Crumrine v. Trekker Distributor, Inc.

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

Case No. 23-cv-22436-BLOOM/Torres

THOMAS CRUMRINE,

Plaintiff,

v.

TREKKER DISTRIBUTOR, INC.,

et al.,

Defendants.

_______________________________/

ORDER ON MOTION TO DISMISS

THIS CAUSE is before the Court upon Defendants Trekker Distributor, Inc. and Trekker

Tractor, LLC (“Defendants”) Motion to Dismiss Counts II and III of the Complaint, ECF No. [15]

(“Motion”), filed on October 2, 2023. Plaintiff Thomas Crumrine (“Plaintiff”) filed a Response in

Opposition to the Motion (“Response”), ECF No. [16], to which Defendants filed a Reply in

Support of the Motion (“Reply”), ECF No. [18]. The Court has reviewed the Complaint, the

Motion, the supporting and opposing submissions, the record in this case, the applicable law, and

is otherwise fully advised. For the reasons set forth below, the Motion is granted in part and denied

in part.

I. BACKGROUND

Plaintiff filed his Complaint on June 29, 2023, asserting three claims against Defendants:

(1) violation of the Fair Labor Standards Act (“FLSA”) (Count I); (2) breach of contract (Count

II); and (3) a claim for declaratory relief pursuant to the Declaratory Judgment Act (Count III). See

generally ECF No. [1].

A. Complaint

Plaintiff’s Complaint alleges the following:

Plaintiff has been working in the scaffolding and access industry since 2008. ECF No. [1]

¶ 11. Defendants recruited Plaintiff “in early 2019 to be a project manager for its newly created

scaffolding and access division.” Id. ¶ 13. Defendants did so primarily to obtain Plaintiff’s

portfolio of clients. Id. ¶ 15. Defendants “induced” Plaintiff to “deliver” his portfolio of clients

“with a false promise of compensation and benefits package that included wages of [a] $60,000

base salary plus commission of 3% on rental business, and 5% on labor profits” on deals that

Plaintiff closed. Id. ¶ 16.

On January 27, 2019, Plaintiff signed a proposal letter provided by Defendants, ECF No.

[1-1] (“Proposal Letter”). The Proposal Letter memorialized Plaintiff’s “job title, FLSA-exempt

classification, compensation basis, and other terms of employment.” Id. ¶ 17. On January 28, 2019,

Defendants also required Plaintiff to execute a Non-Competition, Confidentiality, and Non-

Disparagement Agreement, ECF No. [1-2] (“Non-Compete Agreement”), “as a condition of

employment.” Id. ¶ 18. Relevant here, the Non-Compete Agreement provides that in the event of

Plaintiff’s termination or resignation, Plaintiff is prohibited from competing with Defendants or

from otherwise soliciting Defendants’ clients, employees, or independent contractors for a period

of one year within the following territory in Florida: Seminole, Brevard, Osceola, Volusia, Orange,

Lake and Marion Counties. See generally Non-Compete Agreement; ECF No. [1] ¶¶ 18-19.

Plaintiff began his employment with Defendants on March 1, 2019. ECF No. [1] ¶ 20. On

or about May 4, 2020, Defendants sent Plaintiff a letter informing him that it “had reduced his

annual salary by 10% retroactive to April 27, 2020.” Id. ¶ 21. Plaintiff subsequently “terminated

his employment” with Defendants on March 11, 2022. Id. ¶ 22. Upon Plaintiff’s termination,

Defendants’ management team “asserted” that Plaintiff’s portfolio of clients “now belonged to it”

and “falsely claimed” that Plaintiff was “not permitted to solicit those clients for any reason in or

outside of the restricted territory.” Id. ¶ 23.

In Count I, Plaintiff contends that Defendants violated the FLSA by failing to compensate

Plaintiff for overtime hours worked “at a rate not less than 150% of his regular rate of pay for all

hours worked in excess of 40 in workweek while employed by [Defendants].” Id. ¶ 28 (citing 29

U.S.C. § 207(a)). The Complaint alleges that Plaintiff worked in excess of 40 hours a week

between March 1, 2019 and March 14, 2022.1 Id. ¶ 29.

Count II alleges that Defendants’ breached their employment contract with Plaintiff in two

ways: (1) “by failing to pay all wages due to [Plaintiff] under the contract[;] and (2) by breaching

“an implied obligation of good faith and fair dealing.”2 Plaintiff alleges that the employment

contract is “partly oral and partly written[,]” with the terms of the oral portion of the contract

“generally memorialized” in the Proposal Letter, and with the terms of the written portion of the

contract contained in the Non-Compete Agreement.3 Id. ¶¶ 36-38.

