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Guzzi v. Morano

United States District Court, Third Circuit

August 8, 2013

PETER GUZZI, Plaintiff,
v.
JOSEPH MORANO and U.S. BENEFIT PARTNERS LLC, Defendants.

MEMORANDUM

RONALD L. BUCKWALTER, Senior District Judge.

Currently pending before the Court is a Motion for Summary Judgment by Defendants Joseph Morano and U.S. Benefit Partners LLC. For the following reasons, the Motion is granted in part and denied in part.

I. FACTUAL BACKGROUND

The facts are highly disputed in this case, making it difficult for the Court to provide any clear recitation of the relevant events. Nonetheless, the Court has attempted to decipher the factual history of this case based on the varying versions of events provided by the parties as supported by the evidence of record, [1] with the hope of narrowing the issues for trial, if one becomes necessary.

A. The Parties

Plaintiff Peter Guzzi is an individual residing in Doylestown, Pennsylvania. (Am. Compl. ¶ 2, Answer ¶ 2.) Defendant Joseph Morano is an individual residing in Secaucus, New Jersey (Am. Compl. ¶ 3, Answer ¶ 3.) Defendant U.S. Benefit Partners, LLC ("USBP") is a New Jersey limited liability company with its principal place of business in Secaucus, New Jersey. (Am. Compl. ¶ 4, Answer ¶ 4.) USBP is in the business of, among other things, selling insurance policies through large marketing channels. (Am. Compl. ¶ 16; Answer ¶ 16.)

B. The Alleged Contract

In April 2005, Defendant Morano, Plaintiff Guzzi, and a gentleman named Robert Gladstone were engaged in a phone conversation. At that time, according to Plaintiff, Morano offered Guzzi a one-third partnership in USBP. (Pl.'s Opp'n Summ. J., Ex. A., Declaration of Peter Guzzi ("Guzzi Decl.") ¶ 2, June 5, 2013.) Plaintiff explained that the original purpose of the phone conversation was to generally discuss the future of USBP. (Defs.' Mot. Summ. J., Ex. A at Interrogatory 8 & Ex. B, Resp. to Interrogatory 8.) The three men then purportedly agreed that they would each be a one-third partner and that they were each going to get one-third of the profit for the platforms and people they brought to USBP. (Defs.' Mot. Summ. J., Ex. K, Deposition of Peter Guzzi ("Guzzi Dep."), 52:2-20, 54:17-55:4, Sept. 21, 2012.)[2] This was solely an oral agreement (the "Agreement"). (Id. at 55:5-6.) Plaintiff's obligations under the Agreement were to utilize his efforts so that USBP could enter into contracts to sell Medicare insurance products on behalf of other companies and so that USBP could make contacts with agents and distribution channels to sell the Medicare insurance products. (Guzzi Decl. ¶ 3; Defs.' Mot. Summ. J., Ex. B, Resps. to Interrog. No. 9; see also Pl.'s Opp'n Summ. J., Ex. C, Deposition of Robert Gladstone ("Gladstone Dep."), 19:8-11, Oct. 16, 2012.)

Morano and Gladstone's characterizations of this meeting, however, are markedly different. Gladstone indicated that he was present at a meeting between Plaintiff, Morano, and himself in early 2005. (Defs.' Mot. Summ. J., Ex. D, Declaration of Robert Gladstone ("Gladstone Decl."), ¶ 2, July 27, 2011.) According to his recollection, Morano never offered either Gladstone or Plaintiff a one-third interest in USBP. (Id. ¶¶ 2-3.) Likewise, Morano remarked that, other than his wife, he had never had any business partners in USBP. (Defs.' Mot. Summ. J., Ex. E, Declaration of Joseph Morano ("Morano Decl."), ¶ 7, Feb. 19, 2013.) He went on to note that he never offered Plaintiff a one-third interest in USBP. (Id. ¶ 10.) Moreover, as revealed by Plaintiff's own testimony, Plaintiff never received a K-1 form-which is a profit distribution for shareholders form-nor did he ever sign a membership interest agreement, a stock member agreement, or a shareholders agreement with Morano and USBP. (Guzzi Dep. at 90:12-24, 91:1-5.)

