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HomeMy WebLinkAbout2013-2696 MARY BETH SPUHLER,, : IN THE COURT OF COMMON PLEAS Plaintiff, : OF CUMBERLAND COUNTY, : PENNSYLVANIA v. : : : THE MASSACHUSETTS MUTUAL LIFE : INSURANCE COMPANY, : CONNECTICUT MUTUAL LIFE : CIVIL ACTION - LAW INSURANCE COMPANY, MML : INVESTOR SERVICES, LLC, AND : MATTHEW J. DOBBIE t/d/b/a : uFINANCIAL GROUP, : Defendants. : 13-2696 Civil Term IN RE: PRELIMINARY OBJECTIONS OF DEFENDANTS BEFORE HESS, P.J. OPINION and ORDER Before the Court are three sets of preliminary objections to Plaintiff’s Amended Complaint. Plaintiff’s Amended Complaint contains seven counts. At Count I, a claim for breach of contract against Massachusetts Mutual Life Insurance Company (hereinafter, “MMLIC”), Connecticut Mutual Life Insurance Company (hereinafter, “CMLIC”), MML Investor Services (hereinafter, “MMLIS”), and Mathew J. Dobbie (hereinafter, “Dobbie”); at Count II, a claim for tortious interference with business relations against Dobbie; at Count III, a claim for tortious interference with business relations against MMLIC, CMLIC, and MMLIS; at Count IV, a claim for conversion against all Defendants; at Count V, a claim for civil conspiracy against all Defendants; at Count VI, a claim for unjust enrichment against Dobbie; and at Count VII, a claim for breach of fiduciary duty against all Defendants. (Am. Compl., filed Aug. 22, 2013). Within the three sets of preliminary objections, all of the preliminary objections are in the nature of a demurrer. Plaintiff’s Amended Complaint can be summarized as follows: Plaintiff, Mary Beth Spuhler, is an adult individual residing at 422 Deerfield Road, Camp Hill, PA 17011. (Am. Compl., ¶ 1). Plaintiff is licensed to sell securities, retirement plans, insurance, and other financial products. (Am. Compl., ¶ 9). As part of this occupation, Plaintiff entered into a Career Contract with Dobbie on January 2, 2008. (Am. Compl., ¶ 10). Under the Career Contract, Plaintiff would serve under Dobbie, who is a general agent for MMLIC, as an insurance sales agent for MMLIC and CMLIC. The Career Contract contained the terms of the relationship. (Am. Compl., ¶ 4). Similarly, Plaintiff entered into a Representative’s Agreement whereby Plaintiff was registered to sell securities for MMLIS. (Am. Compl., ¶ 12). During the course of their relationship, Plaintiff maintained an office within Dobbie’s headquarters, located in Camp Hill, Pennsylvania. (Am. Compl., ¶ 13). Louis F. Grammes (hereinafter, “Grammes”) was also an agent with Dobbie. (Am. Compl., ¶ 14). Plaintiff avers that Grammes was Dobbie’s top-producing life insurance agent. (Am. Compl., ¶ 15). Plaintiff and Grammes had an oral agreement that they would split the commissions resulting from new clients that they secured jointly. (Am. Compl., ¶ 14). Plaintiff alleges that she would develop leads and Grammes would act as the closer. (Am. Compl., ¶ 16). On January 23, 2011, Plaintiff discovered that Grammes had written a life insurance policy for a principal of one of their joint clients as to which he would receive all of the commissions, a violation of their oral agreement. Subsequently, Plaintiff discovered that there were other instances where Grammes directed 100% of the commission from joint clients to himself. (Am. Compl., ¶ 18). Plaintiff believes that the value of these converted commissions is in excess of 1 $20,000. (Am. Compl., ¶ 18). 1 A separate action is pending with respect to these alleged converted commissions. 2 Between January and August of 2011, Plaintiff confronted Grammes several times regarding the violations of their agreement. (Am. Compl., ¶ 19). Subsequently, on July 22, 2011, Dobbie informed Plaintiff that she would no longer be allowed to work from Dobbie’s office due to her dispute with Grammes. (Am. Compl., ¶ 20). As a result, Plaintiff had to remove her personal belongings and files and establish a new office, which she believes to be a violation of her Career Contract. (Am. Compl., ¶ 20). Plaintiff further avers that, nearly a year after being told to leave Dobbie’s office, she received a letter from Dobbie terminating her employment relationship with him, MMLIC, CMLIC, and MMLIS. (Am. Compl., ¶ 24). The termination letter alleged that the Plaintiff had engaged in “selling away” as well as other unspecified non-compliance and misbehavior. (Am. Compl., ¶ 25). Within two hours of receiving the termination letter, Plaintiff claims that she sent Dobbie documents proving that she did not engage in selling away. (Am. Compl., ¶ 