Fine v. The Guardian Life Ins. Co. of Am.

Decision Date27 October 2022
Docket NumberCIVIL 3:19-30067-KAR
PartiesMATTHEW FINE, Plaintiff, v. THE GUARDIAN LIFE INSURANCE COMPANY OF AMERICA, Defendant.
CourtU.S. District Court — District of Massachusetts

MEMORANDUM AND ORDER ON DEFENDANT'S MOTION FOR APPLICATION OF THE AFTER-ACQUIRED EVIDENCE DOCTRINE (DKT. NO 134)

KATHERINE A. ROBERTSON, U.S. MAGISTRATE JUDGE

Plaintiff Matthew Fine (Fine) was an insurance salesman for defendant The Guardian Life Insurance Company of America (Guardian). The court denied Guardian's motion for summary judgment on the First Count of Fine's amended complaint, which alleges that Guardian violated the implied contractual covenant of good faith and fair dealing when it failed to pay him renewal commissions after Guardian terminated its agreement with him without cause (Dkt. No. 120). Before the court is Guardian's motion to admit after-acquired evidence to limit liability or damages. In the alternative Guardian asks the court to certify the issue to the Massachusetts Supreme Judicial Court (SJC) (Dkt. No. 134). For the following reasons, Guardian's motion is granted in part and denied in part.

I. Relevant facts[1]

On or around May 6, 2018, Fine travelled to Washington, D.C., to attend Guardian's annual conference at the Marriott Marquis Washington, D.C. (Marriott). During the evening of May 6th, Fine and a Guardian colleague had drinks with two women whom they met at the Marriott bar. The women were not affiliated with Guardian. At approximately 1:30 a.m. on May 7th, Fine, Suarez, and the two women went to Suarez's hotel room where Fine and one of the women had a sexual encounter in the bathroom. Fine took photographs of the encounter. In the early morning hours of May 7th, the Marriott front desk received a report that a guest had been sexually assaulted. Around 3:30 a.m., Marriott security personnel and a law enforcement officer interviewed Fine about an alleged sexual assault. Fine told the police that he had photographs showing that the encounter was consensual, but he wanted to consult an attorney before he showed the photographs to the police. Around 6:00 a.m., Fine called his brother, Randy Fine, who was also a Guardian insurance agent who was attending the conference. In the presence of Marriott security and the D.C. police, Fine told Randy that the allegation of sexual assault was false and that he had proof on his phone. At the Marriott's request, Fine then left the hotel.

After being advised of the allegation, Marriott employees got in touch with Guardian employee Neha Kowal, and told her that Fine had been accused of sexual assault. Kowal notified Guardian's General Counsel and its Senior Security Specialist, Dennis Byrne, of the accusation. In the morning on May 7th, Marriott security personnel told Kowal and Byrne that the police were called to the hotel because Fine was accused of raping a female hotel guest, a man heard screams coming from the room where the rape allegedly occurred, the alleged victim was taken to the hospital by ambulance for the administration of a rape kit, and Fine had been evicted by Marriott security. Kowal and Byrne passed along that information to several senior Guardian employees including Chris Dyrhaug, an executive vice president, who reported it to Deanna Mulligan, Guardian's chief executive officer.

Dyrhaug and Byrne subsequently confirmed to Mulligan what they had been told by Marriott security personnel and told Mulligan that there was a possibility that Fine would be charged with rape. That afternoon, however, Mulligan learned that Fine would not be the subject of criminal charges. Sometime on May 7th, Dyrhaug called Randy and told him that Fine's contract with Guardian was going to be terminated. Randy urged Guardian to hold off on its decision until Guardian had all the facts. Later that evening, Fine heard rumors that Guardian was going to terminate his Field Representative Agreement (FRA).

Around 11:15 a.m. on May 8th, Fine's attorney, Stuart Sears, informed Dyrhaug by email that he had information that would prove that the allegations against Fine were completely false, that he was in the process of providing the information to law enforcement, and that he wanted the appropriate people at Guardian to have the information before they made a decision about Fine's future. Thereafter, Guardian's attorney called Sears, who told Guardian's attorney that he had evidence that would exonerate Fine of criminal charges, but he had to provide it to the police before he shared it with Guardian. After Sears provided the photographs to the police, the police told Sears that Fine would not be charged with a crime, would not be arrested, and that the incident would not be the subject of a report.

