Court filing

Amended Petition for Order to Show Cause for Expedited Injunctive Relief — Fountainhead v. Womply

Record facts

Court	Circuit Court of the 18th Judicial Circuit, Seminole County, Florida — Civil Division
Filed	2021-09-10

Full text

Filing # 134332464 E-Filed 09/10/2021 09:26:46 AM

IN THE CIRCUIT COURT OF THE 18TH
JUDICIAL CIRCUIT, IN AND FOR
SEMINOLE COUNTY, FLORIDA.
CIVIL DIVISION

CASE NO. 2021CA002143
FOUNTAINHEAD SBF,

Plaintiff,
VS.
OTO ANALYTICS, INC. d/b/a WOMPLY,

Defendant.
/

PLAINTIFF’S AMENDED PETITION FOR ORDER TO SHOW CAUSE FOR
EXPEDITED TEMPORARY INJUNCTIVE RELIEF

Plaintiff, Fountainhead SBF LLC (“Fountainhead”), by and through its undersigned
counsel, and pursuant to Section 11 of the Administrative Policies and Procedures of this Court
and Florida Rule of Civil Procedure 1.610(a), files this Amended Petition for Order to Show
Cause for Expedited Temporary Injunctive Relief (“Petition”) against Defendant, OTO
Analytics, Inc. d/b/a Womply (““Womply’”).

INTRODUCTION

1. Fountainhead is a lender that is licensed and supervised by the United States

Small Business Administration (the “SBA”). Exhibit 1, Affidavit of Christopher G. Hurn (“Hurn
Dec.”)! dated September 7, 2021, 2021, at § 5. Among other things, Fountainhead funds and

services loans created under the Paycheck Protection Program (the “PPP”). Jd.

' The Hurn Dec was filed under a Notice of Confidential Information on September 8, 2021 as
part of the original Verified Petition for Order to Show Cause for Expedited Temporary
Injunctive Relief, and incorporated herein to the Amended Petition for Order to Show Cause for
Expedited Temporary Injunctive Relief.

*#%* E-FILED: GRANT MALOY, CLERK OF CIRCUIT COURT SEMINOLE COUNTY, FL 09/10/2021 09:26:45 AM.***#*

2. Womply is a business that referred loans and provided technology services to
Fountainhead, and presently controls access to certain of Fountainhead’s Loan Files (defined
below). Hurn Dec., {fj 8, 14. Womply has blocked Fountainhead’s access to such Loan Files. /d.,
4] 14, 19, 20.

3. In this Petition, Fountainhead respectfully requests that the Court issue an Order
requiring Womply to show cause why the Court should not require Womply to provide
Fountainhead with its Loan Files.

4. As explained below, the operative agreement between Womply and Fountainhead
explicitly states that Womply is required to provide Fountainhead with its Loan Files no later
than thirty days following the termination of the operative agreement, if the Loan Files have been
requested by Fountainhead. Hurn Dec., Ex. A. That agreement was terminated on June 8, 2021,
and Fountainhead’s request for its Loan Files was made on June 16, 2021. Hurn Dec., §] 12; Hurn
Dec., Ex. B. Accordingly, the Loan Files should have been provided by Womply to
Fountainhead approximately two months ago. During that time period, Fountainhead has
persistently devoted significant time and resources attempting to persuade Womply to honor its
contractual obligation, without the need for Court intervention, but has been unsuccessful. Hurn
Dec., J 19.

5. Unfortunately, the urgency of Womply’s refusal to provide the Loan Files has
become more acute, and the situation requires expedited judicial relief, because: (1) seventy-
seven loans to small businesses are pending and cannot be funded without the Loan Files, which
loans the SBA has indicated must be funded in the coming days or not at all, (ii) in the wake of
Womply’s refusal to provide Fountainhead with its Loan Files, the SBA has stressed to

Fountainhead (and other PPP lenders) its regulatory obligation to maintain ready access to its

Loan Files, emphasizing the need to remedy this situation promptly, and (iii) more than sixty-
five regulatory inquiries and subpoenas have been issued to Fountainhead seeking information
contained in the Loan Files that Fountainhead cannot provide, with initial return dates that have
passed or are quickly approaching. Hurn Dec., {J 15-18.

BACKGROUND FACTS

6. The PPP is a relief program designed to assist small businesses struggling with

the economic disruption that has resulted from the COVID-19 pandemic, by providing
inexpensive loans to small businesses to allow them to pay certain expenses, such as employee
payroll.

