Kuhbier v. McCartney, Verrino & Rosenberry Vested Producer Plan

• Decision Date: 08 March 2017
• Docket Number: No. 14–CV–888 (KMK),14–CV–888 (KMK)
• Citation: 239 F.Supp.3d 710
• Parties: Andreas KUHBIER, Plaintiff, v. MCCARTNEY, VERRINO & ROSENBERRY VESTED PRODUCER PLAN; McCartney, Verrino & Rosenberry Vested Producer Plan Administrator; McCartney, Verrino & Rosenberry Insurance Agency; McCartney & Rosenberry Group, Inc., Defendants.
• Court: U.S. District Court — Southern District of New York

239 F.Supp.3d 710

Andreas KUHBIER, Plaintiff,

v.MCCARTNEY, VERRINO & ROSENBERRY VESTED PRODUCER PLAN; McCartney, Verrino & Rosenberry Vested Producer Plan Administrator; McCartney, Verrino & Rosenberry Insurance Agency; McCartney & Rosenberry Group, Inc., Defendants.

No. 14–CV–888 (KMK)

United States District Court, S.D. New York.

Signed March 8, 2017

Elizabeth E. Hunter, Esq., William D. Frumkin, Esq., Frumkin & Hunter LLP, Goshen, NY, White Plains, NY, Counsel for Plaintiff.

Michael J. Cannon, Esq., Lorin A. Donnelly, Esq., Milber Makris Plousadis & Seiden, LLP, Woodbury, NY, Counsel for Defendants.

OPINION & ORDER

KENNETH M. KARAS, District Judge:

Plaintiff Andreas Kuhbier ("Plaintiff") filed suit against Defendants McCartney, Verrino & Rosenberry Vested Producer Plan; McCartney, Verrino & Rosenberry Vested Producer Plan Administrator; McCartney, Verrino & Rosenberry Insurance Agency; and McCartney & Rosenberry Group, Inc. alleging, among other things, that Defendants breached their obligations under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132(a)(1)(B), with respect to certain amounts owed to him under a qualifying plan, and that Defendants similarly breached their contractual obligations to Plaintiff. Plaintiff also alleges that Defendants failed to comply with a document request under ERISA and that Defendants breached other contractual obligations set forth in Plaintiff's employment agreement. Plaintiff moves for partial summary judgment with respect to his claim for unpaid distributions under ERISA, and Defendants cross-move for summary judgment on the same claim as well as for Plaintiff's breach of contract claims. For the following reasons, Plaintiff's Motion is granted in part and denied in part, and Defendants' Motion is denied.

I. Background

A. Factual Background

The following facts are taken from the Parties' respective statements pursuant to Local Rule 56.1 and the documents submitted by each side in support of their Motions.

Defendant McCartney & Rosenberry Group, Inc. ("McCartney & Rosenberry" or the "Agency") was, at all relevant times, engaged in the insurance agency business. (See Defs.' Statement of Material Facts ("Defs.' 56.1") ¶ 7 (Dkt. No. 82); Pl.'s Counter–Statement Pursuant to Local Rule 56.1 ("Pl.'s Resp. 56.1") ¶ 7 (Dkt. No. 93); see also Decl. of Lorin A. Donnelly ("Donnelly Decl.") Ex. I (Dkt. No. 81).) Verrino & Associates, Inc. ("Verrino & Associates"), a former defendant in this case, was also engaged in the insurance agency business. (See Defs.' 56.1 ¶ 6; Pl.'s Resp. 56.1 ¶ 6; see also Donnelly Decl. Ex. H.)

