an 8 offer to join CrossCountry would have to be lucrative enough to be worth the “rig-a-ma- 9 roll” of leaving Caliber and “uprooting [his] team and going elsewhere.” Id. He ended the 10 email saying, “I hope that will give you enough and I see by my clock that it is just 5 min. 11 before 5 your time :)” Id. 12 Plaintiff alleges that this email was sent from Everts to CrossCountry’s Executive 13 Vice President Scott Foreman. Id. ¶ 24. Plaintiff characterizes the Everts email as the 14 “Master Plan” that set into motion CrossCountry’s raid of nearly 80 Caliber employees. 15 Id.¶ 25 Defendant, on the other hand, characterizes this email as Everts “record[ing] his 16 thoughts about leaving Caliber to join Cross Country,” and objects to Plaintiff’s 17 allegation that this email was sent from Everts to Foreman, despite sentences being 18 addressed to “Scott” and despite Everts acknowledging that the email was sent 5 minutes 19 before what would have been 5:00 p.m. in Foreman’s office in New Jersey. Dkt. # 12 at 20 3. 21 Just 13 days later on December 16, 2021, CrossCountry extended to Everts a 22 confidential offer of employment as a Branch Manager with a $1,000,000 sign-on bonus 23 and a potential $500,000 loan volume bonus. Id. ¶ 27, Ex. B (CrossCountry Offer Letter). 24 Plaintiff alleges that Everts signed the offer letter on December 19, 2021, although he 25 continued working at Caliber for three more weeks. Id. ¶¶ 28, 30. Plaintiff alleges that, 26 1 during this time period, Everts misappropriated Plaintiff’s confidential info in the form of 2 extensive amounts of borrower information, to then be used at CrossCountry. Id. ¶ 31. On 3 January 11, 2022, one day after he resigned from Caliber, Everts emailed Caliber Loan 4 Officer Danny To with an offer to leave Caliber and join CrossCountry, and referenced a 5 $400,000 sign on bonus. Id. ¶ 34. 6 On January 7, 2022 Hans Illingworth (previously identified by Everts as someone 7 who would consider jumping to CrossCountry) left his employment with Plaintiff to join 8 CrossCountry as a Regional Manager. Id. ¶ 32. On January 10, 2022, Everts and several 9 other employees (including Michelle Muqtadir) left Caliber and officially joined 10 CrossCountry. Id. ¶ 33. More Caliber resignations followed. In February 2022, ten 11 individuals left Caliber to join CrossCountry, and in March-April 2022, fifteen more 12 employees did the same. Id. ¶ 35. Additionally, 40 support staff employees resigned from 13 Caliber. Id. ¶ 36. The parties refer to the various employees that left Caliber for 14 CrossCountry during the time period at issue as the “Departing Employees.” See 15 generally Dkt. # 1; see also Dkt. # 12 at 13. 16 The complaint alleges that many of the above-mentioned Departed Employees 17 sent to their personal email addresses confidential documents detailing customer interest 18 rates, FICO scores, income, home appraisal values, and other information at around the 19 same time that they left Caliber for CrossCountry. See Dkt. # 1 ¶ 76. The complaint 20 describes in detail how Mark Everts, Mason Buckles, Casey Granston, Hans Illingworth, 21 Lori Johanson, Timothy Lauch, Ryan Mallory, Michelle Muqtadir, and Melissa Medved 22 sent messages from their Caliber email accounts to their personal email accounts that 23 included documents containing customer and loan information. Id. ¶ 76(a)-(i). For 24 example, on December 21, 2021, Lauch sent several spreadsheets of lists of agents, 25 “prospects,” “leads,” “preapprovals,” and a client list that included customer contact 26 1 information and loan information for 400 individuals to his personal email account. Id. ¶ 2 76(f)(i). A few days later, on December 23, he emailed to himself a zip file with 72 3 spreadsheets. Each included detailed loan information for various customers, such as the 4 loan amount, down payment, sales price, monthly payment, and property taxes. Id. ¶ 5 76(f)(ii). Five days later, Lauch sent to himself a “pipeline” spreadsheet with information 6 concerning 150 customers. Id. ¶ 76(f)(iii). And just over a week later, on January 6, 2022 7 (four days before he resigned from Caliber), Lauch sent himself a zip file with numerous 8 spreadsheets with detailed loan and mortgage information for 75 customers. Id. ¶ 9 76(f)(iv). 