T.S. ELLIS, III, District Judge.
This dispute between two competing providers of a specialized insurance service arises from a confidentiality and licensing agreement whereby one of the providers agreed to license its proprietary software for administering the service to the other provider. The agreement between the licensor and the licensee further provided that the licensor agreed it would not solicit the licensee's clients and would not disclose the licensee's confidential information concerning those clients. The business relationship between the two providers soured after the successor-in-interest to a major client of the licensee decided to use the licensor, and not the licensee, for the insurance service. Thereafter, the licensee brought the instant action against the licensor alleging breach of contract, breach of fiduciary duty, and tortious interference with contractual relations. The following questions, among others, are presented on the licensor's motion for summary judgment on all of the licensee's claims:
For the reasons that follow, the licensor's summary-judgment motion must be granted in its entirety, as all of the licensee's claims fail as a matter of law.
Plaintiff General Assurance of America, Inc. ("GAA") is incorporated under the laws of Virginia and has its principal place of business in Richmond, Virginia. Defendant Overby-Seawell Company ("OSC") is organized under the laws of Georgia and has its principal place of business in Kinnesaw, Georgia. Both companies offer collateral tracking services to banks, which banks use to track the insurance status of collateral in which the bank has a security interest. In particular, these collateral-tracking services provide a participating bank with notice if the holder of any collateral falls behind on paying premiums on the policy insuring the collateral or if the holder ceases insuring the collateral altogether. OSC has its own proprietary software banks can use to administer the collateral-tracking service.
In late 1999, OSC and GAA entered into the two agreements at issue here: (1) the Confidentiality Agreement and (2) the Software License Agreement, that enabled GAA to use OSC's collateral-tracking software for GAA clients that used GAA's collateral-tracking service. On November 22, 1999, the parties executed an agreement governing the information that GAA provided to OSC (the "Confidentiality Agreement"). The Confidentiality Agreement provides that "OSC will not solicit GAA clients for CPI or other services once identified as clients or potential clients of GAA." (Doc. 1-1). It further provides that "as a condition of GAA furnishing [certain] information, OSC agrees to treat confidentially such information furnished to OSC by GAA or on GAA's behalf." (Id.) Less than two weeks after executing the Confidentiality Agreement, the parties signed an agreement describing the conditions under which GAA could use OSC's collateral-tracking software (the "Software License Agreement"). Thereafter, GAA's clients who availed themselves of GAA's collateral-tracking service used OSC's proprietary software to interface with GAA's service.
In early 2009, Yadkin Valley began expressing an interest in outsourcing its collateral tracking requirements to an interested provider. Swaim Dep. 70:1-9. Yadkin Valley had a longstanding relationship with Swaim,
In the following months, however, representatives at Yadkin Valley began looking to companies other than GAA for collateral-tracking services. Levan Dep. 134:22-135:3. It appears that Yadkin Valley considered GAA's apparent SAS-70 certification
At some point before June 2009, Levan told Swaim that Yadkin Valley wanted the "TC Software," which is a reference to the proprietary software that OSC licensed to GAA. Swaim Dep. 77:14-78:10. Swaim testified that he was unsure when or how he first learned that GAA leased OSC's software. Swaim Dep. 53:3-11. Nonetheless, at that time, before June 2009, Swaim knew that OSC had this particular software. Swaim Dep. 78:6-10.
Pursuant to an invitation by Yadkin Valley, Kistler presented a proposal on behalf of OSC at Yadkin Valley's offices in North Carolina in June 2009. Levan Dep. 75:19-76:13. See also Swaim Dep. 77:4-10 (estimating that this presentation took place in May 2009). Swaim denies that OSC provided him with any information regarding the specifics of OSC's presentation to Yadkin Valley prior to that presentation. Swaim Dep. 45:19-46:9. In his presentation to Yadkin Valley, Kistler told Yadkin Valley that "[w]hatever they wanted ... they could get as far as functionality with the web-based services." Swaim Dep. 67:18-68:6. Afterward, Swaim spoke with representatives from Yadkin Valley, who expressed their "perception once they saw the OSC proposal that there was more that would suit their needs with OSC than with GAA." Swaim Dep. 68:11-19. Indeed, Yadkin Valley later told Swaim that "there was some functionality that they either received or perceived through OSC that was one of the reasons that they picked OSC over GAA." Swaim Dep. 67:10-17.
