Opinion
Case No: 6:21-cv-1947-PGB-EJK
2023-05-11
OPS INTERNATIONAL, INC., Plaintiff, v. Confidence EKEANYANWU and Kenechukwu Okoro, Defendants.
Amy S. Shay, Joseph Ephraim Somake, Matthew Justin Pearce, Robert J. Stovash, Stovash, Case & Tingley, PA, Orlando, FL, for Plaintiff. Richard W. Smith, NeJame Law, P.A., Orlando, FL, for Defendants.
Amy S. Shay, Joseph Ephraim Somake, Matthew Justin Pearce, Robert J. Stovash, Stovash, Case & Tingley, PA, Orlando, FL, for Plaintiff. Richard W. Smith, NeJame Law, P.A., Orlando, FL, for Defendants. ORDER PAUL G. BYRON, UNITED STATES DISTRICT JUDGE
This cause comes before the Court on Plaintiff's Motion for Partial Summary Judgment (Doc. 24 (the "Motion")), filed February 1, 2023. Defendants responded in opposition on March 3, 2022 (Doc. 30), and Plaintiff replied thereto on March 17, 2023 (Doc. 36). Upon consideration and review of the record, the Court finds that Plaintiff's Motion is due to be granted.
I. BACKGROUND
A. Factual Background
This action stems from two married employees' alleged schemes of fraud and theft at the expense of their employer OPS International Inc. ("Plaintiff" or "OPS"). (Doc. 2 (the "Complaint"), ¶ 29).
Plaintiff is a Florida corporation that operates a compounding pharmacy and Federal Drug Administration ("FDA") Outsourcing Facility, providing a plethora of services such as compounding patient-specific prescriptions and affording compounded medications for use in doctors' offices, clinics, and hospitals. (Id. ¶ 11). Plaintiff employed husband and wife, Kenechukwu Okoro ("Defendant Okoro") and Confidence Ekeanyanwu ("Defendant Ekeanyanwu") (collectively, the "Defendants"). Defendant Okoro was employed as Supply Chain and Data Manager, and Defendant Ekeanyanwu was employed as Quality and Regulatory Manager. (Id. ¶¶ 5-6).
According to Plaintiff, the Quality and Regulatory Manager is responsible for quality oversight of all aspects of pharmaceutical compounding. (Id. ¶ 12). Defendant Ekeanyanwu was thus in charge of interfacing and exchanging information with regulators, developing Standard Operating Procedures to ensure quality and regulatory compliance. (Id. ¶ 12). Accordingly, in her capacity as Manager, Defendant Ekeanyanwu was presumably afforded access to Plaintiff's software systems, formulas, physicians and patient databases, marketing strategies, vendor information and contracts, compliance information, and other confidential and proprietary information. (Id. ¶ 15). In his capacity as Supply Chain and Data Manager, Defendant Okoro presumably had access and was responsible for ordering and tracking the inventory of raw chemicals used by OPS to compound medications and pharmaceutical supplies. (Id. ¶ 16).
Plaintiff asserts that it is able to enjoy goodwill in its industry in part because of its ongoing business practices which incorporate confidential and proprietary information into its dealings with its customers. (Id. ¶ 27). Defendant Ekanyanwu, however, disputes that she was able to access all of Plaintiff's internal documents such as marketing materials, order forms, pricing models, and regulatory compliance materials. (Doc. 32-1, p. 13).
As employees of Plaintiff, Defendants were obliged to follow the policies set forth in the Employee Handbook. (Doc. 24-1, pp. 49-89). The Handbook expressly conveyed its policy that "all employees avoid any conflict between their personal interests and those of the Company" and that the "fundamental principle guiding this policy is that no employee should have, or appear to have, personal interests or relationships that actually or potentially conflict with the best interests of the Company." (Id. at p. 81). The Handbook also expressly refers to Plaintiff's policy on proprietary and confidential information as follows: "It is extremely important that all such information remain confidential, [sic] and particularly not be disclosed to OPS International Inc.'s competitors." (Id.).