Nevertheless, from April 2005 to March 2007, Plaintiff, in purported furtherance of the Agreement, worked approximately ninety hours per week over the course of six to seven days per week. (Guzzi Decl. ¶ 10; Defs.' Mot. Summ. J., Ex. B, Resp. to Interrogatory No. 9.) The total compensation he received over the almost two years he worked for USBP was approximately $40, 000. (Guzzi Decl. ¶ 11.) Plaintiff claims that he accompanied Morano, on behalf of USBP, on at least four business trips-paid for by Morano and/or USBP entirely-for the purpose of negotiating contracts to sell Medicare insurance policies with companies such as Conseco, Pacificare, and Humana. (Guzzi Decl. ¶¶ 12-16; Gladstone Dep. 31:9-24, 48:25-49:9; Morano Dep. 66:24-67:9.) At these meetings, Morano introduced Plaintiff as his "partner." (Guzzi Decl. ¶ 14.) Gladstone clarified that, although Morano did, on occasion, introduce Plaintiff and himself as his partners, "[i]t was just a way of introduction, nothing more than that." (Gladstone Dep. 45:25-46:17.)

C. Plaintiff's Securing of High Level Contracts

According to Plaintiff, from April 2005 to March 2007, he was involved in negotiating and closing contracts to sell insurance policies with, inter alia, Humana, Conseco, and Pacificare. (Defs.' Mot. Summ. J., Ex. B, Resp. to Interrogatory No. 10.) The evidence as to each of these alleged contracts, however, is in dispute.

1. Humana

With respect to Humana, Plaintiff stated in his Responses to Defendants' Interrogatories that he secured the Humana contract in approximately August/September 2005. (Defs.' Mot. Summ. J., Ex. B., Response to Interrogatory No. 5.) The contract was initially to sell Medicare Advantage plans, but eventually evolved into general health insurance as well. (Id.) Plaintiff claimed that he "[u]sed [his] credentials, experience and reputation within the insurance industry to facilitate meetings and negotiations between U.S. Benefit Partners, LLC and Humana and participated in said meetings and negotiations on behalf of U.S. Benefit Partners, LLC." (Id.) According to Plaintiff, he dealt with Jimmy Wenger at Humana, as well as other individuals whose identity he could not recall. (Id.) Plaintiff was unable to provide a value for each contract. (Id.)

The other evidence of record, however, tells a different story. Mr. Gladstone could not remember whether Plaintiff recruited Humana and knew only that he was "part of the meetings with them." (Gladstone Dep. 49:14-51:18.) Defendant Morano unequivocally attested to the fact that "Plaintiff did not procure a contract between USBP or myself and Humana." (Murano Decl. ¶ 21.) Finally, James Wenger, Plaintiff's purported contact at Humana, indicated that prior to his dealings with Mr. Morano and USBP in 2006, he had never met Plaintiff. (Defs.' Mot. Summ. J., Ex. F, Affidavit of James Wenger ("Wenger Aff.") ¶ 6, Oct. 18, 2012.) He went on to explain that he met Peter Guzzi through Morano and USBP sometime in Tampa, Florida in 2006, and that Morano did not introduce Guzzi as his partner. (Id. ¶¶ 6-7.) Additionally, he averred that (1) he had no idea what type of relationship Guzzi had with Morano and USBP; (2) he did not believe Guzzi and Morano to have been partners; and (3) he had no idea whether Guzzi had any ownership interest in USBP and had no reason to believe Guzzi ever had an ownership interest in USBP. (Id. ¶¶ 7-12.) Finally, Wenger indicated that Humana decided to work with USBP based upon Morano's reputation in the insurance industry. (Id. ¶ 5.)

