Fine v. Guardian Life Ins. Co. of Am.
| Decision Date | 10 March 2021 |
| Docket Number | Case No. 3:19-cv-30067-KAR |
| Parties | MATTHEW FINE, Plaintiff, v. THE GUARDIAN LIFE INSURANCE COMPANY OF AMERICA AND PARK AVENUE SECURITIES, LLC, Defendants. |
| Court | U.S. District Court — District of Massachusetts |
MEMORANDUM AND ORDER REGARDING DEFENDANT PARK AVENUE SECURITIES, LLC'S MOTION TO DISMISS
After the agreements Plaintiff Matthew Fine ("Plaintiff") had with The Guardian Life Insurance Company of America ("Guardian") and Park Avenue Securities, LLC ("PAS") (collectively, "Defendants") were terminated, he brought claims against Defendants for breach of the implied covenant of good faith and fair dealing (Count I), unjust enrichment (Count II), and a violation of the Massachusetts Wage Act ("MWA"), Mass. Gen. Laws ch. 149, § 148 (Count III) (Dkt. No. 40, First Amended Complaint). Before the court is PAS's motion to dismiss so much of Plaintiff's First Amended Complaint ("FAC") as alleges claims against it (Dkt. No. 46). The parties have consented to this court's jurisdiction (Dkt. No. 14). See 28 U.S.C. § 636(c); Fed. R. Civ. P. 73. For the reasons that follow, PAS's motion is ALLOWED.
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. 40 ¶ 5). PAS is a limited liability company organized under the laws of Delaware with its principal place of business in New York (Dkt. No. 40 ¶ 6). "Upon information and belief, PAS is a subsidiary/affiliate of Guardian" (Dkt. No. 40 ¶ 6). On December 16, 1997, Guardian purportedly hired Plaintiff as a Field Representative (Dkt. No. 1 ¶ 9). PAS purportedly hired Plaintiff as a Registered Representative on December 13, 2000 (Dkt. No. 40 ¶ 9). Plaintiff's so-called employment agreement with PAS described Plaintiff as an independent contractor (Dkt. No. 40 ¶ 25).
During Plaintiff's tenure with Defendants, he sold approximately 1,800 Guardian insurance policies (Dkt. No. 40 ¶¶ 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. 40 ¶¶ 14, 15). Plaintiff earned renewals in excess of $150,000 to $300,000 annually (Dkt. No. 40 ¶ 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. 40 ¶ 27). He arrived two days early to play golf (Dkt. No. 40 ¶ 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. 40 ¶ 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. 40 ¶¶ 30, 31). The hotel's policy required its staff to notify the police (Dkt. No. 40 ¶ 32). After the policeinvestigated the complaint, they did not charge Plaintiff with a crime (Dkt. No. 40 ¶¶ 2, 32, 33). Guardian prohibited Plaintiff from attending the conference (Dkt. No. 40 ¶ 34).
Plaintiff received a termination letter on May 8, 2018, which stated that "his termination w[ould] be effective May 22, 2017," but provided no explanation for his discharge (Dkt. No. 40 ¶¶ 35, 36).2 After Plaintiff repeatedly pressed for the reason for his discharge, representatives of Guardian stated that they had lost faith in him (Dkt. No. 40 ¶¶ 2, 40). On the Financial Industry Regulatory Authority ("FINRA") Form U-5, which notified FINRA that a registered representative's license to sell securities had been terminated, Guardian and PAS did not indicate that Plaintiff had engaged in misconduct or wrongdoing (Dkt. No. 40 ¶¶ 45, 46).3
Plaintiff's original complaint was filed on May 10, 2019 (Dkt. No. 1). Plaintiff alleged that, by terminating his employment, Defendants breached the covenant of good faith and fair dealing (Count I) and were unjustly enriched (Count II) (Dkt. No. 1). On July 22, 2019, Guardian and PAS moved to dismiss the complaint (Dkt. No. 9). After hearing from the parties, this court denied the motion on March 25, 2020 (Dkt. Nos. 24, 27). See Fine v. Guardian Life Ins. Co. of Am., 450 F. Supp. 3d 20 (D. Mass. 2020). Plaintiff's motion to amend the complaint was allowed without opposition and the FAC was filed on July 16, 2020 (Dkt. Nos. 37, 39, 40). The FAC included the original claims of breach of the covenant of good faith and fair dealing (Count I) and unjust enrichment (Count II) and added a claim for a violation of the MWA againstboth defendants (Count III) (Dkt. No. 40). On August 13, 2020, PAS moved to dismiss the claims against it (Dkt. No. 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)). "'[D]etailed factual allegations' are not required, but the complaint must set forth 'more than labels and conclusions.'" Frith v. Whole Foods Mkt., Inc., Civil Action No. 20-cv-11358-ADB, 2021 WL 413606, at *3 (D. Mass. Feb. 5, 2021) (alteration in original) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). "The alleged facts must be sufficient to 'state a claim to relief that is plausible on its face.'" Id. (quoting Twombly, 550 U.S. at 570).
