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Spathos v. Smart Payment Plan, LLC

United States District Court, W.D. Texas, Austin Division

May 7, 2018




         BE IT REMEMBERED on this day the Court reviewed the file in the above-styled cause, and specifically Plaintiff Raquel Spathos's Motion for Summary Judgment [#115], Defendant Smart Payment Plan, LLC (SPP)'s Response [#119-2] in opposition, and Plaintiffs Reply [#123] thereto; SPP's Motion for Summary Judgment [#117-2], Plaintiffs Response [#120-1] in opposition, and SPP's Reply [#122-2] thereto; and SPP's Motion to Exclude Testimony of Plaintiffs Expert [#126-2].! Having reviewed the documents, the governing law, and the file as a whole, the Court now enters the following opinion and orders.


         This is primarily a breach of contract case. SPP offers bill payment plan services to car dealerships. The bill payment plan services allow a car dealership's customers to complete car loan payments quickly and easily and offer customers the flexibility to set when those payments are made. SPP uses sales agents to sell its services to car dealerships and, in return, the agents earn commissions. Plaintiff formerly worked as one of SPP's sales agents.

         The parties also filed several motions to seal in connection with the pending substantive motions. The Court grants the parties' motions to seal as a matter of course. Additionally, as the Court was drafting this order, Plaintiff filed a motion for leave to file an answer to SPP's counterclaims. See Mot. Leave File Answer [#128]. This motion is not yet ripe and the Court declines to rule on it at this time.

         I. The Agreement and Termination

         In February 2009, Plaintiff and SPP signed a contract memorializing the specifics of their relationship. See Pl's Mot. Summ. J. App. [#116-3] Ex. C (the Agreement). Under the Agreement, SPP engaged Plaintiff to "distribut[e] the Half Payment Plan" and Plaintiff agreed to distribute the plan for five years in exchange for commissions. Id. at 1 The Agreement specified that "[a]ll dealers that [Plaintiff] brings to SPP shall remain [Plaintiff]'s accounts and all agreed upon commissions generated by those dealers shall be paid to [Plaintiff] for the duration that the dealers are involved with the program." Id.

         In a section titled "Confidentiality, " Plaintiff agreed she would not "directly or indirectly" disclose any of SPP's confidential information or use such information "in any manner either during the term of this Agreement or at any time thereafter, except as required in the course of distributing the plan." Id. Furthermore, in a section titled "Exclusive Provider, " Plaintiff agreed to "not distribute any competing payment plans for the duration of this contract." Id. at 2.

         In February 2014, Plaintiff incorporated Paywise Payment Plans, LLC (Paywise) in Delaware and registered the new organization in New York, New Jersey, Florida, Connecticut, Michigan, and Texas. Pl's Mot. Summ. J. [#115] at 3. In March 2014, Plaintiff and Michael DePetrillo, who formerly developed and implemented software for SPP, began exploring business opportunities together. Id.

         In September 2015, SPP terminated its relationship with Plaintiff and ceased paying Plaintiff commissions after it learned Plaintiff created Paywise. Def.'s Mot. Summ. J. [#117] at 5. Plaintiff claims she did not conduct any business through Paywise and never received any income from Paywise. Pl's Mot. Summ. J. [#115] at 3. After the Agreement was terminated, Plaintiff was hired by and now works for U.S. Equity Advantage (USEA). Id. at 4. USEA offers similar bill payment plan services as SPP through its Auto Pay Plus System. Id.

         II. Procedural History

         Plaintiff filed this action in New Jersey state court on November 4, 2015, requesting a preliminary injunction and damages for breach of contract, unjust enrichment, tortious interference with business relations, and conversion. Removal Notice [#1-2] Ex. A (Compl.) at ¶¶ 29-63. Shortly thereafter, SPP removed this case to United State District Court for the District of New Jersey. See Removal Notice [#1] at 1. The Honorable Judge Shipp denied Plaintiffs request for a preliminary injunction and later transferred the case to this Court. See Order of Nov. 17, 2015 [#11]; Order of July 21, 2016 [#30].

         SPP then counterclaimed against Plaintiff for breach of contract, misappropriation of trade secrets, unfair competition, breach of fiduciary duty, fraud, fraudulent inducement, promissory estoppel, and unjust enrichment. Am. Countercl. [#55] ¶¶ 23-112. SPP also requested its own preliminary injunction. Mot. Prelim. Inj. [#49]. This Court denied SPP's preliminary injunction request, finding SPP failed to show a threat of substantial injury. Order of Oct. 28, 2016 [#86].

         After discovery closed, SPP moved to amend its answer to add two affirmative defenses in response to Plaintiffs belated disclosure of alleged oral agreements between SPP and herself at her deposition. Mot. Leave [#108]. The Court ruled Plaintiff could not rely on oral agreements or promises disclosed for the first time during her deposition ...

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