Fraser v. Nationwide Mut. Ins. Co.

• Decision Date: 27 March 2001
• Docket Number: No. CIV.A. 98-CV-6726.,CIV.A. 98-CV-6726.
• Citation: 135 F.Supp.2d 623
• Parties: Richard FRASER, et al., Plaintiff, v. NATIONWIDE MUTUAL INSURANCE CO., et al., Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

135 F.Supp.2d 623

Richard FRASER, et al., Plaintiff, v.NATIONWIDE MUTUAL INSURANCE CO., et al., Defendant.

No. CIV.A. 98-CV-6726.

United States District Court, E.D. Pennsylvania.

March 27, 2001.

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Anita F. Alberts, Doylestown, PA, Constance R. Bortnick, Constance R. Lipson, Blank Rome Comisky & McCauley, LLP, Philadelphia, PA, for plaintiff.

Frederick C. Fletcher II, Curtis P. Cheyney, III, Brian K. Hanstein, Philadelphia, PA, for defendants.

MEMORANDUM AND ORDER

ANITA B. BRODY, District Judge.

INTRODUCTION

PlaintiffsRichard Fraser, d/b/a R.A. Fraser Agency("Fraser") and his wife, Deborah Fraser, filed this action against defendantsNationwide Mutual Insurance Company, Nationwide General Insurance Company, Nationwide Property & Casualty Insurance Company, Nationwide Variable Life Insurance Company, and Colonial Insurance Company of Wisconsin (hereinafter referred to collectively as "Nationwide" or "defendants") in December of 1998 pursuant to federal and Pennsylvania state law.In their Second Amended Complaint, Plaintiffs assert the following theories of recovery based upon the defendants' alleged wrongful conduct: violation of federal and Pennsylvania wiretapping statutes(concerning in transit communication)(Counts I-II); violation of federal and Pennsylvania wiretapping statutes(concerning stored communication)(Counts III-IV); violation of the Article 1 §§ 7and20 of Pennsylvania Constitution(Count V); wrongful discharge (Count VI); breach of implied covenant of good faith and fair dealing (Count VII); defamation (Count VIII); breach of contract (Count IX); violation of the Pennsylvania Wage Payment and Collection Law (Count XI); and violation of Pennsylvania Commissioned Sales Representative Act (Count XII).Plaintiffs also seek a declaratory judgment with respect to contractual obligations under Count X of the Second Amended Complaint.Now before me is defendants' motion for summary judgment on all Counts.

This is one of the few cases that has required a court to interpret the wiretapping acts in the context of recent electronic communication technology.Here, there is a claim that the federal and state wiretapping acts, the Wiretap Act and the Stored Communications Act, cover retrieval of a person's e-mail from post-transmission storage.Because I have determined that these Acts protect only communication in the course of transmission, I will grant summary judgment on this claim.As for the other outstanding claims, I will also grant summary judgment.Nationwide, as a private actor, is not subject to Pennsylvania State Constitutional requirements under Article 1; Fraser has not presented a claim for wrongful discharge under the narrow public policy exception to at-will employment; Fraser may not challenge Nationwide's decision to cancel his Agent's Agreement or the Review Board process under a claim for breach of the implied covenant of good faith and fair dealing; and Fraser has not presented a claim for breach of contract under the Agent's Agreement.

PROCEDURAL BACKGROUND

Plaintiff initiated this action by filing a Complaint on December 28, 1998.On April 9, 1999, plaintiff filed an Amended Complaint.Pursuant to my initial Scheduling Order, all discovery was to be completed by October 1, 1999.On December 10, 1999, I granted an extension of the deadline for discovery until June 30, 2000.On January 24, 2000, I granted plaintiff leave to amend the complaint for a second time.On January 31, 2000, Plaintiff filed a Second Amended Complaint.On June 13, 2000, I granted a second extension of the deadline for discovery until August 15, 2000.On August 31, 2000, defendants timely filed their motion for summary judgment.By a series of stipulations and orders, plaintiffs' time to respond to summary judgment was extended until November 3, 2000.On November 2, 2000, plaintiff filed two motions to compel discovery¹, a motion to mark defendants' counterclaim `dismissed with prejudice', a motion to vacate the protective order previously entered with regard to "Client A", and a motion for leave to file a Third Amended Complaint.By the latter motion, Fraser seeks to drop six causes of action, add a new cause of action, modify the allegations supporting the claims remaining, and dismiss Mrs. Fraser as a partyplaintiff.²

On November 3, 2000, plaintiff filed a response to summary judgment in which plaintiff presumed that I would grant the motion for leave to file a Third Amended Complaint.On January 26, 2001, I informed the parties on the record that I would rule on summary judgment before considering plaintiff's subsequent motions.See docket entry #95 for minute entry.On January 29, 2001, I ordered plaintiff's response stricken as non-responsive and allowed plaintiff until February 9, 2001 to file a response to summary judgment.I granted defendants ten days to reply.