10 Plaintiff states that Caliber generally requires sales employees to execute 11 restrictive covenant agreements in favor of Caliber that prohibit employees from: (1) 12 soliciting Caliber employees to end their employment; (2) removing loans in process at 13 Caliber; and (3) retaining, using, or disclosing Caliber’s confidential business 14 information. Id. ¶ 38. Plaintiff alleges that on January 11, 2022, Plaintiff sent a demand 15 letter to Everts regarding his “restrictive covenants and Caliber’s concerns about his 16 misconduct.” Id. ¶ 61. On January 18, Defendant responded to the letter, denying any 17 wrongdoing or that Evert diverted loans or recruited Caliber employees to join 18 CrossCountry. Id. ¶¶ 62-63. 19 In January 2022, Plaintiff sued Everts in King County Superior Court, and the 20 action resulted in a Stipulated Injunction. Id. ¶ 65. As employees continued to leave 21 Caliber in 2022, Plaintiff sent cease and desist letters demanding the return of 22 confidential information to several former employees, copying Defendant on each. Id. ¶¶ 23 66-67. Plaintiff alleges that none of the former employees responded and that Defendant 24 responded in March 2022 by stating that CrossCountry did not have enough information 25 to “adequately investigate.” Id. ¶¶ 68-69. 26 1 Plaintiff filed a complaint in this Court on May 6, 2022, alleging unfair 2 competition, misappropriation of trade secrets, conversion of confidential and proprietary 3 information, tortious interference with contract, tortious inducement to breach fiduciary 4 duty of loyalty, tortious interference with advantageous business relationships, and civil 5 conspiracy. See Dkt. # 1 ¶ 91-156. Plaintiff seeks compensatory damages in excess of 6 $5,000,000, attorney’s fees and costs, statutory damages under the Defend Trade Secrets 7 Act, pre-judgment interest, and any other relief that the Court deems appropriate. Id. at 8 45. Defendant moved to dismiss the complaint in its entirety for failure to state a claim 9 under Rule 12(b)(6). See Dkt. # 12. Plaintiff filed a response in opposition to Defendant’s 10 motion, Dkt. # 13, and Plaintiff filed a reply in support of dismissal. Dkt. # 14. 11 II. LEGAL STANDARD 12 Under Federal Rule of Civil Procedure 12(b)(6), a court may dismiss a complaint 13 for failure to state a claim. Fed. R. Civ. P. 12(b)(6). The court must assume the truth of 14 the complaint’s factual allegations and credit all reasonable inferences arising from those 15 allegations. Sanders v. Brown, 504 F.3d 903, 910 (9th Cir. 2007). A court “need not 16 accept as true conclusory allegations that are contradicted by documents referred to in the 17 complaint.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 18 2008). Instead, the plaintiff must point to factual allegations that “state a claim to relief 19 that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 568 (2007). If the 20 plaintiff succeeds, the complaint avoids dismissal if there is “any set of facts consistent 21 with the allegations in the complaint” that would entitle the plaintiff to relief. Twombly, 22 550 U.S. at 563; Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). 23 On a motion to dismiss, a court typically considers only the contents of the 24 complaint. However, a court is permitted to take judicial notice of facts that are 25 incorporated by reference in the complaint. United States v. Ritchie, 342 F.3d 903, 908 26 1 (9th Cir. 2003) (“A court may . . . consider certain materials documents attached to the 2 complaint, documents incorporated by reference in the complaint”); Mir v. Little Co. of 3 Mary Hosp., 844 F.2d 646, 649 (9th Cir. 1988) (“[I]t is proper for the district court to 4 ‘take judicial notice of matters of public record outside the pleadings’ and consider them 5 for purposes of the motion to dismiss’”). With these principles in mind, the Court turns to 6 the instant motion. 7 III. DISCUSSION 8 a.) Unfair Competition 9 Both parties agree that Plaintiff brings its first cause of action under Washington’s 10 Unfair Business Practices Act, RCW 19.86.020. Dkt. # 12 at 6; Dkt. # 13 at 8. To 11 establish a claim under the Unfair Business Practices Act, the plaintiff must allege: (1) an 12 unfair or deceptive act or practice; (2) that occurred in trade or commerce; (3) impacting 13 the public interest; (4) injury to the plaintiff’s business or property; and (5) causation. 