Of note, the Handbook indicates that "[a]ny employee who improperly copies, removes (whether physically or electronically), uses or discloses confidential information to anyone outside of the Company may be subject to disciplinary action up to and including termination. Employees may be required to sign an agreement reiterating these obligations." (Id.). Additionally, in the "If You Must Leave Us" section, the Handbook also indicated that "[a]ll [OPS] property" as well as all "Confidential Information" must be returned "at separation." (Id. at p. 85). Indeed, the record reflects that Defendants respectively signed a separate agreement indicating their acknowledgment of the policies set forth in the Handbook in its entirety. (Id. at pp. 91-92). Defendants do not dispute their acknowledgment of the agreement. (Doc. 32-1, p. 14).
Plaintiff alleges that it first discovered Defendants' fraudulent activity on or around July 7, 2021. (Doc. 2, ¶ 29). Specifically, Plaintiff buckets Defendants' alleged misconduct into three distinct fraud schemes: 1) the "Fraudulent Invoicing Scheme, 2) the "Fraudulent Marketing Scheme," and 3) the "Consulting and Fraudulent Sales Scheme." (Id. ¶¶ 30-42).
1. The Fraudulent Invoice Scheme
First, Plaintiff points to its discovery of an alleged shell company, Uttermedsales, LLC ("Uttermedsales") that Defendants were purportedly using to profit from fraudulent invoices. (Id. ¶ 31; Doc. 24-1, p. 94).
The record reflects that Defendant Okoro was listed as the Registered Agent and authorized representative of the aforementioned shell company; the record also reflects a check from Plaintiff to Uttermedsales in the amount of $3,044.43 based on a corresponding invoice. (Doc. 24-1, pp. 93-98). Plaintiff's Chief Financial Officer Naomi Loomis ("Loomis") attested that she was not familiar with this entity and found it odd that the check had been prepared for her signature but also contained a Massachusetts address. (Id. at p. 10). She also attested that Defendant Okoro admitted that the invoice was false and that the address on the check to be paid was Defendant Ekeanyanwu's mother's residential address; Defendant Ekeanyanwu allegedly denied any knowledge of the invoice or that the address in question was her mother's. (Id. at pp. 10-11).
In his affidavit, Defendant Okoro concedes, "Uttermedsales LLC is a startup company formed by [him] to procure and sale [sic] supplies to consumers and or businesses based on an identified need." (Doc. 33-1, pp. 1-2). Although he admits that he was in fact the contact for the invoice, he contends that "it was accurate and that [he] was trying to help, but [Loomis] would not believe that it was legitimate or that the supplies had been delivered, which they had." (Id. at p. 2). He further attested, "At no point did I ever admitted [sic] that the Uttermedsales LLC invoice was false or that I committed any wrongdoing in submission of the invoice of payment." (Id.).
However, Defendant Okoro does not provide an explanation for why he needed to create this shell company in the first place in order to "help" the company. Id. Defendant Ekeanyanwu attested that she did acknowledge the company's address as her mother's but claims that this was "business as usual," pointing to a purportedly similar practice of Ms. Andrea Krall, the Director of Business Marketing. (Doc. 32-1, pp. 16-17). The Court was not able to identify in the record any context surrounding Ms. Krall's practices or agreements with Plaintiff. Plaintiff's discovery of Uttermedsales led to Defendants' being suspended pending an investigation. (Id. at p. 17; Doc. 24-1, p. 11).
The Court is not required to do Defendants' work for them. Defendants have the burden of providing evidence to support their attestations. L.S. Heath Son v. AT&T Information Sys., 9 F.3d 561 (7th Cir. 1993) ("[A] district court need not scour the record to determine whether there exists a genuine issue of fact to preclude summary judgment. Instead, the court can rely upon the non-moving party to show such a dispute if one exists."); Impreglon, Inc. v. Newco Enters., Inc., 508 F. Supp. 2d 1222, 1241 n.16 (N.D. Ga. 2007) ("[I]t is not the Court's duty to comb the record in an attempt to find reasons to grant [p]laintiff's Motion for Summary Judgment."); see also Tomasini v. Mount Sinai Med. Ctr. of Fla., Inc., 315 F. Supp. 2d 1252, 1260 (S.D. Fla. 2004); BFI Waste Sys. of N. Am. v. DeKalb County, 303 F. Supp. 2d 1335, 1342 (N.D. Ga. 2004).
