Marino v. Guilford Specialty Grp., Inc.

• Court: U.S. District Court — District of Connecticut
• Writing for the Court: Alfred V. Covello, United States District Judge
• Decision Date: 21 March 2015
• Docket Number: Civil No. 3:14CV705(AVC)
• Citation: Marino v. Guilford Specialty Grp., Inc., Civil No. 3:14CV705(AVC) (D. Conn. Mar 21, 2015)
• Parties: LORI MARINO Plaintiff, v. GUILFORD SPECIALTY GROUP, INC. Defendant.

LORI MARINO Plaintiff, v. GUILFORD SPECIALTY GROUP, INC. Defendant.

Civil No. 3:14CV705(AVC)

UNITED STATES DISTRICT COURT DISTRICT OF CONNECTICUT

March 21, 2015

RULING ON THE DEFENDANT'S MOTION TO DISMISS

This is an action for damages and declaratory relief. It is brought by the plaintiff, Lori Marino, against her former employer, Guilford Specialty Group, Inc. ("Guilford Specialty").¹ It arises out of Guilford Specialty's use of a non-competition agreement following Marino's departure from the company.

The complaint is brought pursuant to common law tenets concerning tortious interference with business expectancies, negligent misrepresentation, and promissory estoppel. Jurisdiction is authorized pursuant to 28 U.S.C. § 1332² on the basis of diversity of citizenship.

Guilford Specialty has filed the within motion to dismiss pursuant to Rule 12(b)(6) and 12(b)(1) of the Federal Rules of Civil Procedure, asserting that counts one, two, and three failto state claims upon which relief may be granted and count four is not ripe. The issues presented are: 1) whether Guilford Specialty used "improper means" to state a claim for tortious interference with business expectancies; 2) whether Guilford Specialty made a misrepresentation of fact that Marino reasonably relied upon to her detriment; 3) whether Guilford Specialty made a clear and definite promise to state a claim for promissory estoppel; and 4) whether a declaratory judgment as to the enforceability of the restrictive covenants agreement is ripe.

For the following reasons, the motion to dismiss (document no. 18) is DENIED.

FACTS

The complaint alleges the following facts:³

The plaintiff, Lori Marino, has over nineteen years of experience working within the insurance and reinsurance industry. In September 2013, a reinsurance broker recommended her for a potential job opportunity to Louis D. Levinson, the president of the wholesale insurance group at InternationalFinancial Group ("IFG"). Levinson called Marino, informed her of his goal to start a professional lines division, and asked her to contact Robert D. Linton, IFG's chairman, to arrange an interview.

On October 2, 2013, Marino met with Linton to discuss her proposed role, which involved membership on the executive leadership team, responsibility for establishing IFG's presence in the professional liability market, and working out of offices in New York City. Linton asked Marino to prepare a business plan if she wanted to be offered the role.

On October 10, 2013, Marino met with Levinson to discuss her draft business plan, which provided an analysis of IFG's opportunity in the professional liability market and included information regarding IFG's resources and risk appetite. After discussing it and refining it with Levinson, Marino submitted a final business plan to Linton.

In late October 2013, Marino traveled to Hartford, Connecticut, to interview with Betsy Monrad, IFG's chief operating officer and executive vice president. Over the next few weeks, Marino, Linton, and Monrad negotiated Marino's compensation and title. On November 23, 2013, Marino received an offer letter to serve as a senior vice president and director of professional lines. This letter also included an agreement entitled "Confidentiality and Intellectual Property Agreementwith Certain Other Restrictive Covenants" (the "restrictive covenants agreement"), which contained a non-competition agreement.

After reviewing the documents, Marino expressed concern to Joel Burkowsky, the head of human resources, about the restrictive covenant agreement, especially with respect to the non-competition agreement. Burkowsky advised Marino that every employee signed the agreement and that if she refused to sign it, the company would revoke her offer. On November 26, 2013, Marino spoke with Linton by telephone and stated that "she felt pressured and rushed to sign the Restrictive Covenants Agreement because she was currently unemployed and had no leverage to refuse." Linton responded that "he had never enforced a non-compete in 25 years and that if an employee wanted to leave and work elsewhere he has never stood in the way." Linton further stated that the "only purpose in requiring execution of the Restrictive Covenants Agreement was to protect policies IFG had written and keep teams from being taken to competitors." Ultimately, this conversation convinced Marino to sign the agreements. On December 3, 2013, Marino signed the offer letter and restrictive covenants agreement, and on January 6, 2014, she began work.