26). Plaintiff contends that the selling away allegations are damaging to her career. (Am. Compl., ¶ 27). Plaintiff sought, without success, to affiliate with another Massachusetts Mutual agency so that she should continue to collect renewal commissions on existing sales and make new sales. (Am. Compl., ¶ 29). Notwithstanding Plaintiff’s assertion that she provided Dobbie with proof that the selling away allegations were unfounded, Dobbie initially did nothing. (Am. Compl., ¶ 30). Dobbie eventually issued a backdated termination letter that did not contain allegations of selling away after Plaintiff’s attorney threatened MMLIC’s chief counsel with litigation. (Am. Compl., ¶ 30). Nonetheless, Plaintiff has been unsuccessful in securing employment with another Mass Mutual agency. (Am. Compl., ¶ 35). Plaintiff avers that a Mass Mutual agency in Philadelphia wanted to hire her, but the MMLIS home offices directed the agency not to hire her because their 3 database lists her as “do not hire.” (Am. Compl., ¶ 34). Plaintiff avers that the do not hire designation was per Dobbie’s direction and that no independent investigation took place to confirm any allegations. (Am. Compl., ¶¶ 34, 55). The standard of review for preliminary objections in this Commonwealth is well settled. Preliminary objections are properly granted only when, “based on the facts pleaded, it is clear and free from doubt that the complainant will be unable to prove facts legally sufficient to establish a right to relief.” Mazur v. Trinity Area School Dist., 961 A.2d 96, 101 (Pa. 2008) (internal citations omitted). In considering preliminary objections, “all well-pleaded allegations and material facts averred in the complaint, as well as all reasonable inferences deducible therefrom, must be accepted as true.” Wurth by Wurth v. City of Philadelphia, 584 A.2d 403, 407 (Pa. Cmwlth. 1990). However, the trial court “need not accept as true conclusions of law, unwarranted inferences from fact, argumentative allegations, or expressions of opinion.” Penn Title Ins. Co. v. Deshler, 661 A.2d 481, 483 (Pa.Cmwlth. 1995). Pursuant to Pennsylvania Rule of Civil Procedure 1028(a), preliminary objections may be filed by any party to any pleading on several limited grounds including, relevant to the preliminary objections at hand, “legal insufficiency of a pleading (demurrer).” Pa.R.C.P. 1028(a)(4). The standard of review for a demurrer is well-settled: “\[a\] preliminary objection in the nature of a demurrer is properly granted where the contested pleading is legally insufficient. Preliminary objections in the nature of a demurrer require the court to resolve the issues solely on the basis of the pleadings, no testimony or other evidence outside of the complaint may be considered to dispose of the legal issues presented by the demurrer.” Strausser v. PRAMCO, III, 944 A.2d 761, 764-65 (Pa. Super. 2008) (internal citations omitted). A demurrer is “an assertion that a complaint does not set forth a cause of action or a claim on which relief can be granted.” 4 Lerner v. Lerner, 954 A.2d 1229, 1234 (Pa. Super. 2009) (internal citations omitted). “The question presented by the demurrer is whether, on the facts averred, the law says with certainty that no recovery is possible. Where a doubt exists as to whether a demurrer should be sustained, this doubt should be resolved in favor of overruling it.” Wawa, Inc. v. Alexander J. Litwornia & Assoc., 817 A.2d 543, 544 (Pa. Super. 2003), (quoting Price v. Brown, 680 A.2d 1149, 1151 (Pa. 1996)). Initially, Defendants seek the dismissal of Count I, breach of contract, based on legal insufficiency. “A cause of action for breach of contract must be established by pleading (1) the existence of a contract, including the essential terms, (2) a breach of duty imposed by the contract, and (3) resultant damages. The party who pleads the existence of certain facts bears the burden of establishing those facts.” Clairton Slag, Inc. v. Dep’t of Gen. Serv.’s., 2 A.3d 765, 776 (Pa. Cmwlth. 2010). “As a general rule, there is no common law cause of action against an employer for termination of an at-will employment relationship. An at-will employee may be terminated for good reason, bad reason, or no reason at all.” Krajsa v. Keypunch, Inc., 622 A.2d 355, 358 (Pa. Super. 