On September 1, 2009, Yadkin Valley signed a contract with OSC for collateral tracking services. During negotiations among Swaim, Yadkin Valley, and OSC, Yadkin Valley sent OSC the contract that GAA had with ACB. Swaim Dep. 122:5-123:1. According to Swaim, OSC received this contract before giving a pricing quote to Yadkin Valley. Id. OSC proposed a rate of $.24 per tracked loan, one cent per loan less than provided for in the contract between GAA and ACB. Levan Dep. 234:1-22. Prior to signing the contract, Swaim and Yadkin Valley representatives attended an onsite meeting at OSC's headquarters in Kinnesaw, Georgia. Swaim Dep. 42:5-19 (Doc. 166-1).
Sometime in early 2010, Sutton at Securitas contacted Cynthia Pyburn of Capital City regarding collateral-tracking service. Sutton Dep. 111:8-12. Securitas had been pursuing Capital City's business since 2001 and had made at least one sales pitch to Capital City, which considered Securitas to be a "trusted partner." Pyburn Dep. 49:13-50:7. At the time of the contact
In January 2011, Pyburn "began the process of her thinking about cancelling [GAA] because [GAA] didn't have certain services." GAA Dep. 121:1-4. Indeed, Capital City began exploring OSC because of Capital City's "long-standing issues" with GAA. Pyburn Dep. 100:16-19. Pyburn sent a written request to OSC for a presentation, after which representatives from Securitas and OSC visited Capital City's headquarters in Florida to make a presentation regarding OSC's collateral-tracking services. Pyburn maintains that "GAA was not the reason for the meeting nor the topic of discussion" at the onsite visit in Kinnesaw. Pyburn Dep. 64:1-6. Sutton maintains that all data relied upon in negotiations with Capital City came from Capital City. Sutton Dep. 191:12-192:18. Capital City did not select OSC for collateral tracking and also sent GAA notice that it was planning to terminate its contract with GAA, although Capital City has yet to cancel that contract. According to Pyburn, the "issue that triggered" Capital City's notice to terminate GAA was, although Pyburn couldn't "remember the exact terms," was that Pyburn "found both Mr. Vass[a]r and Laura Little insistent that we would do business their way." Pyburn Dep. 56:3-8.
Swaim had a longstanding relationship with Macon Bank and had "provided various insurance products to Macon Bank." Hayes Decl. ¶ 4. At some point, OSC "may have" told Swaim that GAA was a lessee of OSC's TC Software with respect to Macon Bank. Swaim Dep. 43:2-44:16. In fall 2010, Swaim visited Macon Bank's North Carolina office. Accounts differ on whether it was Swaim or a Macon Bank employee who first stated during this visit that Macon Bank was a GAA client. Compare Swaim Dep. 44:17-21 (Macon Bank stated this first) and Hayes Decl. ¶ 5 ("Swaim told to me that he knew that GAA was providing collateral tracking services to Macon Bank"). Swaim then told Kistler that Macon Bank was a GAA client. Swaim Dep. 44:22-45:2. Kistler responded by discussing the possibility of OSC doing a proposal for Macon Bank and asked Swaim to assess Macon Bank's availability. Swaim Dep. 45:3-8. Subsequently, Swaim (i) invited Macon Bank to visit OSC in Georgia, (ii) offered to pay for Macon Bank employees to travel to OSC's headquarters, (iii) requested another in-person meeting at Macon Bank in North Carolina, and (iv) requested a copy of Macon Bank's contract with GAA.
