Securitas Electronic Security, Inc. v. DeBon

Background

Securitas Electronic Security, Inc. sued Bruce DeBon, alleging that he breached duties owed to Securitas while employed as Managing Director of its Diversified Security Solutions Division and after Securitas fired him. According to the complaint, DeBon helped Securitas customer Vornado Realty Trust develop an internal division that would compete with Securitas, induced other Securitas employees to assist, disparaged Securitas, disclosed confidential information, and represented himself as Vornado’s Director of Fire Safety while on Securitas’s payroll. Securitas further alleged that, after his termination, DeBon used proprietary information to compete through Croker Fire Drill and caused customers—including ATCO Management Services, LLC, Jeffrey Management Corp., and Vornado—to cancel or not renew contracts.

Securitas asserted six causes of action: breach of fiduciary duty, unfair competition, tortious interference with existing contracts, tortious interference with prospective business relations, usurpation of corporate opportunities, and unjust enrichment. DeBon denied the material allegations. He moved for judgment on the pleadings under Federal Rule of Civil Procedure 12(c). The court evaluated that motion under the standards used for a motion to dismiss for failure to state a claim under Rule 12(b)(6). At this stage, the court considered the complaint, treated well-pleaded facts as true, and drew reasonable inferences for Securitas. It did not consider allegations from DeBon’s counterclaim or third-party complaint against Felix Gonzalez because those allegations were outside Securitas’s complaint.

Court’s Analysis

Breach of Fiduciary Duty

The court rejected DeBon’s argument that Securitas’s first claim was really a fraud claim subject to the heightened pleading requirements of Rule 9(b). The court held that the claim was based on an alleged betrayal of an employer’s trust, not fraud against Securitas or its customers. Rule 8(a)(2), which requires a plausible statement of a claim, therefore applied. The complaint alleged that DeBon owed Securitas a fiduciary duty, intentionally acted against Securitas, and caused damages through lost contracts. The court held that the claim was sufficiently pleaded and denied the motion to dismiss the first cause of action.

Unfair Competition

The court held that the allegations about DeBon’s alleged misuse of Securitas’s proprietary information plausibly supported a New York unfair-competition claim. DeBon relied on his own version of disputed facts, including who developed and owned certain information and whether it was confidential. The court said those factual disputes could not be resolved on a motion to dismiss because it was required to presume Securitas’s pleaded version was true. The court denied the motion to dismiss the second cause of action.

Tortious Interference

The third cause of action alleged that DeBon interfered with Securitas’s service contracts with Vornado, ATCO, and Jeffrey Management Corp. by inducing premature terminations without cause. The court rejected DeBon’s argument that the complaint failed to allege a contract breach, explaining that the alleged premature termination of Vornado’s contract, if true, would constitute a breach. The court also stated that interference with contracts terminable at will may be actionable when the alleged interference violates a duty of loyalty.

The fourth cause of action alleged interference with Securitas’s prospective business relationships. The court explained that such a claim ordinarily requires allegations that the defendant acted with the purpose of harming the plaintiff, but that dishonest, unfair, or improper means can satisfy that requirement. It held that allegations of commercial disparagement and misuse of proprietary information were sufficient at the pleading stage. The court denied DeBon’s motion to dismiss both the third and fourth causes of action.

Usurpation of Corporate Opportunities

The fifth cause of action alleged that DeBon diverted corporate opportunities for his own benefit. The court explained that the corporate-opportunity doctrine generally prevents corporate fiduciaries and employees from taking for themselves opportunities that should belong to the corporation without consent. A corporation must allege a reasonable or tangible expectation of receiving the opportunity. Securitas alleged that it had acquired DSSI, was providing continuing services to multiple entities, and had contracts that had been renewed repeatedly without complaints. The court held that these allegations were sufficient to plead a reasonable expectation that the relationships would continue and denied the motion to dismiss the fifth cause of action.

Unjust Enrichment

The sixth cause of action alleged that DeBon financially benefited from improper use of Securitas’s resources, confidential client information, proprietary information, and intellectual property. Securitas sought, among other things, repayment of salary and benefits paid during the relevant employment period and compensation connected to customers allegedly induced to contract with Croker instead of Securitas.

The court recognized that unjust enrichment generally cannot duplicate a conventional contract or tort claim. It nevertheless held that dismissal was premature because Securitas could plead unjust enrichment in the alternative. Securitas could not obtain double recovery for the same conduct, but that limitation did not require dismissal at the pleading stage. The court denied the motion to dismiss the sixth cause of action.

Disposition

Chief Judge Colleen McMahon denied DeBon’s motion for judgment on the pleadings, described in the decision as a motion to dismiss, in its entirety. The court denied dismissal of all six causes of action. It did not determine whether the allegations were true or whether Securitas would ultimately prevail. The Clerk was directed to remove the motion at Docket No. 34 from the list of open motions.