In Count III, Plaintiff seeks a declaratory judgment pursuant to the Declaratory Judgment

Act, 28 U.S.C. §§ 2201-2202, that the Non-Compete Agreement was “not supported by a

1 Plaintiff further alleges that Defendants “acted willfully or with reckless disregard as to their

obligation to pay Plaintiff 150% of his regular rate of pay for hours worked in excess of 40 per week, and

accordingly, the violation was willful under 29 §§ U.S.C. 255(a) and 260.” Id. ¶ 32.

2 Plaintiff alleges that Defendants breached the implied obligation of good faith and fair dealing by

“(a) falsely claiming to [Plaintiff] that it had a legitimate business interest to be protected by the restrictive

covenants contained in the contract when it knew or should have known that it did not; (b) falsely stating

to [Plaintiff] in the proposal letter that employment was conditional upon execution of an attached non-

disclosure agreement and confidentiality agreement and then presenting a document for execution that also

contained an undisclosed non-competition covenant; (c) falsely representing to [Plaintiff] that he was an

FLSA-exempt employee when they knew or should have known he was not; and (d) by stating that

[Plaintiff’s] annual base salary would be $60,000 when the Management Team did not intend to pay that

amount at the time The Trekker Group entered the agreement.” Id. ¶ 41.

3 Plaintiff also alleges entitlement to “special damages in the form of lost wages for future

employment[]” in addition to general damages. Id. ¶ 44.

legitimate business interest when made, that [it] became void upon [Defendants’] breach of the

contract,” and that the Non-Compete Agreement is “otherwise unenforceable under applicable

law.” Id. ¶¶ 46, 51. Plaintiff alleges that a declaratory judgment is appropriate because “there is a

substantial controversy between parties, with adverse legal interests, of such immediacy and

existence so as to warrant a declaratory judgment.” Id. ¶ 47.

B. Motion

Defendants move to dismiss Counts II and III pursuant to Rule 12(b)(6). Defendants argue

that Count II must be dismissed because (1) Plaintiff’s breach of contract claim is preempted by

the FLSA; (2) Plaintiffs claim is barred by the employment-at-will doctrine; (3) Plaintiff does not

allege that Defendants breached the Non-Compete Agreement; (4) Plaintiff’s allegation that

Defendants breached the implied obligation of good faith and fair dealing fails to state a claim;

and (5) Plaintiff fails to state a claim premised on Defendants’ alleged fraud in inducing the

contract between the parties. Defendants also argue that Plaintiff’s claim for special damages for

lost future compensation should be stricken or dismissed for failing to comply with Federal Rule

of Civil Procedure 9(g). Defendants contend that Count III must be dismissed because Plaintiff’s

request for declaratory relief fails to implicate an actual controversy between the parties.

II. LEGAL STANDARD

A. Failure to State a Claim for Relief

A pleading in a civil action must contain “a short and plain statement of the claim showing

that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Although a complaint “does not need

detailed factual allegations,” it must provide “more than labels and conclusions, and a formulaic

recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S.

544, 555 (2007); see Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (explaining that Rule 8(a)(2)’s

pleading standard “demands more than an unadorned, the-defendant-unlawfully-harmed-me

accusation”). Nor can a complaint rest on “‘naked assertion[s]’ devoid of ‘further factual

enhancement.’” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557 (alteration in original)).

“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as

true, to ‘state a claim to relief that is plausible on its face.’” Id. (quoting Twombly, 550 U.S. at

570). When a defendant moves to dismiss for failure to state a claim upon which relief can be

granted under Rule 12(b)(6), the court must accept the plaintiff's allegations as true and evaluate

all possible inferences derived from those facts in favor of the plaintiff. See Am. Marine Tech, Inc.

v. World Grp. Yachting, Inc., 418 F. Supp. 3d 1075, 1079 (S.D. Fla. 2019).

III. DISCUSSION

A. Breach of Contract (Count II)

As noted above, Defendants argue that Count II must be dismissed because (1) Plaintiff’s

breach of contract claim is preempted by the FLSA; (2) Plaintiff’s claim is barred by the

employment-at-will doctrine; (3) Plaintiff fails to allege that Defendants breached the Non-

Compete Agreement; (4) Plaintiff’s allegation that Defendants breached the implied obligation of

good faith and fair dealing fails to state a cause of action; (5) Plaintiff fails to state a claim premised

on Defendant’s alleged fraud in inducing the contract; and (6) Plaintiff fails to sufficiently allege

entitlement to special damages under Federal Rule of Civil Procedure 9(g).