GAA filed the instant action on May 4, 2011. OSC moved to dismiss or in the alternative transfer the action on the basis of lack of personal jurisdiction and proper venue in Virginia. By Order dated November 15, 2011, this motion was denied. See Gen. Assurance of Am. v. Overby-Seawell Co., No. 1:11cv483 (E.D.Va. Nov. 15, 2011) (Order). Following the close of the discovery period, OSC moved for summary judgment on all claims. After oral argument, an Order issued granting partial summary judgment in OSC's favor on the grounds that (i) the Confidentiality Agreement's non-solicitation and non-disclosure provisions were void for public policy under Georgia law for lack of a time limitation, and (ii) the Virginia Business Conspiracy Act claim fails as a matter of law because Virginia choice-of-law rules select North Carolina and Florida law. See General Assurance of Am., Inc. v. Overby-Seawell Co., No. 1:11cv483 (E.D.Va. Jan. 26, 2012). The January 26 Order deferred decision on whether summary judgment was appropriate with respect
On March 1, 2012 — before issuance of decision on the remainder of OSC's summary-judgment motion — GAA moved for reconsideration of the January 26 Order's grant of partial summary judgment. With respect to the breach-of-contract claim, GAA argues that the Confidentiality Agreement is not akin to an employment agreement, and that the non-solicitation clause and the non-disclosure clause are not per se void for lack of a time limitation. Alternatively, GAA argues that the Confidentiality Agreement actually does contain a time limitation and that, in any event, Georgia public policy otherwise supports enforcing the agreement. With respect to the tort claims, GAA argues that Virginia law does not apply because GAA was "injured" in Virginia when its clients sent termination letters to GAA in Virginia and it suffered economic losses in Virginia. Finally, GAA argues that the Virginia Business Conspiracy Act proscribes OSC's conduct notwithstanding that OSC's allegedly tortious conduct took place outside Virginia, and that there is a genuine issue of material fact as to whether OSC acted with legal malice. GAA's reconsideration motion, as well as the remainder of OSC's summary-judgment motion, have been fully briefed and argued and are now ripe for disposition.
Summary judgment is appropriate where, on the basis of undisputed material facts, the moving party is entitled to judgment as a matter of law. Rule 56(a), Fed.R.Civ.P. See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The question on summary judgment is "whether a reasonable jury could find in favor of the non-moving party, taking all inferences to be drawn from the underlying facts in the light most favorable to the non-movant[.]" In re Apex Express, 190 F.3d 624, 633 (4th Cir. 1999). Importantly, to defeat summary judgment the non-moving party may not rest upon a "mere scintilla" of evidence, but must set forth specific facts showing a genuine issue for trial. Celotex, 477 U.S. at 324, 106 S.Ct. 2548; accord Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Thus, the party with the burden of proof on an issue cannot prevail at summary judgment on that issue unless that party adduces evidence that would be sufficient, if believed, to carry the burden of proof on that issue at trial. See Celotex, 477 U.S. at 322, 106 S.Ct. 2548.
GAA's motion to reconsider the January 26 Order granting summary judgment is governed under Rule 54(b), Fed.R.Civ.P., which provides that:
In this regard, "[t]he Fourth Circuit has made clear that where ... the entry of partial summary judgment fails to resolve all claims in a suit, Rule 54[] — not Rule 59(e) or 60(b) — governs a motion for reconsideration[.]" Netscape Commc'ns Corp. v. ValueClick, Inc., 704 F.Supp.2d 544, 546-47 (E.D.Va.2010) (citing Am. Canoe Ass'n v. Murphy Farms, Inc., 326 F.3d 505, 514-15 (4th Cir.2003)). In other words, the January 26 Order was not a final judgment or order, as it did not decide all the parties' rights and liabilities. Thus GAA, in its reconsideration request "is not required to make a showing of extraordinary circumstances" as would be required under Rules 59(e) and 60(b)(6). Netscape, 704 F.Supp.2d at 547. Instead, the decision to afford relief from the January
Analysis of GAA's reconsideration motion properly begins with the January 26 Order's grant of summary judgment in favor of OSC on GAA's breach-of-contract claim,
To begin with, the non-solicitation and non-disclosure provisions are undoubtedly restrictive covenants in partial
Any restrictive covenant analyzed for its reasonableness under Georgia law is subject to one of three levels of scrutiny, which "depend[s] generally upon whether the contract at issue is an employment contract, a contract for the sale of a business, or a professional partnership agreement[.]" Swartz Investments, 252 Ga.App. at 368, 556 S.E.2d 460. In this respect, "Georgia courts divide restrictive covenants into covenants ancillary to an employment contract, which receive strict scrutiny and are not blue-penciled, and covenants ancillary to a sale of business, which receive much less scrutiny." Northside Hosp. v. McCord, 245 Ga.App. 245, 247, 537 S.E.2d 697 (2000) (footnotes omitted). In addition, "a middle level of scrutiny has emerged for reviewing professional partnership or professional shareholder agreements." Advance Technology Consultants, Inc. v. Roadtrac, LLC, 250 Ga.App. 317, 319, 551 S.E.2d 735 (2001).
