DeWitt Stern Group, Inc. v. Richard Eisenberg

• Court: Court of Appeals for the Second Circuit
• Decided: May 17, 2018
• Docket: 17-2274-cv
• Status: Unpublished

Opinion

17-2274-cv DeWitt Stern Group, Inc. v. Richard Eisenberg, et al.

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 17th day of May, two thousand eighteen.

PRESENT: PETER W. HALL, SUSAN L. CARNEY, Circuit Judges. JOHN G. KOELTL,* District Judge. ---------------------------------------------------------------------- DeWitt Stern Group, Inc.,

Plaintiff-Appellant,

v. No. 17-2274-cv

Richard Eisenberg and Arthur J. Gallagher Risk Management Services, Inc.

Defendants-Appellees. ---------------------------------------------------------------------- For Appellant: PETER J. BIGING, Goldberg Segalla LLP (Stewart G. Milch, on the brief), Buffalo and New York, New York.

For Appellees: CARMEN J. DIMARIA, Ogletree, Deakins, Nash, Smoak, & Stewart, P.C. (Aaron Warshaw and Nicole A. Welch, on the brief), New York, New York.

* Judge John G. Koeltl, of the United States District Court for the Southern District of New York, sitting by designation. Appeal from a judgment of the United States District Court for the Southern District of

New York (Sweet, J.).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND

DECREED that the judgment of the district court is AFFIRMED.

Appellant DeWitt Stern Group, Inc. (“DeWitt”) appeals the district court’s decision

granting Appellees Richard Eisenberg’s (“Eisenberg”) and Arthur J. Gallagher Risk Management

Services, Inc.’s (“AJG”) (collectively, “Defendants”) motion for summary judgment. DeWitt

claims that it purchased Eisenberg’s book of business when it agreed to employ Eisenberg in 2007.

DeWitt further claims that Eisenberg, with the help of AJG, violated the terms of its 2012

Employment Agreement and committed several torts by soliciting DeWitt’s clients on AJG’s

behalf. We assume the parties’ familiarity with the underlying facts, procedural history, and

issues on appeal.

We review de novo a district court’s decision granting summary judgment. Fratello v.

Archdiocese of N.Y., 863 F.3d 190, 198 (2d Cir. 2017). Summary judgment is appropriate where

“the movant shows that there is no genuine dispute as to any material fact and the movant is entitled

to judgment as a matter of law.” Fed. R. Civ. P. 56(a). On summary judgment, we “construe

the facts in the light most favorable to the non-moving party and must resolve all ambiguities and

draw all reasonable inferences against the movant.” Brod v. Omya, Inc., 653 F.3d 156, 164 (2d

Cir. 2011) (quoting Williams v. R.H. Donnelley, Corp., 368 F.3d 123, 126 (2d Cir. 2004)). Upon

such review, we affirm for substantially the reasons stated by the district court in its well-reasoned

June 26, 2017 opinion. See Dewitt Stern Grp., Inc. v. Eisenberg, 257 F. Supp. 3d 542 (S.D.N.Y.

2017).

2 I. Scope of the 2007 Employment Agreement

DeWitt argues that the language in the opening paragraph of the 2007 Employment

Agreement unambiguously demonstrates that DeWitt purchased Eisenberg’s present and future

book of business. To the extent the 2007 Employment Agreement is ambiguous, DeWitt asserts

that the extrinsic evidence shows that the parties intended for DeWitt to purchase Eisenberg’s

present and future book of business.

The district court correctly concluded that the 2007 Employment Agreement is not

ambiguous and does not involve the sale of Eisenberg’s business. Aside from the opening

paragraph, there is no indication that the 2007 Employment Agreement contemplated the sale of

Eisenberg’s book of business. The Agreement does not define “book of business,” nor does it

outline the consideration provided for Eisenberg’s book of business or reference the names of any

clients or accounts that DeWitt claims it purchased. Rather, the 2007 Employment Agreement

simply outlines the terms of Eisenberg’s employment. See Riverside S. Planning Corp. v.

CRP/Extell Riverside, L.P., 869 N.Y.S.2d 511, 516 (1st Dep’t 2008) (“A contract is unambiguous

if on its face it is reasonably susceptible of only one meaning.” (internal quotation marks and

brackets omitted)).

II. The 2012 Employment Agreement

DeWitt argues that Eisenberg breached the 2012 Employment Agreement by (1) disclosing

DeWitt’s confidential information and soliciting former clients using DeWitt’s confidential

information; (2) diverting business to AJG while he was still in DeWitt’s employ; and (3)

forwarding client information from his DeWitt email account to his personal email account.

The district court correctly held that no reasonable jury could find that Eisenberg breached

3 the 2012 Employment Agreement. The information Eisenberg sent to his personal email account

and to AJG prior to his registration was not confidential. This information belonged to

Eisenberg’s clients, not DeWitt, and the evidence demonstrates that Eisenberg could have obtained

this information through public sources. See Buhler v. Michael P. Maloney Consulting, Inc., 749

N.Y.S.2d 867, 868 (1st Dep’t 2002) (“It is well settled that an employee’s recollection of

information pertaining to the needs and habits of particular customers is not actionable.”); JAD

Corp. of Am. v. Lewis, 759 N.Y.S.2d 388, 388 (2d Dep’t 2003) (holding that employers cannot

protect information that is “readily available from publicly-available sources”).

DeWitt also offers no evidence that Eisenberg used this information to solicit DeWitt’s

clients. To the contrary, DeWitt’s employees consistently testified that DeWitt’s clients flocked

to AJG because of their preexisting relationships with Eisenberg, not because Eisenberg used

DeWitt’s confidential information. See Willis of N.Y., Inc. v. DeFelice, 750 N.Y.S.2d 39, 42 (1st

Dep’t 2002) (“[S]ince the record discloses that many of [the defendant’s] clients are loyal to him

personally, and not to the firm at which he works, he should not be enjoined from soliciting the

clients he originally brought with him to plaintiffs, or related accounts.” (citation omitted)).

DeWitt has not provided any evidence that Eisenberg’s discussions with AJG before his

resignation went beyond preparation to compete later or caused DeWitt to suffer damages. See

Ashland Mgmt. Inc. v. Altair Invs. NA, 869 N.Y.S.2d 465, 473 (1st Dep’t 2008) (“An employee

may create a competing business prior to leaving his employer without breaching any fiduciary

duty unless he makes improper use of the employer’s time, facilities[,] or proprietary secrets in

doing so . . . .” (quoting Schneider Leasing Plus v. Stallone, 569 N.Y.S.2d 126, 128 (2nd Dep’t

1991) (alteration omitted)). A representative from AJG testified that Guggenheim Partners, LLC

4 did not move its insurance business to AJG. Eisenberg testified that he did not solicit New

Regency and the Weinstein Company to move their business to AJG until after he left DeWitt.

The evidence also shows that these clients moved to AJG because of their longstanding

relationships with Eisenberg.

Lastly, DeWitt does not provide any evidence that it was injured by Eisenberg sending

emails from his DeWitt email account to his personal email account. As discussed, there is no

evidence that the forwarded emails contained confidential information or that Eisenberg used the

emails to solicit DeWitt’s clients. Moreover, after the district court issued a preliminary

injunction, Eisenberg worked with counsel to delete the emails or return them to DeWitt.

We have considered DeWitt’s remaining arguments on appeal and find them to be without

merit. We AFFIRM the judgment of the district court.

FOR THE COURT: Catherine O’Hagan Wolfe, Clerk of Court