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Sussmann v. Financial Guards, LLC

United States District Court, E.D. Louisiana

December 7, 2017


         SECTION: “H” (4)



         Before the Court is Defendant Daniel Dragan's Motion to Dismiss pursuant to the Clean Hands Doctrine (Doc. 134), Motion for Reconsideration of this Court's Summary Judgment Order (Doc. 146), and Motion to Vacate Judgment (Doc. 159). For the following reasons, the Motion to Dismiss is DENIED, and the Motions for Reconsideration and to Vacate Judgment are GRANTED IN PART.


         Plaintiffs Eddie Sussmann, Sr. and Leading Edge Financial Services, LLC (“Leading Edge”) bring this action against former employee Daniel Dragan (“Dragan”) and his company, Financial Guards, LLC (“Financial Guards”). In their Complaint, Plaintiffs allege that Dragan worked as an independent contractor managing IT and marketing for Leading Edge for many years before he was terminated on May 15, 2015. They allege that shortly after his termination, Dragan formed Defendant Financial Guards. Plaintiffs allege that Defendants then converted Plaintiffs' assets and confidential information and refused to return them. Plaintiffs allege that Defendants accessed and manipulated Plaintiffs' websites, email, and telephone system with the intention of confusing customers of Leading Edge and attracting customers to Financial Guards. Plaintiffs bring claims for damages and injunctive relief against Defendants under the Computer Fraud and Abuse Act (CFAA), the Lanham Act, the Louisiana Uniform Trade Secrets Act (LUTSA), Louisiana Unfair Trade Practices Act (LUPTA), and for state law conversion.

         After Defendant Financial Guards failed to make an appearance in this matter, this Court entered a default judgment against it on each of Plaintiffs' claims.[1] The default judgment enjoined Financial Guards from utilizing Plaintiff's confidential information or displaying the infringing content and ordered it to return or destroy any and all information belonging to Plaintiffs.

         Having obtained a default against Financial Guards, Plaintiffs then moved for summary judgment against Dragan. The Court found that Plaintiffs were entitled to judgment on their claims against Defendant Dragan for violation of the CFAA, LUTSA, LUTPA, and state law conversion.[2] The Court thereafter entered injunctive relief on those claims.[3] Only Plaintiffs' claim for trade dress infringement, as well as damages on its claims against Dragan and Financial Guards, are left for trial. In addition, Dragan's counterclaims against Plaintiffs for unpaid wages and other costs also remain to be tried.

         Defendant Dragan now moves to dismiss Plaintiffs' claims based on the unclean hands doctrine. In addition, Defendant asks this Court to reconsider its grant of summary judgment and vacate its prior judgment.


         I. Motion to Dismiss

         To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must plead enough facts “to state a claim for relief that is plausible on its face.”[4] A claim is “plausible on its face” when the pleaded facts allow the court to “draw reasonable inference that the defendant is liable for the misconduct alleged.”[5]A court must accept the complaint's factual allegations as true and must “draw all reasonable inferences in the plaintiff's favor.”[6] The court need not, however, accept as true legal conclusions couched as factual allegations.[7] To be legally sufficient, a complaint must establish more than a “sheer possibility” that the plaintiff's claims are true.[8] If it is apparent from the face of the complaint that an insurmountable bar to relief exists and the plaintiff is not entitled to relief, the court must dismiss the claim.[9] The court's review is limited to the complaint and any documents attached to the motion to dismiss that are central to the claim and referenced by the complaint.[10]

         II. Motion for Reconsideration

         A Motion for Reconsideration of an interlocutory order is governed by Federal Rule of Civil Procedure 54(b), which states that: “[A]ny order or other decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties does not end the action as to any of the claims or parties and may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities.” “Under Rule 54(b), ‘the trial court is free to reconsider and reverse its decision for any reason it deems sufficient, even in the absence of new evidence or an intervening change in or clarification of the substantive law.'”[11]“‘[T]he power to reconsider or modify interlocutory rulings is committed to the discretion of the district court, and that discretion is not cabined by the heightened standards for reconsideration' governing final orders.'”[12]


         A. Defendant's Motion to Dismiss

         Defendant Dragan moves for dismissal of Plaintiffs' remaining claims pursuant to the unclean hands doctrine. Specifically, Defendant contends that Sussmann has made false statements to this Court and “constantly lied in his declarations” used to support prior motions. In making this argument, Defendant identifies statements made by Sussmann that he believes to be false.

         At the outset, the Court notes that Defendant's Motion is procedurally improper. Defendant's Motion was filed after the deadline for non-evidentiary motions established by this Court, and at 69 pages plus a 22-page supplement, it far exceeds the 25-page limit established by local rules. In addition, none of the documents identified by Defendant have been properly submitted as competent, authenticated evidence. Ignoring these procedural defects in light of ...

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