QFS Transportation, LLC v. Huguely

District Court, S.D. Ohio·Decided May 27, 2022·No. 1:21-cv-00769·Unknown

Opinion

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF OHIO WESTERN DIVISION

QFS Transportation, LLC, ) ) Plaintiff, ) Case No.: 1:21-cv-00769 ) vs. ) Judge Michael R. Barrett ) Robyn Huguely, et al., ) ) Defendants. ) ) )

OPINION AND ORDER

This matter is before the Court on Defendant Mercury Transportation, Inc.’s Motion to Dismiss (Doc. 32) the Complaint, filed pursuant to Fed. R. Civ. P. 12(b)(2). Plaintiff has filed a memorandum in opposition (Doc. 37), to which Defendant Mercury has replied (Doc. 42). For the reasons that follow, the Motion will be GRANTED. I. BACKGROUND Verified Complaint Allegations. Plaintiff QFS Transportation, LLC (“QFS”) is a Nevada limited liability company and registered to do business in Ohio, with its principal place of business located here in Hamilton County, Ohio. (Verified Complaint, Doc. 1 (¶ 1)). Defendant Robyn Huguely (“Huguely”) is a resident of Newnan, Georgia and is a principal and officer of co-Defendant Queen Logistics, LLC (“Queen”). (Id. (¶ 2)). Queen is a Georgia limited liability company with a principal place of business located in Jonesboro, Georgia. (Id. (¶ 3)). Defendant Mercury Transportation, Inc. d/b/a World Logistics USA, LLC (“Mercury”) is a New Jersey corporation with its principal place of business located in Allentown, New Jersey. (Id. (¶ 4)).1

QFS is a federally registered motor carrier that, among other things, provides third- party logistics services throughout the United States. (Id. (¶ 10)). QFS engages independent contractors as agents to perform services for existing QFS customers in a given local market, as well as to develop additional business there. (Id. (¶11)). On July 22, 2020, QFS and Queen entered into an Agreement for Regional Business Development (“Agreement”) that included sections governing “Exclusivity”, “Non- Competition”, and “Non-Solicitation”. (Id. (¶ 19)). Among its duties, Queen was to develop and solicit freight transportation exclusively for QFS in the southeastern region of the United States. (Id. (¶ 21)). Huguely personally and expressly guaranteed all of

Queen’s obligations to QFS under the Agreement. (Id. (¶ 20); Doc. 1-1 PAGEID 23 & (¶ 2(E)). QFS alleges that it terminated its relationship with Queen on September 13, 2021 and, thereafter, Queen entered into a relationship with Defendant Mercury—a direct competitor of QFS—to perform the same services as it performed for QFS. (Verified Complaint, Doc. 1 (¶¶ 31–33)). On November 19, 2021, counsel for QFS sent a cease- and-desist letter to both Huguely and Queen. (Doc. 1-2). Counsel for QFS sent a letter to Mercury the same date. (Doc. 1-3). That letter provides in pertinent part:

. . . . To the extent Mercury/World is not already aware, AAVC and Queen each entered into separate agreements with QFS known as an Agreement for Regional Business Development (“the Agreement”). Those Agreements were personally guaranteed by Ms. Murphy and Ms. Huguely, respectively, and include continuing

1 QFS invokes subject-matter jurisdiction based on diversity of citizenship and an amount in controversy greater than $75,000. (Verified Complaint, Doc. 1 (¶¶ 6, 7)). See 28 U.S.C. § 1332. prohibitions that survive and remain in effect after the termination of any agency relationship with QFS. The prohibitions include non- compete, non-solicitation, and confidentiality restrictions, each which remain in place for a defined period of time after the date of termination. In AAVC’s case, the agency relationship was terminated on September 21, 2021 and, in Queen’s case, the agency relationship was terminated on September 13, 2021. It has come to QFS’s attention that AAVC, Queen, and/or their respective principals now have agency relationships with Mercury/World and that they have been actively soliciting current agents of QFS, in violation of their Agreements. If they have not provided you copies of their respective Agreements, they should. Or, we can furnish copies upon request if they are unwilling to do so. QFS intends to enforce its Agreement with each of those former agents and their respective guarantors. As QFS continues to investigate this matter, it is (a) putting Mercury/World on notice so that Mercury/World governs its actions accordingly and so that it may immediately cease and desist from committing or aiding and abetting any conduct that violates the Agreement; and (b) expressly reserving all of its rights and claims under the Agreement and applicable law, including without limitation, its right to seek immediate enforcement of the Agreement, damages, and all other relief to which it is entitled. As it relates to Mercury/World, QFS’s position is that, any party with knowledge of the Agreement, that allows or promotes its violation can be held liable for several reasons, including tortious interference with QFS’s contractual and business relationships. . . . . . . . (Doc. 1-3 PAGEID 65–66). By return correspondence dated November 30, 2021, Mercury, though counsel, denied any wrongdoing. (Doc. 1-4). Counsel for QFS replied on December 8, 2021, enclosing a copy of the Agreement between QFS and Queen. (Doc. 1-5 (“To the extent AAVC, Queen, and/or their principals have not already provided you with copies of their Agreements with QFS, they are enclosed here.”)). Motion Practice. On December 10, 2021, QFS filed a Verified Complaint for Temporary Restraining Order, Injunctive Relief, and Damages against Huguely/Queen for breach of contract2; against Huguely/Queen and Mercury for violations of Ohio’s Uniform Trade Secrets Act (“OUTSA”), Ohio Rev. Code § 1333.61–.693; and against Mercury for tortious interference with a contract (the Agreement between Huguely/Queen and QFS)4; and against Huguely/Queen and Mercury for tortious interference with

business relationships (between QFS and its (current and prospective) agents, owner- operators, drivers, and customers)5.6 As required under the local rules,7 QFS filed a separate Motion for Temporary Restraining Order and Preliminary and Permanent Injunction. (Doc. 8). The Court subsequently allowed QFS the opportunity to supplement its Motion.8 (Doc. 12). On February 9, 2022, the Court entered a Temporary Restraining Order against Defendants Huguely, Queen, and Mercury (Doc. 31),9 which expired on March 9, 2022 (Docs. 35, 36). Defendant Mercury filed its Rule 12(b)(2) Motion to Dismiss (Doc. 32) on February 21, 2022.

2 (Verified Complaint, Doc. 1 (¶¶ 46–53, 54–59)).

3 (Verified Complaint, Doc. 1 (¶¶ 60–72)).

4 (Verified Complaint, Doc. 1 (¶¶ 73–77)).

5 (Verified Complaint, Doc. 1 (¶¶ 78–84)).

6 (Doc. 8 PAGEID 81; Doc. 12 PAGEID 142).

7 See S.D. Ohio Civ. R. 65.1(b).

8 (12/21/2021 Minute Entry).

9 The day prior, on February 8, 2022, the Court denied Defendant Huguely’s Rule 12(b)(3) Motion to Dismiss, and/or in the alternative, to Transfer Venue to the Northern District of Georgia (pursuant to 28 U.S.C. § 1404(a)) (Doc. 14) and denied as moot her Motion to Strike (for failure to perfect service) (Doc. 26). (Doc. 30). Thereafter, on May 6, 2022, the Court granted QFS’s Motion to Dismiss (Doc. 39) Defendant Huguely’s Counterclaim (Doc. 27) (for “Discrimination, Breach of Contract and failure to provide the agreed upon services and administration of proper policy and procedure”). (Doc. 45). In the same Opinion and Order, the Court denied (what it construed as) Huguely’s motion to set aside the Clerk’s March 3, 2022 entries of default against her and Defendant Queen. (Id.).

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