Plaintiff responds that dismissal of Count II is improper because (1) his breach of contract

claim is not preempted by the FLSA because it seeks broader relief; (2) the employment-at-will

doctrine is inapplicable; (3) the Complaint sufficiently alleges Defendants’ breach of the implied

obligation of good faith and fair dealing; and (4) the Complaint sufficiently alleges entitlement to

specific damages under Rule 9(g).4 The Court shall discuss each basis for dismissal in turn.

i. FLSA Preemption

The FLSA provides that “[a]ny employer who violates the provisions of section 206 or

section 207 of this title shall be liable to the employee or employees affected in the amount of their

unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an

additional equal amount as liquidated damages.” 29 U.S.C. § 216(b). “As a matter of law, [a]

plaintiff cannot circumvent the exclusive remedy prescribed by Congress in asserting equivalent

state law claims in addition to the FLSA claim.” Garcia v. Nachon Enters., 223 F. Supp. 3d 1257,

1268 (quoting Morrow v. Green Tree Serv'g, L.L.C., 360 F. Supp. 2d 1246, 1252 (M.D. Ala. 2005)

(alterations in original)); see also Bule v. Garda CL SE, Inc., 2014 U.S. Dist. LEXIS 95618, *5

(S.D. Fla. July 14, 2014) (“Section 216 of the FLSA is the exclusive remedy for enforcing rights

created under the Act.”) (citation omitted). “Specifically, where a plaintiff's state law claims are

merely the FLSA claims recast in state law terms, those state law claims are preempted by the

FLSA[.]” Garcia, 223 F. Supp. at 1267 (citing Alexander v. Vesta Ins. Grp., Inc., 147 F. Supp. 2d

1223, 1240-41 (N.D. Ala. 2001)). Conversely, “the FLSA does not preempt state law contract

provisions that are more generous than the FLSA demands.” Freeman v. City of Mobile, Ala., 146

F.3d 1292 (11th Cir. 1998).

Defendants argue that Plaintiff’s breach of contract claim must be dismissed because they

are premised on the same allegations as Plaintiff’s FLSA claim and are thus preempted by the

FLSA. Defendants contend that Plaintiff premises his breach of contract and FLSA claims on

4 As discussed below, Plaintiff’s Response expressly disclaims alleging that Defendants breached

the Non-Compete Agreement or that Defendants committed fraud in the inducement of the employment

contract.

unpaid wages and overtime compensation, and on Defendants alleged misclassification of Plaintiff

as exempt from the FLSA’s protections. Plaintiff responds that the FLSA “does not preempt claims

where a plaintiff-employee seeks broader remedies under state law for what essentially amounts

to a violation of rights arising under the FLSA.” ECF No. [16] at 7.

Plaintiff relies on Freeman v. City of Mobile, Ala., 146 F.3d 1292 (11th Cir. 1998) and

Avery v. City of Talladega, 24 F.3d 1337 (11th Cir. 1994) for support that “the FLSA does not

preempt state law contract provisions that are more generous than the FLSA demands.” Freeman,

146 F.3d at 1298. In Avery, the Eleventh Circuit found that the plaintiff could pursue a state law

breach of contract claim based on the terms of an employee handbook that provided greater relief

than that provided by the FLSA. Avery, 24 F.3d at 1348. The court found that “the district court

erred in holding that the FLSA pre-empts a state law contractual claim that seeks to recover wages

for time that is compensable under the contract though not under the FLSA.” Avery, 24 F.3d at

1348. The Eleventh Circuit reached the same conclusion regarding the plaintiff’s breach of

contract claim in Freeman, finding that the personnel ordinance on which the plaintiff relied “may

give employees rights to overtime compensation beyond those required by the FLSA[.]” Freeman,

146 F.3d at 1292 (citing Avery, 24 F.3d at 1347-48).

Here, Plaintiff’s breach of contract claim alleges entitlement to contractual remedies

beyond those required by the FLSA. Plaintiff alleges that the contract between himself and

Defendants “is partly oral and partly written[]” and contends that the “oral portion of the

employment contract is generally memorialized in a written proposal letter[.]” ECF No. [1] ¶¶ 36-

37. The attached Proposal Letter provides that Plaintiff’s “[a]nnual base salary shall be $60,000”

and notes that Plaintiff “shall be entitled to a 3% commission of all rental volume and 5% of all

labor profits for any transaction that [Plaintiff] close[s] within [his] Territory[.]” ECF No. [1-1] at

2. Plaintiff thus alleges that Defendants “breached the contract by failing to pay all wages due to

[Plaintiff] under the contract.” ECF No. [1] ¶ 40.

Defendants interpret Plaintiff’s breach of contract claim as seeking the same unpaid

overtime compensation sought in Count I, Plaintiff’s FLSA claim. Defendants rely on Bule v.

