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New England Life Insurance Co. v. Linkowski

July 5, 2007

NEW ENGLAND LIFE INSURANCE COMPANY, PLAINTIFF,
v.
STEVE LINKOWSKI, JR., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Ambrose, Chief District Judge

OPINION and ORDER OF COURT

OPINION*fn1

Defendants Minnesota Life, Angela Ferrante, Paul Hilliard, Robert Corcoran, Gary Klobchar, Ibrahim Fetahi, and Dana Curtin ("the Minnesota Life Defendants") have filed a Motion to Dismiss. See Docket No. 48. Though the Motion was initially directed at Plaintiff New England Life Insurance Company's Complaint, I permitted New England leave to file an Amended Complaint. I did so with the understanding that I would treat the Minnesota Life Defendants' Motion to Dismiss as being directed at the Amended Complaint.*fn2 New England has responded to the Motion and the issues are now ripe for resolution.

STANDARD OF REVIEW

In deciding a Motion to Dismiss, all factual allegations, and all reasonable inferences therefrom, must be accepted as true and viewed in a light most favorable to the plaintiff. Colburn v. Upper Darby Twp., 838 F.2d 663, 666 (3d Cir. 1988), cert. denied, 489 U.S. 1065 (1988). I may dismiss a complaint only if it appears beyond a reasonable doubt that the plaintiff can prove no set of facts in support of his claims which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45 (1957). In ruling on a motion for failure to state a claim, I must look to "whether sufficient facts are pleaded to determine that the complaint is not frivolous, and to provide the defendants with adequate notice to frame an answer." Colburn, 838 F.2d at 666.

While a court will accept well-pleaded allegations as true for the purposes of the motion, it will not accept legal or unsupported conclusions, unwarranted inferences, or sweeping legal conclusions cast in the form of factual allegations. See Miree v. DeKalb County, Ga., 433 U.S. 25, 27 n.2 (1977). Moreover, the plaintiff must set forth sufficient information to outline the elements of his claims or to permit inferences to be drawn that these elements exist. See Fed. R. Civ. P. 8(2)(a) and Conley, 355 U.S. at 45-46. Matters outside the pleadings should not be considered.

This includes "any written or oral evidence in support of or opposition to the pleadings that provides some substantiation for and does not merely reiterate what is said in the pleadings." Charles A. Wright and Arthur R. Miller, Federal Practice and Procedure, § 1366 (West 1990).

ANALYSIS

I. COUNTS III AND IV - BREACH OF CONTRACT AND BREACH OF FIDUCIARY DUTIES

In Count III, New England contends that Hilliard and Ferrante breached the covenant not to compete clause of their employment contracts when they solicited New England agents to work for Minnesota Life and / or when they contacted New England policyholders. In Count IV, New England contends that Hilliard and Ferrante breached their duty of loyalty by attempting to induce and in fact inducing other New England agents to leave their employment in order to work for a competitor.*fn3

The Minnesota Life Defendants insist that Counts III and IV fail to state a claim upon which relief can be granted. Specifically, they argue that the covenant not to compete is not enforceable under Massachusetts law*fn4 and that, even if enforceable, Hilliard and Ferrante did not breach the restrictions.

The covenant not to compete at issue provides that:

[f]or a period of two years after termination of the Contract, the Agent shall not, directly or indirectly, contact the policyholders or contractholders of the Company in the territory of the Managing Partner or policyholders of the Company owning Products for which the Agent is agent of record for the purpose of inducing any policyholder or contractholder to lapse, cancel, fail to renew or replace any Product. For a period of one hundred eighty (180) days after termination of the Contract the Agent shall not, directly or indirectly, contact or contract with any agent of the Managing Partner for the purpose of inducing such agent to solicit in the territory of the Managing Partner on behalf of any other insurance company or financial services organization. If the 180 day or two year periods referred to herein shall be deemed unenforceable at law, then such periods shall be reduced to such periods as shall be legally enforceable.

See Docket No. [57-2], p. 44 (emphasis added).

I consider first the Minnesota Life Defendants' argument that the covenant itself is unenforceable. "Non-competition agreements are generally enforceable so long as they are reasonable under the circumstances." Runway Salon, Inc. v. Garey, 68 Mass. App. Ct. 1105, 860 N.E.2d 703, 2007 WL 269846 at * 1(Jan. 31, 007) (citations omitted). "In determining whether a covenant will be enforced in whole or in part, the reviewing court must consider whether (1) it protects the legitimate business interest of the employer against harmful conduct of the former employee; (2) it is supported by consideration; (3) the time, space, and geographical restraints imposed on the former employee are reasonable in the circumstances; and (4) the covenant is consistent ...


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