7. In early February 2021, the United States government and the SBA made
modifications to the PPP, for the purpose of providing sole proprietors, independent contractors,
and self-employed business owners better access to PPP funding.

8. To make the funding and servicing of loans to these types of business more
economically viable to lenders, Womply, with the assistance and input of Fountainhead and
other lenders, designed a technology platform known as “Fast Lane” (along with the related
Teslar system, the “Technology Platform”). Hurn Dec., {| 6. The Technology Platform allows
lenders, such as Fountainhead, to efficiently manage and track loans, as well as to administer,
track and maintain certain loan files that were generated for each loan. /d.

9. Fountainhead has originated more than 263,000 loans through the Technology
Platform (the “Fast Lane Loans”). Hurn Dec., § 8. As Womply is not a lender, and because
Fountainhead is the licensed and regulated lender of record for their Fast Lane Loans,
Fountainhead is responsible for reviewing and submitting each loan to the SBA for approval, and

also for servicing the loans and facilitating forgiveness of the loans. Jd.

10. Fountainhead and Womply entered into agreements to govern their relationship,
including the operative agreement that is relevant to this dispute: the PPP Loan Referral
Agreement (the “Agreement’”). Hurn Dec., Ex. A. Fountainhead agreed to compensate Womply
for its services in connection with the Fast Lane Loans. /d.; Hur Dec., § 10. To date,
Fountainhead has paid Womply substantial fees for such referrals. Hurn Dec., J 10.

11. — Recently, Womply has taken the position that it is entitled to more money from
Fountainhead, and has asserted that, by failing to pay all that is required, Fountainhead has
materially breached the Agreement. Hurn Dec., §] 11. Fountainhead vigorously disputes that it
owes Womply any additional fees and, in any event, has paid Womply greater than 80% of the
amount Womply claims it is owed. /d. The issue of whether any additional fees are owed is
presently being arbitrated in an alternative dispute forum. Jd.”

12. | The Agreement specifically contemplates the situation in which one party has
allegedly materially breached the Agreement, such as by failing to make payments pursuant to
the terms of the Agreement. Hurn Dec., Ex. A. In that situation, (i) the other party may submit a
termination notice (as Womply has done here), (i1) Fountainhead may then request its Loan Files
(as Fountainhead has done here), and (111) Womply is then required to return all Loan files to
Fountainhead within thirty days. /d., at § 6.3. This clause, of course, recognizes the importance
of Fountainhead maintaining such Loan Files, even if the relationship between Fountainhead and

Womply has ended.

* In the alternative dispute forum, Fountainhead has raised a number of counterclaims, including
a claim for declaratory relief. In the declaratory relief claim, Fountainhead seeks, among other
things, a declaration that Womply is obligated to return the Loans Files. Fountainhead is not
seeking injunctive relief or specific performance in that forum, and seeks injunctive relief here
on an expedited basis to preserve the status quo. There is no hearing scheduled or motion before
the alternative dispute forum regarding the Loan Files.

13. Section 6.3 of the Agreement provides in its entirety (with emphasis added):
Upon Lender’s receipt of a Notice of Termination, Lender may request from
Womply, and Womply shall reasonably provide to Lender, a plan for
transmitting to Lender electronic copies of loan files in its possession that
relate to the Referred Loans, to the extent not otherwise in the possession of
Lender. Womply will not unreasonably withhold its cooperation in such selection
and transmissions. Both parties shall agree upon a data format and method of
transmission. Womply shall reasonably provide such requested information to
Lender no later than thirty (30) days following the termination of this
Agreement.

Hurn Dec., Ex. A, at § 6.3.

14. On June 16, 2021, after receiving the Notice of Termination from Womply,
Fountainhead requested from Womply, pursuant to Section 6.3 of the Agreement, a plan for
transmitting to Fountainhead the Loan Files in its possession. Hurn Dec., § 13.

15. Despite its contractual obligation to provide the Loan Files within thirty days of
the termination of the Agreement (i.e., on or before July 8, 2021), Womply has refused to
provide Fountainhead with any of the Loan Files in its possession. Hurn Dec., § 14.

16. | Womply’s refusal has caused — and is continuing to cause — harm to borrowers
because, in many instances, without access to the Technology Platform or its Loan Files,
Fountainhead is unable to assist borrowers in obtaining access to funds they need. Hurn Dec., 4
15. Moreover, this situation has been exacerbated in recent weeks because Fountainhead has
received law enforcement requests, subpoenas (including Grand Jury subpoenas), and regulatory
inquiries regarding certain of the Loan Files. /d.