2. Fraudulent Marketing Scheme
Second, Plaintiff alleges that Defendants altered Plaintiff's marketing materials to misrepresent a relationship between a third-party company and Plaintiff, so that Defendants could funnel profits from Plaintiff illicitly. (Doc. 2, p. 12).
Upon discovering the alleged Invoice Scheme, Loomis subsequently logged into Plaintiff's Dropbox system, which is responsible for safeguarding internal data, and restored several files that had been deleted. (Doc. 24-1, pp. 11-12). Plaintiff describes the restored documents, made available in the record, as follows: 1) "OPS marketing materials that had been altered to add an entity Careplus and another entity, P.I.C. Healthcare-Industry Solutions ("PIC")"; 2) "IRS EIN number for Careplus"; 3) "A list of fees for PIC to pull state licenses"; 4) "Consulting agreements for PIC, signed by Ekeanyanwu and competitors of OPS"; 5) "An invoice from PIC to Pure Pharmaceuticals for the sale of competitors of OPS"; 6) "An invoice from PIC to Pure Pharmaceuticals for the sale of OPS' raw material, HCG"; and 7) "Bank statements for PIC and Ekeanyanwu's personal account." (Id. at pp. 12, 99-149). Defendants do not dispute that files had been deleted from Plaintiff's Dropbox. (Id. at p. 11).
After uncovering the existence of an entity called Careplus Compounding Inc. ("Careplus"), Loomis decided to look up the company—the record shows that its Articles of Incorporation indicated Defendant Ekeanyanwu was President and Akin Bakare ("Mr. Bakare") was the Vice President and Registered Agent. (Id. at pp. 12, 150-152). In response, Defendant Ekeanyanwu attested that Careplus is "unassociated and unaffiliated with [Plaintiff]," "is NOT a pharmacy," and is "completely unrelated to OPS." (Doc. 32-1, p. 21). However, at least one invoice in the record lists Uttermedsales as a "subsidiary of [C]areplus pharmacy." (Doc. 24-1, p. 94).
Defendants, however, do not fully address the nature of the invoices, agreements, and email correspondences between Ekeanyanwu and Mr. Bakare that reference "profit" relative to the "actual cost from [Plaintiff]" and money that is slated to be "directly deposited into the joint TD bank account." (Doc. 24-1, pp. 153-73). Claiming that "Mr. Bakare authorized Defendant Ekeanyanwu to deposit the check into her account to help pay some of the expenses associated with a company that Defendant Ekeanyanwu and Mr. Bakare had tried to start together, separate from and unaffiliated with Plaintiff, that would have done work in South Africa," Defendants stated that "the business arrangement followed OPS's business model effected and directed by the business development director." (Doc. 30, p. 8; Doc. 32-1, p. 23). Defendant further attests that "OPS as the originating pharmacy charged (accounting) the retail pharmacy at its designated price point and the rest is unaffiliated/unassociated to OPS." (Doc. 32-1, p. 23). Defendants also point to an email in which the director of business development welcomes Mr. Bakare as a partner with Plaintiff as evidence that the business relationship was valid. (Id. at pp. 23-24, 93).
This email is of particular concern because the referenced account is not mentioned anywhere else in the record in a way that could mitigate the Court's suspicions about its presumably illicit purpose of being used to defraud Plaintiff. Defendants again fail to provide an explanation as to why a separate account would be necessary absent unscrupulous activity.