On February 9, 2001, plaintiff filed a new response to summary judgment in which he, again, presumed that I would grant his motion to file a Third Amended Complaint.³Plaintiff's response did not address defendants' summary judgment motion with respect to Counts VIII (defamation), X (request for a declaratory judgment), XI (Pennsylvania Wage Payment and Collection Law), or XII (Pennsylvania Commissioned Sales Representative Act) of the Second Amended Complaint.Summary judgment on these four counts is, therefore, granted for plaintiffs' failure to respond.

FACTUAL SUMMARY⁴

Nationwide is a family of insurance companies doing business across the country and headquartered in Columbus, Ohio.Fraser joined Nationwide as an employee in 1986.Subsequently, on or about March 1, 1986, Fraser signed the standard Agent's Agreement to become an exclusive career agent with Nationwide.SeePlaintiff's Appendix in Support of Their Opposition to Defendant's Motion for Summary Judgment("Appendix") Vol. 1at 1.

The Agent's Agreement states that "the parties agree that the purpose of this Agreement will be best served by your acting as an independent contractor.Therefore, it is agreed that you are an independent contractor for all purposes."Id.Upon assuming this status, Fraser obtained considerable freedom as to when, how and where he operated his agency.Fraser was committed under the agreement to represent Nationwide exclusively in the sale and service of insurance.Such exclusive representation is defined in the Agreement to mean "that you will not solicit or write policies of insurance in companies other than those parties to this Agreement, either directly or indirectly, without written consent of these Companies."Id. at 2.

The agreement further states that the agent or Nationwide have "the right to cancel this Agreement at any time" upon written notice.Id. at 2.The provision on cancellation of the agreement includes a statement that "the Agent shall have access to the Agents Administrative Review Board, and its procedures, as it may exist from time to time."Id.The agreement provides for payment of earned deferred compensation upon "qualified cancellation" of the agreement.⁵However, the agent forfeits his right to deferred compensation under paragraph 11(f) of the Agreement if, among other things, he accepts employment with a competitor of Nationwide within one year of cancellation and within a twenty-five mile radius of the agent's business location at the time of cancellation.

On January 23, 1990, Fraser entered into an Agency Office Automation Lease Agreement with Nationwide whereby Fraser leased computer hardware and software from Nationwide for use in the automation of his office and insurance business.The lease agreement explicitly stated in the Preface that the Agency Office Automation("AOA") system "will remain the property of [Nationwide]."Defendant's Motion for Summary Judgment("Defendant's Motion"), Ex. C.All enhancements or software necessary to operate the system were to be provided by Nationwide, and Nationwide assumed responsibility for all system maintenance and repairs.Seeid. at 2.Anytime that someone logged on to the AOA system, a notice appeared on the screen that said:

"Please note: for everyone's mutual protection, AOL SYSTEM⁶ use, including electronic e-mail, MAY BE MONITORED to protect against unauthorized use."

Appendix, Vol. 1at 201.Fraser was charged a monthly fee for use of the system and was responsible for any damage to the hardware caused by negligence.The lease automatically renewed annually, unless notice to cancel was given by either party, and it automatically terminated upon cancellation of the Agent's Agreement.The lease agreement signed by Fraser remained in effect until his Agent's Agreement was cancelled in September, 1998.

Nationwide produced a handbook called the Agency Compensation and Security Handbook("CASH").⁷The handbook explicitly states that it is not part of the contractual agreement between Nationwide and its agents.Towards the front of the CASH book, the following language appears:

"The contents of the Handbook are presented as a matter of information only.The only contractual matters are those expressed in your Agent's Agreement and specifically incorporated by reference made within that contract ... The language used in this handbook, is not intended to create nor is it to be construed to constitute a contract between Nationwide and any or all of its employees, agents or officers."

Defendant's Motion, Ex. G.

In June of 1996, Fraser and other Nationwide agents met to form a Pennsylvania chapter of the Nationwide Insurance Independent Contractors Association("NIICA").NIICA had previously been in existence for some years in other states.Nationwide refused to officially acknowledge NIICA.At the second meeting of the Pennsylvania chapter of NIICA, Fraser was elected to an office of the chapter.He was also asked to create and write a chapter newsletter, which became known as The Pennsylvania...