Given this framework, it is clear that the non-disclosure and non-solicitation provisions in the Confidentiality Agreement must receive the highest level of scrutiny under Georgia law. In examining a restrictive covenant to determine the appropriate level of scrutiny, "[o]ne starting point is the relative bargaining power of the parties," but importantly, "[a]nother factor ... is whether there is independent consideration for the restrictive covenant itself." Swartz Investments, 252 Ga.App. at 369, 556 S.E.2d 460. The Georgia Court of Appeals "generally has applied the highest level of scrutiny where the parties have equal bargaining power, but where there is no consideration for the covenant at issue." Id. at 370, 556 S.E.2d 460 (citing cases). Here, there appears to be no disparity between the bargaining power of GAA and that of OSC, and the record contains no evidence that OSC received independent consideration for the restrictive covenants in the Confidentiality Agreement. In particular, OSC does not appear to have secured similar restrictions on the part of GAA, and there is no indication that GAA agreed to pay greater licensing fees in exchange for OSC's agreement to the restrictive covenants at issue. Even though GAA likely considered OSC's assent to the restrictive covenants essential to the parties' overall bargain, such a demand as a necessary condition to bargain is characteristic of employment contracts and is therefore quite unlike the consideration involved in partnership agreements or sales of business.
Before the strict scrutiny standard is applied to the restrictive covenants at issue, it must be determined whether the January 26 Order properly concluded that both provisions lack a time limitation. This conclusion was indeed correct, as GAA's arguments to the contrary are unpersuasive.
The central question presented with respect to GAA's motion to reconsider the January 26 Order's grant of summary judgment on its breach-of-contract claim is whether, under the strict scrutiny standard applicable to the time-unlimited non-solicitation and non-disclosure provisions of the Confidentiality Agreement, these restrictive covenants are reasonable and therefore enforceable under Georgia law. The enforceability of each of these covenants is addressed in turn.
With respect to the non-solicitation clause, it is clear that covenants not to solicit that are subject to strict scrutiny are enforceable only if strictly limited in time. See, e.g., Howard Schultz & Assocs. of the Se. v. Broniec, 239 Ga. 181, 187, 236 S.E.2d 265 (1977) (citing cases for the proposition that time-unlimited restrictive covenants in employment contracts are unenforceable under Georgia law). As explained supra, the non-solicitation provision here at issue lacks a time limitation and therefore purports to bind OSC never to solicit GAA's clients, even long after a termination of the business relationship between OSC and GAA. Thus, under Georgia law, the non-solicitation provision is overbroad and therefore per se "unreasonable and unenforceable[.]" See Kuehn v. Selton & Assocs., Inc., 242 Ga.App. 662, 664, 530 S.E.2d 787 (2000) (declining to enforce a restrictive covenant in an employment agreement that "has the potential to be effective for decades"); William N. Robbins, P.C. v. Burns, 227 Ga.App. 262, 264, 488 S.E.2d 760 (1997) (declining to enforce an "attorney agreement [that] contained no limitation regarding duration" and thereby "essentially provided that [the lawyer] could never work for any clients who had ever been clients of [his former] firm").
GAA's arguments to the contrary are unpersuasive. The Georgia cases GAA
In any event, the record lacks evidence that OSC breached the non-solicitation clause, i.e., that OSC solicited a GAA client in violation of the Confidentiality Agreement. In Akron Pest Control v. Radar Exterminating Co., 216 Ga.App. 495, 455 S.E.2d 601 (1995), the Georgia Court of Appeals analyzed a non-solicitation clause containing "[t]he phrase `not to solicit ... indirectly[.]'" Id. at 497, 455 S.E.2d 601. Relying on a dictionary definition of "solicit" to supply the "plain, ordinary and popular sense'"
Indeed, a construction of the non-solicitation clause that would prohibit OSC from making sales pitches to GAA clients that seek OSC's business or otherwise initiate contact with OSC would be overbroad and therefore unenforceable inasmuch as the provision, so understood, would overprotect GAA's legitimate competitive interests at the expense of the ability of GAA's current and prospective clients to select their preferred services. See Curtis 1000, Inc. v. Martin, 197 Fed.Appx. 412, 420 (6th Cir.2006) ("[U]nder Georgia law, nonsolicitation provisions `may not contain a bar on the acceptance of business from unsolicited clients.'") (quoting Waldeck v. Curtis 1000, Inc., 261 Ga.App. 590, 583 S.E.2d 266 (2003)).