Loomis further alleges based on the email exchanges in the record that Defendants nefariously attempted to divert Plaintiff's money from third parties through Paypal. (Doc. 24-1, pp. 14-15, 173-76). In her affidavit, Defendant Ekeanyanwu responds to this allegation only by noting, "Unassociated/unaffiliated to OPS where it has already been paid for its centralized pharmacy services." (Doc. 32-1, p. 25). The emails show that Defendant Ekeanyanwu attempted to set up Paypal payments with a customer while acting in her capacity as an employee of Plaintiff. (Doc. 24-1, pp. 173-76).
The parties also dispute whether various invoices were accurate and paid. Loomis alleges that Defendants engaged in self-dealing through these invoices, whereas Defendants claim that these were proper. (Id. at pp. 15-17; Doc. 32-1, pp. 26-28). Plaintiff provides a list of what it alleges are the summation of Defendants' illicit invoices, amounting to a total of $18,084.60. (Doc. 24-1, pp. 203-10).
3. The Consulting and Fraudulent Sales Scheme
Third, Plaintiff contends that Defendants leveraged their Fraudulent Marketing Scheme in furtherance of providing consulting services and raw materials to Plaintiff's competitors via shell entities. (Doc. 2, p. 12).
Plaintiff points to documents in the record reflecting PIC's engagements and consulting agreements with other parties. (Id. at pp. 211-50). Defendant Ekeanyanwu is listed as the Authorized Member and Registered Agent for PIC. (Id. at p. 212). Through PIC, Defendant Ekeanyanwu engaged in and received payment for consulting services rendered to Brookfield Medical Surgical Center Supply ("Brookfield"). (Id. at pp. 211-42). Said activity took place in 2020 while Defendants were still employees of Plaintiff. (Id.). Defendant Ekeanyanwu denies that any "funds were diverted for [Defendants'] benefit while providing consulting services to competitors" and insists that Brookfield was not a competitor of Plaintiff's considering the nature of its products. (Doc. 32-1, pp. 29-30).
In response to Loomis's contention that "Ekeanyanwu simultaneously provided compliance and regulatory services to Brookfield through PIC" even "[w]hile employed with [Plaintiff] and without [Plaintiff's] knowledge or authorization," Defendant Ekeanyanwu replied, "Unaffiliated/unassociated with OPS" in her affidavit. (Id. at p. 30; Doc. 24-1, p. 18). The parties also dispute the extent to which, if any, Defendants provided Brookfield with confidential and proprietary information in conjunction with said consulting arrangement. (Doc. 32-1, p. 30).
Finally, Loomis attested, with supporting documentation, that PIC also consulted for an entity called Pure Pharmaceuticals by performing an audit and then illegally sold them, through Plaintiff, a raw chemical called HCG. (Doc. 24-1, pp. 19, 248-50). There is no dispute that "Okoro had access and was responsible for ordering and tracking the inventory of raw chemicals used by OPS to compound medications, as well as its pharmaceutical supplies," which Plaintiff points to as evidence of Defendants' purported ability to sell HCG at Plaintiff's expense without detection. (Doc. 11, ¶ 16). Defendants do not dispute the sale of this material but rather contend that Pure Pharmaceuticals is not one of Plaintiff's competitors. (Doc. 32-1, p. 31).
In sum, the totality of the aforementioned incidents led to the instant lawsuit. (Doc. 30, ¶¶ 72-74).
B. Procedural Background
Plaintiff originally filed its claim in this Court on November 18, 2021. (Doc. 2). Plaintiff's Complaint asserts multiple claims for monetary and injunctive relief against Defendants. (Doc. 2, ¶¶ 75-144). Plaintiff now moves for partial summary judgment on its breach of fiduciary duty (Count IV) and breach of loyalty (Count V) claims. (Doc. 24). After Defendants' response (Doc. 30) and Plaintiff's reply (Doc. 36), this matter is ripe for review.
II. STANDARD OF REVIEW
"The court shall grant summary judgment if 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). The party moving for summary judgment must "cit[e] to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations . . . , admissions, interrogatory answers, or other materials" to support its position that it is entitled to summary judgment. FED. R. CIV. P. 56(c)(1)(A). "The court need consider only the cited materials" but may also consider any other material in the record. FED. R. CIV. P. 56(c)(3).
