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HomeMy WebLinkAbout98-03596 I .. I ,tl ~ ! \l I ~I "I II i 'd \I ! ..... ~ \ '\ ,! \/ I J ~I~ ..,. \~I~ ,~J ~ I ~ ~~~ , , 1 '1' '> .. ~ q .. ~ .. ~ ~ i , (I ~: l~ i 7' i . ' .~ . ~ ~ ~ ~ tt-: DAVID A. DOMINIANI, Plaintiff IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PA NO. q S'. ,IS (1(" C~u,j . t ,u,.~ v, BYERLY INSURANCE AGENTS & BROKERS, INC, and JAMES C. BYERLY, Defendants COMPLAINT AND NOW, comes Plaintiff, David A. Dominiani, by and through his attorneys, METTE, EVANS & WOODSIDE, and hereby files the following Complaint: 1. Plaintiff, David A. Dominiani ("Dominiani"), is an adult individual residing at 45 Eisenhower Boulevard, Duncannon, Pennsylvania 17020, 2, Defendant, Byerly Insurance Agents & Brokers, Inc, ("Byerly Insurance") is a Pennsylvania corporation with its principal offices at 525 North Twelfth Street, Lemoyne, Cumberland County, Pennsylvania 17043-0525. 3. Defendant, James C. Byerly ("Byerly") is an adult individual residing at 1749 Olmstead Way, Camp Hill, Cumberland County, Pennsylvania 17011. 4. Dominiani began employment with Byerly Insurance on or about July 3, 1989, . , "1 ~ I. ! ~ :, (' , I , ( f"- '. , , : , , , i- (1 I L: ,.. .j . ,. J 1.1. (' -~ 1 (J en U ~;. sq 2 Ul t" III 11. \ Q ~ III ~ ! ~ i ~ ~l n ~ ~~~~g <ll I ~ ~ ~ ffi,' ~ I ~ f- ro ~ t- W ~ I n. ( DA VII) A. DOMINIANI, Plaintiff IN THE COURT OF COMMON COMMON PLEAS FOR CUM8ERLAND COUNTY, PENNSYL VANIA \'. 8YERLY INSURANCE AGENTS & 8ROKERS, INC. and JAMES C. BYERLY, NO. 98 - 3596 Civil Term Defendants NOTICE TO PLEAD TO: PLAINTIFF AND HIS COUNSEL YOU ARE REQUIRED to plead to the within Answer with New Matter and Counterclaim within twenty (20) days of service hereof, or a default judgment may be entered against you. PETERS & W ASILEFSKI By~~Jl8~~ CHARLES E. W ASILEFSKI Attorney ID #21027 2931 North Front Street Harrisburg, PA 17110 [717] 238-7555 Dated: '7(17/r'f Attorney for Defendants 5. Defendants, Byerly Insurance. admit the :i1legations contained in Paragraph 5 of Plaintiff's Complaint. 6. Defendants, Byerly Insurance. admit the allegations contained in Paragraph 6 of Plaintiff's Complaint. 7. Defendant, Byerly Insurance, deny the allegations contained in Paragraph 7 of Plaintiff's Complaint. To the contrary, for at least the last ten (10) months of his employment, failed to perform his obligations under the Deterred Compensation Agreement and generally as an employee, officer, director and further breached his fiduciary duties owed to the corporation. He further committed acts that threatened and eventually resulted in the loss of contracts and agreements between the corporation and insurance companies with which the corporation was doing business. 8, Defendants, Byerly Insurance, deny the allegations contained in Paragraph 8 of Plaintiff's Complaint. To the contrary, Plaintiff quit his employment with Byerly Insurance, which resignation was caused or motivated by Plaintiff's breach of fiduciary duty owed to the corporation and his misconduct that threatened the loss of a corporation contract or agreement with which the corporation was then doing business. If Plaintiff did not resign, his actions and misconduct would have constituted a basis for termination for cause; therefore, if Plaintiff chooses to refer his leaving the employment with Byerly Insurance as a termination, said termination would be for cause. 2 ......... 9. Dcfcndants. Bycrly Insurancc, admit in part and dcny in part thc " ~' " i~ , u, I {, I' t allegations contained in Paragraph 9 of Plaintiff's. It is admitted that at thc timc that Plaintiff left the cmploymcnt of Byerly Insurance, he was entitled to rcccivc reimbursement for propcrly documented out.of- pocket business cxpenses and commissions earned but not yet paid at the time of his departure from cmployment. It is denied, however, that he was owed the amounts alleged. To the contrary, at the time he left the employment with Byerly Insurance, the properly documented out of pocket business expenses were in the sum of $595.80 and commissions earned and not yet paid were in the sum of $4,441.98. Payments in said amounts have been made to Plaintiff. 10. Defendants, Byerly Insurance, deny the allegations contained in Paragraph 10 of Plaintiff's Complaint. To the contrary, Byerly Insurance has made such payments. 