1993) (citations omitted). Here, there is no dispute over the first requirement for a breach of contract cause of action, existence of a contract. Rather, the Defendants point to the language contained in the contracts in support of their demurrer. Related to the breach of a duty imposed by the contract, the Plaintiff states: 41. As described above, Dobbie unilaterally and materially breached these contracts on July 12, 2012 on behalf of both himself/uFinancial and the Mass Mutual Defendants when he informed Spuhler that he was terminating her contracts for false and contrived reasons, and sought to take control of the client base that Spuhler had spent decades developing. 42. Mass Mutual also materially breached the contracts by refusing to allow Spuhler to affiliate with another of its general agents, and thereby continue to 5 service her existing clients and draw commissions from their accounts, and sell additional Mass Mutual products to new clients. (Am. Compl.,¶¶ 41-42). The Defendants argue that Plaintiff was an independent contractor who could be fired at will. In support of this contention, the Defendants cite to the Career Contracts and the Representative’s Agreement. Career Contracts with MMLIC and CMLIC, attached together to Plaintiff’s Amended Complaint as Exhibit A, both contain the same language: This contract shall terminate on the date of written notice of termination by either party to the other party, such notice being mailed to the last known post office address of the other party. Neither in the notice of termination nor at any other time shall the party terminating the contract be required to give any reason or cause for termination, it being the agreement of the parties that this contract may be terminated at will by the other, with or without cause. (Am. Compl. ¶ 10, Ex. A). Additionally, the Representative’s Agreement states, “\[t\]his agreement may be terminated for any reason and without cause by either party at any time by written notice delivered or sent to the last known address of the other party or by MMLIS by written notice personally delivered to Representative”. (Am. Compl. ¶ 12, Ex. B). Since the relative contracts make it clear that Plaintiff could be fired with or without cause, it cannot be claimed that the Defendants breached a duty imposed by the contract. Even if the reason behind the termination was contrived, case law does not prevent an at-will employee from being fired. Furthermore, even reading the Amended Complaint as a whole and accepting all the allegations as true, Plaintiff has not developed how the Defendants owed Plaintiff a duty to associate or affiliate with another Mass Mutual agent. As such, Count I, breach of contract is dismissed as to all Defendants. Next, the Defendants object to various claims of the Plaintiff as violating the gist of the action doctrine. Specially, Dobbie seeks to have Counts II, IV, V, and VII dismissed, and 6 MMLIC, CMLIC, and MMLIS seek to have Counts III, IV, V, and VIII dismissed due to the gist of the action doctrine. Where there are multiple claims contained within a complaint, each of which asserts a different theory of liability, and, furthermore, where there are a number of parties involved, we must be cautious not to blur the lines between those separate claims. The gist of the action doctrine, first recognized in Bash v. Bell Tel. Co., 601 A.2d 825 (Pa. Super. 1992), is a doctrine “designed to maintain the conceptual distinction between breach of contract claims and tort claims.” eToll, Inc. v. Elias/ Savion Advertising, Inc., 811 A.2d 10, 14 (Pa. Super. 2002). The Superior Court explained the distinction between breach of contract claims and tort claims as follows: \[a\]lthough they derive from a common origin, distinct differences between civil actions for tort and contract breach have developed at common law. Tort actions lie for breaches of duties imposed by law as a matter of social policy, while contract actions lie only for breaches of duties imposed by mutual consensus agreements between particular individuals. . . . To permit a promisee to sue his promisor in tort for breaches of contract inter se would erode the usual rules of contractual recovery and inject confusion into our well-settled forms of actions. Id. (citing Bash, 601 A.2d at 829). As a result, the doctrine bars tort claims when there is no other duty other than a contractual one from which the cause of action arises. The gist of the action doctrine acts to foreclose tort claims (1) which arise solely from the contractual relationship between the parties; (2) which allege that the duties breached were grounded in the contract itself; (3) where any liability stems from the contract; and (4) which essentially duplicate the breach of contract claim or where the success of the tort claim is dependent upon the success of the breach of contract claim. Hart v. Arnold, 884 A.2d 316, 340 (Pa. Super. 