An issue of fact is "genuine" only if "a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A fact is "material" if the fact could affect the outcome of the lawsuit under the governing law. Id. The moving party bears the initial burden of identifying those portions of the record demonstrating a lack of genuine dispute of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Hickson Corp. v. N. Crossarm Co., 357 F.3d 1256, 1260 (11th Cir. 2004). If the movant shows "an absence of evidence to support the nonmoving party's case," the burden then shifts to the non-moving party to demonstrate that there are, in fact, genuine disputes of material facts. Celotex, 477 U.S. at 325, 106 S.Ct. 2548; see also Porter v. Ray, 461 F.3d 1315, 1320 (11th Cir. 2006).
Summary judgment should only be granted "[w]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving party." Matsushita Elec. Indus. Co., v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). A court may not grant summary judgment if doing so would be based on witness credibility determination. Johnson v. Lang, No. 19-14278, 2022 WL 2734421, at *4 (11th Cir. July 14, 2022) (quoting Mize v. Jefferson City Bd. of Educ., 93 F.3d 739, 742 (11th Cir. 1996)) ("It is not the court's role to weigh conflicting evidence or to make credibility determinations"); Allen-Sherrod v. Henry Cnty. Sch. Dist., 248 F. App'x 145, 147 (11th Cir. 2007) ("The district court was correct in observing that it could not consider [the individual's] credibility as a witness in ruling upon summary judgment."); Gary v. Modena, No. 05-16973, 2006 WL 3741364, at *16 (11th Cir. Dec. 21, 2006) (holding that Rule 56(c) precludes summary judgment when the only way to reconcile conflicting testimony is to "assess the credibility of witnesses").
"Unpublished opinions are not controlling authority and are persuasive only insofar as their legal analysis warrants." Bonilla v. Baker Concrete Const., Inc., 487 F.3d 1340, 1345 (11th Cir. 2007).
When a moving party has submitted sufficient evidence in favor of summary judgment, the non-moving party "must come forward with specific factual evidence, presenting more than mere allegations." Gargiulo v. G.M. Sales, Inc., 131 F.3d 995, 999 (11th Cir. 1997). Overcoming summary judgment requires more than "[t]he mere existence of a scintilla of evidence;" a showing of only "some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment." Anderson, 477 U.S. at 247-48, 106 S.Ct. 2505 (emphasis in original).
III. DISCUSSION
Plaintiff argues that Defendants breached their duty of loyalty and/or fiduciary duty in multiple ways: 1) they illicitly sold Plaintiff's chemical compound known as HCG to a competing pharmacy; 2) they consulted for Plaintiff's competitors; and 3) they operated a competing compounding pharmacy. (Doc. 36, pp. 3-9). Defendants dispute each of these claims. Accordingly, the Court begins its analysis with Count IV, the breach of loyalty claim, and addresses Count V, the breach of fiduciary duty claim, thereafter. (Doc. 2, ¶¶ 114-25).
The Court recognizes that much of Defendants' conduct is indicative of an overlapping breach of both a fiduciary duty and a duty of loyalty. See Valiant Servs. Grp., LLC v. Com. Works, Inc., No. 21-cv-1239, 2022 WL 738471, at *2 (M.D. Fla. Jan. 24, 2022) ("The duty of loyalty is part of a fiduciary duty, and a breach of a duty of loyalty gives rise to a breach of fiduciary duty claim."). However, the Court separates each cause of action for organizational purposes.
A. Breach of Loyalty (Count IV)
The Court finds that Plaintiff's Motion is due to be granted with respect to Plaintiff's breach of loyalty claim against Defendants. (Doc. 24, pp. 13-18).