11. Defendants, Byerly Insurance, deny the allegations contained in Paragraph 11 of Plaintiff's Complaint. To the contrary, Plaintiff's leaving the employment of Byerly Insurance constituted a termination for cause under the terms of the Deferred Compensation Agreement in Paragraph 4 A. It is believed and therefore averred that Plaintiff's resignation was caused or motivated by his breach of fiduciary duty and his misconduct in threatening agency contracts and agreements with insurance companies with which the corporation was then conducting business. 3 that the allegations contained in Paragraph 20 of Plaintiff's Complaint an: conclusions of law and no further answer is neccssary. To thc extcnt that an answer may be required. it is averred that the Pennsylvania Wage Payment Collection Law is not applicable to the facts of this case. 21. Defendants, Byerly Insurance, admit in part and deny in part the allegations contained in Paragraph 21 of Plaintiff's Complaint. It is admitted that James C. Byerly is President of Byerly Insurance Agents & Brokers, Inc, It is denied, however, that he had full authority to make decisions regarding payment or non- payment of wages. To the contrary, such decisions are made by others or by the Board of Directors in accordance with the agency agreements and applicable law. It is further denied that Plaintiff is due any wages. To the contrary, Plaintiff is not due any wages. 22. Defendants, Byerly Insurance, deny the allegations contained in Paragraph 22 of Plaintiff's Complaint. Said Defendants are advised and therefore aver that the allegations contained in said Paragraph are conclusions of law and no further answer is required. To the extent that an answer is necessary, James C. Byerly, as an individual, is not an "employer" within the meaning of Wage Payment and Collection Law. It is averred that the joinder of James C, Byerly as an individual is frivolous and intended by the Plaintiff to be harassment of James C. Byerly and does not serve any legal purpose. Any obligation to pay wages to employees of the agency is solely the responsibility of the agency. 6 23. Defendants, Byerly Insurance, deny the allegations contained in t': ' r ' :'j ~/c' :J:;, ""~ .l'~.". ' , ~, l' I'\' it! \ I " Paragraph 23 of Plaintiff's Complaint. Said Defendants are advised and therefore aver that the allegations contail,,~d in said Paragraph are conclusions of Jaw and no further answer is required. To the extent that an answer is necessary, it is denied that Plaintiff is due any wages or other payments from Byerly Insurance. It is further denied that the alleged compensation claimed to be due constitute wages under the Wage Payment and Collection Law. 24. Defendants, Byerly Insurance, deny the allegations contained in Paragraph 24 of Plaintiff's Complaint. Said Defendants are advised and therefore aver that the allegations contained in said Paragraph are conclusions of law and no further answer is required. To the extent that an answer is necessary, Byerly Insurance does not owe wages to Plaintiff and therefore its refusal to make payments is justified and there is no violation of the Wage Payment and Collection Law. 25. Defendants, Byerly Insurance, deny the allegations contained in Paragraph 25 of Plaintiff's Complaint. To the contrary, Plaintiff is not due any wages from Byerly Insurance and therefore the refusal is made in good faith and legally justified. 26. Defendants, Byerly Insurance, deny the allegations contained in Paragraph 26 of Plaintiff's Complaint. Said Defendants are advised and therefore aver 1 I \ that the allegations contained in said Paragraph are conclusions of law and no further 7 answcr is rcquired. To thc cxtent that an answer is neccssary, Plaintiff is ncither owed wages nor entitled to liquidated damagcs as defined in the Wage Paymcnt and Collection Law. Further. the Wagc Payment and Collection Law docs not apply to the facts and circumstances of this case. 27. Defendants, Byerly Insurance, deny the allegations contained in Paragraph 22 of Plaintiff's Complaint. Said Defendants are advised and therefore aver that the allegations contained in said Paragraph are conclusions of law and no further answer is required. To the extent that an answer is necessary, Plaintiff is not entitled to an award of attorneys' fees. Further, the Wage Payment