2. Conseco and Pacific Life

As to Conseco, Plaintiff again stated in his Responses to Interrogatories that he secured the USBP Field Marketing Organization contract with Conseco sometime in 2006. (Defs.' Mot. Summ. J., Ex. B, Resp. to Interrogatory No. 10.) He indicated that he "[u]sed [his] credentials, experience and reputation within the insurance industry to facilitate meetings and negotiations between U.S. Benefit Partners, LLC and Conseco and participated in said meetings and negotiations on behalf of U.S. Benefit Partners, LLC." (Id.) Notably, however, Plaintiff could not recall his contact person's name or with whom he negotiated. (Id.) Nor could he value the contract. (Id.) Mr. Gladstone confirmed that Plaintiff was at a meeting where USBP and Conseco discussed a marketing contract. (Gladstone Dep. 48:29-49:9.)

As to Pacific Life, Plaintiff gave almost identical responses. He remarked that he used his "credentials, experience and reputation within the insurance industry" to facilitate the meetings and negotiations that resulted in the Field Marketing Organization contract with Pacific Life in July 2005. (Defs.' Mot. Summ. J., Ex. B, Resp. to Interrogatory No. 10.) Again, however, he was unable to provide a contact person's name or a contract value. (Id.)

Defendant Morano, on the other hand, unequivocally averred in his Declaration that Plaintiff did not procure a contract between USBP or himself and Conseco or Pacific Life. (Morano Decl. ¶¶ 20, 22, 23.) In fact, at his deposition, Morano stated that USBP never had a Field Marketing Organization contract with Conseco and that he himself procured the contract with Pacific Life without any involvement from Plaintiff. (Morano Dep. 65:5-22.) According to Defendants, there is no other record evidence that Plaintiff had any significant role in securing the Conseco or Pacific Life contracts.

D. Securing of Distribution Channels

Plaintiff also alleges that from April 2005 to March 2007, he recruited multiple agents and distribution channels for the purposes of selling insurance policies through USBP, including Brian Fillweber of Inner Circle Marketing, Stacey Price, and James Read of JRM Benefit Consultants, LLC. (Defs.' Mot. Summ. J., Ex. B., Resp. to Interrogatory No. 11, Guzzi Dep. 63:5-20.)

1. Brian Fillweber

With respect to Brian Fillweber, Plaintiff claims that he established a relationship with him at the end of 2006/beginning of 2007. (Defs.' Mot. Summ. J., Ex. B., Resp. to Interrogatory No. 11.) Plaintiff worked to get Fillweber and his company Inner Circle Marketing to use their marketing platform to promote USBP's Medicare Advantage Products. (Id.) According to Plaintiff, Mr. Fillweber procured approximately 8, 000 new applicants, for which USBP was to receive $550 commission for each new applicant, plus $225 per annual renewal for up to ten years, equating to approximately $4, 400, 000 in commissions for new applicants and approximately $18, 000, 000 in renewal commissions. (Id.) Notably, both Mr. Gladstone and Mr. Murano admitted that Plaintiff introduced Mr. Fillweber to Morano. (Gladstone Dep. 36:16-21, 50:15-18; Morano Dep. 22:12-23:5.)

Again, however, Defendants' body of evidence presents a conflicting versions of events. Brian Fillweber's own Declaration indicated that, between 2002 and 2006, he had recruited Plaintiff and subsequently appointed him to work underneath him in his hierarchy of insurance agents[3] to sell primarily under-65 life insurance and related products. (Defs.' Mot. Summ. J., Ex. G, Declaration of Brian Fillweber ("Fillweber Decl.") ¶ 3, Jan. 31, 2013.) Sometime during that period, Plaintiff recruited Morano to work underneath him within the hierarchy for insurance agencies to sell the same types of products. (Id. ¶ 4.) Fillweber met Morano in late 2006 or early 2007. (Id. ¶ 5.) Fillweber did not know whether Morano had been appointed in Plaintiff's downline either individually or through his company USBP. (Id. ¶ 6.) Likewise, Fillweber indicated that he was not aware and did not have any specific knowledge that Plaintiff had an ownership interest in USBP. (Id. ¶ 7.) Fillweber went on to state that neither he nor any of his companies, including Inner Circle Marketing, LLC and Safeway Financial, LLC, were ever appointed under either USBP or Morano to sell health insurance, except to the extent of the Medicare, LLC relationship, where Safeway Financial, LLC, was contracted under Mr. Morano with the Wellpoint family of companies to sell only Medicare insurance products. (Id. ¶¶ 11-12.) Fillweber never worked individually, or through any other company, to sell and/or market health insurance products, other than Medicare Insurance Products, on behalf of Morano or USBP. (Id. ¶¶ 13-14.) Crucially, Mr. Fillweber unequivocally stated that Plaintiff "had no role in the procurement of the relationship entered into between Mr. Morano and myself in November 2007, which resulted in the formation of 1Medicare, LLC." (Id. ¶ 15.)

