Fine v. Guardian Life Ins. Co. of Am., Case No. 3:19-cv-30067-KAR

Decision Date25 March 2020
Docket NumberCase No. 3:19-cv-30067-KAR
CourtU.S. District Court — District of Massachusetts

Julie Rising Bryan, Casner & Edwards, LLP, Boston, MA, Katelyn Jeanne Patton, Michael J. Passarella, Olshan Frome Wolosky LLP, New York, NY, for Plaintiff

Christopher A. Parlo, Melissa C. Rodriguez, New York, NY, Mary Grace Patterson, Morgan, Lewis & Bockius, Boston, MA for Defendants


KATHERINE A. ROBERTSON, United States Magistrate Judge


Matthew Fine ("Plaintiff") sold insurance products as an agent of The Guardian Life Insurance Company of America ("Guardian") and Park Avenue Securities, LLC ("PAS") (collectively, "Defendants"). In the aftermath of Defendants' termination of Plaintiff's employment, he brought an action for breach of the implied covenant of good faith and fair dealing (Count I) and unjust enrichment (Count II). Defendants have moved to dismiss Plaintiff's claims (Dkt. No. 9). The parties have consented to this court's jurisdiction. See 28 U.S.C. § 636(c) ; Fed. R. Civ. P. 73. For the following reasons, Defendants' motion is DENIED.


Guardian, a company which was organized under the laws of New York, provides life, disability, and other insurance products to clients in the United States (Dkt. No. 1 ¶ 5). PAS, a limited liability company organized under the laws of Delaware with its principal place of business in New York, is a wholly owned subsidiary of Guardian (Dkt. No. 1 ¶ 6).

On December 16, 1997, Guardian hired Plaintiff as a Field Representative (Dkt. No. 1 ¶ 9). Plaintiff and Guardian executed a Field Representative Agreement ("FRA"), which provided the terms of Plaintiff's compensation (Dkt. No. 11-1 at 4 ¶¶ 4, 5). The FRA indicated that nothing contained in the agreement "shall be construed to create the relation of employer and employee between [Plaintiff and Guardian]" (Dkt. No. 11-1 ¶ 3). The FRA terminated "immediately ... if the Field Representative ... commit[ted] a fraudulent, immoral or dishonest act ... or fail[ed] to comply with [Guardian's] rules and regulations" (Dkt. No. 11-1 at 5 ¶ 14). In addition, the FRA provided:

[e]ither party may voluntarily terminate this Agreement at any time by written notice addressed to the other, to become effective not earlier than two weeks from the date of delivery.... On termination, [Guardian's] liability for remuneration of any kind shall cease except as set forth in the Field Representative Plan.2

(Dkt. No. 11-1 at 5 ¶14). The FRA further stated: "In all disputes arising under this agreement between the Field Representative and [Guardian], the Laws of the State of New York shall apply" (Dkt. No. 11-1 at 5 ¶ 16).

PAS hired Plaintiff as a Registered Representative on December 13, 2000 (Dkt. No. 1 ¶ 9). As relevant here, the Registered Representative Agreement ("RRA") established Plaintiff's compensation3 and stated that Plaintiff was an "independent contractor," that "[e]ither party may terminate th[e] Agreement at any time upon ten (10) days written notice, specifying the effective date of termination, to the other party," and that the "Agreement will be governed by the laws of the State of New York, without giving effect to the conflicts of law principles thereof" (Dkt. No. 11-1 at 12 ¶ 29, at 14 ¶¶ 45, 48, and at 16 ¶ 63).

During Plaintiff's tenure with Guardian and PAS, he sold approximately 1,800 insurance policies while working in Framingham, Massachusetts (Dkt. No. 1 ¶ 12). He received an annual salary, commissions, and renewal commissions ("renewals") from the Guardian equity, disability, and life insurance products that he sold (Dkt. No. 1 ¶¶ 1, 14, 15). Plaintiff earned renewals in excess of $150,000 to $300,000 per year (Dkt. No. 1 ¶ 53).

On May 1, 2018, Plaintiff traveled to Washington, D.C. to attend a required Guardian conference that was scheduled to begin on May 3, 2018 (Dkt. No. 1 ¶ 27). Plaintiff arrived two days early to play golf (Dkt. No. 1 ¶ 28). Before the conference began, Plaintiff engaged in "consensual sexual activity" with a woman who was attending an unrelated conference at Plaintiff's hotel (Dkt. No. 1 ¶ 29). The hotel staff awakened Plaintiff at 3:00 A.M. and informed him that the woman's male co-worker had accused Plaintiff of sexual misconduct (Dkt. No. 1 ¶¶ 30, 31). The hotel's policy required its staff to notify the police (Dkt. No. 1 ¶ 32). After the police investigated the complaint, Plaintiff was not charged with a crime (Dkt. No. 1 ¶¶ 2, 32, 33). Guardian prevented Plaintiff from attending the conference (Dkt. No. 1 ¶ 34).

