Professional Documents
Culture Documents
151148/2018
NYSCEF DOC. NO. 10 RECEIVED NYSCEF: 06/12/2018
Plaintiff, : AMENDED
: VERIFIED COMPLAINT
-against- :
by its attorneys. Warshaw Burstein, LLP, alleges as and for its Amended Verified Complaint
against defendants Urban Compass, Inc. d/b/a Compass ("Compass") and Jessica Meis ("Meis")
"Defendants"
(collectively, the "Defendants"), as follows:
1. This case represents the latest in a long string of lawsuits against the real estate
startup Compass, whose main corporate strategy appears to willfully and unlawfully rely on
"poaching" Spaces'
undermining its competition by unlawfully Modern real estate agents while
Spaces'
simultaneously misappropriating Modern confidential and proprietary information to
ol'
business through the unlawful misappropriation of Plaintiff's trade secrets. In January 2018,
—
Meis-who was a real estate sales person affiliated with —
Plaintiff-terminated her
previously
Spaces'
relationship with Modern Spaces. Thereafter, Meis emailed Modern proprietary
information-including compilations of buyers and sellers of real estate-to her personal email.
Spaces'
After misappropriating Moderns proprietary information, Meis utilized it in her new role
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as a real estate agent at Compass-a — competitor to Modern Spaces. Upon information and
Spaces'
belief, Compass encouraged Meis to misappropriate Modern proprietary information and
I'
trade secrets for its own financial gain.
ol'
3. Now that Defendants misconduct has been uncovered (although the full extent of
their wrongdoing has yet to be discovered). Modern Spaces seeks to hold Defendants
accountable. Accordingly, Modern Spaces seeks to recover damages to compensate it for (a)
business that has been improperly diverted to Defendants through their unfair competition, (b)
misappropriation of trade secrets under both state and federal law, including a reasonable royalty
Defendants'
for continued possession of Plaintiff s trade secrets, exemplary damages and
attorneys' Spaces'
fees, (c) unlawful interference with Modern exclusive listing agreements. and
Spaces'
injunction should be granted proscribing Defendants from further exploiting Modern
confidential information and putting an immediate halt to the substantial and irreparable harm
and damages Defendants have caused, and continue to cause Modern Spaces as a result of their
unlawful activities.
THE PARTIES
5. Plaintiff Modern Spaces is a corporation duly organized and existing under the
laws of the State of New York, with a business address located at 47-42 Vernon Boulevard, Long
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Delaware, with a principal place of business at 90 Fifth Avenue, 3rd Floor, New York, New
York 10011 and which does business in New York County, New York.
7. Compass is a real estate brokerage firm that operates across the country. It has
8. In November 2017, CEO Robert Reffkin stated in a presentation, "Vision for Real
Future,"
Estate's that Compass's goal was to have a 20 percent market share in the top twenty
markets in the United States by 2020. He also announced that Compass was creating a Customer
from brokers across the country into an integrated platform and database. Compass
10. Jurisdiction is proper pursuant to C.P.L.R. §§ 301 and 302(a) in that, among other
things, Defendants have all transacted business and committed tortious acts within the State of
New York.
11. Venue is proper pursuant to C.P.L.R. §§ 501 and 503 in that at least one of the
parties resides or has its principal place of business within New York County. New York.
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FACTUAL ALLEGATIONS
Spaces'
aces'
A. Modern S Business
specializes in residential and commercial sales and leasing, as well as project development and
13. Founded and developed in Long Island City, Modem Spaces has invested in
community growth through participation in local events, fundraisers, and community service.
Since its launch in 2008, Modern Spaces has grown to capture a large percentage of the
residential market share in Long Island City and has been credited with the transformation and
14. Modern Spaces devotes, and has devoted, substantial time. energy and resources
into building a valuable brand and goodwill by nurturing relationships with clients. developers,
15. While Modern Spaces has devoted substantial efforts to cultivating its business
contacts in the New York City Metro area. it provides a service used within interstate commerce.
Specifically, Modern Spaces markets. sells, and leases real estate properties to potential buyers
of'
or tenants who reside or operate outside of New York. Indeed, many buyers of real estate
16. Meis began her association with Modern Spaces as a real estate agent in
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17. The Agreement is a valid and enforceable contract that imposed upon Meis
certain contractual obligations, including, without limitation. the obligation to adhere to the
18. The Agreement also required Meis to engage in fair and honest dealings, and to
comply with the laws of the New York Department of State, the Real Estate Board Of New York
("REBNY"), the RLS Universal Co-brokerage Agreement, and the REBNY Code of Ethics.
19. During her time with Modern Spaces, Meis was engaged as a real estate sales
agent.
