Thomas Christopher Group, Inc. v. Moreno et al

Filing 15

ORDER granting 6 motion to dismiss as to Defendant Christopher Rios and Defendant Ruben Moreno who shall be terminated from this case. Signed by Judge Elizabeth A. Kovachevich on 7/6/2015. (SN)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
THOMAS CHRISTOPHER GROUP,
INC.
Plaintiff,
v.

CASE NO.: 8:15-CV-992-T-17EAJ

RUBEN MORENO,
CHRISTOPHER RIOS, and
NANCY ESTEP,
Defendants.
/
ORDER GRANTING DEFENDANT RUBEN MORENO AND DEFENDANT
CHRISTOPHER RIOS’ MOTION TO DISMISS/ALTERNATIVE MOTION FOR MORE
DEFINITE STATEMENT
This matter comes to the Court pursuant to Defendants’, RUBEN MORENO and
CHRISTOPHER RIOS (“Defendants”), Motion to Dismiss or in the Alternative Motion for
More Definite Statement, (Doc. # 6), filed May 21, 2015, and Plaintiffs Response in Opposition,
(Doc. # 11), filed June 5, 2015. For the reasons that follow below, Defendants’ Motion is
GRANTED.
LEGAL STANDARD
“A factual challenge that an extrinsic document (such as an arbitration agreement)
deprives the Court of its power to hear a claim may be raised in a Rule 12(b)(1) motion.” Walker
v. Magic Burger, LLC, No. 6:14-CV-1751-ORL, 2015 WL 500909, at *1 (M.D. Fla. Feb. 5,
2015). Under the Federal Arbitration Act (“FAA”), a court is required to “either stay or dismiss a
lawsuit and to compel arbitration upon a showing that (a) the plaintiff entered into a written
arbitration agreement that is enforceable ‘under ordinary state-law’ contract principles and (b)

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the claims before the court will fall within the scope of that agreement.” See Lambert v. Austin
Industries, 544 F.3d 1192, 1195 (11th Cir. 2008) (citing 9 U.S.C. §§ 2— Under contract law,
4).
“[a] party cannot be required to submit to arbitration any dispute which he has not agreed so to
submit.” See Perera v. H & R Block E. Enterprises, Inc., 914 F. Supp. 2d 1284, 1287 (S.D. Fla.
2012) (citing AT & T Technologies, Inc. v. Communications Workers o f America, 475 U.S. 643,
648 (1986)). The party seeking to avoid arbitration must deny the agreement to arbitrate was
made and offer evidence to substantiate the denial. See Perera v. H & R Block Eastern
Enterprises, Inc., 914 F.Supp.2d 1284, 1287 (S.D. Fla. 2012) (citing Wheat, First Security, Inc.
v. Green, 993 F.2d 814, 817 (11th Cir. 1993)).
BACKGROUND
Plaintiff is a corporation specializing in the search and recruitment of corporate
executives, and has developed several systems to perform these services: Christopher Business
Systems (“CBS 5.0”), Christopher People Systems (“CPS”), Christopher Marketing Systems
(“CMS”), Christopher Accounting Systems (“CAS”), and Christopher Facilities Systems
(“CFS”). (Doc. #1). Plaintiff also developed a confidential database (“Candidate Warehouse”)
of established executive candidates. (Doc. # 1 ). Sometime between August and September of
2006, Plaintiff employed Defendant Ruben Moreno, and sometime between August and October
of 2009, Plaintiff employed Defendant Christopher Rios, as executive recruiters. (Doc. # 1).
Plaintiff hired Defendant Ruben Moreno who was a recently convicted felon who pled guilty to
defrauding AutoNation and AOL through wire fraud. (Doc. # 1).
In the initial stages of their respective employments, Defendants entered into
Employment and Non-Disclosure Agreements with Plaintiff. (Doc. # 1). The Agreements
contained restrictive covenants:

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(a) [T]hat for a period of one (1) year after termination of his
employment with TCG [Defendants] would not own, maintain,
engage in, be employed by, be contracted by, or have a financial
interested in any business that offers recruiting, executive
recruiting, employment search or job placement services; (b) that
after termination of his employment with TCG [Defendants] would
not contact, solicit or conduct business with any customer or client
of TCG; and (c) that after termination of [Defendants] employment
with TCG [Defendants] would not contact, solicit or conduct
business with any candidate of TCG.
(Doc. #1). Defendants and Plaintiff also entered into an arbitration agreement:
All controversies, claims, disputes and matters in question arising
out of, or relating to, the employment of the Employee by the
Company or the termination of such employment, or the
Employee’s Employment Agreement, or breach thereof, or the
relations between the parties, arising either during or after the
employment relationship, shall be decided by arbitration in
accordance with the Commercial Arbitration Rules of the
American Arbitration Association . . . The arbitration shall take
place in the city in which the Company’s Office is then located,
and shall be governed by the laws of this State.
(Docs. ## 6-2, 6-3). On September 13, 2013, Defendants resigned; their last day with Plaintiff
was on October 11, 2013. (Doc. # 1). According to Plaintiff, on or about September 17, 2013,
Defendant Ruben Moreno and Nancy Estep formed Sterling Global Executive Search, LLC, a
company engaged in executive searches and recruiting. (Doc. #1).
DISCUSSION
In reviewing the instant Motion, the Court must: first, determine whether there is a valid
arbitration agreement; and second, determine whether the claims are arbitrable. See Perera v. H
& R Block E. Enterprises, Inc., 914 F. Supp. 2d 1284, 1287 (S.D. Fla. 2012). If the disputed
claims are arbitrable, the Court must either stay or dismiss the case and compel arbitration. See
Lambert v. Austin Industries, 544 F.3d 1192, 1195 (11th Cir. 2011).

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I.

Plaintiffs Arbitration Agreement is Enforceable

“Under ordinary contract law, an arbitration agreement is enforceable if it meets the
applicable state's requirements of a validly formed contract—e.g. offer, acceptance,
consideration—and the terms are not unconscionable.” See Perrera, 914 F. Supp. 2d at 1287
(citing Mitsubishi Motors v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 627 (1985); Caley v.
Gulfstream Aerospace Corporation, 428 F.3d 1359, 1368 (11th Cir. 2005)). Plaintiff does not
dispute the existence of a valid and enforceable arbitration agreement, but rather disputes the
scope of the arbitration clause. (Doc. #11).
II.

Each of Plaintiffs Claims are Subject to Arbitration

“As a matter of contract law, the scope of an arbitration agreement depends on the intent
of the parties.” See Perera, 914 F. Supp. 2d at 1287-88 (citing Seaboard Coast Line R.R. v.
Trailer Train Co., 690 F.2d 1343, 1352 (11th Cir. 1982); Seifert v. U.S. Home Corp., 750 So.2d
633, 636 (Fla. 1999)). “[W]here . . . parties concede that they have agreed to arbitrate some
matters pursuant to an arbitration clause, the law’s permissive policies in respect to arbitration
counsel that any doubts concerning the scope of arbitral issues should be resolved in favor of
arbitration.” Granite Rock Co. v. International Brotherhood o f Teamsters, 561 U.S. 287, 298
(2010) (internal quotation marks and citations omitted). “The FAA creates a presumption in
favor of arbitrability; so, parties must clearly express their intent to exclude categories of claims
from their arbitration agreement.” Paladino v. Avnet Computer Technologies, Inc., 134|F.3d
1054, 1057 (11th Cir. 1998) (citations omitted).
In this case, the plain language of the Arbitration Agreement is very broad:
All controversies, claims, disputes and matters in question arising
out of, or relating to, the employment of the Employee by the
Company or the termination of such employment, or the
Employee’ Employment Agreement, or breach thereof, or the
s
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relations between the parties, arising either during or after the
employment relationship, shall be decided by arbitration in
accordance with the Commercial Arbitration Rules of the
American Arbitration Association . . .
(Docs. ## 6-2, 6-3) (emphasis added). Plaintiff agreed to arbitrate “[a]ll . . .
claims . . . arising out of, or relating to . .. the relations between parties. . . arising
either during or after the employment relationship . . . .” Defendants argue the
arbitration agreement covers “all claims and disputes between the parties.” (Doc.
# 6). The Court disagrees. The arbitrable claims and disputes are limited by the
employment relationship. We agree with Plaintiff that the language in the
agreement “cannot mean that ‘all claims’ between the parties are subject to
arbitration. . . . ” (Doc. #11).
However, the Court finds the arbitration clause broad enough to cover
Plaintiffs three claims. Counts I, II, and III arise out of, or relate to, the relations
between the parties during and after the employment relationship—all claims
result from Defendants leaving Plaintiff to work for a competitor: Count I:
Violation of Racketeer Influenced and Corrupt Organizations Act (RICO):
“TCG’s damages are therefore a direct and proximate result of the investment
and/or use of the embezzled funds in the creation and/or operation of
Sterling. . .

