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Seneca One Finance, Inc. v. Bloshuk

United States District Court, D. Maryland

October 5, 2016




         On June 3, 2016, Seneca One Finance, Inc. filed a Complaint in the Circuit Court for Montgomery County, Maryland against former employee Kris Bloshuk. Seneca One alleged that Ms. Bloshuk breached the non-competition and non-solicitation provisions of her employment contract, and that she engaged in a civil conspiracy with her new employer, DRB Capital, to breach Ms. Bloshuk's contract with and fiduciary duties to Seneca One. ECF No. 2. Seneca One also sought an accounting from Ms. Bloshuk for monies unjustly received as a result of her alleged breach. Id. Ms. Bloshuk removed the case to this Court on June 3, 2016, ECF No. 1, and on June 10, 2016 filed a Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), ECF No. 12. A Motions Hearing was held on August 10, 2016. ECF No. 20. For the reasons that follow, Ms. Bloshuk's Motion to Dismiss will be granted.


         I. Seneca One's Business

         Seneca One engages in what it describes as the “highly competitive business of receivable factoring and financing, including financial services and solutions for recipients of deferred payments.” ECF No. 2 ¶ 6. Put simply, its principal activity is to purchase for a lump sum all or a portion of structured settlement annuities or other deferred payment plans.[1] Seneca One identifies structured settlement annuitants or recipients of other deferred payments and alleged that it then works with these individuals with a goal toward finalizing the purchase of the structured settlement payments. Id. ¶ 7. After Seneca One closes a deal with a customer, it alleged that it “commits significant resources to ensure that the customer's experience is a positive one, ” including bearing the costs to obtain court approval of the transaction and advancing large sums of money to the customer prior to obtaining court approval. Id. ¶ 17. It is through these efforts, Seneca One alleged, that Seneca One “builds goodwill with customers and enables Seneca One representatives to build on that goodwill and establish relationships with customers.” Id. The names of these annuitants are usually a matter of public record, and Seneca One allegedly engages in this business throughout the United States. See Id. ¶ 6; ECF No. 15, at 4 (“the names of structured settlement annuitants are in the public record.”).

         II. Ms. Bloshuk's Employment History

         In September 2013, Ms. Bloshuk began working at Seneca One as an “Annuity Specialist.” ECF No. 2 ¶ 18. Annuity Specialists “manage day-to-day relationships with structured settlement annuitants, ” and create and build relationships with customers and prospective customers. Id. ¶ 12. To do so, they “monitor and manage customer information that is kept in Seneca One's proprietary customer database.” Id. The names of structured settlement annuitants are usually in the public record, but Seneca One alleged that Annuity Specialists often become “privy to private information” of customers and potential customers. Id. ¶ 14. Ms. Bloshuk was promoted to the position of Purchasing Manager in March 2015. In this position, she continued to carry out the responsibilities of an Annuity Specialist while also managing other Annuity Specialists. Id. ¶ 19.

         As a condition of her employment, Ms. Bloshuk signed the “Seneca One Finance, Inc. Confidentiality, Non-Solicitation, and Non-Competition Agreement” (“the Contract”), discussed in further detail below, pursuant to which she agreed that she would neither compete against Seneca One nor contact or solicit any potential or existing customer of Seneca One during her employment and for one year thereafter. ECF No. 2 ¶ 21-22.

         On January 7, 2016, Ms. Bloshuk resigned from her employment with Seneca One and immediately began working for DRB Capital (“DRB”), one of Seneca One's competitors. ECF No. 2 ¶ 24-25. Seneca One alleged that in early January 2016, prior to her resignation, Ms. Bloshuk “agreed to accept employment with DRB.” It further alleged that, “on information and belief, at about this time, ” Ms. Bloshuk diverted or, at minimum, “discouraged, ” a potential customer of Seneca One, Theresa Serna, from engaging in a transaction offered by Seneca One in favor of offers made by DRB. Id. ¶ 27. “Soon after joining DRB, ” Ms. Bloshuk assisted in soliciting Ms. Serna on behalf of DRB. Id. Seneca One further alleged that while she was still employed at the company, Ms. Bloshuk “leveraged Seneca One's goodwill” to establish a relationship with another structured settlement annuitant, Anna Donahue, and then solicited Ms. Donahue after joining DRB. Id. ¶ 28.

         Ms. Bloshuk moved to dismiss the Complaint pursuant to Rule 12(b)(6), arguing that the non-competition and non-solicit provisions are facially overbroad and unenforceable, and that even if the non-solicit provision is enforceable, Seneca One failed to state a claim that she was in breach. ECF No. 12-1. She moved to dismiss Seneca One's claim for an accounting on the grounds that (1) she is not the sole possessor of the records containing the information sought, (2) Seneca One has not alleged that she has a duty to render an accounting, and (3) Seneca One improperly alleged an entitlement to money damages rather than just financial information. Id. at 15. Last, Ms. Bloshuk argued that Seneca One's civil conspiracy claim should be dismissed because Seneca One did not allege any agreement between her and DRB, and because she and DRB are not capable of committing the underlying torts. Id. at 18.


         The purpose of a motion to dismiss under Rule 12(b)(6) is “to test the sufficiency of a complaint.” Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). The Supreme Court has further articulated the standard applicable to Rule 12(b)(6) motions. See Ashcroft v. Iqbal, 556 U.S. 662 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). Rule 8 “requires a ‘showing, ' rather than a blanket assertion, of entitlement to relief.” Twombly, 550 U.S. at 556 n.3. To survive a motion to dismiss, a complaint must put forth “plausible claim[s] for relief.” Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009). “But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘show[n]'-‘that the pleader is entitled to relief.'” Iqbal, 556 U.S. at 679 (quoting Fed.R.Civ.P. 8(a)(2)).


         I. The Non-Competition and Non-Solicitation Provisions are ...

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