Garda CL Se., Inc., No. 14-21898-CIV, 2014 WL 3501546 (S.D. Fla. July 14, 2014), Garcia v.

Nachon Enters., Inc., 223 F. Supp. 3d 1257 (S.D. Fla. 2016), Melendez v. G4S Secure Sols. (USA)

Inc., No. 20-24213-CIV, 2020 WL 10140956 (S.D. Fla. Dec. 11, 2020), and Alexander v. Vesta

Ins. Group. Inc., 147 F. Supp. 2d 1223 (N.D. Ala. 2001) to argue that Plaintiff’s breach of contract

claim is duplicative of his FLSA claim and accordingly must be dismissed. However, in each of

those cases, the plaintiffs brought breach of contract claims for unpaid wages, overtime

classification, or misrepresentations regarding FLSA exemptions that were unaccompanied by

claims for broader relief under their respective employment contracts. See Bule, 2014 WL

3501546, *2 (“Plaintiff alleges that he worked for Defendant Garda as a non-exempt employee,

and that during his employment period, he worked without the proper overtime rate for all hours

worked in excess of 40 per week.”); Garcia, 223 F. Supp. 3d 1257 at 1268 (“Garcia’s state law

claims for breach of agreement, unjust enrichment, and quantum meruit are each phrased as state-

law versions of his FLSA overtime claims.”); Melendez, 2020 WL 10140956, at *9 (“[A] a fair

reading of Plaintiffs Complaint shows that Plaintiffs quantum meruit and FLSA claims arise from

the same set of facts and are not materially distinct.”); Alexander, 147 F. Supp. 2d at 1240

(“Plaintiffs contend that Defendants are liable under the FLSA for failing to pay them for overtime

worked.”).

Here, Plaintiff’s allegations demonstrate that his claim is broader than a claim for unpaid

wages or overtime compensation. Unlike Bule, Garcia, Melendez, and Alexander, Plaintiff’s

breach of contract claim is not simply a state-law version of his FLSA claim for overtime

compensation. Count I alleges that Defendants failed to compensate Plaintiff for the overtime he

worked in violation of the FLSA. See ECF No. [1] ¶¶ 28-29. Count II alleges that Defendants

breached their obligation to pay Plaintiff all wages due under his employment contract,

specifically, wages due pursuant to his $60,000 base salary and commission payments

memorialized by the Proposal Letter.5 ECF No. [1] ¶ 37. Accordingly, unlike Bule, Garcia,

Melendez, and Alexander, Plaintiff’s breach of contract claim is not simply a state-law version of

his FLSA claim. Rather, Count II is premised on Defendants’ alleged failure to compensate

Plaintiff in accordance with his salary and commission payments provided by an employment

agreement between the parties.

Prevailing on Count I thus requires demonstrating that Defendants failed to compensate

Plaintiff for his overtime hours in violation of the FLSA, while prevailing on Count II requires

establishing that Defendants failed to compensate Plaintiff based on the $60,000 salary and

commission payments required by the parties’ employment agreement. To do so, Plaintiff must

establish that the Proposal Letter memorializes the terms of employment between the parties,

specifically salary and commission payments. As in Avery and Freeman, Plaintiff’s breach of

contract claim accordingly seeks broader remedies than those provided by the FLSA, namely,

unpaid wage and bonus compensation pursuant to the salary and commission payment terms set

forth in an oral employment agreement between the parties. Such compensation may afford

5 Defendants accurately observes that the Proposal Letter expressly disclaims constituting a

contractual agreement. See ECF No. [1-1] at 3. This does not demonstrate that Count II is due to be

dismissed however, as Plaintiff alleges that the proposal letter memorializes an oral employment agreement

between the parties rather than representing the contract itself. Furthermore, the Non-Compete Agreement

provided by Plaintiff is silent as to compensation. See ECF No. [1-2]. Construing the allegations in the light

most favorable to Plaintiff, the Court concludes that Plaintiff sufficiently alleges that Defendants breached

an oral employment agreement providing the compensation terms set forth in the Proposal Letter.

Plaintiff compensation “beyond th[at] required by the FLSA[.]” Freeman, 146 F.3d at 1292 (citing

Avery, 24 F.3d at 1347-48).

Determining the extent to which Plaintiff’s claim for overtime wages under the FLSA

encompasses his claim for unpaid salary and commission payments under the parties’ employment

agreement is unclear based on the allegations in the Complaint. As noted, the plaintiff in Avery

based its allegations on an employee handbook, 24 F.3d at 1348, while the plaintiff in Freeman

similarly grounded its claims in a personnel ordinance. Freeman, 146 F.3d at 1292. Plaintiff points

to the Proposal Letter’s base salary and commission payments as the basis for his allegation that

Defendants failed to pay “all wages due to [Plaintiff] under the contract[]” without specifically

alleging that Defendants failed to pay Plaintiff the salary and commission payments he was owed.6

ECF No. [1] ¶ 40.

