The Variable Annuity Life Insurance Company (Valic) v. Laeng
ORDER: United States Magistrate Judge Mark A. Pizzo's Report and Recommendation 28 is ACCEPTED and ADOPTED to the extent that it finds VALIC has failed to demonstrate a substantial likelihood of success on the merits. Plaintiff's Motion for Preliminary Injunction 5 is DENIED. Signed by Judge Virginia M. Hernandez Covington on 2/11/2013. (CH)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
THE VARIABLE ANNUITY LIFE
INSURANCE COMPANY (VALIC),
Case No. 8:12-cv-2280-T-33MAP
Pizzo, United States Magistrate Judge (Doc. # 28), in which
Judge Pizzo recommends that Plaintiff VALIC’s Motion for
Preliminary Injunction (Doc. # 5) be denied.
On January 16, 2013, Defendant Fawn Laeng filed an
objection to the Report and Recommendation.
(Doc. # 30).
VALIC filed an objection to the Report and Recommendation
on January 17, 2013.
(Doc. # 31).
Each party filed a
response to the opposing party’s objection (Doc. ## 35, 36)
on January 30, 2013.
After due consideration, and for the
Recommendation as articulated herein.
VALIC is a Texas corporation that markets financial
services to tax exempt organizations.
(Doc. # 1 at ¶¶ 1,
Laeng is a former employee of VALIC.
Id. at ¶ 2.
a condition of employment with VALIC, Laeng was required to
execute a “Registered Representative Agreement” with VALIC
Financial Advisors (VFA).
Id. at ¶ 25.
Pursuant to the
Agreement, “[i]n consideration of [Laeng’s] access to VALIC
such as the customer base developed by VALIC and the other
[Laeng] promised that she would not disclose trade secrets
[or confidential and proprietary information] during the
Id. at ¶¶ 28-29.
provision, promising for one year after leaving employment
within [Laeng’s] assigned territories and assigned to her
during the one year preceding her departure[.]”
Id. at ¶
Importantly, this provision does not prohibit Laeng
from competing with VALIC upon departure; VALIC describes
the non-solicitation provision as “very reasonable” in that
it permits Laeng “to work for a VALIC competitor [and sell]
competing products in the same region she worked before her
(Doc. # 5 at 2).
Laeng left VALIC on July 11, 2012, and began working
at LPL Financial, one of VALIC’s local competitors, the
(Doc. # 1 at ¶ 2).
VALIC alleges that Laeng is
“soliciting and attempting to solicit VALIC’s clients, and
otherwise improperly competing against VALIC in violation
VALIC further claims that Laeng’s actions
“have resulted in more than $629,113.32 being removed from
accounts brokered by LPL Financial . . . .”
Id. at ¶ 6.
On October 5, 2012, VALIC filed the instant action
Id. at 1.
Also on October 5, 2012, VALIC
filed a Motion for Preliminary Injunction, which this Court
referred to Judge Pizzo for the issuance of a Report and
(Doc. ## 5, 7).
Among other requests,
Court’s issuance of an order enjoining Laeng from “directly
prohibiting Laeng from “attempting to induce any Protected
Customer to end or alter his or [her] relationship with
VALIC . . . for a period of one year[.]”
(Doc. # 5 at 15-
Preliminary Injunction on November 16, 2012.
(Doc. # 24).
On January 2, 2013, after examining the evidence against
the touchstone of Rule 65 of the Federal Rules of Civil
Recommendation (Doc. # 28), finding that the Motion for
Preliminary Injunction should be denied.
After conducting a careful and complete review of the
findings and recommendations, a district judge may accept,
Wainwright, 681 F.2d 732 (11th Cir. 1982), cert. denied,
objections, there is no requirement that a district judge
review factual findings de novo, Garvey v. Vaughn, 993 F.2d
776, 779 n.9 (11th Cir. 1993), and the court may accept,
reject or modify, in whole or in part, the findings and
28 U.S.C. § 636(b)(1)(C).
absence of an objection.
See Cooper-Houston v. S. Ry. Co.,
37 F.3d 603, 604 (11th Cir. 1994);
Castro Bobadilla v.
Reno, 826 F. Supp. 1428, 1431-32 (S.D. Fla. 1993), aff’d,
28 F.3d 116 (11th Cir. 1994) (Table).
As explained in the Report and Recommendation of Judge
The decision to grant or deny a preliminary
injunction is within the discretion of the
Carillon Importers, Ltd. v.
Frank Pesce Int’l Group Ltd., 112 F.3d 1125, 1126
(11th Cir. 1997). . . . In determining whether a
preliminary injunction should issue, the district
court considers whether the moving party has
demonstrated (1) a substantial likelihood of
success on the merits; (2) irreparable harm to
the moving party unless the injunction issues;
(3) the threatened injury to the movant outweighs
the potential harm the proposed injunction may
cause the opposing party; and (4) if issued, the
injunction would not disserve or be adverse to
the public interest. MacGinnitie v. Hobbs Group,
LLC, 420 F.3d 1234, 1240 (11th Cir. 2005). Since
a preliminary injunction is an extraordinary and
drastic remedy, a district court should not issue
clearly establishes the burden of persuasion as
to each of the four prerequisites.
Hotels and Resorts, B.V. v. Consorcio Barr, S.A.,
320 F.3d 1205, 1210 (11th Cir. 2003).
(Doc. # 28 at 4-5).