20. While working as a real estate sales agent for Modern Spaces. Meis was privy to
assets and the financial affairs of Modern Spaces. Significantly, this included non-public
information about Modern Spaces present and future projects and developments-highly
21. Meis also had access to highly confidential and proprietary information, including
Spaces'
Modern Customer Management System ("CMS") database, landlord listings, developer
information. and leads generated by Modern Spaces. These client and owner lists contained
valuable, non-public information that was developed or compiled by Modern Spaces over years
password-protected database. Only authorized employees and licensed agents with login
credentials are able to access this database, and when an authorized user leaves Modern Spaces.
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Spaces'
23. To further protect Modern valuable confidential and proprietary
information. the Agreement contained several provisions directly limiting Meis's access and use
of this information.
24. The Agreement set forth that all printed, written or computerized information
of'
relating to the business of Modern Spaces, including, without limitation, open listings, exclusive
listings, co-exclusive listings. co-brokers listings. names. addresses and telephone numbers
pertaining to or in connection with any such listings, is deemed the confidential and proprietary
Information"
information of Modern Spaces (the "Proprietary Information").
25. The Agreement. inter alia. further provided that, upon termination of Meis's
association with Modern Spaces, she was (a) obligated to return all written materials, copies and
notes relating to the Proprietary Information, and (b) prohibited from utilizing or disclosing this
26. In addition, the Agreement provided that Meis would not directly or indirectly
solicit any current or former employee, independent contractor, broker or salesperson of Modern
27. Meis terminated her affiliation with Modern Spaces on January 22, 2018. and
28. Upon information and belief. Defendants conspired to steal and/or unlawfully
Spaces'
appropriate Modern confidential information and Proprietary Information to compete
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29. Upon information and belief, Compass and Meis misappropriated. copied. and
Spaces'
otherwise took Modern confidential information and Proprietary Information, in direct
30. In the days prior to Meis's resignation, she emailed to her personal account
Spaces'
dozens of files from Modern networks and CMS system including proprietary customer
and listing data, as well as internal company documents and forms. Specifically, on January 14,
Spaces'
2018, Meis sent at least 30 emails from her Modern email
Spaces'
containing multiple attachments that contained Modern Spaces confidential or proprietary
information. In particular, Meis emailed to herself a spreadsheet that included a list of potential
buyers (file named "Buyers List.xlsx). She also emailed to herself CMS data on rentals and sales
31. On January 16, 2018, Meis emailed her independent contractor agreement that she
Spaces'
had entered into with Modern Spaces, from her Modern Spaces email to her personal email.
Meis then provided a copy of the agreement to agents of Compass. Thus, Compass had
knowledge of the terms of the Agreement between Meis and Modern Spaces.
32. On January 20, 2018, Meis sent at least another 22 emails from her Modern
Spaces' Spaces'
email to her personal email containing Modern confidential or proprietary
33. Additionally, on January 20, 2018, Meis emailed to herself several files that were
the exclusive listing agreements between Modern Spaces and various owners of property. Meis
of'
provided copies of these exclusive listing agreements to agents of Compass, including general
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34. Upon information and belief, the theft of competitor listings and unethical
ol' competitors'
solicitation of real estate agents and employees is part of an organized and
"poach"
-poach" competitors'
deliberate scheme by Compass to agents and employees and
35. In addition to inducing Meis to breach her Agreement with Modem Spaces, upon
Spaces'
information and belief, Compass blatantly misappropriated and stole Modern Spaces proprietary
materials, including marketing photographs. Consistent with Compass s disregard for fair and
Spaces'
ethical business practices, Compass has taken Modern listing photographs-paid for.
Spaces'
website. showing Modern branded listing photographs, is annexed hereto as "Exhibit
A."
Spaces'
36. Upon information and belief, Compass utilized Modern confidential and
37. Upon information and belief, Compass provided Meis (and other Modern Spaces
agents) with step-by-step instructions to induce property owners to terminate their exclusive
listing agreements (the "Listine Agreements") with Modern Spaces and enter into separate
Defendants' Spaces'
aces'
D. Unlawful Actions Have Harmed Modern S Business
38. Upon information and belief, Compass is intentionally targeting Modern Spaces
and its agents in its efforts to quickly break into the Queens real estate market. Rather than
attempt to engage in lawful competition, Compass has instead engaged and recruited several
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Spaces' ol'
Modern agents with the intention of stealing and otherwise misappropriating Modern
Spaces'
Spaces confidential information and Proprietary Information.
39. Upon information and belief. Compass has targeted Modern Spaces to gain an
unf air competitive advantage over Modern Spaces in the Queens real estate market.
40. These unlawful and unethical actions have caused (and are expected to cause)
clients to terminate their listings with Modern Spaces, causing damage to Modern Spaces.