Plaintiff began working as an independent contractor for Verrino & Associates in May 2005, (see Donnelly Decl. Ex. E ("McCartney Tr."), at 27–28; Donnelly Decl. Ex. H; see also Defs.' 56.1 ¶ 10; Pl.'s Resp. 56.1 ¶ 10), and, at the same time, became an independent contractor for McCartney & Rosenberry, (see McCartney Tr. 27–28; Donnelly Decl. Ex. I; see also Pl.'s Statement Pursuant to Local Rule 56.1 ("Pl.'s 56.1") ¶ 3 (Dkt. No. 88); Defs.' Local Rule 56.1 Resp. to Pl.'s Statement of Material Facts ("Defs.' Resp. 56.1") ¶ 3 (Dkt. No. 90); Defs.' 56.1 ¶ 11; Pl.'s Resp. 56.1 ¶ 11). On May 3, 2005, Plaintiff entered into producer agreements with both Verrino & Associates and McCartney & Rosenberry. (See Donnelly Decl. Exs. H, I; see also Donnelly Decl. Ex. F ("Verrino Tr."), at 26; Pl.'s 56.1 ¶ 3; Defs.' Resp. 56.1 ¶ 3; Defs.' 56.1 ¶ 12; Pl.'s Resp. 56.1 ¶ 12.) Plaintiff's work as a producer consisted of soliciting consumers for insurance and selling insurance. (See Donnelly Decl. Ex. D ("Kuhbier Tr."), at 20; see also Defs.' 56.1 ¶ 14; Pl.'s Resp. 56.1 ¶ 14.)

Plaintiff was paid by commission. (See Verrino Tr. 28; see also Defs.' 56.1 ¶ 19; Pl.'s Resp. 56.1 ¶ 19.)

1. The 2009 Agreement

On January 1, 2009, McCartney & Rosenberry acquired the outstanding stock of Verrino & Associates. (See Verrino Tr. 17–19; Donnelly Decl. Ex. G; see also Defs.' 56.1 ¶ 8; Pl.'s Resp. 56.1 ¶ 8.) Later, in February 2009, Plaintiff, now an employee of McCartney & Rosenberry, (see Verrino Tr. 31–32; see also Defs.' 56.1 ¶ 20; Pl.'s Resp. 56.1 ¶ 20), entered into a new producer agreement (the "2009 Agreement") with McCartney & Rosenberry that was retroactive to January 2009 and superseded the prior producer agreements, (see Donnelly Decl. Ex. K ("2009 Agreement"); see also Kuhbier Tr. 46–47; Pl.'s 56.1 ¶ 4; Defs.' Resp. 56.1 ¶ 4; Defs.' 56.1 ¶ 30; Pl.'s Resp. 56.1 ¶ 30). The 2009 Agreement included three schedules—A, B, and C—when it was signed. (See Kuhbier Tr. 49–51; McCartney Tr. 48; 2009 Agreement; see also Pl.'s 56.1 ¶ 5; Defs.' Resp. 56.1 ¶ 5; Defs.' 56.1 ¶ 31; Pl.'s Resp. 56.1 ¶ 31.) Most relevant here, the 2009 Agreement provides that the producer "may participate in [McCartney & Rosenberry's] Vested Producer Plan, subject to the terms and conditions set forth in SCHEDULE B hereto." (2009 Agreement 3; see also Defs.' 56.1 ¶ 36; Pl.'s Resp. 56.1 ¶ 36.) Schedule B of the 2009 Agreement, entitled "Vested Producer Plan," provides that "[o]n the seventh (7th) anniversary of the Employment Date, Producer shall become eligible to participate in [McCartney & Rosenberry's] Vested Producer Plan as follows." (2009 Agreement, at Schedule B; see also Pl.'s 56.1 ¶¶ 7–8; Defs.' Resp. 56.1 ¶¶ 7–8; Defs.' 56.1 ¶ 39; Pl.'s Resp. 56.1 ¶ 39.) The Vested Producer Plan is set forth as follows:

a. [McCartney & Rosenberry] will maintain an ongoing and updated listing of Producer's accounts, which [McCartney & Rosenberry] will provide to Producer for review on a periodic basis. All such accounts coded to Producer (excluding any Life, Health or Employee Benefit policies) shall be referred to herein as Producer's Book of Business.

b. Upon the Producer's retirement or death ("Termination Date"), [McCartney & Rosenberry] shall pay to Producer (or his/her estate) a bonus amount equal to thirty-five percent (35%) of the sum of all gross commissions paid to [McCartney & Rosenberry] with respect to Producer's Book of Business over the prior 12–month period. Such bonus shall be payable in equal monthly installments on the first of each month for 60 months following the Termination Date.

