Focus Management Group USA, Inc. v. King

171 F. Supp. 3d 1291, 2016 WL 1083938, 2016 U.S. Dist. LEXIS 38273
CourtDistrict Court, M.D. Florida
DecidedMarch 18, 2016
DocketCase No. 8:13-CV-1696-T-35-AEP
StatusPublished
Cited by4 cases

This text of 171 F. Supp. 3d 1291 (Focus Management Group USA, Inc. v. King) is published on Counsel Stack Legal Research, covering District Court, M.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Focus Management Group USA, Inc. v. King, 171 F. Supp. 3d 1291, 2016 WL 1083938, 2016 U.S. Dist. LEXIS 38273 (M.D. Fla. 2016).

Opinion

ORDER

MARY S. SCRIVEN, UNITED STATES DISTRICT JUDGE

THIS CAUSE comes before the Court for consideration of Plaintiff Focus Management Group USA, Inc.’s Motion for Partial Summary Judgment (Dkt.82), Defendant Edmund King’s Response in Opposition (Dkt.97), Plaintiffs Reply (Dkt.100), and the Parties’ Stipulation of Agreed Material Facts (Dkt.98). Upon consideration of all relevant filings, case law, and being otherwise fully advised, the Court orders that the motion is GRANTED IN PART and DENIED IN PART.

I. BACKGROUND

Plaintiff Focus Management Group USA, Inc. (“Focus”) alleges that Defendant Edmund King (“King”) violated a non-competition/non-solicitation clause in his employment agreement. King, on the other hand, alleges that Focus breached the agreement first by failing to pay him compensation to which he was entitled. The relevant facts follow.

Focus is a professional services firm that provides consulting services to under-performing companies. (Dkt. 98 at ¶ 1). On April' 15, 2008, Focus hired King as a professional consultant. (Id. at ¶ 2). The terms of King’s employment were governed by an offer letter that'King signed on April 2, 2008, and a written employment agreement that King signed on April 15, 2008. (Id.).

In the offer letter, Focus agreed to pay King an adjusted starting annual salary of $180,000, “performance related-compensation,” and benefits. (Id. at ¶ 4; Dkt. 83-1 at 5). The offer letter described the performance-related compensation as “accrued annually over period December— November, paid at year end, computed along lines outlined in the attached illustration, discretionary in nature.” (Dkt. 83-1 at 5). Attached to the offer letter was a sample formula for calculating the performance-related compensation. (Dkt. 98 at ¶ 5). The formula was to take into consideration factors such as King’s annual sales, his direct billings, his managed billings, and the overhead burden attributable .to him. (Id.).

The employment agreement contained a choice-of-law provision and a non-solicitation/non-competition clause (“non-compete clause”). (Id. at ¶ 8). The choice-of-law provision stated that King’s employment would be governed by Florida law. The non-compete clause provided that King would not, for a period of one year following the termination or expiration of his employment with Focus:

[1294]*1294Solicit or engage, directly or indirectly (either as an employee, member, officer, director, partner, shareholder, owner, lender, investor, consultant or independent contractor), in providing services of the kind provided by [Focus] as of the Termination Date for those clients of [Focus] for whom [Focus]: (i) is engaged in providing services as of the Termination Date; or (ii) has provided services within the twelve (12) month period prior to the Termination Date; or (iii) has contacted, as of the Termination Date, for the purpose of offering to provide services[.]

(Id.).

In January 2010, Downey Regional Medical Center-Hospital, Inc. (“Downey”) retained Focus to provide services in connection with Downey’s efforts to restructure its business through Chapter 11 of the United States Bankruptcy Code. (Id. at ¶ 10). Focus credited King with 30% of the “sales” associated with the Downey account for his role in securing Downey as a client. (Id. at ¶ 11). The “sales” credit was one of the factors input into the formula that Focus used to calculate King’s performance-related compensation. (Id.).

In early 2012, Gerry Paez, one of the other consultants who had been assigned sales credit for helping Focus secure Dow-ney as a client, resigned. (Id. at ¶ 14). King maintains that the portion of Dow-ney’s sales that Paez received credit for was improperly assigned to the “house,” rather than reallocated among the other employees who were assigned credit for Downey’s sales. (Id.).

In March 2012, Downey emerged from bankruptcy and retained Focus to provide additional services under a new work authorization. (Id. at ¶ 15). Focus agreed to provide Downey with a full-time professional capable of acting as Downey’s Interim Chief Financial Officer (“CFO”). In return, Downey agreed to pay Focus a fixed rate of $10,000 per week. (Id.). Focus selected King to act as Downey’s Interim CFO. (Id. at ¶ 16).

While King was employed by Focus, the company changed its performance-related compensation program. (Id. at ¶ 12). In particular, Focus changed the order in which an employee’s overhead threshold was applied to the employee’s sales, direct billings, and managed billings figures. Focus also began applying a “performance multiplier” that took into account how Focus had performed in relation to its sales goals. (Id.).

In March and May 2012, Focus sent King his February and March “scorecards,” which were documents intended to show King the performance-related compensation he was eligible to receive at that point in time. (Id. at ¶ 17). However, the scorecards specifically stated that the compensation was “contingent upon final declaration by Focus President before payable.” (Id.). ■ The Parties disagree about whether the scorecards reflect the revised methodology for calculating performance-related compensation. (Id. at ¶ 17).

In early 2013, Focus sent King his year-end scorecard for 2012. (Id. at ¶ 20). The scorecard reflected that King’s billings and s,ales rendered him eligible to earn performance-related compensation of $80,458. However, because Focus had only reached 73.5% of its projected sales goals for the 2012 year, Focus determined that King would receive a total of $59,148. The methodology used to calculate King’s 2012 performance-related compensation was also used to calculate the performance-related compensation for other Focus em[1295]*1295ployees. (Id.). King contends, however, that the decision to apply a corporate performance multiplier to reduce his accrued bonus was not communicated to him prior to the reduction. (Dkt. 97 at 16-17).

In February 2013, while King was still employed at Focus, he created Peninsula Healthcare Management, LLC (“Peninsula”), a Nevada limited liability company. (Dkt. 98 at ¶ 19). Peninsula is a professional services company that generates revenue through King’s provision of professional consulting services to Peninsula’s clients. King and his wife are Peninsula’s sole employees. (Id.).

On March 1, 2013, King resigned from Focus, effective March 15, 2013. (Id. at ¶21). On March 22, 2013, King’s newly-created company, Peninsula, entered into a consulting agreement with Downey under which Peninsula agreed to provide King to Downey to act as its Interim CFO — the same role King was fulfilling while employed by Focus. (Id. at ¶ 22). King rendered services to Downey through Peninsula until Downey’s day-to-day operations and management were assumed by a company interested in acquiring Downey. (Id. at ¶ 23).

Invoking this Court’s diversity jurisdiction, Focus filed the instant action on June 28, 2013. (Dkt.l). On August 19, 2013, Focus filed its Amended Complaint, which is the operative complaint. (Dkt.12).

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Bluebook (online)
171 F. Supp. 3d 1291, 2016 WL 1083938, 2016 U.S. Dist. LEXIS 38273, Counsel Stack Legal Research, https://law.counselstack.com/opinion/focus-management-group-usa-inc-v-king-flmd-2016.