Judge Pizzo found that VALIC failed to
Recommendation, VALIC argues (1) that Laeng “‘scrubbed’ the
completely eliminated, could have been used by VALIC to
Laeng . . . set[ ] an appointment with her then-current
VALIC customer to be held the afternoon after her morning
resignation;” (3) that VALIC presented “evidence of written
facilitated the transfer of hundreds of thousands . . . in
funds from . . . protected VALIC clients in the months
after her resignation.”
(Doc. # 31 at 1-2).
will address each of these arguments in turn.
VALIC alleges that Laeng “concealed any trade secret
violations” by scrubbing her laptop.
Id. at 9.
agrees with Judge Pizzo’s finding that VALIC has produced
“no evidence [that Laeng] removed VALIC’s trade secrets.”
(Doc. # 28 at 11).
Laeng acknowledges in her declaration
that she “wiped [her VALIC laptop] to prevent VALIC[’s]
dissemination of personal information.”
(Doc. # 14-1 at
VALIC argues that the circumstances surrounding the
scrubbing of Laeng’s computer make Laeng’s justifications
for doing so “demonstrably implausible.”
(Doc. # 31 at
secrets provision of the Agreement.
VALIC additionally argues that Laeng’s “mass-mailing”
of a certain letter to former VALIC clients soon after
Laeng’s resignation “would [have been] extremely difficult,
if not impossible, to accomplish without retaining VALIC’s
(Doc. # 31 at 13; Doc. # 5-2 at ¶
Laeng argues, however, that “the names of and contact
“lists of employees or eligible participants in both the
Pasco County School District and Hillsborough County School
District are publicly available upon request.”
(Doc. # 14introduced
evidence that the mass-mailing was achievable without the
suspicions fail to establish that Laeng has violated the
Agreement’s trade secrets provision.
VALIC’s claims involving Laeng’s alleged violation of
the restrictive covenant on non-solicitation are similarly
allegation that Laeng “set an appointment with her thencurrent VALIC customer to be held the afternoon after her
between Laeng and her former customer, “Richard,” reveals
no solicitation by Laeng whatsoever (Doc. # 5-2 at 26-27).
Furthermore, the letter that Laeng admittedly sent to an
elementary school principal “was not intended for general
distribution,” and VALIC presented no evidence to show that
the principal was Laeng’s former customer (Doc. # 35 at 5;
transferred from VALIC to Laeng’s new company since Laeng’s
resignation, VALIC has presented no evidence to show that
these transfers resulted from any improper solicitation by
Laeng (Doc. # 5-2 at ¶ 26; Doc. # 31 at 14-15).
that the record evidence does not support a finding that
Laeng breached the Agreement’s non-solicitation provision.
VALIC complains that its “ability to counter Laeng’s
implausible excuses was hampered by . . . the Magistrate’s
decision to conduct the preliminary injunction proceeding
permitted VALIC to cross-examine Laeng.”
(Doc. # 31 at 2).
requested a full evidentiary hearing prior to the November
evidentiary hearing, the Eleventh Circuit has established
before issuance of a preliminary injunction.”
Nursing Svc., Inc. v. Bethesda Mem’l Hosp., Inc., 887 F.2d
1535, 1538 (11th Cir. 1989).
The instant case does not
constitute one similar to All Care Nursing, for example, in
which the Eleventh Circuit determined that “in recognition
of the complexity of the facts and the number of parties
before the court . . . , ‘[a] two-day notice, coupled with
thirty minutes for oral presentations[,] can hardly be said
to constitute a meaningful opportunity to oppose appellees’
motion for preliminary injunction.’”
McDonald’s Corp. v.
Robertson, 147 F.3d 1301, 1312 (11th Cir. 1998) (quoting
All Care Nursing, 887 F.2d at 1538).
resolution of bitterly disputed facts,” id. at 1311, in
which case an evidentiary hearing might be necessary, but
hearing for VALIC’s own shortage of evidence to prove its
claims against Laeng.
The Eleventh Circuit has noted that, in “the category
of cases where there is little dispute as to raw facts but
much as to the inferences to be drawn from them . . . [,]
‘leaves the balancing between speed and practicality versus
Id. at 1313 (quoting Jackson v. Fair,
846 F.2d 811, 819 (1st Cir. 1988)); see also Cumulus Media,
Inc. v. Clear Channel Comm., Inc., 304 F.3d 1167, 1178
(11th Cir. 2002) (applying the Jackson approach).
scrubbed her laptop or that certain former clients have
transferred their accounts to LPL Financial; rather, Laeng
disputes that either of these facts indicates a breach of
The Court acknowledges that “VALIC’s injunction seeks
only the requirement that Laeng abide by her contractual
promises with VALIC.”
(Doc. # 31 at 3).
fact does not excuse VALIC’s burden of persuasion as to the
Because the Court finds that VALIC has failed
to demonstrate a substantial likelihood of success on the
established the remaining three prerequisites.
additionally need not address the issues raised in Laeng’s
Accordingly, it is
ORDERED, ADJUDGED, and DECREED:
United States Magistrate Judge Mark A. Pizzo’s Report
ADOPTED to the extent that it finds VALIC has failed
to demonstrate a substantial likelihood of success on
Plaintiff’s Motion for Preliminary Injunction (Doc. #
5) is DENIED.
DONE and ORDERED in Chambers in Tampa, Florida, this
11th day of February, 2013.
Copies: All Counsel of Record
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