Miami Developer Drops Claims of Misappropriating Trade Secrets and Stealing Key Employees

After nearly two and a half years of litigation, claims of misappropriating trade secrets and stealing key employees are no more after Miami developer Harvey Hernandez dropped a lawsuit against his former employees and a potential business partner.

Do your due diligence and know the people you’re entering a partnership with—that’s the advice of attorney Don Hayden a founding partner at Mark Migdal & Hayden in Miami. He represents defendant RealPage, a Texas-based property management software company, and three former employees.

“They [the plaintiffs] were never able to establish any misappropriation of trade secrets by my client. They were never able to establish there was any valid basis for claiming restrictive covenants were still in place after the individuals were fired, but we’ve been dealing with it for a year and a half,” said Hayden. “The documents they produced were just a data dump.”

Hernandez is the owner of NGD Homesharing, a company that owns and operates multifamily and hospitality brands, to refurbish and rebrand condo properties to home share via Airbnb. He sued RealPage after hiring three of its former employees.

“NGD voluntarily dismissed its claims with prejudice e against all of the defendants including RealPage, Mirasol Capital, Todd Butler, Collin Ross and Kayla Neller on the eve of a contempt hearing where NGD was facing potential dismissal of its claims and an award against it for attorneys’ fees for failing to provide documentation to support its claims of misappropriation of trade secrets and for alleged violations of court orders and other delays over the course of the last 18 months. During the now dismissed litigation, NGD switched counsel four times and had three liens filed against it by its former attorneys after they withdrew from representing NGD,” said RealPage in a written statement. 

John Kirkpatrick of Marko & Magolnick in Miami, who represents NGD Homesharing, did not respond by deadline to a request for comment.

The 2020 lawsuit in Miami-Dade Circuit Court alleged that RealPage had a “pattern of tortious conduct and blatant violations of ongoing contractual obligations, whereby the defendants are unlawfully usurping NGD’s business, technology and goodwill, and misappropriating NGD’s confidential, proprietary and trade secret information for their own pecuniary gain and for the benefit of RealPage’s directly competing business.”

In the fall of 2019, Hernandez and RealPage CEO Stephen Winn met to discuss potential business opportunities, partnerships and deal terms. 

Donald Hayden, of Mark Migdal & Hayden Donald Hayden, of Mark Migdal & Hayden.

“At or about that time, they decide they don’t want to go forward because of the Airbnb concerns,” said Hayden. “They learned the relationship with Airbnb is not going to develop into something, so the discussions don’t go very far.”

Hayden said RealPage’s doubts started after it learned about a lawsuit between Airbnb and NGD Homesharing, as well as a lawsuit between Hernandez and his former business partner Cindy Diffenderfer. 

Hayden said RealPage did make an offer to Hernandez, which was rejected due to it being too low. According to the complaint, the offer was to “procure NGD’s intellectual property and software with respect to its Niido™ platform for a proposed purchase price, and RealPage advised it desired to extend employment offers to NGD’s key employees and technical team.”

“Defendants have conspired to misappropriate NGD’s valuable business information to unlawfully compete against, and destroy NGD’s business,” said the lawsuit. 

In the complaint, NGD alleged that a non-disclosure agreement was signed by its former employees to protect its trade secret information and business information to make sure RealPage its former employees wouldn’t misuse information considered confidential during negotiations. It also alleged that RealPage was working to develop technology products to compete in the home-sharing industry.

“Mr. Hernandez’s house of cards fell in on him. His claims against my client were never established. In fact, they were unable to provide any evidence of misappropriation of trade secrets and the like,” said Hayden. “We had developed our own technologies elsewhere and sure, we hired their technology people, but only after Hernandez had fired them a few months earlier.” 

In May, Miami-Dade Circuit Judge David Miller dismissed the case with prejudice before an evidentiary hearing after Hernandez voluntarily withdrew his claims.

“As that was approaching, they dismissed the entire lawsuit to avoid what the judge had indicated he’d do because they hadn’t been compliant with striking all of their pleadings and the link,” said Hayden. 

Hayden said it’s crucial for attorneys with similar cases to force the claimant to come forward with evidence of the allegations they’ve made against your client. 

“Sometimes it’s a long road to get there, but we were able to get a favorable result for our client and establish that the claims had no merit,” said Hayden. 

RealPage said it will not seek to pursue any actions against Hernandez.

“They’re just focused on developing their business and just happy this expensive litigation is behind us,” said Hayden.

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