14 Panang v. Farmers Ins. Co. of Wash., 204 P.3d 885, 889 (Wash. 2009) (citing Hangman 15 Ridge Trainings Stables, Inc. v. Safeco Title Ins. Co., 719 P.2d 531, 533 (Wash. 1986)). 16 “The first two elements may be established by a showing that (1) an act or practice which 17 has a capacity to deceive a substantial portion of the public (2) has occurred in the 18 conduct of any trade or commerce.” Evergreen Moneysource Mortgage Co. v. Shannon, 19 274 P.3d 375, 384 (Wash. 2012) (citing Hangman Ridge, 719 P.2d at 785-86). 20 Defendant argues that the complaint fails to allege any specific deception or 21 deceptive actions undertaken by CrossCountry, and that the only deceptive act that the 22 complaint alleges—an unauthorized credit pull by a Departed Employee—is inadequate, 23 because there is no way that a single unauthorized credit pull can deceive a substantial 24 portion of the public. Dkt. # 12 at 7. Plaintiff counters that there is a “high likelihood that 25 additional plaintiffs have been or will be injured in exactly the same fashion,” bringing 26 1 this case within the realm of public interest. Dkt. # 13 at 10 (citing Evergreen, 247 P.3d 2 at 385). 3 However, “conduct that is not directed at the public, but, rather, at a competitor, 4 lacks the capacity to impact the public in general.” Evergreen, 247 P.3d at 385. Plaintiff 5 alleges that Defendant took specific actions against Caliber in what Plaintiff describes as 6 a meticulously planned raid of Caliber’s employees and business interests pursuant to a 7 “Master Plan.” Dkt. # 1 ¶ 2; Dkt. # 13 at 4. Plaintiff alleges injury to its business, Dkt. # 1 8 ¶¶ 83-84, and causation, id. at ¶ 20-37. But Plaintiff’s attempt to connect this alleged 9 conduct by CrossCountry—directed at a competitor—to potential public interest impact 10 falls short, and consequently, Plaintiff fails establish the first and third elements of the 11 claim. Plaintiff’s Count I is DISMISSED with leave to amend. 12

13 b.) Misappropriation of Trade Secrets 14 Plaintiff’s second claim is brought under the Defend Trade Secrets Act of 2016, 18 15 U.S.C. § 1836, et seq. It creates a private right of action for the misappropriation of a 16 trade secret. Attia v. Google, 983 F.3d 420, 424 (9th Cir. 2020). The Act defines a “trade 17 secret” as “financial,” “business,” and “economic” information that “the owner thereof 18 has taken reasonable measures to keep … secret,” and that provides “independent 19 economic value, actual or potential, from not being generally known to, and not being 20 readily ascertainable through proper means by, another person who can obtain economic 21 value from the … use of the information.” 18 U.S.C. § 1839(3). “[T]he definition of what 22 may considered a ‘trade secret’ is broad.” InteliClear, LLC v. ETC Global Holdings, Inc., 23 978 F.3d 653, 657 (9th Cir. 2020) (citation omitted). “Misappropriation” is defined as 24 “(1) the ‘acquisition of a trade secret of another by a person who knows or has reason to 25 know that the trade secret was acquired by improper means;’ (2) the disclosure of a trade 26 1 secret without the owner’s consent; and (3) the use of a trade secret without the owner’s 2 consent.” Attia, 983 F.3d at 424 (citing 18 U.S.C. § 1839(5)(A), (5)(B)). 3 Plaintiff alleges that several Departed Employees who left Caliber to join 4 CrossCountry sent emails from their Caliber email accounts to their personal accounts 5 containing customer information, loan and mortgage information, scripts, and other 6 documents. Dkt. # 1 ¶ 76(a)-(i). Plaintiff alleges that Caliber takes reasonable measures to 7 keep such data secret, such as having employees sign employment agreements that 8 contain confidentiality clauses. Id. ¶¶ 52-56, 70. Further, Plaintiff alleges that the 9 Departed Employees took the sensitive information for use at CrossCountry, and 10 CrossCountry directed the employees to obtain this information by improper means. Id. 11 ¶¶ 77-78, 107-108. Plaintiff believes that this information is now contained in 12 Defendant’s electronic systems. Id. ¶ 79. 