41. The actions of Defendants have caused damage to Modern Spaces that will only
increase as Defendants (a) use the confidential information of Modern Spaces, including, without
limitation, the Proprietary Information, to undermine Modern Spaces, and (b) lure agents and
42. Plaintiff repeats and realleges the allegations contained in the foregoing
if'
paragraphs as if fully set forth herein.
43. Meis was associated with Modern Spaces as an independent contractor pursuant
to the Agreement.
44. Modern Spaces has fulfilled all of its obligations to Meis under the Agreement.
45. As set forth above, Meis has breached material terms of the Agreement by, among
Spaces'
other things, misappropriating and disclosing Modern confidential information and
46. In doing so, Meis also violated the New York State. Department of State rules,
with a real estate broker, forthwith turn over to such broker any
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19 NYCRR § 175.14.
of'
47. As a result of Meis's violation thereof, and her legal obligations under the
Agreement, Modern Spaces has suffered and will continue to suffer irreparable harm.
48. As a result of Meis's breach of the Agreement. Modern Spaces has suffered. and
will continue to suffer, damages, including the loss of commission fees, business opportunities.
49. Plaintiff repeats and realleges the allegations contained in the foregoing
50. The Agreement is a valid and enforceable contract that exists between Modern
of'
51. Upon information and belief, Compass had knowledge of the Agreement,
including the details of the non-disclosure provision. Specifically, Meis emailed the Agreement
Spaces'
from her Modern Spaces email to her personal email on January
.1anuary 16, 2018. Thereafter, she
shared the Agreement with agents of Compass, including general counsel for Compass.
52. Meis has materially breached the Agreement by, among other things.
misappropriating and disclosing the confidential information and Proprietary Information and
53. Compass had actual knowledge of the Agreement between Modern Spaces and
Meis.
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Spaces and Meis by, among other things, directing. encouraging and inducing her to breach her
between Modern Spaces and Meis, Modern Spaces has suffered, and will continue to suffer,
irreparable harm.
Spaces'
disregard of Modern rights. Accordingly, Modern Spaces is entitled to recover punitive
58. Plaintiff repeats and realleges the allegations contained in the foregoing
59. The Listing Agreements are valid contracts that exist between Modern Spaces and
property owners.
Spaces'
60. Upon information and belief, Compass had knowledge of Modern Listing
Agreements when it hired Meis. who had access to and had been showing the properties for
Modern Spaces. Specifically, Meis emailed some of the exclusive listing agreements from her
Modern Spaces email address to her personal email address. Meis then provided copies of those
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61. Pursuant to Compass's written instructions, Meis induced the owners of the
properties to terminate Listing Agreements with Modern Spaces and enter into separate
62. The actions of Compass have caused such owners to breach such Listing
63. The rules of the New York Department of State, Division of Licensing Services
provide that:
19 NYCRR § 175.8.
Spaces'
64. Compass knowingly and intentionally interfered with Modern exclusive
65. Compass's interference with the Listing Agreements has caused Modern Spaces
Spaces'
disregard of Modern rights. Accordingly. Modern Spaces is entitled to recover punitive
(Trade Secret Misappropriation Under the Defend Trade Secrets Act, 18 U.S.C. § 1836)
67. Plaintiff repeats and realleges the allegations contained in the foregoing
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68. Upon information and belief, Defendants have violated the Defend Trade Secrets
Act of 2016. 18 U.S.C. § 1836, et seq (the "DTSA"), by misappropriating trade secrets from
Modern Spaces for services used in, or intended for use in. interstate or foreign commerce.
69. The DTSA defines trade secret as "all forms and types of financial, business,
procedures, programs, or codes, whether tangible or intangible. and whether or how stored,
if (A) the owner thereof has taken reasonable measures to keep such information secret; and (B)
the information derives independent economic value, actual or potential, from not being
generally known to, and not being readily ascertainable through proper means by, another person
information."
who can obtain economic value from the disclosure or use of the
Spaces'
70. Defendants possesses Modern trade secrets in the form of. among other
things, compilations of data from Modern Spaces proprietary CMS system, including client lists,
which are sufficiently secret to derive economic value from not being generally known to
persons who can obtain economic value from the disclosure or use of that information. The data
compilations were created and maintained through countless hours of direct client interactions
and/or other work and would be unavailable to Compass through publicly forums or locations.
The client lists, customer and landlord listings, listing agreements, client contact information.
engineercd-
engineered"
and leads are not known or available to the public, nor could they be "reverse
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Spaces'
71. Modern confidential information and trade secrets relate to services used
72. Modern Spaces has taken reasonable measures to protect the secrecy of its
confidential information and trade secrets, including password protecting its proprietary
databases and requiring brokers who have access to it (including Meis) to sign agreements
Spaces'
restricting the use of Modern proprietary information.
