Bankers Life and Casualty Company v. Laycock et al
Filing
20
ORDER Granting in Part and Denying in Part Motion for Temporary Restraining Order. This case is set for a preliminary injunction hearing on Tuesday, March 13, 2018, at 8:00 a.m. in Courtroom A601 at the Alfred A. Arraj Courthouse, 901 19th Street, Denver, Colorado. ORDERED by Judge Raymond P. Moore on 2/26/2018. (cthom, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Raymond P. Moore
Civil Action No. 18-cv-00459-RM
BANKERS LIFE AND CASUALTY COMPANY,
Plaintiff,
v.
ROBERT LAYCOCK,
MATTHEW (“MAX”) HALL,
JESSIE JANSEN,
OLGA ASCIONE,
KRISTEN RENNERFELDT,
JETTA LESTER-GARCIA, and
REX YOUNG,
Defendants.
______________________________________________________________________________
TEMPORARY RESTRAINING ORDER
______________________________________________________________________________
This matter is before the Court on Plaintiff Bankers Life and Casualty Company’s
Motion for Temporary Restraining Order, with supporting documentation (collectively, the
“Motion”) (ECF No. 7), seeking an ex parte restraining order against Defendants, all of whom
are Plaintiff’s former employees or agents (i.e., independent contractors). After being fully
advised, the Motion is GRANTED in part and DENIED in part as stated herein, for the
reasons stated herein.
I.
BACKGROUND
The following is gleaned from the Verified Complaint and Motion. Plaintiff allegedly
provides seniors with various insurance and financial products, such as long-term care insurance,
life annuities, and Medicare Supplement Insurance. Plaintiff uses both employees and agents
(collectively, “employees”) to provide its products to customers/policyholders. Plaintiff’s
Complaint, and request for temporary injunctive relief, are against seven former employees.
Plaintiff asserts Defendants Laycock, Hall, Jansen, Ascione, Rennerfeldt, and LesterGarcia (collectively, “Laycock Defendants”) recently (between October 3, 2017 and January 9,
2018) terminated their employment relationship1 with Plaintiff to work for a competitor. But,
before they did so, the Laycock Defendants allegedly copied and/or removed policyholder
information which contains confidential information and trade secrets belonging to Plaintiff. In
addition, after they terminated their employment, Defendants Jansen and Ascione allegedly
represented that they were still agents for Plaintiff when they were not. This is also the case as to
Defendant Rex Young. Although Defendant Young’s employment relationship with Plaintiff
terminated in May 2013, he allegedly recently2 represented he was still Plaintiff’s agent to one of
Plaintiff’s customers.
Based on Defendants’ alleged conduct, Plaintiff asserts the following claims for relief:
(1) Breach of Contract – First, Second, Third, Fourth, Fifth, and Sixth Claims for Relief
against Defendants Laycock, Hall, Jansen, Ascione, Rennerfeldt, and Lester-Garcia,
respectively;
(2) Misappropriation of Trade Secrets under the Defend Trade Secrets Act of 2016
(“DTSA”) – Seventh Claim for Relief against Laycock Defendants;
(3) Misappropriation of Trade Secrets under the Colorado Uniform Trade Secrets Act
(“CUTSA”) – Eighth Claim for Relief against Laycock Defendants;
(4) Conversion – Ninth Claim for Relief against Defendants Hall and Jansen; and
1
Although some Defendants were agents and, thus, had agency relationships, such distinctions are immaterial for
purposes of the Motion and this Order; therefore, the Court will refer to both relationships as “employment
relationships.”
2
An exact date has not been provided, but it was apparently after November 30, 2017. (Verified Complaint, ¶¶40,
44, 55, 57.)
2
(5) Violation of Colorado Consumer Protection Act (“CCPA”) – Tenth Claim for Relief
against Defendants Jansen, Ascione, and Young.
Plaintiff’s Complaint asserts various forms of relief is warranted, including the issuance of a
temporary restraining order; preliminary injunctive relief; permanent injunctive relief (against
Defendant Young only); the return of all information taken/copied; the identification of all
persons to whom such information was shared; the submission of electronic devices for forensic
inspection; and the award of attorney’s fees (except as to Defendant Young).
II.