17. Despite many requests from Fountainhead to Womply, highlighting the
importance of the Loan Files, Womply has continued to block Fountainhead’s access to them.
Hum Dec., § 19. Although Fountainhead repeatedly has attempted to resolve this Loan File

dispute with Womply amicably, including asking Womply to simply reinstate Fountainhead with

access to the Technology Platform for a brief period, such that Fountainhead could retrieve the
Loan Files in question at no expense to Womply, Womply has refused to cooperate. /d.

18. Fountainhead has an obligation to maintain all documents and supporting material
relating to its loans. In this regard, the Loan Files Fountainhead is seeking for each of its loans
consist of the following: (i) “Know Your Customer” information; (ii) bank information; (iii)
funding instructions; (iv) “Audit Report”; (v) the applicant’s tax documentation; (vi) Lender
Form 2484; (vii) all other data utilized to determine applicant eligibility; (viii) all other applicant
information from Plaid and Persona; and (ix) any and all communications with borrowers or
potential borrowers (the “Loan Files”). Hurn Dec., § 16. (“Loan files” also consist of a signed
Borrower Application Form 2483 and promissory note, but Fountainhead already has access to
those documents through a DocuSign system and therefore is not seeking them from Womply in
this Petition.)

19. In order to comply (or largely comply)> with its obligations to provide the Loan
Files, Womply could simply reinstate Fountainhead’s access to the Technology Platform, which
would require little more than a click of a button.

20. Based on the foregoing, on August 27, 2021, Fountainhead filed a Complaint
against Womply seeking Specific Performance and Injunctive Relief. Fountainhead served its

Complaint on Womply on Womply’s counsel on August 31, 2021.4

> Some “Loan File” information appears to be maintained by Womply in a location other than the
Technology Platform. However, assuming there has been no deletion or modification of
information contained on the Technology Platform, access to the Technology Platform is likely
to provide Fountainhead with the majority of the information it needs on an expedited basis.

* As explained in note 3, below, Womply’s outside counsel agreed to accept service of process.

21. By this Petition, Fountainhead seeks a temporary injunction against Womply
decreeing that Womply immediately transmit or cause to transmit to Fountainhead electronic

copies of the Loan Files.

ARGUMENT

Section 11 of the Administrative Policies and Procedures of this Court authorize a party
to file a Petition for Order to Show Cause, and, if the Order to Show Cause is granted, to
schedule a hearing date to have the matter heard. In this Verified Petition, as supported through
the Sworn Affidavit of Fountainhead’s CEO, Fountainhead seeks an Order requiring Womply to
show cause why a temporary injunction should not be issued requiring Womply to immediately
provide Fountainhead with the Loan Files.

Essentially, Fountainhead is seeking an injunction against Womply’s continued breach of
contract; in particular, Fountainhead is seeking specific performance of Womply’s obligation
under the Agreement to provide Fountainhead with the Loan Files. “[T]he same general rules
apply to injunctions against the breach of a contract that apply to specific performance.”
Professional Golfer’s Ass’n of America v. Bankers Life & Cas. Co., 166 So. 2d 488, 492 (Fla. 2d
DCA 1964); Grant v. U.S., 289 F. Supp. 2d 1361, 1367 (S.D. Fla. 2003) (“Specific performance
is a form of injunctive relief.”).

Florida Rule of Civil Procedure 1.610(a) provides for relief in the form of a temporary
injunction if the movant establishes: (1) a likelihood of irreparable harm, (11) the unavailability of
an adequate remedy at law, (111) a substantial likelihood of success on the merits, and (iv) support
for the injunction is within considerations of public interest. Phantom of Clearwater, Inc. v.
Pinellas Cnty., 894 So. 2d 1011, 1014 (Fla. 2d DCA 2005). Establishment of these elements

carries with it the duty to grant an appropriate remedy—in this case, injunctive relief. See Sentry

Ins. v. Dunn, 411 So. 2d 336, 336 (Fla. 5th DCA 1982). In deciding whether to issue an
injunction in a particular case, the Court should consider the totality of the circumstances and
determine whether injunctive relief is necessary to achieve justice between the parties. Davis v.
Joyner, 409 So. 2d 1193, 1195 (Fla. 4th DCA 1982).