c. Any violation of Sections 5 or 6 of this Agreement by Producer will result in forfeiture of the bonus payable under the Vested Producer Plan and will require Producer to immediately return all payments already received.

d. The Employment Date shall be the date hereof; provided, however, if Producer had been engaged previously on a continuous basis as an independent contractor prior to the date hereof, the Employment Date, shall be deemed to have commenced on the date of the Producer's first independent contract agreement.

e. The parties intend that this Vested Producer Plan comply with Section 409A of the Internal Revenue Code, the applicable Treasury Regulations promulgated thereunder and Internal Revenue Service Notice 2005–1, and shall be interpreted consistently therewith.

(2009 Agreement, at Schedule B.) Section 5 of the 2009 Agreement prohibits Plaintiff from disclosing confidential information or using confidential information for his own benefit without the express consent of McCartney & Rosenberry. (See id. at 2; see also Defs.' 56.1 ¶ 33; Pl.'s Resp. 56.1 ¶ 33.) Section 6 of the 2009 Agreement prohibits Plaintiff for a period of five years from soliciting or attempting to influence any accounts handled by McCartney & Rosenberry, or soliciting or attempting to persuade any other producer or salesperson of McCartney & Rosenberry to work for or represent another insurance broker, insurance agent, or insurance company. (See 2009 Agreement 2; see also Defs.' 56.1 ¶ 34; Pl.'s Resp. 56.1 ¶ 34.) Schedule C of the 2009 Agreement provides that with respect to item (d) of the Vested Producer Plan, Plaintiff's first contract date was May 5, 2005. (See 2009 Agreement, at Schedule C; see also Pl.'s 56.1 ¶ 78; Defs.' Resp. 56.1 ¶ 78; Defs.' 56.1 ¶ 43; Pl.'s Resp. 56.1 ¶ 43.)

The 2009 Agreement also addresses the issue of amendment. Specifically, the 2009 Agreement states that "[t]his written Agreement contains the entire Agreement between the parties and shall supersede any and all other agreements between the parties." (2009 Agreement 3; see also Pl.'s 56.1 ¶ 61; Defs.' Resp. 56.1 ¶ 61.) The 2009 Agreement goes on to stipulate that "no waiver or modification of this Agreement or any covenant, condition, or limitation herein contained shall be valid unless in writing and duly executed by the parties to be charged therewith." (2009 Agreement 3; see also Pl.'s 56.1 ¶ 62; Defs.' Resp. 56.1 ¶ 62.)

Beyond the Vested Producer Plan, the 2009 Agreement includes a number of other relevant provisions. Among other things, the 2009 Agreement provides that the producer (Plaintiff) was "an at-will employee whose employment with [McCartney & Rosenberry] shall be terminable by either party at any time and for any reason, subject to applicable law." (2009 Agreement 1; see also Pl.'s 56.1 ¶ 69; Defs.' Resp. 56.1 ¶ 69; Defs.' 56.1 ¶ 32; Pl.'s Resp. 56.1 ¶ 32.) The 2009 Agreement stipulates also that "[McCartney & Rosenberry] shall reimburse Producer for reasonable and necessary business expenses in accordance with SCHEDULE A." (2009 Agreement 2; see also Defs.' 56.1 ¶ 35; Pl.'s Resp. 56.1 ¶ 35.) The 2009 Agreement offers, separate from the Vested Producer Plan, participation in a "[s]imple IRA" whereby a producer may contribute his or her own pre-tax income to the retirement plan and McCartney & Rosenberry will contribute up to $6,000. (See 2009 Agreement, at Schedule A; see also Defs.' 56.1 ¶ 37; Pl.'s Resp. 56.1 ¶ 37.) Finally, paragraph 10 of Schedule A to the 2009 Agreement provides that the producer is "required to produce a minimum of $50,000 in new Property & Casualty insurance premiums per month. [McCartney & Rosenberry] shall review production on a monthly basis and reserves the right to adjust the amount drawn against future...