13 Defendant argues that the complaint fails to allege any facts raising a plausible 14 inference that CrossCountry misappropriated Caliber’s trade secrets and presents no facts 15 supporting the allegation that employees misappropriated confidential information “with 16 [CrossCountry’s] knowledge and approval, if not with its specific direction.” Dkt. # 12 17 (quoting Dkt. # 1 ¶ 77). Defendant cites CleanFish, LLC v. Sims for the contention that 18 the mere allegation that a departing employee took confidential information and then 19 began working for a competitor is insufficient to state a claim at the motion to dismiss 20 stage. Case No. 19-cv-3663-HSG, 2020 WL 1274991, at *10 (N.D. Cal. Mar. 17, 2020). 21 However, the case is factually distinguishable. The court found Plaintiff’s allegation that 22 customer lists constituted a trade secret to be too “high level” to give the court or 23 defendants notice of the boundaries of the alleged trade secret. 2020 WL 1274991, at * 24 10. Additionally, CleanFish dealt with the alleged misappropriation of information 25 obtained by one employee. Id. Here, Plaintiff provides details of numerous emails sent 26 1 by Departed Employees around the time of their resignation that included sensitive and 2 confidential loan and mortgage information. Id. ¶ 76. Plaintiff alleges that many of the 3 Departed Employees were subject to confidentiality agreements and policies to protect 4 customers’ sensitive data. Id. ¶ 56. And Plaintiff alleges that CrossCountry now has 5 possession of this information that Caliber attempted to keep confidential. Crucially, 6 Plaintiff alleges that CrossCountry obtained it from the Departed Employees. Id. ¶¶ 78- 7 79. 8 As the CleanFish court noted, “to adequately plead indirect misappropriation, ‘the 9 plaintiff must allege facts to show that the defendant … had reason to know that the 10 disclosing party had acquired [the information] through improper means or was 11 breaching a duty of confidentiality by disclosing it.” 2020 WL 1274991, at * 10. In 12 CleanFish, Plaintiff only alleged that the employee and defendant “continuously 13 communicated” with each other. Here, Plaintiff alleges concrete examples of Departed 14 Employees leaving Caliber with valuable information via email— and immediately 15 joining CrossCountry. 16 Further, the facts alleged by Plaintiff tend to exclude the “innocent explanation” 17 of simple competition advanced by Defendant and discussed in CleanFish. Taking 18 Plaintiff’s allegations as true and drawing all reasonable inferences in the Plaintiff’s 19 favor, as the Court must at this stage, the Court finds that Plaintiff adequately states a 20 claim for misappropriation under the Defend Trade Secrets Act. Defendant’s request to 21 dismiss Count II is DENIED. 22

23 c.) Conversion of Confidential and Proprietary Information 24 Defendant requests that this Court dismiss Plaintiff’s conversion claim as pre- 25 empted by Washington’s Uniform Trade Secrets Act (UTSA), RCW 19.108.900. The 26 1 UTSA states that it “displaces conflicting tort, restitutionary, and other law of this state 2 pertaining to civil liability for misappropriation of a trade secret.” RCW 19.108.900. It 3 does not preempt contractual or civil liability relief not based upon misappropriation. Id. 4 In support of their preemption argument, Defendant cites LaFrance Corp. v. 5 Werttemberger, Case No. C07-1932Z, 2008 WL 5068653 (W.D. Wash. Nov. 24, 2008) 6 and Illinois Tool Works, Inc. v. Seattle Safety, LLC, Case No. C07-2061JLR, 2009 WL 7 10675668 (W.D. Wash. Jan 28, 2009), both cases where plaintiff brought both a UTSA 8 claim and a conversion claim, and where the court found preemption to be applicable. 9 Plaintiff argues that it adequately pled that Defendant wrongfully took Caliber’s 10 confidential information via the Departing Employees and used it to divert Caliber’s 11 customers and prospects to CrossCountry. Dkt. # 1 ¶¶ 77-79, 90, 116. 