1 RUTAN & TUCKER, LLP Milford W. Dahl, Jr. (State Bar No. 36796) 2 mdahl@rutan.com Timothy A.

Spivey (State Bar No. 269084) 3 tspivey@rutan.corn 611 Anton Boulevard, Suite 1400 4 Costa Mesa, California 92626-1931 Telephone: 714-641-5100 5 Facsimile: 714-546-9035 6 Attorneys for Plaintiff INSURANCE TRACKING SERVICES, INC. 7 8 9 10 11 INSURANCE TRACKING SERVICES, INC., a California corporation 12 Plaintiff, 13 V. 14 MYCOI, LLC, an Indiana limited liability 15 company; RYAN KITTO, an individual; KRISTEN NUNERY, an individual; and DOES 16 1 to 20, inclusive, 17 18 19 20 21 22 23 24 25 26 27 28
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SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF ORANGE CENTRAL JUSTICE CENTER

Case No.

COMPLAINT FOR DAMAGES AND INJUNCTIVE RELIEF FOR: (1) FRAUD (2) VIOLATION OF THE UNFAIR COMPETITION LAW (CAL. BUS. & PROF. CODE 17200, ET SEQ.)

Defendants. DEMAND FOR JURY TRIAL

attorneys at law

2464/025685-0001

5223197.1 a04/05/13

COMPLAINT

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For its Complaint, Insurance Tracking Services, Inc. ("Plaintiff') alleges as follows:

THE PARTIES
1. Plaintiff is, and at all relevant times was, a California corporation in good standing

4 doing business throughout the United States and with its principal place of business in Long 5 Beach, California. 6 2. Defendant MY COI, LLC ("myCOI") is as Indiana corporation that currently does,

7 and at all relevant times did, business in California, including the County of Orange. 8 3. Defendant Ryan Kitto ("Kitto") is an individual whom Plaintiff is informed and

9 believes currently, and at all relevant times did, reside in Marion County, Indiana. 10 4. Defendant Kristen Nunery ("Nunery") is an individual whom Plaintiff is informed

11 and believes currently, and at all relevant times did, reside in Marion County, Indiana. 12 5. Plaintiff is ignorant of the true names and capacities of defendants sued herein as

13 Does 1 through 20, inclusive, and therefore sues these defendants by such fictitious names 14 Plaintiff is informed and believes, and based thereon alleges, that each fictitiously named 15 defendant is affiliated with myCOI, Kitto and Nunery and is in some manner legally responsible 16 for the events, occurrences and damages caused to Plaintiff as alleged in this Complaint. Plaintiff 17 will seek leave of court to amend this Complaint to allege the true names and capacities of the 18 fictitiously named defendants when ascertained. 19 6. Plaintiff is informed and believes, and based thereon alleges, that at all relevant

20 times mentioned in this Complaint, myCOI, Kitto and Nunery and Doe defendants 1 through 20 21 (collectively "Defendants"), and each of them, (a) were acting as the owners, partners, managing 22 members, affiliates, agents, servants, employees, alter egos, successors or predecessors of each of 23 the other Defendants, (b) were acting within the course and scope of such relationship, with the 24 knowledge, express or implied, of each of the other Defendants, and (c) have approved and ratified 25 the acts of each of the other Defendants. 26 / / / 27 / / / 28 / / /
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JURISDICTION AND VENUE

Jurisdiction in the State of California is proper pursuant to California Code of Civil

3 Procedure Section 410.010 in that Defendants, and each of them, have substantially engaged in 4 business in the State of California and the acts complained of herein took place in the State of 5 California. 6 8. Venue is proper in Orange County as to Kitto and Nunery pursuant to Code of Civil

7 Procedure section 395(a). Venue is proper in Orange County as to myCOI because myCOI is an 8 out-of-state corporation which Plaintiff is informed and believes and based thereon alleges is not 9 qualified to do business in California yet is currently doing business in Orange County and other 10 counties within California. Specifically, Plaintiff is informed and believes and based thereon 11 alleges that myCOI is doing business in Orange County, where myCOI has recently responded to 12 a request for proposal from the Automobile Association of America, located in Costa Mesa, 13 California. 14 15 16 17 9.
FACTUAL BACKGROUND Kitto and Nunery Receive Plaintiff's Confidential and Proprietary Information by False Pretenses

Plaintiff is a specialty firm that offers fully outsourced and automated certificate of