Early on May 8th, 2018, Mulligan discussed the matter with members of Guardian's board of directors. At some point on May 8th, without speaking with or attempting to speak with Fine or Suarez, Guardian decided to terminate Fine's FRA, relying on the contract's two-week notice provision. During a telephone call in the early evening of May 8th, Dyrhaug notified Fine and Sears that Fine's FRA with Guardian would be terminated because Guardian had "lost faith" in Fine. Guardian's May 8, 2018, letter to Fine indicated that his FRA was terminated pursuant to the agreement's fourteen-day notice provision that permitted termination by either party for any reason and without cause.

During his deposition, Fine testified that he brought marijuana gummies from Massachusetts to Washington, D.C., gave gummies to the two women whom he and Suarez met in the Marriott bar and offered them to Suarez, had sex with a married woman who was angry at her husband for cheating on her, took photographs of their sexual encounter, and texted a photograph of the woman's breast to a group of his friends without the woman's permission. Guardian asks the court to admit this evidence, which it characterizes as after-acquired evidence, to support its contention that it had good cause to terminate Fine's FRA and is not liable to him for commissions on life and disability insurance policies he sold while he was affiliated with Guardian (Dkt. No. 134). On this basis, Guardian asks to the court to: (1) reconsider its decision denying summary judgment to Guardian; or (2) admit the evidence at trial on the issue of liability and/or to limit damages.[2] Fine opposes the motion (Dkt. No. 141).

II. Analysis

A. Reconsideration of the court's summary judgment ruling Guardian argues that, in denying summary judgment, this court declined to rule on Guardian's argument that after-acquired evidence defeated Fine's claim in the absence of a more “developed record” (Dkt. No. 135 at 9). In advancing this contention, Guardian has misquoted this court's decision. In fact, the court declined to consider whether Guardian could rely on so-called afteracquired evidence “in the absence of developed argument.” Fine v. Guardian Life Ins. Co. of Am., Civil No. 3:19-30067-KAR, 2022 WL 673663, at *13 n.12 (D. Mass. Mar. 7, 2022) (emphasis supplied).

There is a material difference in these two terms.

At the summary judgment stage, [t]he district court is free to disregard arguments that are not adequately developed.” Higgins v. New Balance Athletic Shoe, Inc., 194 F.3d 252, 260 (1st Cir. 1999); see also Mackey v. Town of Tewksbury, 433 F.Supp.3d 116, 163 (D. Mass. 2020) (Defendants' failure to adequately develop the ... argument ... amounts to a waiver of the argument for purposes of their summary judgment motion;” citing Higgins); Williams v. City of Brockton, CIVIL ACTION NO. 12-10430-JGD, 2015 WL 13849392, at *2 (D. Mass. Dec. 29, 2015) (the plaintiff waived his argument when he buried it in a footnote; citing Higgins). Guardian relegated to a footnote its argument that [e]vidence acquired following the termination of Fine's agreement lent further support to Guardian's losing faith in Fine and its belief that he had put Guardian's reputation at risk ....” (Dkt. No. 87-1 at 20 n.11). Guardian supported this argument by citing to Strobeck v. Muggia, No. 14-P-1299, 2016 WL 320215, at *2-3 (Mass. App. Ct. Jan. 27, 2016), an unpublished decision of the Massachusetts Appeals Court that -although Guardian did not bring this aspect of the case to the court's attention - applied Delaware, rather than Massachusetts, law. The Strobeck court's application of Delaware law to the facts that were before it says absolutely nothing about that court's view of what Massachusetts law was or should be. When the court investigated the state of the law in Massachusetts, it discovered that the SJC had stated that [i]n the rare opportunities that [the SJC] and the [Massachusetts] Appeals Court have had to consider the issue of after-acquired evidence in the context of a termination from employment, neither of the courts has adopted, or declined to adopt, this doctrine.” EventMonitor, Inc. v. Leness, 44 N.E.3d 848, 851 (Mass. 2016) (citing Flesner v. Tech. Commc'ns Corp., 575 N.E.2d 1107, 1113-14 (Mass. 1991); Prozinski v. Ne. Real Estate Servs., 797 N.E.2d 415, 425-26 (Mass. App. Ct. 2003) (Cypher, J.)).

Guardian neither brought these cases to the court's attention, nor did it advance any argument as to why, in the face of this precedent, the court could or should rely on after-acquired evidence in ruling on Guardian's summary judgment motion. In these circumstances, the court held that Guardian had waived the argument that it was entitled to rely on after-acquired evidence for purposes of summary judgment. See Higgins, 194 F.3d at 260.

Guardian now asks the court to reconsider this ruling. “The granting of a motion for reconsideration is ‘an extraordinary remedy which should be used sparingly.' Palmer v. Champion Mortg. 465 F.3d 24, 30 (1st Cir. 2006) (...

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