LEGAL STANDARD
Pursuant to Fed. R. Civ. P. 65(b)(1), “the court may issue a temporary restraining order
without written or oral notice to the adverse party or its attorney only if: (A) specific facts in an
affidavit or a verified complaint clearly show that immediate and irreparable injury, loss, or
damage will result to the movant before the adverse party can be heard in opposition; and (B) the
movant’s attorney certifies in writing any efforts made to give notice and the reasons why it
should not be required.” In addition, Local Rule 65.1 also requires a certificate of counsel or an
unrepresented party which addresses providing notice, and the provision of copies of filings, to
opposing counsel and any unrepresented adverse party. D.C.COLO.LCivR 65.1.
Case law also sets forth certain requirements which must be met before injunctive relief
may be had. Specifically, in order to obtain relief, the plaintiff must establish: “‘(1) a substantial
likelihood of prevailing on the merits; (2) irreparable harm unless the injunction is issued; (3)
that the threatened injury outweighs the harm that the preliminary injunction may cause the
opposing party; and (4) that the injunction, if issued, will not adversely affect the public
interest.’” Diné Citizens Against Ruining our Environment v. Jewell, 839 F.3d 1276, 1281 (10th
Cir. 2016) (quoting Davis v. Mineta, 302 F.3d 1104, 1111 (10th Cir. 2002)); Watts v. Karmichael
3
Family, LLC, No. 07-cv-00638-MSK-MJW, 2007 WL 1059051, at *1 (D. Colo. Apr. 4, 2007)
(unpublished) (motion for temporary restraining order is examined under same standards
applicable to requests for preliminary injunction). The Tenth Circuit no longer applies a
“modified test”3 for determining temporary or preliminary injunctive relief, finding it
inconsistent with the Supreme Court’s decision in Winter v. Natural Resources Defense Council,
Inc., 555 U.S. 7 (2008). Diné Citizens, 839 F.3d at 1282 (deciding preliminary injunction).
“Because a preliminary injunction is an extraordinary remedy, the movant’s right to relief must
be clear and unequivocal.” Diné Citizens, 839 F.3d at 1281 (citation and quotation marks
omitted).4
In addition, as to the evidence which the courts consider on a motion for injunctive relief,
the Tenth Circuit has stated:
We [the Tenth Circuit] must be mindful…, as the Supreme Court has cautioned,
that “a preliminary injunction is customarily granted on the basis of procedures
that are less formal and evidence that is less complete than in a trial on the
merits.” University of Texas v. Camenisch, 451 U.S. 390, 395, 101 S. Ct. 1830,
68 L. Ed. 2d 175 (1981). A hearing for preliminary injunction is generally a
restricted proceeding, often conducted under pressured time constraints, on
limited evidence and expedited briefing schedules. The Federal Rules of
Evidence do not apply to preliminary injunction hearings.
Heideman v. South Salt Lake City, 348 F.3d 1182, 1188 (10th Cir. 2003).
3
Under the “modified test,” when the other three requirements for preliminary injunctive relief tip strongly in the
movant’s favor, the test is modified so that the movant may meet the likelihood of success on the merits requirement
“‘by showing that questions going to the merits are so serious, substantial, difficult, and doubtful as to make the
issue ripe for litigation and deserving of more deliberate investigation.’” Diné Citizens, 839 F.3d at 1282 (quoting
Davis, 302 F.3d at 1111).
4
Even if any of Plaintiff’s request falls within the three types of disfavored injunctions, and requires a heightened
showing, the Court finds such showing has been made in this case as to Laycock Defendants. See New Mexico
Dep’t of Game & Fish v. U.S. Dep’t of Interior, 854 F.3d 1236, 1246 n.15 (10th Cir. 2017).
4
III.
ANALYSIS
A. Requirements of Rule 65(b)(1)(B) and Local Rule 65.1
As stated, Plaintiff’s Complaint is verified and its Motion is supported by affidavits and
other materials. In addition, Plaintiff submitted a proposed order, and certified that service, or
attempted service, of the Complaint and Motion has been made on Defendants. Thus, Plaintiff
has shown the requirements of Rule 65(b)(1)(B) and the Local Rule 65.1 have been met. The
issue then is whether Plaintiff has shown the four requirements for temporary injunctive relief
have been met.