Plaintiff received a termination letter on May 8, 2018, which stated that "his termination will be effective May 22, 2017" (Dkt. No. 1 ¶¶ 35, 36).4 After Plaintiff repeatedly pressed Guardian to state a reason for his termination, its employees stated that they had " ‘lost faith’ " in him (Dkt. No. 1 ¶¶ 2, 40). Plaintiff had not received a complaint or bad review during his twenty year tenure with Defendants (Dkt. No. 1 ¶ 1). On the Financial Industry Regulatory Authority ("FINRA") Form U5, which notified FINRA that a registered representative's license to sell securities was terminated, Defendants did not indicate that Plaintiff had engaged in wrongdoing (Dkt. No. 1 ¶¶ 45, 46).


"A Rule 12(b)(6) motion to dismiss challenges a party's complaint for failing to state a claim." Ngomba v. Olee , CIVIL ACTION NO. 18-11352-MPK, 2020 WL 107969, at *2 (D. Mass. Jan. 9, 2020). In ruling on the motion, a court must "treat all well-pleaded facts in the complaint as true and draw all reasonable inferences in favor of the plaintiff." In re Fin. Oversight & Mgmt. Bd. for P.R. , 919 F.3d 121, 127 (1st Cir. 2019) (citing Ocasio-Hernández v. Fortuño-Burset , 640 F.3d 1, 7 (1st Cir. 2011) ). "In order to survive a motion to dismiss under Rule 12(b)(6), the plaintiff must provide ‘enough facts to state a claim to relief that is plausible on its face.’ " Ngomba, 2020 WL 107969, at *2 (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ). "[L]abels and [legal] conclusions, and a formulaic recitation of the elements of a cause of action ...." are insufficient to "raise a right to relief above the speculative level." Twombly, 550 U.S. at 555, 127 S.Ct. 1955. "Simply put, the court should assume that well-pleaded facts are genuine and then determine whether such facts state a plausible claim for relief." Ngomba, 2020 WL 107969, at *2 (citing Iqbal, 556 U.S. at 679, 129 S.Ct. 1937 ).

A. Count I: Breach of the Implied Covenant of Good Faith and Fair Dealing

Plaintiff alleges that Defendants breached the implied covenant of good faith and fair dealing by terminating his employment without good cause and with the purpose of retaining his earned renewal commissions (Dkt. No. 1 ¶¶ 55, 56). In the alternative, Plaintiff claims that Defendants terminated him in good faith but without good cause, which resulted in him losing "reasonably ascertainable future compensation based on his past services" (Dkt. No. 1 ¶ 57). Although the FRA and RRA contain choice-of-law provisions stating that New York law applies to disputes "arising under the agreement[s]" and although Defendants contend that those provisions control, Plaintiff disputes the application of New York's substantive law (Dkt. No. 11-1 at 5 ¶ 16 and at 16 ¶ 63). Plaintiff contends that the court should apply Massachusetts law because the application of New York law will violate Massachusetts' policy (Dkt. No. 17 at 7-8 & n.2). Plaintiff's contention is persuasive.

1. Choice of Law

Notwithstanding Plaintiff's claim that "[h]is entitlement [to compensation] is a matter of law, not contract," the remedy that he seeks arises under the terms of the FRA and RRA that provides for the payment of renewal commissions (Dkt. No. 11-1 at 4 ¶ 5 and at 12 ¶ 29; Dkt. No. 17 at 6). See Petricca v. City of Gardner, 429 F. Supp. 2d 216, 224 (D. Mass. 2006) (absent evidence of a contractual relationship between the parties, plaintiff's claim for a breach of the covenant failed as a matter of law); Ayash v. Dana-Farber Cancer Inst., 443 Mass. 367, 822 N.E.2d 667, 684 (2005) ("The scope of the covenant [of good faith and fair dealing] is only as broad as the contract that governs the particular relationship."). Compare Comput. Sales Int'l v. Lycos, Inc. , No. Civ.A. 05-10017-RWZ, 2005 WL 3307507, at *3 (D. Mass. Dec. 6, 2005) (the contract's choice-of-law provisions did not apply because "the ‘bulk of [plaintiff's] allegations involve[d] conduct ... unrelated to the contract's terms’ ") (quoting Bay State Anesthesia v. Mallinckrodt, Inc., No. CIV.A. 02-1117RWZ, 2002 WL 31761286, at *1 (D. Mass. Dec. 6, 2002) ). Consequently, the court must determine whether to enforce the choice-of-law provisions in the agreements by applying New York law.5

"Although the [c]ourt could ‘choose[ ] to forgo independent choice of law analysis and accept the parties' [contractual] agreement’ that [New York] law applies, the [c]ourt instead chooses to analyze choice of law independently because doing so furthers justice." Auctus Fund, LLC v. Sunstock, Inc. , 405 F. Supp. 3d 218, 226 (D. Mass. 2019) (citing Shay v. Walters, 702 F.3d 76, 80 (1st Cir. 2012) (quoting Borden v. Paul Revere Life Ins. Co., 935 F.2d 370, 375 (1st Cir. 1991) ). "A federal court sitting in diversity evaluates contractual choice of law provisions according to the rules of the forum state, here Massachusetts."...

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