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Chona Allison, et al v. Crc Insurance Services

December 6, 2010

CHONA ALLISON, ET AL., PLAINTIFFS/COUNTERCLAIM DEFENDANTS,
v.
CRC INSURANCE SERVICES, INC., AN ALABAMA CORPORATION, DEFENDANT/COUNTERCLAIM PLAINTIFF,
v.
CHONA ALLISON, ET AL., COUNTERCLAIM DEFENDANTS.



The opinion of the court was delivered by: James B. Zagel United States District Judge

Judge James B. Zagel

MEMORANDUM OPINION AND ORDER

Counterclaim-Defendant Tim Turner ("Turner") moves to dismiss CRC Insurance Services ("CRC")'s counterclaim against him for breach of fiduciary duty (count IV), violation of the Illinois Trade Secrets Act (count VII), and tortious interference with contract (count V) arguing that this court is not the proper venue. For the following reasons, Turner's motion to dismiss is granted.

I. BACKGROUND

CRC is a nationwide wholesale insurance broker. Given the nature of the services it provides, CRC invests considerable time, money, and effort in developing and maintaining relationships with each of its employees, existing clients, potential clients, and insurance markets.

Turner began working at CRC in 1999. Over the course of his employment by CRC, Turner served as President of the Chicago office, Regional Director, member of Board of Directors, and Co-President of CRC. Turner had access to CRC Confidential and Proprietary Trade Secret Information. On January 22, 2010, Turner resigned from CRC. Turner is now employed in California by Ryan Specialty Group ("RSG"), and he is one of the founders of Ryan-Turner Specialty, LLC ("RTS"). CRC alleges that Turner, along with Patrick Ryan and others, schemed to exploit CRC's business secrets to engineer a mass raid of CRC brokers and staff, and to solicit and accept business from CRC's customers.

After resigning from CRC, Turner filed a lawsuit in California state court, County of Los Angeles, seeking a declaration that certain restrictive covenants in the Agreement were unlawful under California law. On June 7, 2010, CRC cross-complained against Turner in California, alleging, inter alia, breach of contract, breach of fiduciary duty, misappropriation of trade secrets, and intentional interference with contractual relations.

The litigation in this court was filed on May 4, 2010 by former employees of CRC in Chicago. This litigation seeks a declaration that certain covenants in their employment agreements with CRC are invalid. Turner is not a plaintiff to this litigation. On August 4, 2010, CRC named Turner as a counterclaim defendant asserting claims against him for breach of fiduciary duty, violation of the Illinois Trade Secrets Act ("ITSA"), and tortious interference with contract.

Actions between CRC, RTS/RSG, individual brokers, Turner, and/or Ed McCormack ("McCormack") are pending in Alabama, Pennsylvania, California, and this court. By agreement of the parties, the Alabama action against McCormack is stayed. The Pennsylvania action is also stayed by agreement of CRC and RTS/RSG. CRC asked Turner to stay his action in California, but Turner has declined to do so. The parties, nonetheless, have agreed that the discovery in this case may be used in the California case.

II. STANDARD OF REVIEW

A motion to dismiss based on a forum selection clause is properly brought pursuant to Federal Rule of Civil Procedure 12(b)(3). See Muzmdar v. Wellness Int'l Network, Ltd., 438 F.3d 759, 760 (7th Cir. 2006). When a defendant challenges venue, the plaintiff bears the burden of establishing that venue is proper. Faur v. Sirius Int'l Corp., 391 F.Supp.2d 650, 657 (N.D. Ill. 2005). The court may consider facts outside of the complaint when determining whether venue is proper. Continental Cas. Co. v. American Nat'l Ins. Co., 417 F.3d 727, 733 (7th Cir. 2005).

III. DISCUSSION

Turner argues that three of CRC's claims against him in this litigation -- breach of fiduciary duty, ITSA violation, and tortious interference with contract -- arise out of Turner's former employment relationship with CRC. This relationship is governed by an employment agreement ("Agreement") specifying that certain actions at law or in equity must be brought in California state courts. Pursuant to the terms of Turner's employment agreement:

[a]ny action at law, suit in equity, or judicial proceeding relating to the validity, construction, interpretation, and enforcement of this Agreement,or any provision hereof, shall be instituted and determined exclusively in the courts of ...


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