The Court therefore concludes that, to the extent Plaintiff’s breach of contract claim is

premised on Defendants’ failure to provide overtime compensation or their mischaracterization of

Plaintiff as FLSA-exempt, Plaintiff’s breach of contract claim is preempted by the FLSA.

Conversely, to the extent that Plaintiff’s breach of contract claim is premised on Defendants’

failure to pay Plaintiff’s base salary and commission payments pursuant to an oral employment

agreement, Plaintiff’s breach of contract claim is not preempted by the FLSA. Cf. Morrow v. Green

Tree Servicing, LLC, 360 F. Supp. 2d 1246 at 1253 (“[D]ue to the vagueness of [Plaintiff’s] claims,

the court can only suspect, but cannot conclude, that her state-law claims are preempted by the

FLSA. Consequently, it would be premature to hold that the FLSA prevents Morrow from bringing

6 Defendants’ contention that Plaintiff “fails to allege that the Trekker Defendants breached any

specific agreement to pay him different or greater wages than the FLSA authorized[]” is controverted by

the pleadings. Although Plaintiff does not specify the precise wages owed, the Complaint makes clear that

he is seeking compensation pursuant to the oral employment agreement, not minimum wage payments

owed under the FLSA.

claims for breach of contract and unjust enrichment.”). Defendants have accordingly failed to show

that Count II must be dismissed because it is preempted by the FLSA. The Court proceeds to

address Defendants’ alternative arguments in favor of dismissal.

ii. Employment-at-will doctrine

Defendants contend that the employment-at-will doctrine bars Plaintiff’s breach of contract

claim in Count II because Plaintiff alleges that the employment agreement specifies that his

employment was at will. Plaintiff responds that his breach of contract claim is “rooted in

nonpayment of wages and bonus compensation” and that the employment-at-will doctrine is thus

no bar to Plaintiff’s claim. ECF No. [16] at 9.

The Court agrees with Plaintiff. The employment-at-will doctrine provides that “[w]here

the term of employment is discretionary with either party or indefinite … either party for any

reason may terminate it at any time and no action may be maintained for breach of the employment

contract.” DeMarco v. Publix Super Markets, Inc., 360 So. 2d 134, 135 (Fla. 3d DCA 1978). As

discussed above, Plaintiff alleges that Defendants breached the terms of an oral contract between

the parties by failing to compensate Plaintiff based on the employment agreement’s salary and

commission payment provisions. Plaintiff accordingly alleges that Defendants breached the

contract by failing to compensate Plaintiff pursuant to those terms of employment. Plaintiff does

not allege that Defendants terminated the employment agreement, or that doing so is unlawful. As

such, the employment-at-will doctrine presents no bar to Plaintiff’s breach of contract claim.

iii. Allegations regarding the Non-Compete Agreement

Defendants next argue that Plaintiff’s breach of contract claim omits allegations that

Defendants breached the restrictive covenant provisions in the Non-Compete Agreement and that

Plaintiff thus fails to state a breach of contract claim with respect to the Non-Compete Agreement.

Plaintiff responds by clarifying that Count II does not allege that Defendants breached the terms

of the Non-Compete Agreement; “[i]nstead, [Plaintiff’s’] claims are rooted in the breach of his

oral employment agreement.” ECF No. [16] at 10. While not a model of clarity, the Court accepts

Plaintiff’s representation that its breach of contract claim pertains only to the oral portion of the

employment contract. As such, dismissal is unwarranted on this basis.7

iv. Implied duty of good faith and fair dealing

Defendants also argue that Plaintiff fails to state a claim that Defendants breached their

implied obligation of good faith and fair dealing because Plaintiff “fails to allege that the Trekker

Defendants breached an express term of any enforceable agreement.” ECF No. [15] at 6. Plaintiff

responds that he sufficiently alleges that Defendants breached their implied obligation of good

faith and fair dealing because this claim is premised on Defendants’ failure to pay all wages owed

to Plaintiff under the oral employment agreement. Plaintiff contends that the allegations regarding

Defendants’ breach of this implied obligation do not attempt to state a freestanding claim, but

instead “underscore and give context to the breach of the employment agreement.” ECF No. [16]

at 13.