12 The elements for a claim of conversion are: (1) a defendant intentionally interfered 13 with property that belonged to plaintiff, (2) by either taking or unlawfully retaining it, (3) 14 thereby depriving the rightful owner of possession. United Federation of Churches, LLC 15 v. Johnson, 598 F. Supp. 3d 1084, 1100 (W.D. Wash. 2022). In Washington, the Court 16 uses a three-step analysis to determine whether a conversion claim is preempted by the 17 UTSA. The Court must: “(1) assess the facts that support the plaintiff’s [non-UTSA] civil 18 claim, (2) ask whether those facts are the same as those that support the plaintiff’s UTSA 19 claim, and (3) hold that the UTSA preempts liability on the civil claim unless the 20 common law claim is factually independent from the UTSA claim.” T-Mobile USA, Inc. 21 v. Huawei Device USA, Inc., 115 F. Supp. 3d 1184, 1198 (W.D. Wash. 2015) (citing 22 Thola v. Henschell, 164 P.3d 524, 530 (2007)). The framework set forth by the 23 Washington Supreme Court mandates that a conversion claim is preempted by UTSA if 24 plaintiff actually asserts a UTSA claim. Plaintiff does not do so here. Notably, Defendant 25 cites no caselaw supporting preemption of a plaintiff’s conversion claim by UTSA where 26 1 the plaintiff did not also bring an UTSA claim. Defendant’s request to dismiss Count III 2 on the basis of preemption is DENIED. 3

4 d.) Tortious Interference with Contract 5 To state a tortious interference claim, plaintiff must allege: (1) the existence of a 6 valid contractual relationship or business expectancy; (2) that defendants had knowledge 7 of that relationship; (3) an intentional interference inducing or causing a breach or 8 termination of the relationship or expectancy; (4) that defendants interfered for an 9 improper purpose or used improper means; and (5) resultant damage. United Federation 10 of Churches, 598 F. Supp. 3d at 1098. Defendant argues that Plaintiff has failed to plead 11 any facts regarding the third element that show that CrossCountry caused Departing 12 Employees to breach their employment agreements with Caliber. Dkt. # 12 at 13. 13 Defendant contends that Plaintiff’s allegation that CrossCountry intentionally induced 14 and encouraged Departing Employees to breach their contracts with Caliber by (1) 15 soliciting Caliber employees to terminate their employment, (2) diverting, converting, 16 and removing loans in process at Caliber to take them to CrossCountry, and (3) retaining 17 and using Caliber’s information is insufficient to state a claim of tortious interference. Id. 18 The Court disagrees. The various emails containing loan, mortgage, and customer 19 information sent by Departing Employees around the time of their departures raise an 20 inference that Departing Employees took certain information with them in order to build 21 up their business while at CrossCountry, i.e. sell residential mortgages to retail 22 customers. Dkt. # 1 ¶ 76. It is possible that the Departing Employees’ actions violated 23 their employment agreements.2 However, even if the Employees’ actions did not violate 24 25 2 Nonetheless, “[a]n enforceable contract is not required to support a tortious interference action.” Bombardier Inc. 26 v. Mitsubishi Aircraft Corp., 383 F. Supp. 3d 1169, 1188 (W.D. Wash. 2019) (citation omitted). 1 their employment contracts, the complaint adequately alleges that the Employees 2 improperly retained confidential information that was then passed on to CrossCountry. 3 Indeed, the complaint contains a litany of detailed allegations that specific Departed 4 Employees sent to themselves confidential customer and loan information within weeks 5 and even days of leaving Caliber. This suggests that these actions were done 6 intentionally. The fact that each Departed Employee then joined CrossCountry is further 7 evidence of the same. See Dkt. # 1 ¶ 13(a)-(r). Whether the Departing Employees acted 8 under Defendant’s specific direction is yet to be proven. But at this stage, the Court must 9 accept Plaintiff’s allegations—that CrossCountry now possesses purloined information 10 that could only be obtained from Caliber employees in violation of their employment 11 contracts—as true. Dkt. # 1 ¶ 79. See TMP Worldwide Advert. & Commc’n, LLC v. 12 LATCareers, LLC, Case No. C08-5019RBL, 2008 WL 4603404, * 3 (noting that standard 13 for viable pleading under Fed. R. Civ. P. 12(b)(6) is less stringent than that applicable to 14 summary judgment and denying request to dismiss tortious interference with contract 15 claim where complaint, construed liberally, met each element). Defendant’s request to 16 dismiss Count IV is DENIED. 17

