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Brown & Brown, Inc., et al v. Robert Cola

June 15, 2011

BROWN & BROWN, INC., ET AL.,
BROWN & BROWN OF PENNSYLVANIA, INC. AND GRINSPEC, INC. PLAINTIFFS,
v.
ROBERT COLA, RYAN TOLA, AND
DOYLE ALLIANCE GROUP, DEFENDANTS.



The opinion of the court was delivered by: Buckwalter, S. J.

MEMORANDUM

FINDINGS OF FACT

1. Plaintiff Brown & Brown, Inc. ("Brown & Brown") is a national insurance brokerage and service company. (Compl. ¶ 13.)

2. Plaintiffs Brown & Brown of Pennsylvania, Inc. ("Brown-Pa.") and Grinspec, Inc. ("Grinspec") are wholly-owned subsidiaries of Brown & Brown. (N.T. 3/29/2011, Robert Cola, at 12:5-8; 20:4-7.)

3. Brown & Brown and its subsidiaries, including Brown-Pa. and Grinspec, offer a broad range of insurance and reinsurance products and services, as well as risk management, third-party administration, insurance consulting, and other insurance-related services to both the public and private sectors. (Compl. ¶ 13.)

4. Brown & Brown has a number of subsidiary companies throughout the country, with each focused on the insurance needs of its clients in a particular region or for particular insurance products. Brown-Pa. and Grinspec are two of Brown & Brown's subsidiaries, based in Pennsylvania and New Jersey, respectively. (Id. ¶¶ 14-15.)

5. One particular brokerage business in which Brown & Brown had an acquisition interest -- Doyle Consulting Group, Inc. and Doyle Consulting Group of New Jersey, Inc. (collectively, "Doyle Consulting Group") -- was owned by Frank Doyle and Kevin Mullin. (N.T. 3/29/2011, Robert Cola, at 7:17-8:1.)

6. Discussions between Brown & Brown, on the one hand, and Doyle Consulting Group, Doyle and Mullin, on the other hand, culminated in February 2004 with the execution of an Asset Purchase Agreement through which Brown & Brown and the newly created Brown-Pa. acquired the assets of Doyle Consulting Group.(N.T. 3/29/2011, Robert Cola, at 12:5-8.

7. The closing on the Asset Purchase Agreement occurred on February 1, 2004. (See Asset Purchase Agreement, attached as Exh. C to Pls.' Resp. to Cola's Mot. for Summ. J.)

8. Following the closing and as part of the transaction, Doyle joined Brown-PA as its Executive Vice President, and all of the customers and accounts of Doyle Consulting Group became customers and accounts of Brown & Brown and its subsidiaries, including brown Pa.(N.T. 3/29/2011, Robert Cola, at 13:15-25; 15:21-24.) 2004.

9. Prior to February 2004, Defendant Robert Cola was an employee and key broker for Doyle Consulting Group. (N.T. 3/29/2011, Robert Cola, at 20:11-13.)

10. Cola developed relationships with the clients of Doyle Consulting Group, clients which he would continue to service after the business was purchased by Brown & Brown. (N.T. 3/29/2011, Robert Cola, at 110:9-16.)

11. Prior to February 2004, Defendant Ryan Tola also was an employee and key broker for Doyle Consulting Group. (N.T. 3/29/2011, Robert Cola, at 20:11-13; N.T. 3/29/2011, Ryan Tola, at 136:21-137:1.)

12. Section 7.17(a) of the Asset Purchase Agreement required Doyle Consulting Group to terminate the employment of certain of its employees, including Cola and Tola, prior to January 30, 2004. (See Asset Purchase Agreement, attached as Exh. C to Pls.' Resp. to Cola's Mot. for Summ. J.)

13. Accordingly, upon the acquisition of the assets of Doyle Consulting Group by Brown & Brown and Brown-Pa., Cola and Tola's respective employment with Doyle Consulting Group ended. (Id.)

14. Pursuant to the Asset Purchase Agreement, Doyle Consulting Group terminated Tola's and Cola's employment effective February 1, 2004. (Id.)

15. In turn, the newly-formed Brown-Pa. agreed to offer new employment to those same employees, including Cola and Tola, following their termination by Doyle Consulting Group. (Id.)

16. Cola and Tola each accepted Brown-Pa.'s offer, signing Employment Agreements that became effective on February 1, 2004 and contained the restrictive covenants at issue here. (Pls.' Exhs. 43, 68.)

17. To become an employee of Brown-Pa., Cola was required to sign an employment agreement containing certain restrictive covenants. (Pls.' Exh. 68.)

18. Cola was presented with the Brown-Pa. employment agreement on Friday, January 23, 2004. (Cola Aff. at ¶ 8, attached as Exh. A to Cola's Mot. for Summ. J.)

19. Cola then had three days to review that agreement and consult with an attorney of his choice before he signed it. (Id. at ¶ 9.)

20. During that time, Cola did, in fact, telephone an attorney, although he apparently was unable to reach him.(Id. at ¶ 12.)

21. Cola signed his Employment Agreement on January 26, 2004.(Pls.' Exh. 68; N.T. 3/29/2011, Robert Cola, at 12:24-13:1.)

22. Cola's Employment Agreement with Brown-Pa. was also signed by Frank Doyle. (Pls.' Exh. 68; N.T. 3/29/2011, Robert Cola, at 13:2-7.)

23. Section 8(e) contains, inter alia, the following statement: Employee has carefully considered, and agrees that the provisions of this Section are fair, reasonable, and not unduly restrictive on Employee, and that Employee has had an opportunity to obtain legal advice before agreeing to its terms.

Id. § 8(e).

24. In his Employment Agreement, Cola agreed to a series of restrictive covenants designed to protect the business interests and goodwill that Plaintiffs purchased, as well as the further goodwill earned by Plaintiffs through their own hard work. (Pls.' Exh. 68.)

25. There are a series of confidentiality provisions (paragraph 8 (a) and 10 of the agreement) as well as a non-solicitation provision (paragraph 8(b) of the agreement, in the Cola agreement.

26. In connection with and following Brown & Brown's acquisition of Doyle Consulting Group, Tola's employment with Doyle Consulting Group ended, and he, like Cola, became an employee of Brown-Pa., executing an employment agreement with Brown-Pa. dated February 1, 2004. (Pls.' Exh. 40.)

27. Between March of 2000 and February of 2004, Tola worked for DCG as an employee benefits junior consultant. (N.T., 3/29/11, 136:21-23.)

28. At DCG, Tola learned the skills of an insurance broker and consultant, especially in the area of employee benefits. Tola learned about all aspects of analyzing employee benefit programs, marketing DCG's services and servicing accounts in connection with employee benefit programs. Tola also established relationships with accounts, most of whom were New Jersey school districts. (N.T., 3/29/11, 173:9-174:24.)

29. In early 2004, Tola learned that DCG was being sold to the Brown & Brown organization. (N.T., 3/29/11, 137:25-138:5.)

30. At the time of the acquisition, Tola considered himself to be an expert in the area of employee benefits ...


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