Liberty Mut. Ins. Co. v. Gemma

• Citation: 301 F.Supp.3d 523
• Decision Date: 19 March 2018
• Docket Number: No. 2:16–cv–00483,2:16–cv–00483
• Parties: LIBERTY MUTUAL INSURANCE COMPANY, et al., Plaintiffs v. Vincent GEMMA, et al., Defendants
• Court: U.S. District Court — Western District of Pennsylvania

301 F.Supp.3d 523

LIBERTY MUTUAL INSURANCE COMPANY, et al., Plaintiffs

v.Vincent GEMMA, et al., Defendants

No. 2:16–cv–00483

United States District Court, W.D. Pennsylvania.

Filed March 19, 2018

Ronald L. Hicks, Jr., Nicholas J. Bell, Meyer, Unkovic & Scott LLP, Pittsburgh, PA, Michael G. Donovan, Steven L. Manchel, Manchel & Brennan, P.C., Norwood, MA, for Plaintiffs.

Alan E. Cech, Murtagh, Hobaugh & Cech, LLC, Wexford, PA, B. Ted Licastro, Justin T. Papciak, Morella & Associates, P.C., Pittsburgh, PA, for Defendants.

MEMORANDUM

Yvette Kane, District Judge, United States District CourtBefore the Court are Defendants Vincent Gemma ("Gemma"), and Everest Insurance, LLC, Everest Consulting Group, L.P.,¹ and Everest Consulting Group, LLC's (collectively, "Everest Defendants"), motions to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). (Doc. Nos. 46, 49.) For the reasons that follow, the Court will grant in part and deny in part the motions to dismiss.

I. BACKGROUND

A. Procedural Background

Plaintiff Liberty Mutual Insurance Company ("Liberty Mutual"), initiated the above-captioned action by filing a complaint against Gemma on April 22, 2016. (Doc. No. 1.) In its first complaint, Liberty Mutual asserted ten counts against Gemma, which set forth claims for breach of contract, breach of fiduciary duty/duty of loyalty, conversion, misappropriation of trade secrets under the Pennsylvania Uniform Trade Secrets Act, a violation of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030, unjust enrichment, tortious interference with a contract, tortious interference with prospective economic advantage, and unfair competition, as well as a request for injunctive relief. (Id. at 22–29.) On the same date that it filed its complaint, Liberty Mutual also filed a motion for a preliminary injunction against Gemma. (Doc. No. 2.) On May 2, 2016, the Honorable Cathy Bissoon conducted a conference with the parties via telephone (Doc. No. 12), in which the court "encouraged the parties to attempt to reach agreement on Plaintiff's requested injunctive relief" (Doc. No. 16). Subsequently, the parties submitted a standstill agreement on May 10, 2016, under which Gemma agreed to adhere to certain restrictions pending an Order from the Court as to the status of Liberty Mutual's motion for injunctive relief. (Id. ) The Court approved the standstill agreement on May 10, 2016. (Doc. No. 18.)

On May 16, 2016, Gemma filed an answer to Liberty Mutual's complaint. (Doc. No. 22.) The Court then issued an Order dated June 6, 2016, which mandated that all expedited discovery would be due by July 29, 2016. (Doc. No. 26.) On the same date, Gemma filed an amended answer to Liberty Mutual's complaint. (Doc. No. 27.) On June 28, 2016, Liberty Mutual moved for a protective order (Doc. No. 28), which the court granted, subject to certain revisions (Doc. No. 29). On December 15, 2016, Liberty Mutual filed an amended complaint against Gemma and the Everest Defendants, setting forth ten counts. (Doc. No. 37.)

Subsequently, on March 30, 2017, Gemma and the Everest Defendants each filed the instant motions to dismiss the amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) (Doc. Nos. 46, 49.) Gemma submitted a brief in support of his motion on March 30, 2017. (Doc. No. 47.) Liberty Mutual submitted a brief in opposition to Gemma's motion to dismiss on April 28, 2017. (Doc. No. 55.) Gemma did not submit a reply brief. As to their motion, the Everest Defendants submitted a brief in support on March 30, 2017. (Doc. No. 50.) Liberty Mutual submitted a brief in opposition to the Everest Defendants' motion to dismiss on April 28, 2017. (Doc. No. 54.) On May 5, 2017, the Everest Defendants filed a reply brief. (Doc. No. 56.) Accordingly, as they are either fully briefed, or the requisite time period for responsive briefing has expired, both motions are ripe for disposition.

