Both sides hopeful after judge’s ruling in Brown & Brown case

March 09-- Mar. 9--DAYTONA BEACH -- A judge Friday dismissed eight of the 11 complaints in Brown and Brown's lawsuit against upstart rival Foundation Risk Partners, but the legal battle between the two Daytona Beach-based national insurance agencies is far from over with both sides claiming they will prevail.

[Ex-Brown & Brown execs refute 'betrayal' accusations]

[Ex-Brown & Brown execs sue former employer]

Brown & Brown in October sued its former retail division chief financial officer Tom Tinsley and the new company Tinsley now works for, Foundation Risk Partners, accusing the defendants of stealing "trade secrets," breach of contract and breach of fiduciary duty on the part of Tinsley.

Foundation Risk Partners, a company founded in January 2017 by several former Brown & Brown executives including Charlie Lydecker, FRP's CEO, in turn sued Brown & Brown as well as separately filing a motion to dismiss the insurance giant's complaints.

Judge Leah Case of the Seventh Judicial Circuit for Volusia County dismissed the majority of Brown & Brown's complaints but allowed three to stand:

--The alleged breaching of Tinsley's fiduciary duties to Brown & Brown that the insurance giant said resulted in damages to the company;

--The accusation that Tinsley and Foundation Risk Partners "misappropriated Brown (& Brown)'s trade secrets."

--The accusation that Foundation Risk Partners and its affiliated companies wrongfully interfered with Tinsley's contractual relationship with Brown & Brown.

Tinsley, the only individual named as a defendant in Brown & Brown's lawsuit, is chief administrative officer at Foundation Risk Partners. He left Brown & Brown in August 2016, several months before the new company was formed.

Lydecker, a former regional president for Brown & Brown, left in July 2016.

In issuing her ruling, Case also explained that her review of the legal dispute was "limited to whether the complaint alleges sufficient facts to state a cause of action.

"The court's consideration of a motion to dismiss does not allow for any speculation as to the veracity of the facts or whether they will be proved at trial," she wrote.

Attorneys representing Brown & Brown, Tinsley and Foundation Risk Partners both expressed optimism that their side would ultimately prevail.

Lawrence Ingram, an attorney with Freeborn & Peters LLP who represents Brown & Brown, said the complaints that were dismissed were due to "technicalities," adding that his client plans to soon refile amended versions of those complaints.

"The case is going forward," the Tampa-based attorney said in a phone interview. "This isn't going to affect the outcome of the lawsuit."

James Gassenheimer, an attorney with Berger Singerman law firm in Miami who represents Tinsley and Foundation Risk Partners, said his clients are "very pleased with the ruling.

"Motions to dismiss are very hard to win. To have the majority of the claims dismissed at this early stage is a very good sign," Gassenheimer said.

"On a motion to dismiss, prior to discovery, the law is that the court must accept all of the allegations that Brown & Brown claims are true. It can't speculate," he said.

"We're confident that once we get into discovery and the true facts come out that we will prevail," Gassenheimer said.

Brown & Brown has 20 days to file an amended complaint. Tinsley and Foundation Risk Partners have 20 days after that to file a response.

The next step after that would be for both sides to enter the legal discovery stage, including the gathering of documents and sworn statements.

Barring an out-of-court settlement, the case would then proceed to a jury trial.

Brown & Brown is no stranger to suing rival companies started by former executives.

In 2017, Brown & Brown won what was hailed at the time as an insurance industry record high $20 million out-of-court settlement from Lake Mary-based rival AssuredPartners Inc., which was launched in 2011 by several ex-Brown & Brown executives, including former vice chairman and chief operating officer Jim Henderson who is now AssuredPartners CEO.

Henderson told The News-Journal following the settlement that the deal was worth it because it did not require his company to admit guilt and allowed it to focus on its own growth.

Today, AssuredPartners is the nation's 10th-largest insurance brokerage with an estimated $1 billion in annual revenues, according to the latest annual ranking by trade publication Business Insurance.

Brown & Brown, led by CEO J. Powell Brown and his father, chairman J. Hyatt Brown, is the nation's sixth-largest insurance brokerage, according to the ranking. The insurance giant in 2018 saw its annual revenues top the $2 billion mark for the first time in its nearly 80-year history. It currently employs 9,590 workers in 40 states, including more than 300 at its headquarters on Ridgewood Avenue in Daytona Beach. The company is expected to soon begin construction of its future headquarters building on North Beach Street, where it plans to bring at least 625 more white-collar workers to the city's downtown upon the completion of the new corporate campus late next year.

Foundation Risk Partners saw its revenues rise to $175 million last year, which would rank it as the nation's 35th largest insurance brokerage. As of Feb. 1, its workforce has grown to 900 employees in eight states, including 50 at its headquarters at Cornerstone Office Park in Daytona Beach.

Ingram, the attorney for Brown & Brown, said of the judge's preliminary ruling, "We feel like we'll get a fair result at the end of the day. It's part of the process."

Gassenheimer, the attorney for Tinsley and Foundation Risk Partners, also expressed confidence in the eventual outcome.

"We're grateful that the judge carefully considered the papers and was thoughtful about her ruling," he said.

___

(c)2019 The News-Journal, Daytona Beach, Fla.

Visit The News-Journal, Daytona Beach, Fla. at www.news-journalonline.com

Distributed by Tribune Content Agency, LLC.