A. Fountainhead Has Suffered and Will Continue to Suffer Irreparable Harm

Fountainhead will suffer irreparable harm if an injunction is not issued against Womply
requiring Womply to return the Loan Files. A party suffers irreparable injury where the party
“cannot be adequately compensated if, at some later point in time, it prevails on the merits of the
case.” Glen Raven Mills, Inc. v. Ramada Int'l, Inc., 852 F. Supp. 1544, 1547 (M.D. Fla. 1994).

Under the Agreement, Womply is required to provide Fountainhead with the Loan Files
following occurrences that indisputably have occurred here (i7.e., Womply issued a Notice of
Termination of the Agreement and Fountainhead requested its Loan Files). Hurn Dec., Ex. A.
Inexplicably, Womply has refused to provide Fountainhead with the Loan Files, which has and
will continue to cause severe hardship to Fountainhead, innocent third parties, and law
enforcement efforts. Hurn Dec., {J 15-19.

As an initial matter, because Fountainhead has been deprived of access to the Loan Files,
it is unable to assist certain borrowers in obtaining access to funds that these borrowers
desperately need in order to continue operating their businesses. Hurn Dec., §] 16. Recently,
Fountainhead received notice from the SBA’s Office of Credit Risk Management concerning
loans in “undisbursed” status, stating that Fountainhead needed to fund the loans within three
business days. /d. (Fountainhead is seeking additional time to fund the loans, during the
pendency of this Petition. /d.) This is a direct result of Fountainhead not having access to the

Loan Files from Womply. /d. Currently, there are seventy-seven loans, with a total loan principal

of $1,060,499, that are unable to be funded because Fountainhead cannot access the Loan Files
due to Womply’s conduct. /d. In particular, Fountainhead does not have access to the due
diligence information, bank and financial information, and fraud check information, which
prevents Fountainhead from completing the loan process, and, in turn, assisting these small
businesses. /d. If these seventy-seven loans are not funded promptly, they never can be funded.
Moreover, as of September 2, 2021, Fountainhead has received more than sixty-five
subpoenas from government agencies and law enforcement officials, including the Secret
Service, the U.S. Attorney’s Office, and the U.S. Department of Homeland Security, regarding
more than 125 separate borrowers for loans referred through Womply. Hum Dec., § 17.
Fountainhead is unable to fully comply with law enforcement and judicial requests because it
does not have access to the complete Loan Files. /d. If Fountainhead, at some later date, is
provided with access to its Loan Files, it likely will be of less utility to law enforcement officials.
Furthermore, due to Womply’s actions, and despite the contractual protections
specifically designed to avoid this situation, Fountainhead’s ability to comply with its regulatory
obligations has been compromised. Hurn Dec., {| 18. In this regard, under SBA regulations and
rules, Fountainhead is obligated to maintain, for a period of six years following final disposition
of its PPP loans, all applications for financing, financing instruments, and “all other documents
and supporting material relating to such loans, including correspondence.” 13 CFR 120.461(d).
Fountainhead is further required to allow the SBA’s authorized representatives to review, inspect
and copy all records and documents relating to the loans or as requested for SBA oversight. 13
CFR 120.1010. Fountainhead is unable to maintain this documentation because of Womply’s
refusal to honor the terms of the Agreement and provide Fountainhead with the Loan Files. Hur

Dec., § 18, 19.

This irreparable harm will continue and worsen if Womply’s actions remain unchecked,
as Womply continues to flout its clear obligations under the Agreement to return to Fountainhead
its Loan Files.

B. Fountainhead Has No Adequate Remedy at Law

A party seeking temporary injunctive relief must also show that it lacks an adequate
remedy at law. This requirement is similar to the “irreparable harm” requirement, and Florida
courts recognize that a party has an inadequate remedy at law where money will not compensate
the party for its injuries. See Women's Emergency Network v. Vush, 191 F. Supp. 2d 1356, 1360
(S.D. Fla. 2002).

For the reasons discussed in the preceding section, Fountainhead has no adequate remedy
at law to redress Womply’s conduct. Womply’s continued refusal to comply with its contractual
obligation to provide Fountainhead with the Loan Files will result in Fountainhead: (i) being
unable to fund otherwise appropriate loans, (ii) running afoul of its regulatory obligations, and
(iii) being unable to respond to subpoenas and other law enforcement / judicial requests. Hurn
Dec., J] 17-19. None of these harms is compensable by mere money damages.