Count II: Violation of Racketeer Influenced and Corrupt

Organizations Act (RICO): “As a direct and proximate result of Rios’s and
Estep’s conspiring with Moreno [to steal Plaintiffs operating systems and
confidential databases entrusted to Defendants during employment], TCG has
suffered damage. . . .” Count III: Violation of Computer Fraud and Abuse Act

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(CFAA): “As a direct and proximate result of Defendants’ actions [destruction of
information on company owned laptops], TCG has been damaged.” (Doc. # 1).
The Court in the Eleventh Circuit has stated “arising out of,” as used in an
arbitration agreement, requires a “direct relationship” between the claim and the
duties specified by the contract. See Doe v. Princess Cruise Lines, Ltd., 657 F.3d
1204, 1219 (11th Cir. 2011) (deciding there was no direct relation between the
dispute and the employer’s contract because “[t]he cruise line could have engaged
in that tortious conduct even in the absence of any contractual or employment
relationship with [the employee]”). Plaintiff argues there is no direct relation
between the RICO or CFAA claims and the arbitration clause, (Doc. #11), but
the Court disagrees. Defendants’ access to Plaintiffs electronically stored
information is in direct relation to the employer-employee agreement, whereby
Plaintiff entrusted Defendants with confidential information in order to carry out
employment tasks. In addition, Plaintiff alleges Defendants used embezzled funds
to create Sterling, but Plaintiff disregards the hefty income provided to
Defendants during their respective employments, which might be in direct
relation to the alleged pattern of racketeering and the creation of Sterling, the
competitor. At least without Plaintiffs training, Defendants would be unable to
create the very executive recruitment company the Employment Agreement
sought to avoid. In sum, the RICO and CFAA claims could not have occurred
independent of the Agreements.

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III. Dismiss or Stay
“The weight of authority clearly supports dismissal of the case when all of
the issues raised in the district court must be submitted to arbitration.” Perera v.
H & R Block Eastern Enterprises, Inc., 914 F. Supp. 2d 1284, 1290 (S.D. Fla.
2012) (citing Caley v. Gulfstream Aerospace Corp., 333 F.Supp.2d 1367, 1379
(N.D. Ga. 2004)). All of Plaintiffs claims are arbitrable, so the Court exercises
it’s discretion to dismiss the case with prejudice. Alternative Motion for More
Definite Statement is moot because Motion to Dismiss is granted. Accordingly,
it is
ORDERED that Defendants’ Motion to Dismiss Counts I, II, and III for
lack of subject matter jurisdiction is GRANTED WITH PREJUDICE as to
Defendant Christopher Rios and Defendant Ruben Moreno who shall be
terminated from this case.
DONE and ORDERED in Chambers, in Tampa, Florida, this 6th day of
July, 2015.

C

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