Harvey Hernandez’s firm alleges RealPage stole trade secrets, poached employees

Miami /
Jun.June 18, 2020 05:45 PM
Harvey Hernandez and RealPage CEO Steve Winn

Harvey Hernandez and RealPage CEO Steve Winn

UPDATED, June 19, 12 p.m.: Fresh off of a settlement with Airbnb, Miami real estate developer Harvey Hernandez’s NGD Homesharing is suing RealPage, alleging the popular property management software company stole trade secrets and employees from Hernandez’s firm.

NGD Homesharing is suing RealPage, an affiliate and three of Hernandez’s employees for allegedly misappropriating NGD’s proprietary technology and trade secrets to benefit RealPage’s competing business, according to a complaint filed in Miami-Dade County court this week.

The suit alleges the “defendants engaged in a wrongful pattern of conduct and tortuous activity intentionally designed to gut NGD of its good will, proprietary technology, employees and to unlawfully usurp NGD’s business.”

The lawsuit involves a business opportunity gone wrong between NGD Homesharing and Dallas-based RealPage, according to the complaint. A spokesperson from RealPage declined to comment, citing pending litigation.

NGD develops technology for owners and operators of multifamily communities that’s designed to help tenants and owners rent out their apartments or condos on home-sharing platforms such as Airbnb.

The complaint alleges Hernandez and RealPage CEO Stephen Winn began discussing business opportunities for this technology in November at a meeting at RealPage’s office. In order to move forward with NGD, RealPage and its affiliate signed a non disclosure agreement, according to the complaint.

As a result of the agreement, NGD then began sharing confidential information about its technology with RealPage, according to the complaint. An executive from RealPage then sent a memo to Hernandez in December, outlining possibilities for Niido, an NGD platform.

It was at this time that RealPage previewed its “unlawful plan to poach and usurp NGD’s employees, and valuable goodwill and technology,” according to the complaint.

The complaint also alleges that three former employees, Todd Butler, then-NGD’s chief technology officer; Kayla Neller, vice president of program management; and Collin Ross, an independent consultant, “conspired and worked together to attempt to undermine NGD’s business.”

NGD alleges the employees disseminated NGD’s technology, software and confidential financial information, a breach of their contracts.

On February 15, RealPage submitted an offer for NGD’s intellectual property and software for its Niido platform, which NGD declined. RealPage advised it also wanted to extend employment offers to NGD’s key employees and technical team, according to the complaint.

NGD alleges RealPage’s offer “was not made in good faith” and that it was really an attempt by RealPage to create a “false trail of interest in pursuing an acquisition of NGD’s technology, when RealPage’s true motivation was to allegedly steal trade secrets and proprietary information, and to poach the employees who created the technology.”

The former employees are now working for RealPage, according to the suit.

NGD is seeking compensation, temporary and permanent injunctive relief and attorney fees and costs.

The lawsuit was filed just three months after NGD settled litigation with Airbnb relating to a separate partnership to develop and operate Airbnb-branded apartments. Airbnb filed a lawsuit in January, claiming it invested $11 million into the partnership and alleging that Hernandez siphoned off $1 million into another one of his projects and disguised it as a loan. A week later, NGD Homesharing filed a counter suit, alleging that Airbnb engaged in a pattern of bad faith actions.

Hernandez and companies tied to the Miami developer have been tied to even more litigation. Just last month, a lender sued Hernandez after his company allegedly defaulted on a $2 million loan for its downtown Miami condo tower, seeking to foreclose on nine condo units.

And last year, a judge awarded the Brickell House condo association $40.6 million from Hernandez’s development firm a after the robotic car garage technology malfunctioned and left residents without a working garage at the luxury condo tower that Hernandez developed.

Correction: A previous version of the story incorrectly stated the complaint was filed in federal court. The complaint was filed in Miami-Dade County Circuit Court.


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