and Collection Law does not apply to the facts and circumstances of this case. WHEREFORE, Defendants, Byerly Insurance, demands that Plaintiff's Complaint be dismissed. NEW MATTER 28. Plaintiff was employed by Byerly Insurance in a marketing and sales capacity and for a period of time during this employment was Manager of the Plaintiff's bond department, Vice President, Chief Financial Officer, Chief Operating Officer, member of the corporation's Board of Directors and a fiduciary of the corporation's ESOP. In his capacity in the various positions held while employed by Byerly Insurance, Plaintiff was privy to confidential information, including, but not 8 limitcd to, customcr lists, insurancc product supplicr lists, market stratcgies and plans, records, documents, and other confidcntial information all for thc purposcs of sccuring and retaining clients for Byerly Insurancc busincss. 29. Plaintiff was cmployed by Byerly Insurance on July 3,1989. 30. On or about April 3, 1998, Plaintiff's employment was terminated as a result of a purportcd letter of resignation dated the same date, without notice for the purpose of operating DJL Associates, Inc. in direct competition with Byerly Insurance. 31. Plaintiff, by virtue of his position within Byerly Insurance, had access to many contidential records, documents and other materials that are essential to the operation of Byley Insurance's business. It is believed and therefore averred, that Plaintiff removed, without the authority to do so, numerous original documents and copies of documents from the oftices of Byerly Insurance, which documents and copies thereof are confidential and the property of Byerly Insurance. Plaintiff removed the original documents and copies of documents in order to use said documents and other materials in direct competition with Byerly Insurance. 32. While still employed by Byerly Insurance, in breach of his duty of loyalty to his employer and in breach of their agreement of confidentiality and not to compete, Plaintiff and others conspired to leave the employment of Plaintiff and to take 9 business, sources of busincss, sourccs of product and othcr conlidcntial information from Byerly Insurance in ordcr to directly compctc with Byerly Insurancc. 33. Within approximately one hour of Plaintiff announcing his departure from the employment with Byerly Insurance, Byerly Insurance received a Memorandum from Washington International Insurance Company dated April 3, 1998, rescinding and terminating an agreement between Washington International Insurance Company and Byerly Insurance that had granted Byerly Insurance to be broker of record for Non-Standard (Brokered) Contract Bond Business. The effect of this rescission and termination was to prevent Byerly Insurance from placing brokered business with Washington International for over 100 of Byerly Insurance's long and established business relationships. Additionally, at the time of this occurrence, Byerly Insurance was placed in peril because it was placed into a position of possibly not being able to meet outstanding obligations to issue bonds on existing contract bids. The broker program was continued with DJL Associates, Inc., Plaintiff's new insurance agency. 34. On April 6, 1998, Byerly Insurance received verbal notice from USF&G that two clients of Byerly Insurance had notified USF&G that it was no longer their insurance broker and that another USF&G agent was appointed as the clients broker of record for the placement of insurance. On April 7, 1998, Byerly Insurance received a letter from USF&G stating that it had received a letter from The Ingerman 10 ~r I~. i~ '), , I f ; Group, a clicnt of 13ycrly Insurancc, datcd April I, 1998, appointing anothcr agcnt as its agcnt of record. Also on April 7. 1998, 13ycrly Insurance reccivcd anothcr lettcr from USF&G suiting that it had rcccivcd an agcnt of rccord Icttcr from Rcynolds Construction Management, Inc., a clicnt of 13ycrly Insurancc, dated April 3, 1998. appointing another USF&G agent for representation of Reynolds Construction Management, Inc. DJL Associates, Inc" Plaintiff's new agency. was appointed the agent in each of these circumstances, 35. It is believed and therefore averred that Plaintiff, while still employed with Byerly Insurance, participated in repeated contacts with Byerly Insurance's clients and other sources of business for the sole purpose of directly competing with Byerly Insurance and to take such business from Byerly Insurance in breach of his fiduciary duty to the corporation. 