Retirement Corp. of Am. v. Henning

2019 Ohio 4589
CourtOhio Court of Appeals
DecidedNovember 8, 2019
DocketC-180643
StatusPublished
Cited by5 cases

This text of 2019 Ohio 4589 (Retirement Corp. of Am. v. Henning) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Retirement Corp. of Am. v. Henning, 2019 Ohio 4589 (Ohio Ct. App. 2019).

Opinion

[Cite as Retirement Corp. of Am. v. Henning, 2019-Ohio-4589.]

IN THE COURT OF APPEALS FIRST APPELLATE DISTRICT OF OHIO HAMILTON COUNTY, OHIO

THE RETIREMENT CORPORATION : APPEAL NO. C-180643 OF AMERICA, TRIAL NO. A-1702512 : and : O P I N I O N. FIFTH THIRD BANK, : Plaintiffs-Appellants, : vs. : DAVID B. HENNING, : and : FORMIDABLE ASSET MANAGEMENT, :

Defendants-Appellees. :

Civil Appeal From: Hamilton County Court of Common Pleas

Judgment Appealed From Is: Affirmed in Part, Reversed in Part, and Cause Remanded

Date of Judgment Entry on Appeal: November 8, 2019

Zieger, Tigges & Little LLP, Marion H. Little, Jr., and Christopher J. Hogan, for Plaintiffs-Appellants,

Freking Myers & Ruel, LLC, Kelly Mulloy Myers and Brian P. Gillan, for Defendant- Appellee David B. Henning,

Stagnaro, Saba & Patterson Co., L.P.A., Peter A. Saba and Jeffrey M. Nye, for Defendant-Appellee Formidable Asset Management. OHIO FIRST DISTRICT COURT OF APPEALS

MYERS, Judge. {¶1} The Retirement Corporation of America (“RCA”) and Fifth Third Bank appeal the judgment of the Hamilton County Court of Common Pleas dismissing their action for breach of contract, breach of fiduciary duty, misappropriation of trade secrets, tortious interference with prospective business relationships, and spoliation of evidence against RCA’s former employee, David B. Henning, and Henning’s new employer, Formidable Asset Management (“Formidable”). For the reasons that follow, we affirm the trial court’s judgment dismissing the breach-of- contract claim and reverse its judgment dismissing the remaining claims.

I. Background Facts and Procedure

{¶2} Henning was employed by RCA, a registered investment advisor, from March 2010 to April 2017. In his capacity as a relationship manager, Henning provided investment-related advisory and wealth-planning services to RCA customers. Henning’s employment agreement with RCA restricted him from disclosing or using RCA’s confidential information at any time after the termination of his employment and from soliciting RCA customers for a period of 18 months following the termination of his employment. {¶3} The employment agreement contained the following provisions: [5(a)] Employee agrees that during the term of Employee’s employment with Employer and for the periods of time set forth in subsections 5(a)(i) through 5(a)(iii) respectively after the termination of Employee’s employment with Employer for any reason, whether voluntary or involuntary, Employee will not, directly or indirectly, do or suffer any of the following: (i) For eighteen (18) months after the termination of Employee’s employment with Employer for any reason, whether voluntary or involuntary, solicit any person who is an employee, officer, agent, customer or supplier of the Employer or any of

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Employer’s affiliates or subsidiaries to terminate said relationship. (ii) For eighteen (18) months after the termination of Employee’s employment with Employer for any reason, whether voluntary or involuntary, solicit, attempt to solicit, accept, attempt to accept, direct or attempt to direct, divert or attempt to divert, take away or attempt to take away business of or from any customers of the Employer or any of Employer’s affiliates or subsidiaries, either for himself or for any other corporation, limited liability company, partnership, proprietorship, firm, association or other business entity in competition with the Employer or any of its affiliates or subsidiaries or advise or assist any person or entity with respect thereto. As used in this Agreement the term “customer” means any customer, whether actual or potential, of Employer or any of Employer’s affiliates and subsidiaries with whom Employee had business contact, or whose identity Employee learned through employment with Employer or Employer’s affiliates or subsidiaries, during the twelve (12) months immediately before Employee’s employment with Employer ended. (iii) At any time after the termination of Employee’s employment with Employer for any reason, whether voluntary of [sic] involuntary, disclose, divulge, discuss, copy, reproduce, publish, reveal, show, use or otherwise communicate in any manner any Confidential Information. Employee acknowledges and agrees that all Confidential Information is, and shall remain, the property of Employer. Upon termination of Employee’s employment with Employer, Employee agrees not to remove such Confidential Information, copy it, or commit it

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to memory to use outside of Employer. Employee shall promptly return to Employer all copies and originals of all documents and other materials containing or referring to Confidential Information and any other materials that belong to Employer or its affiliates or subsidiaries. The covenant in this subsection 5(a)(iii) has no temporal, geographical or territorial limitation and is not limited by the time periods set forth in the preceding subsections. {¶4} “Confidential Information” was defined in the employment agreement to include the following: [C]onfidential information and trade secrets, which include customer lists, identities of customer contact persons, lists of prospective customers, accounting and tax projections, compilations of information, records, and specifications, marketing programs and materials, employee training programs, client service and retention strategies, methods of operating, intellectual property, information regarding customers and employees of Employer, and information about the Employer that is not known to the public and gives Employer an opportunity to obtain an advantage over competitors who do not know such information[.] {¶5} In early 2017, RCA was acquired by, and ultimately became a subsidiary of, Fifth Third Bank. On April 3, 2017, Henning and RCA entered into an agreement to terminate Henning’s employment agreement with RCA (the “termination agreement”), which contained a provision expressing that “[e]mployee desires to continue his * * * employment with RCA following the termination of the [e]mployment [a]greement.” In addition, the termination agreement provided: 1. Effective upon the Closing (as defined in the Purchase Agreement), the Employment Agreement is hereby terminated, and all rights

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and obligations under the Employment Agreement are canceled and void. *** 2. Effective upon the Closing, to the extent permitted under applicable law, each of Employee and RCA releases and forever discharges the other from any and all obligations under the Employment Agreement. {¶6} Fifth Third acquired RCA as planned and the closing took place on April 7, 2017. Henning resigned from RCA on April 21, 2017, and immediately began working for Formidable and soliciting RCA customers. {¶7} According to the amended complaint, in the weeks prior to his resignation, Henning accessed RCA’s password-protected computer system and emailed from and to his personal email account detailed spreadsheets containing contact and account information for RCA customers. He provided these customer- related documents in electronic format to Formidable and prepared a separate document that contained the information. After saving the electronic documents that he removed, Henning deleted the emails by which he had sent and received the documentation. {¶8} After his resignation, Henning allegedly used the RCA customer information to begin soliciting RCA customers. He also allegedly logged into RCA’s computer system and either accessed or tried to access RCA’s confidential customer information.

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Cite This Page — Counsel Stack

Bluebook (online)
2019 Ohio 4589, Counsel Stack Legal Research, https://law.counselstack.com/opinion/retirement-corp-of-am-v-henning-ohioctapp-2019.