B. Injunctive Relief – the Return of Documents and Information
1. Substantial Likelihood of Success on the Merits
Plaintiff asserts it will likely succeed on the merits of all of its claims as against Laycock
Defendants. However, for the purposes of the Motion, the Court need only decide whether
Plaintiff has shown a substantial likelihood of success on the merits on one of its claims against
each such Defendant which affords Plaintiff the relief it currently seeks. See Life Time Fitness,
Inc. v. DeCelles, 854 F. Supp. 2d 690, 695 (D. Minn. 2012); Covertech Fabricating, Inc. v. TVM
Bldg. Prods., Inc., 2017 WL 4863208, at *2 n.1 (W.D. Pa. Oct. 26, 2017). Thus, the Court
examines this requirement as to Plaintiff’s first six claims based on breach of contract, i.e., the
alleged breach by Laycock Defendants of their respective Bankers Life and Casualty Company
Agent Agreements (ECF Nos. 1-7 through 1-12, Exhibits 7-12).5
In order to establish a claim for breach of contract, Plaintiff must show: (1) the existence
of a contract; (2) its performance or justification for nonperformance; (3) defendant’s failure to
5
The Laycock Defendants also entered into Arbitration Agreements identical in all material respects. (ECF Nos. 1-1
through 1-6.) On this record, Plaintiff has sufficiently shown that, notwithstanding the agreement to arbitrate,
pursuant to paragraph 7 of each agreement, either party thereto “may file in a court of competent jurisdiction a claim
for temporary, preliminary or emergency injunctive relief solely to preserve the status quo prior to and/or in aid of
arbitration.” (E.g., ECF No. 1-1, page 6, ¶7.1.) This claim for injunctive relief “shall be filed” in state or federal
district court where the agent last worked if the parties’ relationship has terminated. (E.g., ECF No. 1-1, ¶7.2.)
5
perform; and (4) resulting damages to plaintiff. Saturn Systems, Inc. v. Militare, 252 P.3d 516,
529 (Colo. App. 2011) (citing W. Distrib. Co. v. Diodosio, 841 P.2d 1053, 1058 (Colo. 1992)).
In this case, Plaintiff has made the requisite showing. The current record shows Laycock
Defendants are each parties to an Agent Agreement, with terms that survive its termination.
Such terms include Laycock Defendants’ obligation “to return all such information6 (including
copies) to the Company [Plaintiff] immediately upon termination of this Agreement, regardless
of the format of such information.” (ECF Nos. 1-7 through 1-12, page 11, ¶24.) Plaintiff has
presented sufficient evidence to support a substantial likelihood of success on the allegations that
Laycock Defendants took such information without returning it. Finally, Plaintiff’s showing is
also sufficient as to their alleged damages, e.g., the removal of Plaintiff’s confidential
information concerning its customers/policyholders, which information includes such matters as
customers’ personal identifiable information or “PII.”
2. Irreparable Harm
A plaintiff seeking injunctive relief “‘must demonstrate a significant risk that he or she
will experience harm that cannot be compensated after the fact by money damages.’” New
Mexico Dep’t of Game & Fish v. United States Dep’t of the Interior, 854 F.3d 1236, 1250 (10th
Cir. 2017) (quoting Fish v. Kobach, 840 F.3d 710, 751–52 (10th Cir. 2016)). “[S]imple
economic loss usually does not, in and of itself, constitute irreparable harm; such losses are
compensable by monetary damages.” Heideman, 348 F.3d at 1189. Moreover, the “harm must
be both certain and great, and not merely serious or substantial.” New Mexico Dep’t of Game &
6
“Such information” is Plaintiff’s “Confidential Information,” which is broadly defined to “include[], without
limitation, information relating to research, developments, methods, processes, procedures, improvements, ‘Knowhow’, compilations, market research, marketing techniques and plans, business plans and strategies, PII [Personal
Identifiable Information], and all other information related to prospects, applicants and past and present insurance
customers, price lists, pricing policies and financial information or other business or technical information and
materials, in oral, demonstrative, written, graphic or machine-readable form, which is unpublished, not available to
the general public or trade, and which is maintained as confidential and proprietary information by the Company for
regulatory, customer relations, or competitive reasons.” (ECF Nos. 1-7 through 1-12, page 11, ¶24.)
6
Fish, 854 F.3d at 1250 (quotations marks and citation omitted). Here, the Court finds irreparable
harm has been sufficiently shown. Based on the information which Plaintiff asserts Laycock
Defendants removed, such information includes not only Plaintiff’s confidential customer lists
but also Plaintiff’s customers’ PII which such customers expect to be kept confidential and
protected from disclosure to third parties.