18 e.) Tortious Inducement to Breach Fiduciary Duty of Loyalty 19 The parties characterize count five as a claim for aiding and abetting breach of 20 fiduciary duty. See Dkt. # 12 at 16-17 n. 2; Dkt. # 13 at 18. The complaint alleges that 21 Defendant induced numerous management-level Departed Employees to breach their 22 fiduciary duties of loyalty to Caliber. Dkt. # 1, ¶¶ 132-33. It further alleges that 23 inducement on the part of Defendant occurred when CrossCountry solicited Caliber’s 24 employees, removed and diverted loans that were in process at Caliber, misappropriated 25 26 1 Caliber’s confidential information, and concealed these activities from Caliber. Id., ¶ 140. 2 Under Washington law, a claim for breach of fiduciary duty requires plaintiff to 3 prove: (1) the existence of a duty owed, (2) a breach of that duty, (3) resulting injury, and 4 (4) that the claimed breach proximately caused the injury. In re Consolidated Meridian 5 Funds, 485 B.R. 604, 618 (Bankr. W.D. Wash. 2013). To plead a claim for aiding and 6 abetting, plaintiff must allege (1) the existence of a violation by the primary wrongdoer; 7 (2) knowledge of this violation by the aider and abettor; and (3) that the aider and abettor 8 substantially assisted in the primary wrong. Id. at 616. Defendant does not dispute that 9 Departed Employees owed fiduciary duties to Caliber, but argues that the complaint fails 10 to adequately plead the substantial assistance element and adequately allege that 11 CrossCountry assisted any Departing Employees in any breach of their fiduciary duty. 12 Dkt. # 12 at 17. 13 Plaintiff argues that the complaint’s allegations of CrossCountry’s $1.5 million 14 offer to Everts, Everts’s solicitation email to Loan Officer Danny To, and subsequent 15 solicitations from Departed Employees using confidential information obtained as 16 Employees left their jobs with Caliber are sufficient to state a claim for aiding and 17 abetting. In particular, Plaintiff alleges that CrossCountry was aware and supportive of 18 Departed Employees using confidential information in order to encourage more Caliber 19 employees to jump ship. Dkt. # 1 ¶ 77. Indeed, Plaintiff alleges that confidential 20 information is now on CrossCountry’s electronic systems, Id. ¶ 107, presumably for use 21 by CrossCountry. The unusual circumstance of numerous Departing Employees sending 22 information from their Caliber email accounts to their personal email accounts just as 23 they transitioned to CrossCountry raise Plaintiff’s allegations beyond mere speculation 24 and into the realm of possible “agreement and concerted action” between the Departed 25 Employees and Defendant. Brashkis v. Hyperion Capital Group, LLC, Case No. 3:11-cv- 26 1 05635 RBL, 2011 WL 6130787, *3 (W.D. Wash. Dec. 8, 2011); see also A.H. Lundberg 2 Assoc, Inc. v. TSI, Inc., Case No. C14-1160JLR, 2016 WL 9226998, *5 (W.D. Wash. 3 Feb. 18, 2016) (declining to dismiss aiding and abetting breach of fiduciary claim when 4 plaintiff alleged that defendant used a third party’s confidential knowledge of customers 5 and pending proposals to obtain contracts that they would not have obtained without the 6 confidential knowledge). Defendant’s request to dismiss Count V is DENIED. 7 f.) Tortious Interference with Advantageous Business Relationships 8 A tortious interference with business expectancy claim must allege: (1) the 9 existence of a valid contractual relationship or business expectancy; (2) that defendant 10 had knowledge of the relationship; (3) an intentional interference inducing or causing a 11 breach or termination of the relationship or expectancy; (4) that defendants interfered for 12 an improper purpose or used improper means; and (5) resultant damage. United 13 Federation of Churches, 598 F. Supp. 3d at 1098 (citing Leingang v. Pierce Cty. Med. 14 Bureau, Inc., 930 P.2d 288, 300 (1997)). Defendant argues that Plaintiff fails to 15 adequately plead any of the required elements. Dkt. # 12 at 17. 16 The Court agrees with Defendant as to the second, third, and fourth elements. 17 Plaintiff’s allegation that it had a business expectancy with “its customers and/or 18 prospects,” Dkt. # 1 ¶ 145, and specifically, with 736 Caliber loans/customers whose 19 names Everts forwarded from his work account to his personal email account on 20 December 12, 2021, Id. ¶ 76(a)(i), is sufficient to put Defendant on notice as to Plaintiff’s 21 business expectancy with those individuals. See Straw v. Avvo, Inc., Case No. C20- 22 0294JLR, 2020 WL 5066939, *5 (W.D. Wash. Aug. 27, 2020) (Plaintiff must “‘tie… 23 losses to specific relationships’ between the plaintiff and ‘identifiable third parties.’”) 