18 insurance tracking and evidence of insurance issuance solutions. For example, when an 19 organization contracts with third parties to purchase goods, procure services, lease or rent 20 designated premises or license franchises, the executed contracts generally include provisions 21 requiring third parties to provide and maintain insurance in accordance with specific limit and 22 coverage requirements. Plaintiff takes on the responsibility to monitor compliance against 23 contract insurance requirements with the use of its proprietary insurance tracking system and 24 industry specific insurance expertise. This process is commonly referred to as "insurance 25 certificate tracking" ("Certificate Tracking Services"). As a separate service, Plaintiff will also 26 take on the responsibility of preparing and issuing certificates of insurance for insurance broker 27 firms ("Issuance Services"). Plaintiff's Certificate Tracking Services are invaluable to its clients 28 as they limit clients' exposure to risk created in the event third parties fail to comply with
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insurance requirements. Because these insurance policies represent a client's best chance of

2 recovery for liabilities falling within the purview of a hold harmless agreement, verifying that the 3 required coverages are in force and monitoring ongoing compliance are critical steps in a 4 comprehensive insurance certificate tracking program. 5 10. On or about June 7, 2009, Plaintiff was contacted in California by Kitto, who

6 represented that he was, at the time, employed by an insurance broker firm, Mavum Risk 7 Management, LLC ("Mavum"). Kitto first contacted Plaintiff through Plaintiff's marketing 8 web site, 9 11. Kitto indicated he wished to obtain a presentation of Plaintiffs Issuance Services

10 and expressed an interest to review the Certificate Tracking Services. Kitto explained that he, as 11 an alleged broker at Mavum, intended to refer Mavum's clients to Plaintiff. 12 12. On or about June 8, 2009, Plaintiff, while in California, had a telephone call with

13 Kitto for purposes of Plaintiff determining whether Mavurn is a viable candidate for its services 14 and to provide Kitto with additional information Kitto requested regarding Plaintiffs services. 15 13. After the June 8, 2009 telephone call, based on representations made by Kitto

16 Plaintiff, through its representative Rick Lopez, sent a follow up email, attached to which were 17 certain confidential documents Kitto requested during the phone call with Mr. Lopez, including 18 Plaintiffs Certificate Tracking Services proposal, Issuance Services proposal, work flow chart and 19 service agreement, as well as a sample Commercial General Liability Policy Exclusion 20 Verification Certificate. The documents attached to the Juen 8, 2009 email are Plaintiff's 21 confidential and proprietary information. Accordingly, the email was marked "Confidential" and 22 had a confidentiality provision at the bottom of the email indicating that the information 23 transmitted is sensitive and only intended for the addressee. A true and correct copy of the June 8, 24 2009 email, without attachments, is attached hereto as Exhibit 1. 25 14. Additionally, in the June 8, 2009 email, Mr. Lopez scheduled another meeting with

26 Kitto and Kitto's "colleagues" for June 11, 2009. 27 15. On June 11, 2009, Plaintiff held a conference call with Kitto and Nunery. Kitto

28 and Nunery represented that Nunery was a fellow employee of Mavum. Plaintiff has since learned
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1 that this representation was false. Nunery was never an employee of Mavum.
2 16. During the conference call, Mr. Lopez presented a confidential web demonstration

3 (a "webinar") of Plaintiffs Certificate Tracking Services and Issuance Services. Plaintiff believed 4 that it was sharing confidential information with Kitto and Nunery for the purpose of Mavum 5 referring its clients to Plaintiff for Certificate Tracking and Issuance Services. Through this 6 webinar, Kitto, Nunery and Mavum obtained Plaintiffs confidential and proprietary information, 7 including, but not limited to, proposals, fee schedules, work flow charts, service agreements, 8 frequently asked questions, as well as Certificate Tracking Services features, roadmaps, plans, 9 specifications, mechanics, designs, techniques and methods to increase monetization. 10 17. Plaintiff would not have shared any of this information with Kitto and Nunery if

11 Plaintiff was not misled into believing Kitto and Nunery intended to refer Mavum's clients to 12 Plaintiff. 13 18. After hearing no further response from Kitto or Nunery, Mr. Lopez emailed Kitto

14 on June 23, 2009 to follow up on whether Kitto or Nunery discussed Plaintiffs Certificate 15 Tracking and Issuance Services with their clients. Kitto responded that he had spoken with several 16 clients and did not find much interest at that time. 17 18 19 19.
Kitto and Nunery Use Plaintiffs Confidential and Proprietary Information to Start myCOI to Compete with Plaintiff