3. Balance of Harms and Public Interest
The Court finds that the balance of hardships weighs in Plaintiff’s favor. The temporary
injunctive relief provided requires Laycock Defendants to return what is not theirs, and to
comply with what they are contractually obligated to do under their respective Agent
Agreements. On this record, any hardship to Laycock Defendants to return and cease using such
information would not outweigh the harm to Plaintiff if Laycock Defendants were allowed to
continue to retain and/or use such information. For these same reasons, the Court finds that
temporary injunctive relief will not be contrary to the public interest.
C. Injunctive Relief – False Statements to Plaintiff’s Policyholders
The Tenth Claim is against Defendants Jansen, Ascione, and Young (collectively,
“CCPA Defendants”). As it is the only claim alleged against Defendant Young, Plaintiff must
establish a likelihood of success on this claim as well in order to obtain relief as to him.
1. No Substantial Likelihood of Success on the Merits
To establish a deceptive-trade-practices claim under the CCPA, a plaintiff must show:
(1) that the defendant engaged in an unfair or deceptive trade practice;
(2) that the challenged practice occurred in the course of defendant’s business,
vocation, or occupation;
(3) that it significantly impacts the public as actual or potential consumers of the
defendant’s goods, services, or property;
(4) that the plaintiff suffered injury in fact to a legally protected interest; and
(5) that the challenged practice caused the plaintiff’s injury.
7
R.W. Beck, Inc. v. E3 Consulting, LLC, 577 F.3d 1133, 1149 (10th Cir. 2009) (quoting Rhino
Linings USA, Inc. v. Rocky Mountain Rhino Lining, Inc., 62 P.3d 142, 146–47 (Colo. 2003)). To
determine whether a challenged practice significantly impacts the public, the Colorado courts
consider, among other things, “‘the number of consumers directly affected by the challenged
practice.’” R.W. Beck, Inc., 577 F.3d at 1149 (quoting Rhino Linings USA, Inc., 62 P.3d at 149).
Here, Plaintiff alleges only three consumers have been impacted, see Complaint, ¶¶44, 48, 56-7,
but has not shown that this is sufficient under the CCPA. Further, Plaintiff relies on allegations
of consumers cancelling their policies to establish injury and causation. However, with one
exception,7 such allegations are made in conjunction with assertions of Laycock Defendants
(which does not include Defendant Young) using policyholder information to persuade
policyholders to cancel policies, rather than with assertions of CCPA Defendants making false
representations of association with Plaintiff. (Cf. Complaint, ¶¶ 39, 43, 47, 51, 54 with ¶¶44, 48,
56-7.) Accordingly, Plaintiff fails to establish a substantial likelihood of success as to its CCPA
claim.8
2. Other Requirements for Injunctive Relief
In light of the Court’s finding that Plaintiff fails to establish a likelihood of success, it
need not address the remaining three prerequisites for temporary injunctive relief under the
CCPA claim. See Diné Citizens, 839 F.3d at 1285.
D. Relief Requested
Plaintiff requests several forms of relief. First, Plaintiff requests attorney’s fees from
Laycock Defendants in connection with the Motion, relying on three sources: (a) the Agent
7
The one exception is with respect to Defendant Ascione. (Complaint, ¶48.)
Even though Plaintiff fails to establish this claim, it does not impact relief as against Laycock Defendants in light
of the Court’s findings in favor of Plaintiff as to the First through Sixth Claims for Relief as to these particular
Defendants.
8
8
Agreements; (b) the CTSA; and (b) the DTSA. On this record, the Court finds Plaintiff has not
shown any of such sources affords the requested relief, even if the Court decided whether
Plaintiff has established a substantial likelihood of success on the merits of the CUTSA and/or
the DTSA claims. See ECF No. 1-7, Agent Agreement, ¶28 (providing indemnification for
claims brought by third-parties, and for “connected expenses” as a result of Agent’s performance
in connection “with work performed pursuant to this Agreement”); Colo. Rev. Stat. § 7-74-105
(court has discretion to award fees to prevailing party where “a motion to terminate an injunction
is made or resisted in bad faith”); 18 U.S.C. § 1836(b)(3)(D) (court has discretion to award fees
to prevailing party where “a motion to terminate an injunction is made or opposed in bad faith”).
Next, Plaintiff requests from each Laycock Defendant: (a) the return of all copies of
policyholder information, and any documents and summaries containing such information; (b) a
signed declaration identifying all third parties with whom he/she has shared such policyholder
information; and (c) to temporarily cease and desist from using any such information. On this
record, the Court finds such relief is warranted and within the scope of the breach of contract
claims.