36, Further, it is believed and therefore averred that Plaintiff had, while still employed with Byerly Insurance, provided confidential information to others in order to obtain competitive advantage over Byerly Insurance in breach of his fiduciary duty to the corporation. 37. Plaintiff's actions, while still employed by Byerly Insurance, constituted a breach of his fiduciary duty to the corporation and such misconduct threatened and resulted in the loss of agency contracts and the loss of an ability to consistently transact business with prior relationships and agreements. 11 CERTIFICATE OF SERVICE This is to ccrtify that I, Pamela J. Crum, a Lcgal Assistant in thc law offices of Peters & Wasilefski, have this \ '\ day of ~\..,,\ ." ' 199 (1" served a true <':\ and corrcct copy of the foregoing ANSWER WITH NEW MA TIER AND COUNTERCLAIM OF DEFENDANTS, 8YERLY INSURANCE AGENTS BROKERS, INC. AND JAMES C. BYERLY, TO PLAINTIFF'S COMPLAINT upon all parties by hand delivering a copy of same to counsel as follows: Daniel Sullivan, Esquire 3401 North Front Street Post Office Box 5950 Harrisburg, PA 17110.0950 ~ ~ " ". ' "'. , ".\..~~,~ . '~.,.." Pamela J. Crum I I i 1 I I I I I , records, documents and other confidential intormation" referenced in PlIl"Ugraph 28, Dominiani is unuble to admit 01' deny whethel' such documC'lIts or information constitute confidential information. 29. Admitted. 30. Admitted in part and denied in part. It is admitted that Dominiani's employment was terminated by Byerly Insul'llnce on or about April 3, 1998. However, paragraph 30 does not accurately recite the circumstances regarding the termination of employment. On the contmry, Dominiani was fired by Byerly Insurance on April 3, 1998 when he refused to sign an onerous and oppressive employment contract prepared by and presented to him by James Byerly, James Byerly had set a deadline of April 3, 1998 for Dominiani to deliver the signed employment agreement to him or to his representative. James Byerly told Dominiani that if he did not do so by April 3, 1998 he would be fired. Dominiani refused to sign the employment agreement and was fired on April 3, 1998. Any suggestion in paragraph 30 that Dominiani resigned or voluntarily quit his employment is expressly denied for the reasons set forth herein. Dominiani began business as DJL Associates, Inc. because he was fired by Byerly Insurance and needed other employment. .2- 31. Denied. The response to paragl'Hph 28 is hereby incorporated by reference. It is denied that Dominiani removed any confidential information or other property of Byerly Insurance. 32. The averments of paragraph 32 are conclusions of law to which no response is required. To the extent a response is required, the averments are specifically denied. Dominiani did not conspire with others to leave the employment of Byerly Insurance and to take business, sources of business, sources of product and other confidential information from Byerly Insurance in order to directly compete with Byerly Insurance in breach of an alleged duty of loyalty and in breach of an agreement of confidentiality and not to compete. On the contrary, as a result of James Byerly's ultimatum to Dominiani and his subsequent firing of Dominiani, Dominiani began operation on April 6, 1998 of a surety insurance" based business. It is specifically denied that Dominiani breached any agreement or duty owed to Byerly Insurance. On the contrary, Dominiani fulfilled all contractual obligations and duties owed by him. 33. Admitted in part and denied in part. After reasonable investigation, Dominiani is without information or knowledge sufficient to form a belief as to the timing or circumstances regarding the referenced Memorandum from Washington International Insurance Company. The referenced Memorandum was previously .3- attached as Exhibit "C" to a Complaint filed against Dominiani and others at Docket No. 98-1983-Equity, Court of Common Pleas of Cumberland County, Pennsylvania. 