In mid 2012, the San Mateo Transit District ("SamTrans") issued a public request

20 for proposal ("RFP") for certain insurance services. Plaintiff responded to this RFP. 21 20. In or around August 2012, Plaintiff met with SamTrans to discuss Plaintiff

22 providing Certificate Tracking Services. During the meeting, Plaintiff became aware that myCOI 23 had also submitted a proposal to SamTrans in response to the same RFP. Plaintiff also became 24 aware that Kitto was in some way affiliated with myCOI. 25 21. Plaintiff subsequently discovered that Kitto and Nunery had started myCOI in

26 November 2009, less than five months after Kitto and Nunery received Plaintiffs confidential and 27 proprietary information. Indeed, myCOI offers the same Certificate Tracking Services as Plaintiff 28
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22.

Plaintiff is informed and believes and based thereon alleges that Plaintiff, since at
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1 the latest November 2009, has been wrongfully competing with Plaintiff, using Plaintiffs 2 confidential and proprietary information (including, but not limited to, confidential pricing 3 information, contracts and client proposals), usurping Plaintiffs customers and potential 4 customers, and continues to wrongfully compete with Plaintiff to the present. 5 6 7 23. FIRST CAUSE OF ACTION (For Fraud against Kitto, Nunery and Does 1-20) Plaintiff incorporates each and every allegation in paragraphs 1 through 22, above,

8 as if set forth in full and re-alleged herein. 9 24. As alleged above, Kitto, Nunery and Does 1 through 20 knowingly and

10 intentionally made numerous false and/or misleading representations of material fact with the 11 intent to deceive and/or induce reliance by Plaintiffs. As alleged above, Kitto, Nunery and Does 1 12 through 20 further failed to disclose and concealed facts which they had a duty to disclose to 13 prevent other statements that they had made from being false and misleading. As alleged above, 14 Kitto, Nunery and Does 1 through 20 made at least the following misrepresentations: 15 a. On or about June 8, 2009, Kitto represented to Plaintiff that he was

16 representing Mavum in order to explore the possibility of Mavum referring its clients to Plaintiff 17 for Certificate Tracking and Issuance Services. 18 b. On or about June 11, 2009, Kitto and Nunery represented to Plaintiff that

19 Nunery was an employee of Mavum. 20 25. Based on the foregoing, Kitto, Nunery and Does 1 through 20 were able to

21 persuade Plaintiff to share its confidential and proprietary information with them. Plaintiff 22 believed that Kitto and Nunery were offering Plaintiff a new source of customers through Mavum. 23 26. Plaintiff actually and reasonably relied on Kitto and Nunery's misrepresentations,

24 omissions, and concealments resulting in substantial damages to Plaintiff. 25 27. Had Plaintiff known the truth that Kitto, Nunery and Does 1 through 20 were not

26 using Plaintiffs confidential and proprietary information to refer Mavum clients to Plaintiff, but 27 instead were appropriating Plaintiffs confidential and proprietary information to create a 28 competing business, Plaintiff would never have given Kitto, Nunery and Does 1 through 20 any of
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1 its confidential and proprietary information. 2 28. As a direct and proximate result, Plaintiff has been damaged in a sum in excess of

3 the jurisdictional limits of this Court and in an amount to be proven at trial. 4 29. Kitto, Nunery and Does 1 through 20's herein-alleged wrongful acts and omissions,

5 and each of them, were knowingly, willfully, intentionally, maliciously, oppressively, and 6 fraudulently undertaken with the express purpose and intention of defrauding Plaintiff, all to the 7 substantial financial benefit of Kitto, Nunery and Does 1 through 20, and each of them, entitling 8 Plaintiff to punitive damages. 9 10 11 12 30. SECOND CAUSE OF ACTION (For Violation of California Business and Professions Code 17200, et seq. [The Unfair Competition Law] against All Defendants) Plaintiff incorporates each and every allegation in paragraphs 1 through 29, above,

13 as if set forth in full and re-alleged herein. 14 31. California Business and Professions Code 17200, et seq., (the "Unfair

15 Competition Law" or "UCL") authorizes private lawsuits to enjoin acts of "unfair competition," 16 which includes any unlawful, unfair, or fraudulent business practice. 17 32. The UCL imposes strict liability. Plaintiff need not prove Defendants intentionally