Finally, even assuming, arguendo, that the non-solicitation clause is not unenforceable for lack of a time limitation and that a breach occurred, the non-solicitation clause is nonetheless overbroad for yet another reason, namely that it prohibits OSC from soliciting GAA clients regardless of whether those clients use OSC's software.
With respect to the non-disclosure provision, the authority on which GAA relies makes clear that the unlimited duration of the non-disclosure provision is not necessarily fatal to that provision's enforceability. For example, in Salsbury Laboratories, Inc. v. Merieux Laboratories, Inc., a Georgia federal court sitting in diversity considered whether a time-unlimited nondisclosure provision in a contract governed under Iowa law could be enforced consistent with Georgia public policy. 735 F.Supp. 1545, 1550 (M.D.Ga.1988). In concluding that the non-disclosure provision at issue there did not run afoul of Georgia public policy notwithstanding that it contained no time limit, the Salsbury Laboratories court explained that information constituting a trade secret under Georgia statute or confidential information arising from a fiduciary relationship may receive indefinite protection. See id. at 1552-53. To be sure, Salsbury Laboratories is inapposite on the issue of the non-solicitation provision's enforceability, as the case's holding and supporting rationales are limited to non-disclosure provisions. Nonetheless, Salsbury Laboratories does restate and apply settled Georgia law that the lack of a time limitation is not necessarily fatal to a claim for breach of a non-solicitation provision with respect to trade secrets. See Allen v. Hub Cap Heaven, Inc., 225 Ga.App. 533, 539, 484 S.E.2d 259 (1997) ("A nondisclosure clause with no time limit is unenforceable as to information that is not a trade secret.").
Ultimately, Georgia law in this respect is unavailing to GAA, as the record is devoid of evidence that OSC actually disclosed any of GAA's trade secrets. GAA's Rule 30(b)(6) deponent cannot identify specifically
To recapitulate, the non-solicitation provisions are unenforceable as a matter of settled Georgia law because (i) they lack a time limitation and (ii) are overbroad in purporting to prohibit OSC from soliciting any GAA customer. Moreover, the record contains no evidence that OSC breached either the non-solicitation and non-disclosure provision. It follows that the January 26 Order correctly granted summary judgment on the breach-of-contract claim, as the claim fails as a matter of law. GAA's reconsideration motion as to this aspect of the January 26 Order is therefore appropriately denied.
Analysis next proceeds to GAA's reconsideration motion as to the January 26 Order's conclusion that Virginia law does not govern GAA's tort claims. The January 26 Order notes that because the allegedly tortious conduct took place outside Virginia, Virginia choice-of-law rules
Virginia law selects the place of where the wrongful act occurred and not, as GAA contends, the place where the injury was suffered. It is settled that "Virginia applies the lex loci delicti, the law of the place of the wrong, to tort actions[.]" Milton v. IIT Research Inst., 138 F.3d 519, 521 (4th Cir.1998) (citing Jones v. R.S. Jones and Assoc., 246 Va. 3, 431 S.E.2d 33 (1993)). And Virginia law defines a "tort" as "any civil wrong or injury; a wrongful act[.]" Buchanan v. Doe, 246 Va. 67, 71, 431 S.E.2d 289 (1993) (citation omitted). Accordingly, "Virginia's choice of law rule selects the law of the state in which the wrongful act took place, wherever the effects of that act are felt."