Sometime in November 2013, during the time in which these negotiations took place, Marino submitted an application toSwiss Re for employment. On January 14, 2014, a Swiss Re recruiter contacted Marino to discuss her pending application. Marino informed the recruiter that she recently joined IFG, which was a client of Swiss Re's reinsurance division, and that her employment agreement contained a non-competition agreement. Despite learning this information, the recruiter continued to contact Marino, but she never asked for an updated application or a copy of the non-competition agreement.

Throughout the first couple of weeks at IFG, Marino began to doubt IFG's commitment to the professional lines division. During her first week, Linton and Monrad "admonished" Marino for sharing her business plan with IFG's senior vice president and chief marketing officer and told her that it should not be shared with anyone at the company. Linton and Monrad also decided not to pursue temporary office space in New York City. On January 17, 2014, the Friday before Martin Luther King weekend, IFG issued a press release announcing Marino's hire and the company's plan to enter the professional lines market, which disappointed and confused Marino, "as it is well known in the industry that if you release something on the Friday afternoon preceding a holiday weekend, the news reaches a far more limited audience."

On January 21, 2014, Marino sent an e-mail to Linton notifying him that she received the first submission onprofessional lines. Linton responded "stating that she was not to accept any submissions or write any business until: (a) a reinsurance contract was in place and signed; and (b) a pricing actuary dedicated to professional lines was hired and on board at IFG." Marino indicated to Linton that she was "simply keeping [him] in the loop on the market reaction to IFG's announcement." She also "remind[ed] [him] that her business plan called for use of an outside filing/actuarial consulting firm to assist with development of forms and pricing of the products," which Linton dismissed by stating that IFG's chief actuary would hire a professional lines pricing actuary without her input.

On January 31, 2014, Linton requested that Marino change her business plan to limit the insurance capacity offered on her products, to restrict the types of coverage offered, and to increase her reinsurance limits to a level outside industry norms. Marino responded that increasing the reinsurance limits would cause the professional lines to run unprofitably for years and IFG would become uncompetitive in the professional lines market.

In late January 2014, Marino met with Robert Petrilli, the chief executive officer and managing director of corporate solutions at Swiss Re. Marino and Petrilli agreed that "there was no active conflict or concern with moving forward becauseIFG and Swiss Re did not compete at all in the Professional Lines space." Throughout the next month, Marino interviewed with Swiss Re executives and board members.

On February 10, 2014, Marino learned from IFG's senior vice president and chief information officer, Raymond Karrenbauer, that the company's infrastructure could not process the type of business Marino intended to write. Karrenbauer estimated that "it would take at least 18 months to complete the necessary build-out given the rigorous regulatory and financial reporting requirements needed for admitted versus non-admitted business." This eighteen month delay had never been disclosed previously to Marino.

On February 18, 2014, IFG hired Christopher M. Lewis as senior vice president and chief risk officer. Thereafter, Linton and Lewis met with several professional lines reinsurance companies and brokers without Marino.

On February 21, 2014, Marino expressed concerns to Levinson about the changes in her business plan, her exclusion from business meetings, and the multiple impediments she continually faced. On February 22, 2014, Linton asked for Marino's opinion about IFG possibly hiring an executive vice president from another firm. Marino told Linton that "it would significantly dilute her role." On February 28, 2014, Marino provided Lintonwith a revised business plan. Linton responded with more questions and hurdles not previously discussed.

On March 3, 2014, "Petrilli conveyed to Marino an oral offer of employment" on behalf of Swiss Re. During that conversation, Petrilli informed Marino that the non-competition agreement would not be an issue. On March 4, 2014, Marino orally accepted a slightly amended offer and that afternoon, she signed a formal offer letter.

Later that same day, Marino met with Levinson, who informed her that Eric Smith, the president and chief executive officer of Swiss Re Americas, called Linton and told him that Marino accepted the company's offer. Levinson noted that Linton was "ballistic" about the news of her departure. To inform IFG of her resignation, Marino e-mailed a formal resignation letter to Linton and Monrad.

Following her resignation, "Linton made multiple calls to senior executives at various entities within Swiss Re Group Holdings for the purpose of intimidating Swiss Re into revoking Marino's offer of employment." He informed these individuals of the non-competition agreement and his intention to enforce it. Moreover, Linton misrepresented to Swiss Re that IFG paid significant fees to recruiters in hiring Marino and...