2005) (citing eToll, 811 A.2d at 19). The 7 essence of the doctrine, therefore, is to “\[preclude\] plaintiffs from re-casting ordinary breach of contract claims into tort claims.” eToll, Inc., 811 A.2d at 14. Here, the Plaintiff has attempted to establish an assortment of claims in the alternative to her breach of contract claim. A close reading of the complaint makes it readily apparent that all of these claims arise out of the termination of her employment and/or a refusal on the part of one or more of the defendants to hire her. As noted above, however, the employment relationship of the parties was clearly at-will. We discern nothing from the complaint which would permit tort claims to arise from this otherwise straightforward contract action. Finally, we turn to Dobbie’s preliminary objections to Count VI, unjust enrichment. Essentially, unjust enrichment is an equitable doctrine. Mitchell. v. Moore, 729 A.2d 1200, 1203 (Pa. Super. 1999). “The elements of unjust enrichment are benefits conferred on defendant by plaintiff, appreciation of such benefits by defendant, and acceptance and retention of such benefits under such circumstances that it would be inequitable for defendant to retain the benefit without payment of value.” Stoeckinger v. Presidential Fin. Corp. of Delaware Valley, 948 A.2d 828, 833 (Pa. Super. 2008) (quoting Styer v. Hugo, 619 A.2d 347, 350 (Pa. Super. 1993). However, “it has long been held in this Commonwealth that the doctrine of unjust enrichment is inapplicable when the relationship between parties is founded upon a written agreement or express contract, regardless of how harsh the provisions of such contracts may seem in the light of subsequent happenings.” Wilson Area Sch. Dist. v. Skepton, 895 A.2d 1250, 1254. (Pa. 2006) (citations omitted). 8 Plaintiff argues that Pennsylvania law allows her to argue alternate theories or recovery. While Plaintiff’s contention is generally true, here it is manifest that the relationship between the Plaintiff and Dobbie was governed by a written contract. As such, although the consequences may be harsh, a claim for unjust enrichment is inapt. As such, we sustain Defendants’ preliminary objection to Count VI. Having found that all of Plaintiff’s counts are dismissed, there is no reason to discuss the many other theories for demurrer that the Defendants raise to Plaintiff’s various counts. ORDER th AND NOW, this 28 day of April, 2014, upon consideration of Defendants’ Preliminary Objections to Plaintiff’s Amended Complaint, and after oral argument, heard April 4, 2014, as stated above, the Preliminary Objections of Defendants are SUSTAINED and the complaint DISMISSED. AND FURTHER, Plaintiff's Motion for Leave to File Second Amended Complaint is DISMISSED as moot. BY THE COURT, ___________________________ Kevin A. Hess, P.J. 9 MARY BETH SPUHLER,, : IN THE COURT OF COMMON PLEAS Plaintiff, : OF CUMBERLAND COUNTY, : PENNSYLVANIA v. : : : THE MASSACHUSETTS MUTUAL LIFE : INSURANCE COMPANY, : CONNECTICUT MUTUAL LIFE : CIVIL ACTION - LAW INSURANCE COMPANY, MML : INVESTOR SERVICES, LLC, AND : MATTHEW J. DOBBIE t/d/b/a : uFINANCIAL GROUP, : Defendants. : 13-2696 Civil Term IN RE: PRELIMINARY OBJECTIONS OF DEFENDANTS BEFORE HESS, P.J. ORDER th AND NOW, this 28 day of April, 2014, upon consideration of Defendants’ Preliminary Objections to Plaintiff’s Amended Complaint, and after oral argument, heard April 4, 2014, as stated above, the Preliminary Objections of Defendants are sustained and the complaint DISMISSED. AND FURTHER, Plaintiff's Motion for Leave to File Second Amended Complaint is DISMISSED as moot. BY THE COURT, ___________________________ Kevin A. Hess, P.J. Bruce C. Fox, Esquire Andrew J. Horowitz, Esquire Obermayer Rebmann Maxwell & Hippel LLP BNY Mellon Center, Suite 5240 Pittsburg, PA 15219 Counsel for Plaintiff Walter W. Cohen, Esquire Kevin J. Kehner, Esquire Obermayer Rebmann Maxwell & Hippell LLP 200 Locust Street, Suite 400 Harrisburg, PA 17101 Counsel for Plaintiff Samuel E. Cohen, Esquire Marshall Dennehey Warner Coleman & Goggin 2000 Market Street, Suite 2300 Philadelphia, PA 19103 Counsel for Mathew J. Dobbie William P. Thornton, Jr., Esquire Julie E. Ravis, Esquire Beth A. Dodson, Esquire 111 North Sixth Street, P.O. Box 679 Reading, PA 19603 Counsel for Massachusetts Mutual Life Insurance Company, Connecticut Mutual Life Insurance Company, and MML Investors Services, LLC.