18 or negligently engaged in unlawful, unfair or fraudulent business practicesbut only that such 19 practices occurred. 20 21 22 33. The material misrepresentations, concealments, and non-disclosures by Defendants

are unlawful, unfair, and fraudulent business practices prohibited by the UCL. 34. Defendants violated the UCL by engaging in, among others, common law fraud to

23 misappropriate Plaintiff's confidential and proprietary information to start myCOI, a competing 24 business. 25 35. The Defendants' above-alleged actions and each of them further constitute unfair

26 business acts and practices since the actions were deceptive, sharp, immoral, unethical, oppressive, 27 unscrupulous, substantially injurious, and operate to the competitive disadvantage of other 28 businesses that do not engage in such practices. Moreover, the injuries to Plaintiff were
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1 2

substantial and outweigh the utility of Defendants' practices. 36. The unlawful, unfair, and fraudulent business practices of Defendants are ongoing

3 and present a continuing threat to Plaintiffs and others' business. myCOI has realized unjust 4 profits, gains and advantages as a proximate result of its misappropriation of Plaintiff's 5 confidential and proprietary information, and will continue to realize unjust profits, gains and 6 advantages as a proximate result of its misappropriation as long as such misappropriation is 7 permitted to continue. 8 37. Pursuant to the UCL, Plaintiff is entitled to preliminary and permanent injunctive

9 relief ordering Defendants to cease this unfair competition, as well as disgorgement and restitution 10 to Plaintiff of all money collected or held in connection with Defendants' unfair competition, or 11 12 13 14 15 such portion of those revenues as the Court may find equitable.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff prays for relief and judgment as follows:

UNDER THE FIRST CAUSE OF ACTION

1. For damages according to proof at trial but in an amount no less than the

16 jurisdictional limit of this court; 17 2. For punitive damages against Defendants in an amount sufficient to punish and set

18 an example; 19 20

UNDER THE SECOND CAUSE OF ACTION

3. For preliminary and permanent injunctive relief enjoining Defendants, their agents,

21 servants and employees and all persons acting in concert with them from continuing to engage in 22 the unfair, unlawful and/or fraudulent business practices alleged above and that may yet be 23 discovered in the prosecution of this action; 24 4. For restitution and disgorgement of all money or property wrongfully obtained by

25 Defendants; 26 5. For an accounting by each and all Defendants for any and all profits derived by

27 them from the herein-alleged unlawful, unfair, and/or fraudulent conduct and/or business 28 practices;
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1
2 3 4

UNDER ALL CAUSES OF ACTION

6. 7. 8. For attorneys' fees and expenses pursuant to applicable laws; For costs of suit; For such other and further relief as the Court deems just and proper. RUTAN & TUCKER, LLP By: Timothy A. Spivey Attorneys for Plaintiffs INSURANCE TRACKING SERVICES, INC.

5 Dated: April 5, 2013 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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EXHIBIT 1

Rick Lo ez
From: Sent: To: Subject: Attachments: Rick Lopez [Rick@instracking.com ] Monday, June 08, 2009 10:53 AM Ryan Kifto ITS Certificate of Insurance Tracking & Issuance - Proposal Certificate_ofinsurance_Tracking_Proposal.pdf; Cerlificate_of Insurance_Issuance_Proposal.pdf; Certificte_of Insurance_Tracking_Service Agreement.pdf; Certificte_of Insurance_Issuance_Service Agreement.pdf; ITS_CGL_Exclusion_Verification_Certificate.pdf Confidential

Sensitivity:

Hello Ryan, Per our conversation, please find attached the ITS certificate of insurance tracking and issuance proposals and service agreements. In addition, I have included a sample of our Commercial General Liability Policy Exclusion Verification Certificate for your review. I look forward to meeting with you and your colleagues on Thursday June 11 th at 2:00PM (Eastern Time). The email invite notification (including the web demo login instructions) will follow momentarily. Please feel free to contact my office if you have any further questions. Best regards, Rick Lopez Insurance Tracking Services, Inc. (ITS) 110 W. Ocean Blvd., Suite 602 Long Beach, CA 90802 (562) 435-2955 - P (562) 435-2999 - F rickeinstracking,con -i - E www.instracking.com W

The information transmitted herewith in sensitive nformation intended only for use to the incliAdual or entity to which it is addressed, if- the reader of this message is not the intended recipient, you are h ere b y n o tified that any review, retransmissiori, dissemination, distribution, copying or other use of, or taking of any action in reliance upon, this information is strictly prohibited, if you have received this communication in error, please contact the sender and delete the material from your computer.,

Exhibit 1 -- Page 9