2. Stacey Price and James Read

With respect to the two other identified distribution channels, Stacey Price and James Read of JRM benefits Consultants ("JRM"), Plaintiff claimed to have established these relationships in May 2005 and November 2005-February 2006 respectively. (Defs.' Mot. Summ. J., Ex. B., Resp. to Interrogatory No. 11.) With respect to both, he explained that these channels were procured so that they would use their marketing platforms to promote USBP's Medicare Advantage Products. (Id.) Gladstone believed that Plaintiff may have recruited Ms. Price and Mr. Read, and Mr. Fillweber because those were Plaintiff's contacts, but he was not entirely sure. (Gladstone Dep. 49:18-50:2.) Morano also admitted that Stacey Price was an agent that Plaintiff recruited and that his company may have received commissions or "overrides" from her work. (Morano Dep. 68:19-69:7, 104:17-19.)

As before, however, Morano's Declaration flatly denied that Plaintiff produced a distribution channel with Stacey Price or with James Read of JRM on behalf of either USBP or himself. (Morano Decl. ¶¶ 25-26.) He also asserted that USBP did not benefit from JRM Benefit Consultants, LLC or from Stacey Price as a result of Plaintiff's efforts. (Id. ¶¶ 28-32.)

E. Plaintiff's Entitlement to Shared Profit of USBP

In his Amended Complaint, Plaintiff alleges that he generated significant revenue for Defendants, but was not compensated pursuant to the alleged oral contract between himself and Morano/USBP. (Am. Compl. ¶¶ 23.) According to that Amended Complaint, Defendants wrongfully terminated that contract in March 2007, at which time he was owed commissions and/or salary in excess of $175, 000. (Id. ¶¶ 20, 25.) In support of this alleged agreement, Plaintiff notes that USBP issued a 1099 form to Plaintiff for at least the year of 2005 indicating that there was some level of agreement. (Pl.'s Opp'n Summ. J., Ex. E.) Defendants also admitted that Plaintiff was an independent contractor that worked for USBP, which, according to Plaintiff, reflects some type of a contract and agreement between himself and USBP. ( Id., Ex. J, Resp. to Interrogatory No. 10.) Plaintiff goes on to note that USBP's profits increased significantly between 2005 and 2006, due in part to Plaintiff's generation of sales for Medicare Advantage. ( Id., Ex. E.) When asked about the basis for his estimated income, however, Plaintiff indicated that the question was difficult to answer because he did not directly sell products, but rather worked at getting the agents aboard.[4] (Guzzi Dep. 94:2-96:24.)

In response, Defendants contend that Plaintiff provides no documentation or proof as to the amount of money allegedly owed to Plaintiff and the purpose for which it is owed. They claim that there is no record evidence demonstrating commission structures, commission distribution agreements, contracts with carriers, amounts paid or received for insurance contracts, renewals, or policies written or cancelled. (Defs.' Mem. Supp. Mot. Summ. J. 16.) As Plaintiff admitted in his deposition, his entire work history from 2002 to 2012-other than a brief six-month period with a different organization where he received W-2 income-resulted in only 1099 income. (Guzzi Dep. 39:9-18, 41:3-12.) He also emphasized that the money he got from USBP was not salary, such as ...


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