United States District Court, M.D. Tennessee, Nashville Division
NEWBERN MAGISTRATE JUDGE
WILLIAM L. CAMPBELL, JR. UNITED STATES DISTRICT JUDGE
before the Court is Plaintiff First Fidelity Capital Markets,
Inc.'s Motion for Summary Judgment (Doc. No. 63).
Defendants filed a response (Doc. No. 72) and Plaintiff filed
a reply (Doc. No. 77). For the reasons stated below,
Plaintiff's Motion for Summary Judgment is DENIED.
First Fidelity Capital Markets, Inc. (“First
Fidelity”) is a boutique advisory firm that helps
companies fix residential mortgage lending operations and
increase profitability. (Doc. No. 64 at 1.) In November 2014,
First Fidelity engaged in discussions with Defendant Reliant
Mortgage Ventures, LLC d/b/a Reliant Bank Mortgage Services
(“Reliant”) regarding forming a business
relationship. (Doc. No. 73 at ¶ 1.) First Fidelity
sent a draft consulting agreement to Reliant dated November
17, 2014, which set First Fidelity's compensation at 40
basis points on the amount of loans funded by the mortgage
bankers proposed by First Fidelity and hired by Reliant.
(Id. at ¶ 4.) Reliant never signed the draft
agreement, at least in part because it viewed the
compensation proposal as too high. (Doc. No. 78 at
¶¶ 4-5.) On December 1, 2015, First Fidelity sent
Reliant an amended consulting agreement without the 40 basis
point compensation, leaving the amount of compensation to be
“further outlined in a separate addendum.”
(Id. at ¶ 6.) The parties never agreed on the
services to be provided by First Fidelity and did not execute
the December 1, 2015 agreement. (Id. at ¶¶
between the First Fidelity and Reliant ceased until
mid-January 2015, when the parties began discussions centered
around two mortgage bankers: Kyle Zotter and Mark Considine.
In connection with the renewed discussions, on January 25,
2015, First Fidelity and Reliant entered into the Reciprocal
Confidentiality and Non-disclosure Agreement (the
“Agreement”). (Doc. No. 66-3.)
provisions of the Agreement are at issue: the non-disclosure
clause and the non-circumvention clause. The non-disclosure
clause requires the parties to keep certain information
confidential and to disclose confidential information only
within their organizations on a need to know basis.
(Id. at 2, section 2.1.) The Agreement specifically
provides that the parties will not “disclose to any
person that the Confidential Information has been made
available to it or that the Discussions are taking
non-circumvention clause states:
The Parties agree that no effort shall be made to circumvent
this Agreement including, in violation of this Agreement, any
current or proposed relationships with any First Fidelity
Clients or third parties which are formally provided to
Reliant Bank Mortgage Services as potential employment
candidates by First Fidelity, as part of this agreement.
Fidelity introduced Zotter and Considine as potential
employment candidates and provided Reliant with their resumes
and information about their mortgage origination business.
(Doc. 73 at ¶ 11; Doc. No. 80-1 at 3; Doc. No. 80-2 at
days after executing the Agreement on January 25, 2015,
Reliant learned that Elliot Jacobs, CEO of First Fidelity,
told Reliant's Group Manager, Sam Preis, about the
discussions regarding the potential hire of Zotter and
Considine. (Doc. No. 75-1 at ¶ 16.) The parties
continued their discussions through at least February 4,
2015. (Doc. No. 80-5 at 7.) By February 6, 2015, the parties
had stopped their discussions. (Doc. No. 75-8 at 2.)
March and early April 2015, Reliant hired Zotter and
Considine directly. (Doc. No. 73 at ¶ 13.) The parties
dispute who among Zotter, Considine, and Reliant initiated
the contact after the discussions with First Fidelity ended.
(See Doc. No. 75-1 at ¶¶ 19-23; Doc. No.
79-1 at 1.) Zotter worked for Reliant as Senior Mortgage Loan
Originator from March 23, 2015 through March 31, 2016.
Considine worked for Reliant as Senior Mortgage Loan
Originator from April 8, 2015 through March 31, 2016.
(Id. at ¶ 15.) While working for Reliant,
Zotter and Considine originated $89, 936, 483 and $111, 394,
117 in residential mortgage loans, respectively.
(Id. at ¶ 18.)
First Fidelity filed this action against Reliant alleging
breach of contract and moved for summary judgment. (Doc. No.