"To cross the plausibility threshold a claim does not need to be probable, but it must give rise to more than a mere possibility of liability." Grajales v. P.R. Ports Auth., 682 F.3d 40, 44-45 (1st Cir. 2012) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). "A determination of plausibility is 'a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.'" Id. at 44 (quoting Iqbal, 556 U.S. at 679). "[T]he complaint should be read as a whole, not parsed piece by piece to determine whether each allegation, in isolation, is plausible." Hernandez-Cuevas v. Taylor, 723 F.3d 91, 103 (1st Cir. 2013) (quoting Ocasio-Hernández, 640 F.3d at 14). "The plausibility standard invites a two-step pavane." A.G. ex rel. Maddox v. Elsevier, Inc., 732 F.3d at 80 (citing Grajales, 682 F.3d at 45). "First, the[c]ourt 'must separate the complaint's factual allegations (which must be accepted as true) from its conclusory legal allegations (which need not be credited).'" Frith, 2021 WL 413606, at *3 (quoting Elsevier, 732 F.3d at 80). See Twombly, 550 U.S. at 555 (). "Second, the [c]ourt 'must determine whether the remaining factual content allows a "reasonable inference that the defendant is liable for the misconduct alleged."'" Frith, 2021 WL 413606, at *3 (quoting Elsevier, 732 F.3d at 80). "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).
In the FAC, Plaintiff claims that as his employer under the MWA, PAS violated that law by failing to pay commissions that were due to him (Dkt. No. 40 ¶¶ 65-73). PAS argues that the MWA claim must be dismissed because Plaintiff fails to allege sufficient facts to show that PAS was Plaintiff's employer under either of the two tests that Massachusetts courts have used to determine whether a defendant was an employer under the MWA: (1) the statutory test, which analyzes the employer-employee relationship under Mass. Gen. Laws ch. 149, § 148B; or (2) the common law test, which determines whether a defendant is a joint employer or part of an integrated enterprise (Dkt. No. 46-1 at 12-21; Dkt. No. 50 at 8-14). See Gallagher v. Cerebral Palsy of Mass., Inc., 86 N.E.3d 496, 499, 502 (Mass. App. Ct. 2017).
"The Wage Act imposes liability on employers who fail to pay wages earned by their employees." Ellicott v. Am. Capital Energy, Inc., 906 F.3d 164, 169 (1st Cir. 2018) (citing Mass. Gen. Laws ch. 149, § 148). "To establish a Wage Act claim, a plaintiff must show that: (1) hewas an employee under the Wage Act; (2) the compensation constitutes wages pursuant to the Wage Act; (3) the Wage Act was violated; and (4) any individual defendants were corporate officers as defined by the statute." Id. (citing Stanton v. Lighthouse Fin. Servs., Inc., 621 F. Supp. 2d 5, 10 (D. Mass. 2009)). The first element, Plaintiff's status as PAS's employee, is at issue here.
The MWA applies only to employer-employee relationships. See Ferrara v. Voyport II, LLC, Case No. 16-cv-12024-LTS, 2018 WL 5555066, at *2 (D. Mass. Oct. 29, 2018). "In order to determine whether such a relationship exists, Massachusetts courts apply a two-step inquiry under the 'Independent Contractor Statute.'" Id. (quoting Mass. Gen. Laws ch. 149, § 148B). "First, the 'threshold question is whether the plaintiff[ ] provided services to the defendant[ ],' which creates a presumption that the individual is an employee." Id. (alterations in original) (quoting Sebago v. Boston Cab Dispatch, Inc., 28 N.E.3d 1139, 1147 (Mass. 2015)). "Under the second step, the putative employer may rebut that presumption by proving, pursuant to a three-part test, that the person worked as an independent contractor." Gallagher, 86 N.E.3d at 499. Consequently,...
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