Given this, the January 26 Order correctly concluded that under Virginia choice-of-law rules, the place of the wrong, i.e., the place of the last event necessary to complete an alleged tort, is the place where OSC's alleged interference with GAA's client relationships took place. See Consulting Eng'rs Corp. v. Geometric Ltd., 561 F.3d 273, 280 n. 6 (4th Cir.2009) (observing in a civil-conspiracy action that "`the last event necessary to make an act liable for an alleged tort' ... would be [the defendant's] hiring of [the plaintiff's former employee]") (quoting Quillen, 789 F.2d at 1044); Hilb Rogal & Hobbs Co. v. Rick Strategy Partners, Inc., No. 3:05cv355, 2006 WL 5908727, at *7 (E.D.Va. Feb. 10, 2006) (applying the law of the state where "the acts of solicitation that led to" plaintiff's economic damages occurred), aff'd, 230 Fed.Appx. 328 (4th Cir.2007); X-It Prods., L.L.C. v. Walter Kidde Portable Equip., Inc., 155 F.Supp.2d 577, 640 (E.D.Va.2001) (concluding under Virginia choice-of-law rules that communications allegedly involving wrongful disclosure and misuse of information "occurred only in Illinois and North Carolina" and that "[a]s such, Illinois and North Carolina law, not Virginia law, shall apply to the misappropriation of trade secrets claim").
The cases on which GAA relies actually support the result reached here that Virginia choice-of-law rules require application of the law of the place where the last act completing the tort occurred, regardless of where the effects of the tort were felt. Each of these cases involved a claim for fraud, which as an element requires a demonstration of the plaintiffs reliance. And in each case, the place of reliance — which completes the fraud tort — happened to be the place of the plaintiff's domicile. See, e.g., Feeley v. Total Realty Mgmt., 660 F.Supp.2d 700, 713-14 (E.D.Va.2009) (last event completing the tort was plaintiff's reliance in Virginia).
Application of this choice-of-law framework to GAA's claim that OSC violated the Virginia Business Conspiracy Act firmly supports the correctness of the January 26 Order's conclusion that because none of the acts on which the claim arises occurred in Virginia, the claim fails as a matter of law. Indeed, a contrary conclusion would offend the longstanding rule that "the laws of one State have no operation outside of its territory[.]" Pennoyer v. Neff, 95 U.S. 714, 722, 24 L.Ed. 565 (1877) (citation omitted). As the Fourth Circuit has observed, "[t]his rule reflects core principles of constitutional structure," including "the autonomy of individual states within their respective spheres" and "the maintenance of a national economic union unfettered by state-imposed limitations on interstate commerce." Carolina Trucks & Equip., Inc. v. Volvo Trucks of N. Am., Inc., 492 F.3d 484 (4th Cir.2007) (citations omitted). Here, GAA has adduced no evidence that the activity giving
In sum, GAA's motion to reconsider the January 26 Order's grant of summary judgment on the breach-of-contract and business-conspiracy claims lacks merit for the reasons stated. Additionally, GAA's argument that Virginia law applies to its tort claims is unpersuasive. Thus, it is appropriate to deny GAA's reconsideration motion in its entirety.
Analysis next proceeds to OSC's motion for summary judgment with respect to the remaining tort claims. GAA alleges that independent of its obligations arising from the Confidentiality Agreement,
The legal sufficiency of the breach of fiduciary duty claim will be addressed first. North Carolina law, which governs the claim with respect to OSC's conduct toward Yadkin Valley and Macon Bank, defines a fiduciary relationship as "one in which there has been a special confidence reposed in one who in equity and good conscience is bound to act in good faith and due regard to the interests of the one reposing confidence[.]" Dalton v. Camp, 353 N.C. 647, 651, 548 S.E.2d 704 (2001) (citation and internal quotation marks omitted). Such a relationship "extends to any possible case ... in which there is confidence reposed on one side, and resulting domination and influence on the other.'" Id. (emphasis in original) (citations omitted). Given this, "a fiduciary
The record makes clear that this is not such a circumstance, as there is no evidence that OSC exercised dominating influence over GAA, or that there was a disparity in sophistication between them. To the contrary, GAA acknowledges that the Confidentiality Agreement "was entered into by two parties with equal bargaining power." GAA Summ. J. Opp'n 13. The record makes clear that GAA and OSC were sophisticated businesses that relied on their own independent business judgments in arranging for OSC to license its collateral-tracking software to GAA. Moreover, the record clearly shows that OSC and GAA independently pursued their own separate business objectives, and that OSC provided assistance to GAA only in situations in which OSC stood to benefit. Thus, because the record evidence fails to support the existence of a fiduciary relationship between GAA and OSC, the breach of fiduciary duty claim fails with respect to Yadkin Valley and Macon Bank.