'rhe Memorandum is a written document which speaks for itself so that Dominiani denies the accuracy and completeness of Defendants' attempt to describe or selectively paraphrase therefrom. Washington International only terminated a side agreement with Byerly Insurance that was in place in the first instance only because of Dominiani's personal involvement in managing this business. The basic agency agreement between Washington International and Byerly Insurance was not terminated, and, to the best of Dominiani's knowledge and information, continues in effect at this time. It is denied that Byerly Insurance was placed in any peril or that it could not meet outstanding obligations to issue bonds on existing contract bids. Dominiani believes and therefore avers that not only could Byerly Insurance meet obligations with other sureties, but that Washington International specifically advised James Byerly that it would honor contracts on all bid bonds issued on or before April 3, 1998. It is admitted that DJL Associates, Inc. can service brokered business through Washington International. However, to date no such brokered business has been placed and none is anticipated, 34. Admitted in part and denied in part. It is admitted that DJL Associates, Inc. was appointed agent of record for The Ingerman Group and - 4 . Reynolds Construction Management, Inc, on or after April 6, 1998, Both The Ingerman Group and Reynolds Construction Management, Inc, approached DJL Associates, Inc, requesting that it service their surety needs. After reasonable investigation, Dominiani is without information or knowledge sufficient to form a belief as to the remaining averments of paragraph 34. 35. The averments of paragraph 35 are conclusions of law to which no response is required. To the extent a response is required, the averments are denied. Any suggestion that Dominiani has breached any agreement with Byerly Insurance or breached any alleged fiduciary duty to Byerly Insurance is denied, Dominiani advised certain third parties that his employment with Byerly Insurance was going to be terminated or had been terminated. He responded to inquiries from third parties regarding his ability to service their insurance needs. Dominiani did not solicit business from any Byerly Insurance customers. Dominiani fulfilled all contractual obligations and duties owed by him. 36. The averments of paragraph 36 are conclusions of law to which no responsive pleading is required. To the extent a response is required, the averments are denied. The response to paragraph 28 is hereby incorporated by reference. Dominiani did not provide confidential information to others in order to obtain competitive advantage over Byerly Insurance. - 5 . 37, The avcrmcnts of paragraph 37 are conclusions of law to which no ,'csponsive pleading is required. To the extent a response is required, the averments are denied. Dominiani did not breach any alleged fiduciary duty nor engage in any misconduct to the detriment to Byerly Insurance. 38. The averments of paragraph 38 arc conclusions of law to which no responsive pleading is required. To the extent a response is required, the averments are denied. The averments of paragraph 30 are hereby incorporated by reference. 39. The averments of paragraph 39 are conclusions of law to which no response is required. To the extent a response is required, the averments are denied. As set forth in Dominiani's Complaint, the Pennsylvania Wage Payment and Collection Law applies to this case, 40. It is admitted that subsequent to Dominiani's filing of his Complaint in this action that Byerly Insurance made certain payments to Dominiani. Dominiani's out-of-pocket expenses and outstanding commissions have been paid. He has not been paid pursuant to the Deferred Compensation Agreement. - 6 - NEW MATTER 43, On or about February 2, 1998, Dominiani resigned his positions as an officer and director of Byerly Insurance and any position with respect to administration of the company ESOP. 44. From February 2, 1998 until April 3, 1998, Dominiani's status with Byerly Insurance was solely as an employee. 45. The agreement regarding confidentiality and not to compete referenced by Byerly Insurance is unreasonable, illegal, unconscionable, against public policy and is not enforceable. 46. The actions of James Byerly and Byerly Insurance leading up to and culminating in Dominiani's termination on April 3, 1998 provide justification for all of Dominiani's actions. WHEREFORE, Dominiani demands that Byerly Insurance's Counterclaim be dismissed with prejudice. - 8 . By: Mg'IVrE, gVANS & WOODSIDE -\'" . \ /1 ," ~JT-"'.