Defendants' Spaces'
73. misappropriated Modern trade secrets through improper and
Spaces'
unlawful means, including by Meis emailing Modern trade secrets to her personal email
Spaces'
74. Defendants acquired and used Modern trade secrets in a manner to which
Plaintiff did not consent and for the purpose of deriving economic benefit for Defendants and to
Spaces'
75. At the time that Modern trade secrets were disclosed to Defendants,
Defendants knew or had reason to know that the trade secrets were acquired through improper
Spaces'
and unlawful means, under circumstances giving rise to a duty to maintain Modern trade
secrets.
76. Defendants knowingly and improperly obtained, used. and disclosed such trade
secrets in violation of DTSA and relevant common law and statutory provisions prohibiting
Defendants'
77. As a direct and proximate cause of conduct. Modern Spaces has
suffered and continues to suffer the disruption of its business relationships and the loss of clients
and potential clients, misappropriation of its trade secrets, and devaluation of its trade secrets and
Defendants' Spaces'
business. misappropriation of Modern confidential information and trade
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secrets has caused and will continue to cause Modern Spaces substantial injury, including, but
not limited to actual damages, lost profits, harm to its reputation, and the diminution in value of
its trade secrets and business. Defendants have been unjustly enriched by their misappropriation
Defendants'
of confidential information and trade secrets.
Spaces'
78. To the extent Modern damages cannot be quantified, Defendants should
Spaces'
be order to pay a reasonable royalty for unauthorized disclosure or use of Modern trade
secrets.
knowing, willful, malicious, fraudulent, and oppressive. Modern Spaces is entitled to an award
attorneys'
of exemplary damages and reasonable fees as a consequence.
Spaces'
80. Because Modern remedy at law is inadequate, Modern Spaces seeks-in
relief'
addition to damages-a — temporary, preliminary. and permanent injunctive relief to protect its
trade secrets, as well as its legitimate business interests. Modern Spaces will continue to suffer
81. Plaintiff repeats and realleges the allegations contained in the foregoing
if'
paragraphs as if fully set forth herein.
82. virtue of her affiliation with Modern Spaces, Meis was placed in a position of
By
Spaces'
trust and had access to Modern valuable confidential information, Proprietary
Information and trade secrets relating to its business in Queens, New York.
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Spaces'
83. This confidential and proprietary information is not known to Modern
competitors or to the public at large, and gives Modern Spaces a competitive advantage against
competitors.
84. Defendants have acted in bad faith and have engaged in unfair competition with
Spaces'
Modern Spaces by misappropriating and exploiting Modern Spaces confidential information,
including, without limitation the Proprietary Information, for their own benefit.
85. Thus, Compass - a relatively new player in the Long Island City real estate
market - now has access to the valuable customer and landlord listings that has taken Modern
Spaces years to compile, thereby gaining an unfair competitive advantage in the Queens real
estate market.
Defendants' Spaces'
86. As a result of misappropriation of Modern confidential and
proprietary information. Modern Spaces has suffered and will continue to suffer irreparable harm
to its business reputation and goodwill for which Plaintiff has no adequate remedy at law.
confidential information and Proprietary Information, Modern Spaces has suffered damages in an
Plaintiff'
88. Plaintiff repeats and realleges the allegations contained in the foregoing
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89. Modern Spaces has invested substantial time and resources in acquiring and
nurturing its client relationships and has a reasonable expectation of continuing to do business
90. Defendants tortiously interfered with the economic relationships between Modern
Spaces and its clients through unlawful means, including but not limited to unfair competition
Spaces'
and misappropriation of Modern trade secrets and confidential information.
91. As a direct and proximate result of Defendants tortious actions, Modern Spaces
has suffered and will continue to suffer irreparable harm to its business and goodwill for which
92. As a direct and proximate result of Defendants tortious actions. Modern Spaces
determined at trial;
to be determined at trial;
Defendants'
c. awarding a reasonable royalty for continued possession of
Spaces'
Modern trade secrets;
Spaces'
confidential and proprietary information;
attorneys'
together with attorneys fees; and
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f. awarding Modern Spaces such other and further relief as this Court may
Yours,
WARSHA BURSTEIN, LLP
y: Marc A. Lavaia
Plaintiff"
Attorneys for Plainti
110
555 Fiah Avenue, Floor
New York. NY 10017
Tel: 212-984-7740
Email: mlavaia@wbny.com
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VERIFICATION
thereof, and the same is true to my own knowledge, except as to the matters therein stated to be
'
alleged upon infonnation and belief. and as to those matters I b ve the - o be true.
ERIC BENAIM
otary P li
li~
Marc A. t.svula
Notary Public State of NeupYork
No.: 02LA8gF2899
Qualified In Queens County
Conuniealon Explree April 1S,
Cornrnieslon 1$, ~
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