B. Factual Background²

1. Liberty Mutual's Sale of Insurance

The allegations in the amended complaint stem from events surrounding Gemma's former employment as a sales representative with Liberty Mutual, departure from Liberty Mutual, and subsequent professional involvement with the Everest Defendants. (Doc. No. 37.) Liberty Mutual "offers a wide range of property-casualty insurance products and services to both individuals and businesses, including personal[,] automobile, homeowners, personality liability and life insurance." (Id. ¶ 14.) Its customers "are its policyholders," and both current and prospective policyholders "seeking Liberty Mutual insurance provide sensitive and confidential information to Liberty Mutual in order to determine the extent of coverage." (Id. ¶ 15.) Consequently, its revenues "are based, in large part, on the premiums it receives from its policyholders." (Id. ¶ 17.) To that end, Liberty Mutual employs sales associates to market its products to customers and "develops group savings plus, affinity, marketing agreements or relationships with groups ... that assist Liberty Mutual in advertising, marketing and selling Liberty Mutual products to the group members and/or their clientele." (Id. ¶¶ 18–19.) Specifically, Liberty Mutual, which has a sales office located in Wexford, Pennsylvania, "had such relationships with Northwood, a residential real estate company serving the Greater Pittsburgh region." (Id. ¶¶ 20–21.)

2. Gemma's Employment with Liberty Mutual

Gemma began his employment with Liberty Mutual as a sales representative in 1998 and was "assigned to and worked out of the Wexford office until his resignation on April 7, 2016." (Id. ¶ 22.) After receiving multiple promotions over the course of his employment, at the time of his resignation, Gemma was an executive sales representative, "the highest level of sales representative in the company." (Id. ) In this capacity, he worked extensively on Liberty Mutual's "affinity/group savings and/or marketing programs, especially with Northwood," which is a "full-service real estate firm, with offices throughout the Greater Pittsburgh area ... [that] provides services to its customers at all steps of the real estate process ... assisting customers with their insurance needs." (Id. ¶¶ 28–29.)

In 2005, "Liberty Mutual entered into affinity/group savings and marketing relationships with Northwood," through which "Northwood markets Liberty Mutual by offering its customers the opportunity to receive quotes for insurance coverage underwritten by Liberty Mutual, and discounted affinity/group savings pricing." (Id. ¶ 30.) Gemma played a central role in the beginning of this relationship between Liberty Mutual and Northwood, and served as "the lead contact person who directed and managed Liberty Mutual's affinity/group savings and marketing programs with Northwood."³ (Id. ¶ 31.) In this regard, Gemma "actively worked with Northwood on behalf of Liberty Mutual, frequently traveling to its offices and spending time there developing relationships and good will with Northwood personnel."⁴ (Id. ¶ 36.) Liberty Mutual "devoted significant resources" to the development of its relationship with Northwood, citing as examples Gemma's roles on the board of the Northwood Charitable Foundation and as the former chair of Northwood's golf tournament on multiple occasions. (Id. ¶ 37.)

As a result of its relationship with Northwood, Liberty Mutual "received a significant number of customer leads and developed a significant number of policyholders." (Id. ¶ 38.) In addition, "Liberty Mutual offered, and Northwood accepted, substantial discounts off Liberty Mutual's insurance pricing for Northwood and its customers." (Id. ¶ 41.) Gemma continued to act as Liberty Mutual's primary contact person with respect to Northwood (Id. ¶ 42), and from November 9, 2015 to April 7, 2016 (the date of Gemma's resignation), Gemma "sold over 100 policies to customers of Northwood" on behalf of Liberty Mutual (Id. ¶ 44).

3. Exchange of Confidential Information Related to Policyholders

In his capacity as a sales representative, Gemma gained access to information regarding Liberty Mutual's current and prospective policyholders, and "[t]hose existing and prospective policyholder referral relationships are the lifeblood of Liberty Mutual's business." (Id. ¶¶ 45–46.) Because of the nature of his position as a sales representative, Gemma communicated with current and prospective policyholders, "determin[ed] the needs and preferences of policyholders/referral sources, solicit[ed] those policyholders/referral sources, [and] introduc[ed] product lines to those policyholders/referral sources ... all for Liberty Mutual." (Id. ¶ 47.) Gemma was thus required to develop and gather information about policyholders, which "is treated by Liberty Mutual as highly confidential and valuable," and he "agreed expressly to ensure the confidentiality of that information."⁵ (Id. ¶¶ 48–49.)

Further, "[s]ince the beginning of his employment with Liberty Mutual," and as a condition of his employment and eligibility for compensation and various benefits, Gemma "executed a series of agreements with Liberty Mutual containing confidentiality and restrictive covenant provisions." (Id. ¶ 55.) According to Liberty Mutual, the most recent agreement of this type is the Gemma Agreement, which Gemma signed in relation to the Liberty Mutual 2016 US Executive Sales Representatives Compensation Plan ("2016 Comp Plan"), "which provided Gemma the opportunity to earn substantial bonus compensation beyond his base salary as well as bonus compensation beyond what he received in 2015." (Id. ¶ 56.) His signing of the Gemma Agreement was required in order for him to receive any benefits under the 2016 Comp Plan, and in 2016, he was paid by Liberty Mutual according to the terms of the 2016 Comp Plan. (Id. ¶ 57.) The agreement required, inter alia, that Gemma "maintain the confidentiality of Liberty Mutual's confidential information and ... abide by certain post-employment restrictive covenants." (Id. ¶ 58.)

Speci...