C. Fountainhead Has a Substantial Likelihood of Success on the Merits

To establish a right to a temporary injunction, the plaintiff must show it has a “substantial
likelihood of success on the merits” of this action. See Cushman & Wakefield, Inc. v. Cozart, 561
So. 2d 368, 371 (Fla. 2d DCA 1990).

Here, Fountainhead has asserted entitlement to specific performance because of
Womply’s breach of the Agreement. As explained more thoroughly above, Fountainhead is
seeking what it is plainly entitled to under the Agreement: its Loan Files. While Womply has

taken the position that it will not return the Loan Files until it is paid additional fees, that is an

entirely separate issue (that presently is being arbitrated in an alternative dispute resolution
forum). The Agreement specifically contemplates the scenario that one party has allegedly
breached the Agreement, such as not paying the fees it is required to pay under the Agreement.
Hum Dec., Ex. A. In that circumstance, the other party may issue a termination notice (as
Womply has done), and Fountainhead then may request the return of the Loan Files (as
Fountainhead has done). Hurn Dec., Ex. B; Hurn Dec. {J 12-13. Womply is then required to
return the Loan Files within 30 days of the Notice of Termination, which it has failed to do here.
Hur Dec., { 14. For these reasons, Fountainhead respectfully submits that the ultimate issue
before the Court — whether Womply is obligated to provide the Loan Files to Fountainhead — is
straightforward, and Fountainhead has a very high probability of success on the merits.

D. The Requested Relief Will Promote and Protect the Public Interest

Finally, courts consider whether the issuance of an injunction will promote and protect
the public interest, looking to the effect of the requested injunction on non-parties. See
Dragomirecky v. Town of Ponce Inlet, 882 So. 2d 495, 497 (Fla. 5th DCA 2004). Florida courts
have held that consideration of the public interest weighs against injunctive relief only where the
injury to the public (if the injunctive relief is granted) outweighs the moving party’s right to
injunctive relief. Jd.

In this case, entry of the requested injunctive relief would not cause injury to the public;
on the contrary, it would significantly serve the public interest. Perhaps most obviously, if
Womply complies with its contractual obligation to provide Fountainhead with its Loan Files,
Fountainhead will be in a position to fund scores of loans to small businesses that otherwise
cannot be funded due to Womply’s restriction of access. Hurn Dec., {| 16. Moreover, as

evidenced by the more than sixty-five law enforcement subpoenas served on Fountainhead

seeking loan file information, law enforcement official and regulators require certain Loan File

information, but are being deprived of the information because of Womply’s refusal to provide

the Loan Files. /d., 12. Finally, for reasons designed to ultimately serve the public interest, the

SBA requires that lenders maintain ready access to their complete Loan Files, and it is axiomatic

that the return of Fountainhead’s Loan Files will serve that objective. Hurn Dec., ¥ 18.

WHEREFORE, Fountainhead respectfully requests that this Court enter an Order to

Show Cause scheduling an expedited hearing and requiring Womply to show cause why

injunctive relief should not be granted directing Womply to immediately transmit or cause to

transmit to Fountainhead electronic copies of the Loan Files, and granting such other relief as

this Court deems just and proper.

Dated this 10 day of September, 2021.

SHUTTS & BOWEN LLP
Attorneys for Plaintiff

By: Daniel T. Stabile, Esq.
Daniel T. Stabile, Esq.

Florida Bar No. 95750

200 South Biscayne Boulevard
Suite 4100

Miami, Florida 33131

Tel: (305) 415-9063

E-mail: dstabile@shutts.com

and

Eric Reed, Esq.

Florida Bar No. 557161
300 S. Orange Avenue
Suite 1600

Orlando, Florida 32801
Tel: (407) 423-3200
E-mail: ereed@shutts.com

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that the foregoing was filed through the Florida statewide E-Portal
system this 10" day of September, 2021, which will send a copy to Alexander L. Cheney, Esq.,
Counsel for OTO Analytics, Inc. d/b/a Womply, acheney@willkie.com? and OTO Analytics, Inc.
d/b/a Womply Co-Counsel, Kevin D. Fowler, kfowler@foley.com and Emily J. Lang,
elang@foley.com.

/s/ Eric C. Reed
ERIC C. REED, ESQ.

> On August 27, 2021, Alexander L. Casey, Esq. of Willkie Farr & Gallagher, LLP agreed to
accept service on behalf of Womply, and on August 31, 2021, a copy of the Complaint was
provided to Alexander L. Casey, Esq.

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