Kenyon v. Union Home Mortgage Corporation, 581 F.Supp.3d 951

Background

Michael Kenyon was hired by Union Home Mortgage as a branch manager in July 2019 and executed an employment agreement with a one-year non-compete and an August 2019 addendum extending the non-compete to March 30, 2023 based on a Leesburg lease representation (lease was actually executed Sept. 9, 2019).
Kenyon resigned in August 2020 but returned under a settlement agreement that preserved the employment agreement and its non-compete.
After returning, Kenyon alleges retaliatory and hostile treatment: failure to repost his biography, office phone and parking access issues, and reassignment of his customers, prospective customers, and referral sources (many relationships predated his employment).
Kenyon sued seeking declaratory relief that the non-compete is unenforceable and asserted six claims: tortious interference (Count II), breach of contract (III), retaliation/public policy (IV), constructive discharge (V), and fraudulent inducement (VI).
Union Home moved for judgment on the pleadings as to Counts II–VI and sought Rule 11 sanctions; Kenyon conceded he cannot sustain Counts III–VI, leaving Count II (tortious interference) and sanctions in dispute.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Tortious interference with business relationships (Count II)	Kenyon: his customers, prospective customers, and referral sources (many acquired before employment) are his relationships, not Union Home's; Union Home intentionally reassigned them and took other actions to interfere.	Union Home: an employer cannot tortiously interfere with its own relationships; Kenyon's book of business is effectively also Union Home's, so no third-party interference; alternative: insufficient facts.	Denied as to Count II — court held Union Home failed to show as a matter of law that Kenyon's relationships were necessarily Union Home's; factual issues remain about who owned the relationships and whether conduct was improper.
Counts III–VI (breach of contract; retaliation/public policy; constructive discharge; fraudulent inducement)	Kenyon initially pled these claims but concedes he cannot sustain them.	Union Home moved for judgment on the pleadings on these counts.	Granted — Kenyon conceded inability to sustain these claims; judgment entered for defendant on Counts III–VI.
Rule 11 sanctions	N/A (Defendant sought sanctions alleging claims were asserted for improper purposes)	Union Home: seeks sanctions because plaintiff abandoned multiple claims and allegedly litigated improperly.	Denied — Court found Defendant failed to comply with Rule 11 procedural prerequisites and that the claims did not lack any non-frivolous legal basis; no Rule 11 violation shown.

Key Cases Cited

Ashcroft v. Iqbal, 556 U.S. 662 (2009) (articulates modern pleading standards under Twombly/Iqbal)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must state a plausible claim for relief)
A & B–Abell Elevator Co. v. Columbus/Cent. Ohio Bldg. & Constr. Trades Council, 73 Ohio St.3d 1 (1995) (elements of tortious interference with business relationships)
Dolan v. Glouster, 173 Ohio App.3d 617 (2007) (a person cannot tortiously interfere with his own business relationship)
Fred Siegel Co., L.P.A. v. Arter & Hadden, 85 Ohio St.3d 171 (1999) (Ohio adopted fair-competition defense from Restatement)
Kehoe Component Sales Inc. v. Best Lighting Prods., Inc., 796 F.3d 576 (6th Cir. 2015) (impropriety often factual; question for jury where reasonable disagreement exists)
Geo-Pro Serv., Inc. v. Solar Testing Labs., 145 Ohio App.3d 514 (2001) (statement of tortious-interference elements under Ohio law)
INVST Fin. Grp., Inc. v. Chem–Nuclear Sys., Inc., 815 F.2d 391 (6th Cir. 1987) (district court must impose Rule 11 sanctions if violation found)
Ridder v. City of Springfield, 109 F.3d 288 (6th Cir. 1997) (Rule 11 objective-reasonableness standard)
Mann v. G & G Mfg., Inc., 900 F.2d 953 (6th Cir. 1990) (Rule 11 reasonableness inquiry)