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Gar Disability Advocates, LLC v. Deem

United States District Court, D. New Jersey

May 22, 2018

GAR DISABILITY ADVOCATES, LLC,, Plaintiff,
v.
MIRANDA DEEM, ERICA DOUGHERTY, PAMELA HOFER, and JOHN DOES #1-99,, Defendants.

          OPINION

          KEVIN MCNULTY. U.S.D.J.

         Plaintiff GAR Disability Advocates, LLC ("GAR") sues defendants Miranda Deem, Erica Dougherty, and Pamela Hofer. GAR alleges that defendants have engaged in conversion and tortious interference with existing business relationships. GAR seeks temporary restraints, a permanent injunction, and damages. Defendant Pamela Hofer moves to dismiss the complaint for improper service of process, lack of personal jurisdiction, improper venue, and failure to state a claim. I find that the District of New Jersey is not a proper venue and I order that the case be transferred to the Eastern District of Kentucky.

         I. BACKGROUND[1]

         Plaintiff GAR is a Delaware limited liability company with its principal place of business in New Jersey. (Compl. ¶ 1). GAR's parent company is Asta Funding, Inc. ("Asta Funding") (Compl. ¶ 3).

         GAR is an organization that assists individuals applying for and receiving Social Security Disability benefits or Supplemental Security Income. (Compl. ¶ 6). Non-attorney advocates and case managers assist GAR clients at all stages throughout the disability application process. (Compl. ¶ 24).

         GAR formerly maintained a satellite office in Morehead, Kentucky ("Kentucky Office"). (Compl. ¶ 14). Defendants Ms. Deem, Ms. Doherty, and Ms. Hofer, former employees of GAR's Kentucky Office, are all residents of Kentucky. (Compl. ¶¶ 3, 8). Ms. Hofer was hired as manager of the Kentucky Office and a non-attorney advocate on August 3, 2015. (Compl. ¶¶ 15-17). As a non-attorney advocate, Ms. Hofer provided direct representation to clients before Administrative Law Judges. (Compl. ¶ 17). Ms. Dougherty was hired as a case manager on August 3, 2015. (Compl. ¶ 18}. Ms. Deem was hired as a case manager on March 17, 2016. (Compl. ¶ 19).

         Ms. Deem, Ms, Dougherty, and Ms. Hofer were provided with GAR properly, including laptop computers, for work purposes. (Compl. ¶ 25). They were also afforded access to GAR's Customer Relationship Management Software, known as "Sales Force." (Compl. ¶ 26). Sales Force can generate confidential reports, including a list of a case manager's active client roster. (Compl. ¶ 27). A client roster contains personal information such as an applicant's name, telephone number, state of residence, and alleged disabilities. (Compl. ¶ 28).

         Given the confidential nature of the information that GAR employees encounter, all GAR employees must agree to be bound by the terms of the Employee Code of Conduct and the Employee Handbook. (Compl. ¶ 29). The Code of Conduct stipulates that an individual may not directly or indirectly disclose any confidential information to any third person or use any such information for the benefit of anyone other than GAR without the explicit prior written consent of GAR. (Compl. ¶ 31). The Employee Handbook states that "when an Employee's employment with Asta Funding terminates, for whatever reason, the Employee is required to immediately return all Company-owned property used during his/her employment, and all documents, disks, and other materials containing proprietary or confidential information belonging to the Company." (Compl. ¶ 32). The Employee Handbook includes a list of company-owned property (such as keys, credit cards, computers, etc.). (Compl. ¶ 33). The Employee Handbook also states that employees must return all originals or duplicates of any written or other tangible items, in whatever form, including trade secrets and confidential information. (Compl. ¶ 34). Ms. Dougherty, Ms. Hofer, and Ms. Deem all agreed to be bound by the terms of the Employee Code of Conduct. (Compl. ¶¶ 35, 36, 38).

         Ms. Dougherty was terminated on July 14, 2016 by Ms. Hofer. (Compl. ¶ 39). On March 3, 2017, the GAR Kentucky Office was officially closed and all employees were terminated. (Compl. ¶ 40). On March 9, 2017, Ms. Hofer was provided with pre-printed FedEx labels to facilitate her return of GAR property that was in her custody. (Compl. ¶ 41).

         On or around March 16, 2017, Ms. Hofer or someone acting on her behalf hung a sign in the window of the former GAR Kentucky Office advising clients to contact Ms. Hofer on her personal cell phone. (Compl. ¶ 43). Following her termination, Ms. Hofer continued to travel to hearings and conduct them, advising GAR clients that she was authorized to do so. (Compl. 144).

         GAR received communication from clients about continued contact from the defendants. (Compl. ¶ 47). GAR then sent cease-and-desist letters to Ms. Deem. (Compl. ¶ 47). The defendants have allegedly failed to return GAR's property in accordance witti the Employee Code of Conduct and the Employee Handbook. (Compl. ¶ 48). Defendants have allegedly continued to use GAR's property in an effort to contact GAR clients for the purpose of inducing them to terminate their relationship with GAR. (Compl. ¶ 49). Defendants have purportedly attempted to have clients begin working with Ms. Hofer or with another organization, People's Disability Advocates. (Compl. ¶ 49).

         Plaintiff GAR asserts three causes of action. First, GAR alleges conversion. GAR claims that Ms. Dougherty, Ms. Hofer, and Ms. Deem have failed to return GAR property, including client lists and computers. (Compl. ¶¶ 50-54). Second, GAR alleges tortious interference with existing business relationships. Third, GAR seeks temporary restraints and a permanent injunction. GAR claims that defendants are causing irreparable harm as a result of "ongoing conduct damage to GAR's business reputation, Defendants' improper communications with GAR's clients, misuse of GAR's confidential information including clients lists and client information, and/or to contact GAR's clients for purposes of inducing them to move their cases from GAR to Defendants." (Compl. ¶¶ 64-68).

         GAR seeks injunctive relief barring defendants from contacting any active client of GAR, disparaging GAR to clients or employees of GAR, or disparaging GAR to staff members of the Social Security Administration. (Compl.). GAR also demands that defendants immediately return all GAR property, direct all inquiries received from GAR clients to GAR's corporate headquarters, immediately place in escrow (or, alternatively, surrender to the court) all fees paid by any clients of GAR to defendants, and other appropriate relief. (Compl.).

         Currently before the court is Ms. Hofer's motion to dismiss for improper service of process, lack of personal jurisdiction, improper ...


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