“Every contract contains an implied covenant of good faith and fair dealing, requiring that

the parties follow standards of good faith and fair dealing designed to protect the parties’

reasonable contractual expectations.” Centurion Air Cargo, Inc. v. United Parcel Serv. Co., 420

F.3d 1146, 1151 (11th Cir. 2005) (citing Cox v. CSX Intermodal, Inc., 732 So. 2d 1092, 1097 (Fla.

1st DCA 1999)). “A breach of the implied covenant of good faith and fair dealing is not an

7 Plaintiff similarly clarifies that Count II does not include a breach of contract claim premised on

Defendants fraudulently inducing Plaintiff to sign an employment contract. See Response at 14 (Defendants

“arguments are inapplicable given that [Plaintiff’s] claims are not based on fraudulent inducement. The

essence of [Plaintiff’s] allegations centers on the Trekker Group's failure to honor specific terms of the

employment agreement regarding his compensation … not fraudulent inducement.”).

independent cause of action, but attaches to the performance of a specific contractual obligation.”

Id.

Here, Count II alleges that Defendants breached their obligation to compensate Plaintiff

based on the salary and commission bonus terms provided in an oral employment agreement. As

such, there can be no independent breach of Defendants’ implied duty of good faith and fair

dealing. To the extent that Plaintiff’s breach of contract claim is premised on an independent

obligation of good faith and fair dealing, see ECF No. [1] ¶ 41, that portion of the claim is

dismissed.

v. Special damages

Finally, Defendants argue that the Court must dismiss or strike Plaintiff’s claim for special

damages because Plaintiff fails to “specifically state[]” the special damages he is allegedly entitled

to under Federal Rule of Civil Procedure 9(g). Plaintiff responds that his allegation that he suffered

special damages “in the form of lost wages for future employment” satisfies Rule 9(g)’s relatively

permissive pleading standard. Defendants reply that Plaintiff fails to refute his failure to plead

specific damages with particularity, and that this relief should thus be dismissed.

Rule 9(g) provides that “[i]f an item of special damage is claimed, it must be specifically

stated.” Fed. R. Civ. P. 9(g). As numerous courts have observed, the 1993 amendment to the

Federal Rules of Civil Procedure “nullified the purpose somewhat of Rule 9(g).” Therapeutics

MD, Inc. v. Evofem Biosciences, Inc., No. 20-cv-82296, 2022 WL 2341965, at *2 (S.D. Fla. June

1, 2022). “Accounting for Rule 26’s early and considerable disclosure requirements, courts have

trended toward a more lenient and practical reading of Rule 9(g).” Lord v. Univ. of Miami, No. 13-

22500-CIV, 2022 WL 18023293, at *6 (S.D. Fla. July 26, 2022) (citing 5A Charles A. Wright &

Arthur R. Miller, Federal Practice & Procedure § 1311 (4th ed. 2022)). “Commentators have

likewise noted that ‘[a] strict approach to the application of Rule 9(g) has little justification when

special damages are sought simply as a supplement to the plaintiff's general damages, as long as

the pleading has satisfied the rule's underlying notice function.’” Id. (alteration in original).

Here, Plaintiff alleges that “[i]n addition to general damages, [Plaintiff] has suffered special

damages in the form of lost wages for future employment.” ECF No. [1] ¶ 44. Defendants contend

that this allegation fails to comply with Rule 9(g) because the Complaint lacks supporting

allegations that Plaintiff’s lost future wages naturally result from a breach of the oral employment

agreement. Defendants rely on Great Am. Indem. Co. v. Brown, 307 F.2d 306 (5th Cir. 1962),

Trump v. Clinton, 626 F. Supp. 3d 1264 (S.D. Fla. 2022), Land Title of Cent. Fla., LLC v. Jimenez,

946 So. 2d 90 (Fla. Dist. Ct. App. 2006) for support. Those decisions fail to demonstrate that

Plaintiff’s claim for special damages must be dismissed at this juncture, however.

In Trump and Jimenez, for instance, the plaintiffs failed to plead entitlement to special

damages. See Trump, 626 F. Supp. 3d at 1310 (“The Amended Complaint also fails to allege

falsity, that any falsehood impacted third parties’ desire to deal with him or resulted in pecuniary

loss, or special damages.”) (footnote call number omitted); Jimenez, 946 So.2d at 92 (“While the

complaint filed by Ms. Jimenez sought general damages, it did not seek special damages resulting

from the mineral rights reservation.”). Neither decision supports dismissing a claim for special

damages merely because Plaintiff’s allegations fail to explain how those damages were caused by

Defendants’ conduct. While it is generally true that special damages depend on a finding that those

damages were “a foreseeable and normal consequence[] of the alleged wrongful conduct”,

Bothmann v. Harrington, 458 So. 2d 1163, 1168 (Fla. 3d DCA 1984) (citation omitted),

Defendants have not shown that Plaintiff’s failure to precisely specify how their conduct

foreseeably led to Plaintiff’s loss of future wages justifies dismissal of his claim for special

damages under Rule 9(g).