"To state a claim for a breach of a duty of loyalty, [d]efendants must allege (1) the existence of a duty of loyalty, (2) a breach of that duty, and (3) damages proximately caused by the breach." Martin v. Partsbase, Inc., No. 20-80235-CIV, 2020 WL 7495536, at *2 (S.D. Fla. Dec. 4, 2020) (citing Hennegan Co. v. Arriola, 855 F. Supp. 2d 1354, 1361-62 (S.D. Fla. 2012); Gracey v. Eaker, 837 So. 2d 348 (Fla. 2002)). "It is well-established under Florida law that an employee owes a fiduciary duty and a duty of loyalty to his or her employer." Charles Schwab & Co. v. McMurry, No. 08-cv-534-FtM-29SPC, 2008 WL 5381922, at *1 (M.D. Fla. Dec. 23, 2008). "Additionally, an employee owes a fiduciary duty of loyalty to his or her employer not to 'engage in disloyal acts in anticipation of his future competition, such as using confidential information acquired during the course of his employment or soliciting customers and other employees prior to the end of his employment.' " Nat'l Ins. Consulting Grp., LLC v. Kandel, No. 19-cv-22373, 2020 WL 13389742, at *3 (S.D. Fla. Jan. 15, 2020) (citation and emphasis omitted).
"[A]cts that . . . constitute actual competition include solicitation of business for an employee's personal endeavor, which otherwise the employee had an obligation to obtain for an employer, competing with the employer for customers or employees, and employee behavior leading to the mass resignation of the employer's workforce." Nat'l R.R. Passenger Corp. v. Veolia Transp. Servs., Inc., 791 F. Supp. 2d 33, 49 (D.D.C. 2011) (emphasis in original); see also RKI, Inc. v. Grimes, 177 F. Supp. 2d 859, 877 (N.D. Ill. 2001) (holding that an employee breached the duty of loyalty by downloading confidential information while employed and using that information to compete more effectively against the employer); ABC Trans Nat. Transp., Inc. v. Aeronautics Forwarders, Inc., 62 Ill.App.3d 671, 20 Ill.Dec. 160, 379 N.E.2d 1228, 1237 (1978) (holding that it was a breach of the duty of loyalty for employee to continue working for original employer after establishing a personal venture that competed with employer).
Plaintiff has afforded this Court several pieces of significant evidence: Plaintiff points to consulting contracts between competitors Pure Pharmaceuticals and Brookfield, respectively, and PIC (for which Defendant Ekanyanwu is the Authorized Member and Registered Agent), a copy of an invoice to Pure Pharmaceuticals from PIC for the sale of HCG raw materials, and personal bank records reflecting paid consulting services to Brookfield. (Doc. 24-1, pp. 19, 223-50; Doc. 11, ¶ 11). Moreover, Loomis's testimony corroborates that this transaction ensued without Plaintiff's knowledge after Defendant Ekanyanwu conducted an audit for Pure Pharmaceuticals—an entity that Defendant admits was also a compounding pharmacy in the industry—without Plaintiff's knowledge or consent. Plaintiff further alleges that Defendant Okoro was responsible for tracking this raw material and therefore was able to assist in this transaction without Plaintiff's detection. (Id. at p. 19). These exchanges all ensued while Plaintiff was employing Defendants. (Doc. 24-1, pp. 19, 223-50).
Defendants argue that the above-mentioned evidence is "conclusory" in terms of showing that the materials were actually transferred and claim that, because HCG had been forbidden by the FDA, Plaintiff has not shown a proximate cause of damages. (Doc. 30, p. 13). They do not, however, dispute the auditing service that PIC conducted for Pure Pharmaceuticals, and Defendant Ekeanyanwu herself concedes that the bank statements "for PIC and Ekeanyanwu personal [a] counts" were "[u]nassociated/unaffiliated with OPS." (Doc. 32-1, p. 21).
The Court finds that these acts alone are sufficient to grant summary judgment on Plaintiff's breach of loyalty claim. As employees of Plaintiff, Defendants owed Plaintiff a duty of loyalty. McMurry, 2008 WL 5381922, at *1. There is no dispute that Defendants were aware of Plaintiff's policy that "all employees avoid any conflict between their personal interests and those of the Company" and that the "fundamental principle guiding this policy is that no employee should have, or appear to have, personal interests or relationships that actually or potentially conflict with the best interests of the Company." (Doc. 24-1, p. 81).
