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Lundgren v. AmeriStar Credit Solutions, Inc.

United States District Court, W.D. Pennsylvania

August 18, 2014


For GARY W. LUNDGREN, Plaintiff: Daniel W. Ernsberger, LEAD ATTORNEY, Behrend & Ernsberger, Pittsburgh, PA.

For AMERISTAR CREDIT SOLUTIONS INC, trading and doing business as AMERISTAR TAX CENTERS, Defendant: Michael E. Rowan, LEAD ATTORNEY, Shumaker Williams, P.C., Harrisburg, PA.

Page 544



I. Introduction

This matter comes before the court upon a motion for summary judgment (ECF No. 19) filed by Defendant Ameristar Credit Solutions, Inc. Plaintiff, Gary Lundgren, filed a brief in opposition (ECF No. 25) and Defendant filed a reply (ECF No. 29). For the reasons that follow, Defendant's Motion is granted in part as to Plaintiff's claims under 15 U.S.C. § 1125 (Counts I and II). Further, the Court declines to exercise jurisdiction over Plaintiff's remaining state law claims of publicly placing a person in a false light, appropriation of Plaintiff's name and likeness, wrongful discharge for reasons against public policy, and breach of implied contract of employment (Counts III, IV, V and VI).

II. Jurisdiction and Venue

The Court has jurisdiction over Plaintiff's claims pursuant to 28 U.S.C. § 1331 and 28 U.S.C. § 1367. Venue is proper pursuant to 28 U.S.C. § 1391(b).

III. Factual Background[1]

Defendant is a debt settlement and tax resolution business located in Johnstown, Pennsylvania. (ECF No. 21 at ¶ 1). Defendant was previously in the mortgage service industry and began offering tax resolution services in July 2010. (ECF No. 25-3 at 2). Plaintiff is an " enrolled agent" with the Internal Revenue Service (" IRS" ). ( Id. at ¶ 2). An enrolled agent is a person authorized to represent taxpayers before the IRS by either passing a three-part comprehensive IRS test covering individual and business tax returns, or through experience as a former IRS agent. ( Id. at ¶ 2 n.1). Prior to his employment with Defendant, Plaintiff was employed by Freedom Tax Relief located in Sacramento, California. (ECF No. 32-2 at 8). According to Plaintiff, he was approached by Vice President Scott Geisel (" Geisel" ), via email regarding possible employment opportunities with Defendant in response to information Plaintiff had posted with an online employment service. ( Id. at 9-10). Following a telephonic interview with Geisel and President David Bassett (" Bassett" ), Plaintiff was offered employment as an enrolled agent with Defendant, and accepted that offer on July 16, 2010. (ECF No. 22-3 at 2; ECF No. 32-2 at 9-10).

On July 18, 2010, Plaintiff executed various documents detailing the terms and conditions of his employment with Defendant (" Employment Agreement" ). (ECF No. 22-4 at 2-24). Plaintiff acknowledged that he read and understood the documents before signing them. (ECF No. 32-2 at 11). Among other things, Plaintiff's Employment Agreement provided:

Employee acknowledges that Employee's employment is " at will" , subject to applicable law, and that either Employer or Employee may terminate employment at any time, with or without notice, for any reason or no reasons whatsoever. Nothing in this Agreement shall constitute a promise of employment for any particular duration or rate of pay.

(ECF No. 22-4 at 7). The Employment Agreement further included a covenant whereby Plaintiff was precluded from engaging, either directly or indirectly, in competition with, or soliciting any customer,

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client or account of Defendant. (ECF No. 22-4 at 6).

According to Plaintiff, the Employment Agreement was not the entire agreement between the parties. At the time Plaintiff began working for Defendant, he had his own tax relief business servicing six to eight clients. (ECF No. 32-2 at 56). Plaintiff had operated this business as a sole proprietorship since 1991, and, in connection with this business, Plaintiff maintained a website and a PayPal account through which he accepted payments for his services.[2] ( Id. at 56-57). Plaintiff maintains that Bassett agreed that he could continue to serve his own clients. (ECF No. 26 at 1). However, Bassett testified by deposition as follows:

Q. And when he was hired, did you expect him to give up his customer referrals from past clients?
A. Yes, of course. If he's coming to work for us, we would assume he's not running his own --. The way he explained it to me was that he had a few clients that he was finishing up. And I said, I'm fine with you finishing up a few clients; what is that going to take, a few months, six months, go ahead and finish them up, that's fine, but not to take on new clients or to continue to solicit new business or run a competing business with ours.
Q. So you were aware that he had an ongoing business with clients at the time he was hired?
A. No, I was not. . . . I was aware that he had a business that he previously ran that he had to finish up. I was not aware that he was going to relocate to Pennsylvania and advertise and continue to run it. That would be in direct violation to what we agreed to. Why would I be okay with that?
* * *
Q. And so when you first interviewed him, you were aware that he had some clients; is that right?
A. I believe the way he said it to me was he had two or three or four clients he had to finish up.
Q. And what did you tell him?
A. Go ahead and finish them up, there's no reason to drop the ball on them.

(ECF No. 22-1 at 9-11). Plaintiff continued to maintain his own business while employed by Defendant, but did not acquire any new clients between August 2010 and June 2012. (ECF No. 32-2 at 58).

Plaintiff moved from California to Johnstown, Pennsylvania and began working for Defendant on or about August 16, 2010. (ECF No. 21 at ¶ 8). At the time Plaintiff began his employment with Defendant, he was the only enrolled agent, although additional enrolled agents were subsequently hired. (ECF No. 32-2 at 14). In addition to the enrolled agents, case workers were also hired to process case information for enrolled agents to review. ( Id. at 17-18). When Plaintiff first started with Defendant, he was responsible for approximately 40 case files, and at one point had responsibility for 183 case files. ( Id. at 20-21). Plaintiff testified that there was an average expectation to " turn over" or close a file within a 12-month period, although some cases took several months to process while others took several years. ( Id. at 21).

In 2011, Plaintiff was asked if he was interested in participating in Defendant's ...

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