-' ~_ ("::~'--'_/-:____ Daniel L. Sullivan, Esquire Sup. Ct, J.D. No. 34548 '. , " 3401 North Front Street P.O. Box 5950 Harrisburg, PA 17110.0950 (717) 232-5000 Attorneys for Plaintiff David A. Dominiani DATED: h.>>-i "'\ \'i cl ''(5 ~.. ~ v, IN THE COURT OF COMMON COMMON PLEAS FOR CUM8ERLAND COUNTY, PENNSYLVANIA DA VII> A, DOMINIANI, Plaintiff BYERLY INSURANCE AGENTS & BROKERS, INC, and JAMES C, BYERLY, NO, 98 - 3596 Civil Term Defendants ANSWER OF DEFENDANTS, BYERLY INSURANCE AGENTS & BROKERS. INC, AND JAMES C. BYERLY, TO NEW MATTER TO DEFENDANTS' COUNTERCLAIM NOW COMES, Defendants, Byerly Insurance Agents & Brokers, Inc. and James C. Byerly (collectively referred to as "Byerly Insurance"), by and through their attorneys, Peters & Wasilefski, and answers the New Matter to their Counterclaim as follows: 1, Defendants, Byerly Insurance, deny the allegations contained in Paragraph 43 of Plaintiff's New Matter to Counterclaim, To the contrary, Plaintiff's resignation as an officer and director of Byerly Insurance was not effective until February 10, 1998 after Plaintiff complied with various requests for information and the Board of Directors acted upon his resignation. Plaintiff continued to be a fiduciary for the corporation's ESOP and continued to have the duties and responsibilities related ~, ,...~ to that position for several months following February, 1998, In further answer, Defendants deny said allegations pursuant to Pa. Rule of Civil Procedure 1029(e). 2. Defendants, Byerly Insurance, deny the allegations contained in Paragraph 44 of Plaintiff's New Matter to Counterclaim. To the contrary, Plaintiff continued to owe a fiduciary duty to the corporation and the beneficiaries of the ESOP and also had duties and responsibilities to Defendants, Byerly Insurance, as an employee. In further answer, Defendants deny said allegations pursuant to Pa. Rule of Civil Procedure 1029(e). 3. Defendants, Byerly Insurance, deny the allegations contained in Paragraph 45 of Plaintiff's New Matter to Counterclaim. Said Defendants are advised and therefore aver that said allegations are conclusions of law and no further answer is required. To the extent that an answer may be necessary, the confidentiality and non- compete agreement is reasonable, legal, conscionable and enforceable. In further answer, Defendants deny said allegations pursuant to Pa. Rule of Civil Procedure 1029(e). 4. Defendants, Byerly Insurance, deny the allegations contained in Paragraph 46 of Plaintiff's New Matter to Counterclaim. To the contrary, no action or inaction on behalf of Defendants justifies Plaintiff's inappropriate actions or breach of his agreements with Defendants. In further response, it is denied that Plaintiff was terminated. To the contrary, Plaintiff quit his employment with Byerly Insurance, 2 VERIFICATION [ hcreby afnrm that the following lilcts arc correct: [ am a Dcfendant in thc foregoing action and thc atlllchcd Answer to New Matter of Counterclaim is based upon information which I have furnished to my counsel and information which has becn gathcred by my counsel in preparation of the de tense of the lawsuit. The language of the Answcr to New Matter of Counterclaim is that of counsel and not of me. I have read the Answer to New Matter of Counterclaim and to the extent that the Answer to New Matter of Counterclaim is based upon intormation which I have given to my counsel, it is true and correct to the best of my knowledge, information and belief. To the extent that the content of the Answer to New Matter of Counterclaim is that of counsel, I have relied upon counsel in making this verification. I hereby acknowledge that the facts set forth in the aforesaid Answer to New Matter of Counterclaim are made subject to the penalties of 18 Pa. C.S. Section 4904 relating to unsworn falsification to authorities. Dated: 'it/ ;J.S79'iJ , 1 Q/ /f) .~'r~- L..-. 6:). . i James C, Byerly . /~. >. " I ::.... ~-~ v' p',.-: -- I ~. {}1 '-j .f ,~ t). 1 . ~ U ~;..; ,"'j-':" , ,.) ., l:~': ~". ~ ~ '.' ~':'J_ , \ -. : '~ ~! <.:.i , ., , ,-. (:!.~ \.~" L I ~~ - lL.', .. Z ..,J n... j l";: I I I,U ( ~.; r.!:: <1_ U~ I,' O~I ':j U t;. () ~ ~ 2 ~~~~m dUq ~. q~! ~ 8 t.l ~ <ll ~ ~ .j ffin' ~ f-~N.t- W ~ J: n. (