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151148/2018
NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 02/06/2018
SPACES,
VERIFIED COMPLAINT
Plaintiff, ',
-against-
("Plaintiff"
Plaintiff L.I. City Ventures LLC, d/b/a Modern Spaces or "Modern Spaces"),
by its attorneys, Warshaw Burstein, LLP, alleges as and for its 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 gain
to compensate it for (a) business that has been improperly diverted to Defendants through their
Spaces'
unfair competition, (b) theft of trade secrets, (c) unlawful interference with Modern
exclusive listing agreements, and (d) damage to its public reputation and goodwill.
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THE PARTIES
3. Plaintiff Modern Spaces is a corporation duly organized and existing under the laws
of the State ofNew York, with a business address located at 47-42 Vernon Boulevard, Long Island
Delaware, with a principal place of business a 90 Fifth Avenue, 3rd Floor, New York, New York
10011 and which does business in New York County, New York.
5. Upon information and belief, Defendant Meis is an individual, residing the in the
6. 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.
7. 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.
FACTUAL ALLEGATIONS
Spaces'
aces'
A. Modern S Business
specializes in residential and commercial sales and leasing, as well as project development and
9. Founded and developed in Long Island City, Modern 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
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market share in Long Island City and has been credited with the transformation and growth of the
community.
10. Modern Spaces devotes, and has devoted, substantial time, energy and resources
into building a valuable brand and goodwill by nurturing relationships with clients, developers,
11. Meis began her association with Modern Spaces as a real estate agent in November
2017, executing a formal Independent Contractor Relationship Agreement with Modern Spaces in
12. The Agreement is a valid and enforceable contract that imposed upon Meis certain
contractual obligations, including, without limitation, the obligation to adhere to the requirements
13. 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.
14. During her time with Modem Spaces, Meis was engaged as a real estate sales agent.
15. While working as a real estate sales agent for Modern Spaces, Meis was privy to
valuable, non-public information relating to clients, listings, business operations, strategies, assets
and the financial affairs of Modern Spaces. Significantly, this included non-public information
Spaces'
about Modern present and future projects and developments-highly confidential
16. Meis also had access to highly confidential and proprietary information, including
Spaces'
Modern Customer Management System ("CMS") database, landlord listings, developer
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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 of
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,
Spaces'
18. To further protect Modern valuable confidential and proprietary
information, the Agreement contained several provisions directly limiting Meis's access and use
of this information.
19. The Agreement set forth that all printed, written or computerized information
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").
20. 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
21. 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
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22. Meis terminated her affiliation with Modern Spaces on January 22, 2018, and
23. Upon information and belief, Defendants conspired to steal and/or unlawfully
Spaces'
appropriate Modern confidential information and Proprietary Information to compete
24. Upon information and belief, Compass and Meis misappropriated, copied, and
Spaces'
otherwise took Modern confidential information and Proprietary Information, in direct
25. In the days prior to Meis's resignation, she emailed to her personal account dozens
Spaces'
of files from Modern networks and CMS system including proprietary customer and
26. Upon information and belief, the theft of competitor listings and unethical
competitors'
solicitation of real estate agents and employees is part of an organized and deliberate
"poach" competitors'
scheme by Compass to agents and employees and misappropriate their trade
27. In addition to inducing Meis to breach her Agreement with Modern Spaces, upon
Spaces'
information and belief, Compass blatantly misappropriated and stole Modern 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, and
Spaces' A."
showing Modern branded listing photographs, is annexed hereto as "Exhibit
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28. 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 "Listing Agreements") with Modern Spaces and enter into separate agreements
Spaces'
aces'
D. Defendants Unlawful Actions Has Harmed Modern S Business
29. 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 Modern
Spaces'
Spaces agents with the intention of stealing and otherwise misappropriating Modern
30. Upon information and belief, Compass has targeted Modern Spaces to gain an
unfair competitive advantage over Modern Spaces in the Queens real estate market.
31. 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.
32. 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
33. Plaintiff repeats and realleges the allegations contained in the foregoing paragraphs
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34. Meis was associated with Modern Spaces as an independent contractor pursuant to
the Agreement.
35. Modern Spaces has fulfilled all of its obligations to Meis under the Agreement.
36. As set forth above, Meis has breached material terms of the Agreement by, among
Spaces'
other things, misappropriating and disclosing Modern confidential information and
37. In doing so, Meis also violated the New York State, Department of State rules,
19 NYCRR § 175.14.
38. 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.
39. 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,
40. Plaintiff repeats and realleges the allegations contained in the foregoing paragraphs
41. The Agreement is a valid and enforceable contract that exists between Modern
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42. Upon information and belief, Compass had knowledge of the Agreement, including
43. Meis has materially breached the Agreement by, among other things,
misappropriating and disclosing the confidential information and Proprietary Information and
44. Compass had actual knowledge of the Agreement between Modern Spaces and
Meis.
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.
48. Compass's actions were committed knowingly, willfully and in conscious disregard
Spaces'
of Modern rights. Accordingly, Modern Spaces is entitled to recover punitive damages in
49. Plaintiff repeats and realleges the allegations contained in the foregoing paragraphs
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50. The Listing Agreements are valid contracts that exist between Modern Spaces and
property owners.
Spaces'
51. 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.
52. Pursuant to Compass's written instructions, Meis induced the owners of the
properties to terminate Listing Agreements with Modern Spaces and enter into separate
53. The actions of Compass have caused such owners to breach such Listing
54. The rules of the New York Department of State, Division of Licensing Services
provide that:
19 NYCRR § 175.8.
Spaces'
55. Compass knowingly and intentionally interfered with Modern exclusive
56. Compass's interference with the Listing Agreements has caused Modern Spaces to
57. Compass's actions were committed knowingly, willfully and in conscious disregard
Spaces'
of Modern rights. Accordingly, Modern Spaces is entitled to recover punitive damages in
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58. Plaintiff repeats and realleges the allegations contained in the foregoing paragraphs
59. By virtue of her affiliation with Modern Spaces, Mies was placed in a position of
Spaces'
trust and had access to Modern valuable confidential information, Proprietary Information
Spaces'
60. 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.
61. Defendants have acted in bad faith and have engaged in unfair competition with
Spaces'
Modern Spaces by misappropriating and exploiting Modern confidential information,
including, without limitation the Proprietary Information, for their own benefit.
62. 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'
63. 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.
Defendants' Spaces'
64. As a result of misappropriation of Modern trade secrets,
confidential information and Proprietary Information, Modern Spaces has suffered damages in an
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65. Plaintiff repeats and realleges the allegations contained in the foregoing paragraphs
66. 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 with
67. Defendants tortiously interfered with the economic relationships between Modern
Spaces and its clients through unlawful means, including but not limited to unfair competition and
Spaces'
misappropriation of Modern trade secrets and confidential information.
68. 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
69. As a direct and proximate result of Defendants tortious actions, Modern Spaces has
determined at trial;
at trial;
Spaces'
c. enjoining Defendants from utilizing any of Modern confidential
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attorneys'
together with fees; and
e. awarding Modern Spaces such other and further relief as this Court may
February 5, 2018
Yours,
WARSHA W RSTEIN, LLP
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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 information and belief, and as to those matters ve o be true.
ERIC BENAIM
lic
u-o n.t-sis
Publio State of New Yodt
Notary
No.: OOLAOOF2OBO
Qualified ta Queene County
Conunlesion Euphee AprO 15, 2018
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