Plainly put, there is no genuine dispute of material fact that Defendant Ekeanyanwu consulted for a competitor of Plaintiff's as a "personal endeavor" through PIC, thus undermining their own employer's standing in the market, and subsequently sold Plaintiff's property to that competitor for additional profit. Kandel, 2020 WL 13389742, at *3; (Doc. 24-1, pp. 19, 248-50; Doc. 32-1, p. 21).
Between consulting for a competitor and leveraging that relationship to sell Plaintiff's property to that competitor, the Court finds that no reasonable jury could conclude that Defendants did not proximately cause damage to Plaintiff. Defendants overtly attempt to skirt responsibility for their actions by making claims about Plaintiff's conduct as it pertains to HCG, which is simply a red herring and irrelevant for purposes of this lawsuit. (Doc. 30, p. 13). Defendants' perception of what they think should be or should have been done with their employer's property is not a license to sell it for their own personal gain.
The bottom line is quite simple: while employed by Plaintiff, Defendants converted Plaintiff's property without Plaintiff's consent after rendering services—at a personal premium—to a competitor that cut against Plaintiff's best interests. (Id.). The Court cannot fathom a universe in which the conversion of another's property can constitute a good faith defense to a breach of a duty of loyalty claim. Arriola, 855 F. Supp. 2d at 1362. The question, therefore, is not whether Defendants breached their duty of loyalty but rather to what extent. Accordingly, summary judgment for Plaintiff's breach of loyalty claim is due to be granted.
B. Breach of Fiduciary Duty (Count V)
The Court finds that summary judgment is also due to be granted with respect to Plaintiff's claim for a breach of fiduciary duty.
The Court recognizes that, in analyzing Defendants' conduct under a breach of fiduciary duty framework, it almost certainly implicates the breach of duty of loyalty as well. Because the Court has already found that summary judgment is due to be granted with regard to this cause of action, the Court will not engage in further analysis of its legal classification of Defendants' misconduct.
"A plaintiff must prove three elements to establish a claim for breach of fiduciary duty: '(1) the existence of a fiduciary duty; (2) breach of that duty; and (3) damage proximately caused by the breach.' " Wilchombe v. TeeVee Toons, Inc., 555 F.3d 949, 958-59 (11th Cir. 2009) (citation omitted). "The duty of loyalty is part of a fiduciary duty, and a breach of a duty of loyalty gives rise to a breach of fiduciary duty claim." See Valiant, 2022 WL 738471, at *2 (citing Taubenfeld v. Lasko, 324 So. 3d 529, 538 (Fla. 4th DCA 2021); Stonepeak Partners, LP v. Tall Tower Cap., LLC, 231 So. 3d 548, 553 (Fla. 2d DCA 2017)). It has long been settled that embezzlement is precisely the kind of misconduct that typifies an employee's breach of fiduciary duty. See Connelly v. Special Rd. & Bridge Dist. No. 5, 99 Fla. 456, 466, 126 So. 794 (1930) (holding that a "breach of duty" occurs when an agent "engages in a transaction which tends to bring his personal interest into conflict with his obligations as a fiduciary agent," particularly when "the agent derives profits form transactions which operate directly to the prejudice of his master's business"); see also LaSalle Bank Lake View v. Seguban, 937 F. Supp. 1309, 1324 (N.D. Ill. 1996); Beltran v. Brentwood N. Healthcare Ctr., LLC, 426 F. Supp. 2d 827, 831 (N.D. Ill. 2006).
Plaintiff highlights Loomis's discovery of Uttermedsales, an unidentified company under the control of Defendant Okoro, as additional evidence of Defendants' breach of fiduciary duty. (Doc. 24, p. 8). Specifically, Plaintiff points to the OPS check—with Defendant Ekeanyanwu's mother's address on it—that had been prepared as payment to Uttermedsales for the purchase of invoiced medical supplies as particularly concerning evidence of self-dealing. (Doc. 24-1, pp. 94-96).