24 (quoting Pac. Nw. Shooting Park Ass’n v. City of Sequim, 144 P.3d 276, 280 (Wash. 25 26 1 2006)). 2 However, as to the second element, Plaintiff fails to adequately allege that 3 CrossCountry had specific knowledge of Plaintiff’s relationships with “customers and/or 4 prospects” or the 736 customers listed in the spreadsheet sent to Everts’s personal email 5 account. Further, concerning the third and fourth elements, Plaintiff fails to allege that 6 CrossCountry interfered with Caliber’s relationships with “customers and/or prospects,” 7 such that any customer or prospect (including any customer listed in the Everts 8 spreadsheet) actually terminated their relationship with Caliber. See Lundberg, 2016 WL 9 9226998, at * 5 (allegations that third party raided client lists and that plaintiff actually 10 lost contracts or expectancies as a result were sufficient to support tortious interference 11 claim). Finally, while Plaintiff claims Caliber expected to receive millions in profit from 12 loan originations by the Departed Employees, Dkt. # 1 ¶ 83, this does not salvage their 13 claim. Plaintiff’s tortious interference with business expectancy is DISMISSED with 14 leave to amend. 15 g.) Civil Conspiracy 16 Plaintiff’s seventh count, for civil conspiracy, alleges that CrossCountry conspired 17 with the Departed Employees to violate the Employees’ various legal obligations to 18 Caliber, such as restrictive covenants concerning solicitation of employees, 19 misappropriation of confidential information, and removal of loans in process with 20 Caliber. Dkt. # 1 ¶ 152. A Washington civil conspiracy claim requires that a plaintiff 21 allege that (1) two or more people contributed to accomplish an unlawful purpose or 22 combined to accomplish a lawful purpose by unlawful means, and (2) the conspirators 23 entered into an agreement to accomplish the object of the conspiracy. Williams v. Geico 24 Gen. Ins. Co., 497 F. Supp. 3d 977, 985 (W.D. Wash. 2020). “Because the conspiracy 25 must be combined with an unlawful purpose, civil conspiracy does not exist 26 1 independently—its viability hinges on the existence of a cognizable and separate 2 underlying claim.” Id. 3 Defendant argues that, because Plaintiff has failed to plead an underlying 4 actionable claim against CrossCountry, Plaintiff’s civil conspiracy claim must also fail. 5 Dkt. # 12 at 20. Further, Plaintiff argues that the facts and circumstances relied upon by 6 Plaintiff are just as consistent with lawful or honest purposes as they are with an unlawful 7 purpose. Id. (citing Puget Sound Sec. Patrol, Inc. v. Bates, 389 P.3d 709, 714 (Wash. 8 2017)). 9 The Court has found that the complaint pleads underlying actionable claims. See 10 discussion supra Section III.b-e. Plaintiff alleges that the “Master Plan” (the Everts 11 email) set out CrossCountry’s plan to poach Caliber’s employees and specifically bring 12 over Everts’s team. Dkt. # 1 ¶ 24. Plaintiff further alleges that Evert, on his first day at 13 CrossCountry, solicited Caliber employee Danny To leave his employment—in violation 14 of a non-solicitation clause of his employment agreement with Caliber. Id. ¶¶ 34, 40, 41. 15 And the complaint alleges that in 2021 and 2022, numerous Caliber employees joined 16 CrossCountry, taking with them customer and loan information that would be valuable to 17 CrossCountry on their way out the door. Id. ¶ 76(a)-(i). Investigation and discovery will 18 reveal the extent to which CrossCountry was aware of the Departed Employees’ actions. 19 But at this stage, Plaintiff sufficiently alleges that Defendant conspired with the Departed 20 Employees to violate their legal obligations to Caliber. Defendant’s request to dismiss 21 Count VII is DENIED. 22

24 25 26 1 IV. CONCLUSION 2 For the reasons stated above, the Court GRANTS in part and DENIES in part 3 Defendant’s motion to dismiss. Within fourteen (14) days from the date of this Order, 4 Plaintiff may file an amended complaint addressing the deficiencies described above. If 5 Plaintiff does not file an amended complaint within that time, the Court may dismiss this 6 action with prejudice. 7

8 DATED this 30th day of March, 2023. 9 A

10 11 The Honorable Richard A. Jones United States District Judge 12

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