Similarly, there is insufficient evidence of a fiduciary relationship between GAA and OSC under Florida law, which requires that a plaintiff adduce evidence of "some degree of dependency on one side and some degree of undertaking on the other side to advise, counsel, and protect the weaker party." Watkins v. NCNB Nat'l Bank of Fla., N.A., 622 So.2d 1063, 1065 (Fla.App.3d Dist.1993) (internal quotation and citation omitted). Where, as here, "the parties are dealing at arm's length, a fiduciary relationship does not exist because there is no duty imposed on either party to protect or benefit the other." Taylor Woodrow Homes Fla., Inc. v. 4/46-A Corp., 850 So.2d 536, 541 (Fla.App. 5th Dist.2003). Thus, GAA has failed to adduce evidence sufficient to support the existence of an implied fiduciary duty under Florida law, which in turn requires granting OSC's summary-judgment motion
In sum, the record contains insufficient evidence on which a jury could conclude that OSC owed fiduciary duties to GAA. As a result, the breach of fiduciary duty claims, as well as the accounting request and constructive trust claims, fail as a matter of law. It is therefore appropriate to grant OSC's motion for summary judgment on these claims.
Finally, OSC seeks summary judgment on GAA's claim for tortious interference with contractual relations. In opposition to summary judgment, GAA argues with respect to Yadkin Valley and Capital City that the record contains sufficient evidence supporting its claim that OSC improperly induced these two GAA clients to decline to renew their collateral-tracking agreements with GAA. GAA further argues with respect to Macon Bank that although Macon Bank remains a GAA client, OSC is liable to GAA for GAA's costs incurred in keeping Macon Bank as a client after Swaim approached Macon Bank regarding OSC's collateral-tracking service. OSC responds that Macon Bank's continuing status as a GAA client precludes any liability to GAA for tortious interference, and that the claim as to Yadkin Valley and Capital City fails for lack of evidence that the interference was unjustified or malicious.
Under North Carolina law, which governs the tortious-interference claim with respect to Yadkin Valley and Macon Bank, a plaintiff must "forecast evidence of the following elements" of tortious interference with contract:
Varner v. Bryan, 113 N.C. App. 697, 701, 440 S.E.2d 295 (1994) (quoting Childress v. Abeles, 240 N.C. 667, 674, 84 S.E.2d 176 (1954)). Given this, the claim necessarily fails as a matter of law with respect to Macon Bank for lack of evidence of inducing non-performance, as Macon Bank remains a GAA client. With respect to Yadkin Valley, "[i]n order to demonstrate the element of acting without justification, the action must indicate `no motive for interference other than malice.'" Area Landscaping, L.L.C. v. Glaxo-Wellcome, Inc., 160 N.C. App. 520, 523, 586 S.E.2d 507 (2003) (quoting Filmar Racing, Inc. v. Stewart, 141 N.C. App. 668, 674, 541 S.E.2d 733 (2001)). In this respect, "[t]he plaintiffs evidence must show that the defendant acted without any legal justification for his action." Varner, 113 N.C.App. at 702, 440 S.E.2d 295 (citing Childress, 240 N.C. at 675, 84 S.E.2d 176).