Defendants’ reliance on Brown similarly fails to support dismissal at this stage in the

proceedings. In Brown, the court observed that the plaintiff’s complaint pled entitlement to special

damages “without specifically itemizing the same.” Brown, 307 F.2d at 307-08. The court rejected

the defendant’s argument that Plaintiff violated Rule 9(g) for failing to specify the amount as well

as the nature of the special damages claim. Id. at 308. In so doing, the court observed that the

defendant had notice of the plaintiff’s claim for special damages yet “neglected or failed to [us]e

the[ ] pre-trial procedures” at its disposal to clarify the nature of Plaintiff’s special damages claim.

Id. at 308. The court thus concluded that “[t]here was sufficient compliance” with Rule 9(g) and

accordingly admitted the plaintiff’s claim for special damages at trial. Id. As Lord observes,

“[d]istrict courts since Brown have similarly reviewed not only the pleadings but also ‘parties’

initial disclosures and subsequently produced discovery in determining whether any actual

prejudice has resulted from a lack of specificity in the complaint.’” (quoting Therapeutics, MD,

2022 WL 2341965, at *2) (footnote call number omitted).

The Court concludes that Defendants have not established that Plaintiff’s failure to specify

how Defendants’ conduct entitles Plaintiff to special damages justifies dismissing such relief for

failing to comply with Rule 9(g). Defendants may re-raise their objection should Plaintiff’s initial

disclosures fail to sufficiently compute its entitlement to special damages pursuant to Rule

26(a)(1)(iii), or if Plaintiff’s discovery responses otherwise fail to provide adequate notice of the

special damages sought in this action. In the absence of such shortcomings, the Court finds that

Plaintiff’s claim for special damages sufficiently complies with Rule 9(g) at this early stage in the

proceedings.

B. Declaratory Judgment (Count III)

Defendants contend that Plaintiff’s claim for declaratory relief regarding the Non-Compete

Agreement must be dismissed as a matter of law. Defendants argue that any resulting declaratory

judgment would constitute “an improper ‘advisory opinion as to the enforceability’” of the

restrictive covenants contained within the Non-Compete Agreement. Motion at 8 (quoting Trianon

Condo. Ass’n, Inc. v. QBE Ins. Corp., 741 F. Supp. 2d 1327, 1331 (S.D. Fla. 2010)). Plaintiff

responds that the allegations supporting a declaratory judgment meet the necessary criteria, and

the Court should accordingly exercise its discretion and issue a declaratory judgment. Defendants

reply that Plaintiff’s Response expressly disclaims that Defendants breached the Non-Compete

Agreement, and there is thus no actual controversy with respect to the restrictive covenant

provisions.

The Declaratory Judgment Act instructs that in “a case of actual controversy … any court

of the United States … may declare the rights and legal relations of any interested party seeking

such declaration.” 28 U.S.C. § 2201(a). The Eleventh Circuit has “set out the following non-

exclusive guideposts for district courts to consider in deciding whether to adjudicate, dismiss, or

stay a declaratory judgment action under § 2201(a):”

(1) the strength of the state's interest in having the issues raised in the federal

declaratory action decided in the state courts;

(2) whether the judgment in the federal declaratory action would settle the

controversy;

(3) whether the federal declaratory action would serve a useful purpose in

clarifying the legal relations at issue;

(4) whether the declaratory remedy is being used merely for the purpose of

“procedural fencing”—that is, to provide an arena for a race for res judicata or to

achieve a federal hearing in a case otherwise not removable;

(5) whether the use of a declaratory action would increase the friction between

our federal and state courts and improperly encroach on state jurisdiction;

(6) whether there is an alternative remedy that is better or more effective;

(7) whether the underlying factual issues are important to an informed resolution

of the case;

(8) whether the state trial court is in a better position to evaluate those factual

issues than is the federal court; and

(9) whether there is a close nexus between the underlying factual and legal issues

and state law and/or public policy, or whether federal common or statutory law

dictates a resolution of the declaratory judgment action.

Nat'l Tr. Ins. Co. v. S. Heating & Cooling Inc, 12 F.4th 1278, 1282-83 (11th Cir. 2021) (citing

Ameritas Variable Life Ins. Co. v. Roach, 411 F.3d 1328, 1331 (11th Cir. 2005)).