Third, Plaintiff requests from Laycock Defendants the submission of all electronic
devices he/she has used since April 1, 2017, for a computer forensic inspection to confirm
deletion of all information. At this juncture, the Court finds such request is more properly
addressed within the scope of expedited discovery to be had.
Finally, Plaintiff requests that Defendants Jansen, Ascione, and Young9 each be ordered
to cease and desist from stating or suggesting to policyholders or prospective policyholders that
9
The proposed Order also includes Defendant Lester-Garcia but there are no allegations she made such
representations, and the CCPA Claim is not directed against her. (Complaint, ¶¶52-54.)
9
he/she represents Plaintiff. As stated, Plaintiff has not shown a substantial likelihood of success
on the merits of the CCPA claim. Accordingly, such relief may not be had.
IV.
CONCLUSION
Based on the foregoing, it is
ORDERED that Plaintiff’s Motion for Temporary Restraining Order (ECF No. 7) is
GRANTED in Part in that Defendants Robert Laycock, Matthew Hall, Jessie Jansen, Olga
Ascione, Kristen Rennerfeldt, and Jetta Lester-Garcia are temporarily restrained as follows:
(1) Defendants Laycock, Hall, Jansen, Ascione, Rennerfeldt, and Lester-Garcia shall
return all copies of policyholder information each Defendant removed or copied from
Plaintiff Bankers Life, and any documents or summaries containing such information,
within three business days of the effective date of this Order;
(2) Defendants Laycock, Hall, Jansen, Ascione, Rennerfeldt, and Lester-Garcia shall
submit individual, signed declarations, identifying all third parties with whom the
Defendant shared copies of policyholder information each Defendant removed or
copied from Bankers Life, and any documents or summaries containing such
information, within three business days of the effective date of this Order;
(3) Defendants Laycock, Hall, Jansen, Ascione, Rennerfeldt, and Lester-Garcia shall
cease and desist from using copies of policyholder information each Defendant
removed or copied from Bankers Life, and any documents or summaries containing
such information, from the effective date of this Order; and
(4) Defendants Hall and Jansen are ordered to return all physical files they removed
from Bankers Life, along with copies of the same, within three business days of the
effective date of this Order; and it is
10
FURTHER ORDERED that Plaintiff’s Motion for Temporary Restraining Order (ECF
No. 7) is DENIED in Part in that the Motion is DENIED as to Defendant Rex Young; and it is
FURTHER ORDERED that this Order be and is hereby conditioned upon Plaintiff's
filing with the Clerk of this Court an undertaking in the form of a surety bond in the amount of
$30,000.00 no later than 4:30 p.m. on Tuesday, February 27, 2018, to secure the payment of
such costs and damages as may be sustained by any party who is found to be wrongfully
restrained hereby. This Order shall only become effective upon the posting of such bond;
and it is
FURTHER ORDERED that Plaintiff immediately serve a copy of this Order on
Defendants by overnight mail to their last known address and by hand delivery simultaneously,
and shall file a certificate of service with the court within two (2) business days of such service;
and it is
FURTHER ORDERED that the parties (except Defendant Young) are ordered to confer
on an expedited discovery schedule to be presented to the Court within seven (7) days of the
effective date of this Order; and it is
FURTHER ORDERED that pursuant to Fed. R. Civ. P. 65(b)(4), any Defendant
restrained may apply to this Court to dissolve or modify this Order on two (2) days’ notice, or
such shorter notice as this Court may allow, but no such application shall serve to suspend this
Order once effective or stay its terms unless otherwise ordered by this Court; and it is
FURTHER ORDERED that this Temporary Restraining Order shall remain in effect for
fourteen (14) days from its effective date, unless it is otherwise modified by the Court;10 and it is
10
The parties are advised that the Court has a criminal trial beginning the week of March 12, 2018. Therefore, if
Plaintiff seeks to extend this Order or if the adverse parties consent to an extension of this Order, they shall notify
the Court as soon as possible but no later than 12:00 p.m. (noon) on Thursday, March 8, 2018.
11
FURTHER ORDERED that this case is set for a preliminary injunction hearing on
Tuesday, March 13, 2018, at 8:00 a.m. in Courtroom A601 at the Alfred A. Arraj Courthouse,
901 19th Street, Denver, Colorado.
DATED this 26th day of February, 2018 at 4:50 p.m.
BY THE COURT:
____________________________________
RAYMOND P. MOORE
United States District Judge
12
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?