In view of the entire record, it is clear that GAA's tortious-interference claim with respect to Yadkin Valley fails given the lack of record evidence that OSC acted maliciously or otherwise without justification. The undisputed facts establish that OSC sought to provide collateraltracking service to Yadkin Valley only after Yadkin Valley had become dissatisfied with GAA and only after Yadkin Valley had sought OSC's business. In this respect, it cannot be said that OSC acted without justification. Area Landscaping, 160 N.C.App. at 523-24, 586 S.E.2d 507 (affirming grant of summary judgment where plaintiff "failed to present evidence that [defendant] acted without justification" given that defendant's contract bid "was a legitimate business interest and indicates a non-malicious motive for their `interference'"). Despite GAA's contention to the contrary, GAA and OSC were at all times competitors in the collateral-tracking industry because each offered its own collateral-tracking service and, as explained supra, nothing in the Confidentiality Agreement or the Software License Agreement prevented OSC from offering its own competing collateral-tracking service to GAA's clients as long as OSC did not solicit those clients or disclose GAA's confidential information in the process. See S.N.R. Management, 189 N.C.App. at 615, 659 S.E.2d 442 (concluding that "plaintiff and [defendants] were competitors and as such, [defendants'] actions were justified"). Moreover, GAA has forecasted no evidence that OSC ever made misrepresentations about GAA to its customers, or that GAA was ever on a "hit list." See Combs v. City Elec. Supply Co., 203 N.C. App. 75, 85, 690 S.E.2d 719 (2010). Nor is there any evidence that OSC acted out of spite or ill will toward GAA. See Barker v. Kimberly-Clark Corp., 136 N.C. App. 455, 463, 524 S.E.2d 821 (2000). In sum, GAA has adduced no evidence that OSC acted maliciously or without justification in its contacts with Yadkin Valley.
Seminole Tribe of Fla. v. Times Publ'g Co., 780 So.2d 310, 315 (Fla.App. 4th Dist. 2001). As to the third element of intentional and injustified interference, "[i]t is only when malice is the sole basis for interference that it will be actionable." McCurdy v. Collis, 508 So.2d 380, 383 (Fla.App. 1st Dist.1987) (citing Ethyl Corp. v. Baiter, 386 So.2d 1220, 1225-26 (Fla App.3d Dist.1980)). Thus, "[a] person who interferes with the business relations of another with the motive and purpose, at least in part, to advance [or protect] his own business [or financial] interests, does not interfere with an improper motive." McCurdy, 508 So.2d at 383 n. 2 (quoting Fla. Standard Jury Instruction (Civil) MI 7.2). Put another way, "so long as improper means are not employed, activities taken to safeguard or promote one's own financial, and contractual interests are entirely non-actionable." Ethyl Corp. v. Baiter, 386 So.2d 1220, 1225 (Fla.App.3d Dist. 1980).
In light of these standards under Florida law, GAA's tortious-interference claim with respect to Capital City fails in two respects. First, GAA has adduced no evidence that OSC's conduct toward Capital City was cause of Capital City's decision not to renew its agreement with GAA. Indeed, the only record evidence of the reason for Capital City's decision in this regard concerns Capital City's dissatisfaction with GAA. See, e.g., GAA Dep. 121:1-4 (acknowledging that Pyburn "began the process of her thinking about cancelling [GAA] because [GAA] didn't have certain services"); Pyburn Dep. 100:16-19 (testifying about Capital City's "long-standing issues" with GAA); id. 56:3-8 (testifying that the "issue that triggered" Capital City's notice to terminate GAA was that Pyburn "found both Mr. Vass[a]r and Laura Little insistent that we would do business their way"). Notably, the undisputed fact that Capital City did not decide to use OSC for collateral tracking casts substantial doubt on GAA's assertion that Capital City's termination of GAA had anything to do with OSC. Even if Capital City's dissatisfaction with GAA would not have occurred but for OSC's overtures, this record presents no reasonable basis for the conclusion that any access or use of GAA's confidential information by OSC caused that dissatisfaction. Furthermore, there is no evidence that during OSC's negotiations with Capital City, OSC ever disparaged GAA or disclosed GAA's confidential information to Capital City, and Securitas and OSC maintain that they used none of GAA's confidential information in their negotiations with Capital City.
For the reasons stated, GAA's claims against OSC for breach of contract, breach of fiduciary duty, constructive trust, accounting, and tortious interference with contractual relations all fail as a matter of law. It is therefore appropriate to deny GAA's motion to reconsider the January 26 Order and also to grant OSC's motion for summary judgment in its entirety.
An appropriate order will issue.
Rash v. Toccoa Clinic Med. Assocs., 253 Ga. 322, 325, 320 S.E.2d 170 (1984).
Peoples Security Life Ins. Co., 322 N.C. at 223, 367 S.E.2d 647 (quoting Macauley Bros. v. Tierney, 19 R.I. 255, 256, 33 A. 1 (1895)).