As mentioned, the Court's determination that summary judgment is due to be granted for Plaintiff's breach of loyalty claim necessarily engenders the same result for its breach of fiduciary duty claim. Valiant, 2022 WL 738471, at *2.
Defendants claim that this shell company was created in an effort "to help during the pandemic" without providing any evidence or explanation as to why a separate company was required to order medical supplies or why the address of the shell company was not affiliated with Plaintiff. (Doc. 30, p. 5).
It is not the Court's role to hunt down possible theories or shreds of evidence that could potentially cast doubt on what appears to be a straightforward attempt to embezzle funds from Plaintiff. Like the Seguban and Beltran courts, this Court finds that Defendants' apparently concerted attempt to steal from Plaintiff constitutes an additional breach of fiduciary duty to Plaintiff, adding more color to the mosaic of Defendants' unscrupulous conduct. 937 F. Supp. at 1324; 426 F. Supp. 2d at 831.
The Court has additionally determined that no reasonable jury could find that Defendants did not breach their fiduciary duty when they used Careplus to manipulate funds to Plaintiff's detriment. Defendants claim that Careplus was entirely unrelated to Plaintiff and that they did not engage in misconduct. (Doc. 32-1, p. 21). However, Defendants' assertions lack substantive evidentiary support. (Doc. 32). For instance, Defendants reference a welcome email from the director of business development to Mr. Bakare as evidence that Careplus's activity was all authorized. (Doc. 32-1, pp. 23-24, 93). While this email may show that the director was aware of Careplus's existence as a customer, it in no way indicates that the business director knew about or would have approved of what appears almost certainly to be the financial scheming that Plaintiff has shown with specificity in the record. (Doc. 24-1, pp. 99-149). The same applies to Defendant Ekanyanwu's email with marketing director Andrea Kroll concerning requests for Careplus materials. (Doc. 38-2, pp. 1-5).
The Court was not obligated to consider this evidence: Defendants originally failed to provide this email exchange in the record, but the Court nonetheless gave Defendants the opportunity to file these emails a second time. FED. R. CIV. P. 56(c)(3); (Doc. 37). Alas, the Court did not find these emails helpful.
Namely, Defendants do not sufficiently address Plaintiff's multiple pieces of concerning evidence: Careplus's articles incorporation showing Defendant and Mr. Bakare as heads of the company, the existence of a joint bank account between the two, Defendant Ekanyanwu's attempt to solicit third-party payments through Paypal as opposed to through Plaintiff's regular payment process, and references to personal profit using Plaintiff's proprietary payment formulas. (Id.). At a minimum, Defendants acted in a way that created a conflict between their "personal interest" and their obligations as "fiduciary agent[s]" by setting up their own bank account and attempting to disrupt their employer's payment system with an entity of their own that seems entirely unnecessary other than to funnel money away from Plaintiff. Connelly, 99 Fla. at 466, 126 So. 794.
Absent additional evidence from Defendants to support more than their mere assertions, summary judgment is due to be granted with respect to both Plaintiff's breach of fiduciary duty and breach of loyalty claims. Gargiulo, 131 F.3d at 999.
As mentioned, Defendants almost certainly breached their duty of loyalty here as well; however, the Court analyzes Defendants' conduct within the framework of fiduciary duty because it implicates behavior that is directly reflective of the embezzlement that the Court finds is more specifically analyzed under the breach of fiduciary duty cause of action. Connelly, 99 Fla. at 466, 126 So. 794. At this procedural stage, the Court need only clarify whether Defendants breached their duty of loyalty and fiduciary duty as opposed to the degree to which each was breached. Because the Court finds that both duties were breached, the Court ends its inquiry into Defendants' conduct there and need not parse through more specifically which conduct falls under one or both of the duties implicated in this case. See Valiant, 2022 WL 738471, at *2.
IV. CONCLUSION
Accordingly, it is ORDERED AND ADJUDGED that Plaintiff's Motion for Partial Summary Judgment (Doc. 24) is GRANTED.
DONE AND ORDERED in Orlando, Florida on May 11, 2023.