As a threshold matter, Defendants are incorrect that Plaintiff’s failure to allege a breach of

the Non-Compete Agreement demonstrates that a declaratory judgment is improper. Defendants

rely on Trianon Condo. Ass’n, Inc. v. QBE Ins. Corp., 741 F. Supp. 2d 1327, 1331 (S.D. Fla. 2010)

to argue that any declaratory judgment regarding the restrictive covenants would constitute an

improper advisory opinion due to the absence of an actual controversy regarding the Non-Compete

Agreement. In Trianon Condo Ass’n, Inc., the court found that the plaintiff failed to sufficiently

state a cause of action for a declaratory judgment regarding the enforceability of an insurance

contract’s coinsurance provision. Id. at 1331. The court observed that the “[p]laintiff’s [c]omplaint

fails to allege any actions taken on behalf of [] either party that would support [p]laintiff’s

conclusion that there is uncertainty as to any right or obligation with regard to the enforceability

… of the coinsurance provision.” Id. (citation omitted). The court thus concluded that “Plaintiff is

merely seeking an advisory opinion as to the enforceability of a provision in the contract[]”

considering that “[t]he present case is no different than a lawsuit which may have been brought by

Plaintiff immediately after the parties entered into the contract.” Id. at 1331.

Unlike Trianon Condo Ass’n, Inc., Plaintiff’s Complaint contains allegations pertinent to

the restrictive covenants both at the time they were executed between the parties as well as after

Defendants alleged breach of the oral employment agreement. On one hand, Plaintiff’s allegation

that the restrictive covenants “were not supported by a legitimate business interest when made”

could have been brought immediately after the parties executed the Non-Compete Agreement.

ECF No. [1] ¶ 51. On the other hand, Plaintiff alleges that the restrictive covenants “became void

upon [Defendant] Trekker Group’s breach of the contract and are otherwise unenforceable under

applicable law.” Id.

Those allegations provide that Plaintiff’s request for a declaratory judgment is partially

tethered to Defendants alleged breach of the oral employment. Moreover, Plaintiff alleges that

Defendants are currently enforcing the restrictive covenants, which Defendants acknowledge in

their Motion.8 Trianon Condo Ass’n, Inc. is therefore distinguishable, as Plaintiff alleges both that

Defendant’s breach of the oral employment agreement invalidated the restrictive covenants, and

that Defendants are actively enforcing the terms of those provisions. See Trianon Condo. Ass’n,

Inc., 741 F. Supp. 2d at 1331 (observing that “[i]f [the defendant] never takes any action to enforce

the coinsurance provision, a judicial determination as to the enforceability of the coinsurance

provision in question is purely advisory.”). Plaintiff alleges that the restrictive provisions are

therefore causing both present and future injury by prohibiting him from soliciting his former

clients. As such, Count III’s request for declaratory relief seeks a declaratory judgment that is not

“purely advisory.” Trianon Condo. Ass’n, Inc., 741 F. Supp. 2d at 1331.

Neither party has analyzed the Eleventh Circuit’s factors set forth in Ameritas and

referenced above. Other than characterizing Plaintiff’s request for declaratory relief as a request

for an improper advisory opinion, Defendants do not provide further argument as to why Count III

8 See ECF No. [1] ¶ 1 (Defendants “threatened to sue [Plaintiff] if he attempted to keep servicing

those clients or work elsewhere in the region.”); id. ¶ 23 (Defendants “falsely claimed that he was not

permitted to solicit those clients for any reason in or outside of the restricted territory.”); Motion at 3 (“Upon

[Plaintiff’s] termination of employment, the Trekker Defendants enforced the non-solicitation provisions

of the [Non-Compete] Agreement.”).

Case No. 23-cv-22436-BLOOM/Torres

should be dismissed for failure to state a claim to relief.” Dismissal of Count III is accordingly

improper in light of Defendants’ failure to meet their burden to show that Plaintiff fails to state a

claim for relief under Rule 12(b)(6).

IV. CONCLUSION

Accordingly, it is ORDERED AND ADJUDGED that:

1. Defendants’ Motion to Dismiss Plaintiffs Complaint, ECF No. [15], is GRANTED

IN PART AND DENIED IN PART consistent with this Opinion.

2. Defendants shall file their Answer to the Complaint by February 2, 2024.

DONE AND ORDERED in Chambers at Miami, Florida, on January 22, 2024.

BETHBLOOM =——<“i—i‘“CSO

UNITED STATES DISTRICT JUDGE

cc: Counsel of Record

° Defendants’ reliance on McIntosh v. Harbour Club Villas Condominium Ass’n, 468 So.2d 1075

(Fla. 3d DCA 1985) for the general proposition that plaintiffs may not use claims for declaratory judgment

“as a tool to advise attorneys as to the proper path to pursue[]” fails to show that dismissal is warranted. □□□

at 1081.

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