Vazirani et al v. Heitz
Filing
143
MEMORANDUM AND ORDER granting 121 Motion for Summary Judgment. Signed by District Judge Monti L. Belot on 6/27/2012. (alm)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
ANIL VAZIRANI and
SECURED FINANCIAL SOLUTIONS, LLC,
Plaintiffs,
v.
MARK V. HEITZ and
JORDAN CANFIELD,
Defendants.
VAZIRANI & ASSOCIATES
FINANCIAL, LLC,
Plaintiff,
v.
MARK V. HEITZ and
JORDAN CANFIELD,
Defendants.
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CIVIL ACTION
No.
09-1311-MLB
CIVIL ACTION
No.
11-1032-MLB
MEMORANDUM AND ORDER
Before the court are the following:
1.
Defendants’ motion for summary judgment (Doc. 121);
2.
Plaintiffs’ response (Doc. 132); and
3.
Defendant’s reply (Doc. 137).
Undisputed Facts
The following undisputed facts were in existence during the
relevant time period:
Individuals
Anil Vazirani was an insurance agent.
Vazirani contracted as an
independent agent, also known as a producer, with life insurers to
sell life insurance and annuity products of such insurers.
Mark Heitz served as President of Aviva Sales and Distribution.
Jordan Canfield served in various executive positions for sales
and distribution at Aviva, including Executive Vice-President of Sales
and
Distribution.
management
of
Canfield
Aviva’s
relationships.
had
direct
independent
responsibility
distribution
and
for
the
sales
Canfield left Aviva in August 2009 to become CEO of
Innovation Design.
Heitz and Canfield each had the authority to terminate Aviva’s
producer contracts, including its contracts with Vazirani and his
downline agents.
Justin Jacquinot was an Aviva regional vice president of sales
and
marketing
who
reported
to
Canfield.
One
of
Jacquinot’s
responsibilities was “interfacing” with Vazirani.
Ron Shurts was a principal of Annexus Distributions.
Business Entities
Secured
Financial
Solutions,
LLC
(“SFS”)
and
Vazirani
&
Associates Financial, LLC (“Vazirani & Associates”) were owned and
operated solely by Vazirani.
SFS was a marketing name only.
It did
not sell insurance products and had no downline producers or agents.
SFS had no contractual relationship with Aviva.
Vazirani & Associates was an independent marketing organization,
also known as an IMO, that worked with multiple insurance companies
to perform distribution and marketing functions for one or more of
such insurers’ products or product lines.
Aviva Life and Annuity Company (Aviva) provided life insurance,
annuity products and other services to individuals, families and
-2-
businesses. Aviva used many marketing organizations to recruit agents
to sell its products and to provide marketing and sales support.
Aviva considers some of those organizations its “key distribution
partners,” but Vazirani’s organization was not one of them.
Advisors Excel, LLC (“Advisors Excel”) was an IMO located in
Topeka,
Kansas.
Advisors
Excel
competed
with
other
marketing
organizations, including Vazirani & Associates, for downline agents.
Advisors Excel was one of Aviva’s key distribution partners since at
least 2007.
Annexus Distributors AZ, LLC, formerly known as Shurwest Product
Connection, LLC, developed with Aviva a line of annuity products
(“Aviva’s Annexus products”) that were issued by Aviva under one of
Aviva’s three distribution channels.
Aviva’s Annexus products were
marketed and distributed differently than the annuities offered under
Aviva’s other two distribution channels.
Aviva granted Annexus
Distributors the exclusive rights to market and sell Aviva’s Annexus
products.
Annexus Distributors had the right to determine (i) what
marketing organizations could market Aviva’s Annexus annuities to
agents and (ii) which Aviva agents could sell such annuities to
consumers.
The only IMOs that were authorized to market Aviva’s
Annexus products to agents were a small group of IMOs which had been
hand-picked by Annexus Distributors.
Annexus Distributors were
granted
distribution
this
exclusive
marketing
and
authority
by
contracting directly with those IMOs.
Financial Independence Group (“FIG”) was one of Aviva’s “key core
marketing groups” since approximately 2008.
FIG and Advisors Excel
were two of the select group of approximately 12 IMOs that were
-3-
authorized by contract with Annexus Distributors in 2008 to: (i)
market Aviva’s Annexus line of products to other agents, and (ii)
recruit
agents
products.
members
to
such
IMO’s
downline
to
sell
Aviva’s
Annexus
Neither Vazirani, Vazirani & Associates nor SFS were
of
the
select
group
of
IMOs
contracted
with
Annexus
Distributors.
Creative
Marketing
International
Corporation
(CMIC)
was
a
marketing organization that performed marketing and distribution
functions for several different life insurers.
CMIC was a wholly-
owned subsidiary of Aviva which competed with Vazirani for downline
agents.
Innovation
Design
was
a
product
development
company
that
developed annuity and life insurance products. Innovation Design was
not (and never has been) a marketing organization, did not have (and
has never had) a downline of insurance agents, and did not sell (and
never has sold) insurance products.
Aviva’s Business Practices Regarding IMOs
Aviva had in place certain rules that govern the conduct and
practices
of
IMOs
concerning
the
recruiting
of
agents
to
such
organizations’ downlines to sell Aviva products.
One of Aviva’s rules governing the conduct of IMOs in recruiting
agents prohibited an IMO such as Vazirani & Associates from recruiting
a producer away from another IMO to sell the same Aviva distributionchannel products by offering such producer a higher commission level
within the first six months of transfer.
Aviva never had a policy placing any restrictions on an IMO’s
ability to bind downline agents to non-compete covenants.
-4-
Vazirani’s Pre-termination Dealings with Aviva
Aviva’s contract with Vazirani authorized him, subject to certain
terms and conditions, to sell Aviva life insurance and annuity
products as an independent producer, and to recommend that Aviva
contract with additional agents to sell certain Aviva products as part
of the Vazirani downline.
From approximately 2005 until April 1, 2009, Vazirani contracted
with Aviva and/or its predecessor entities, American Investors and
AmerUs, as an independent agent to sell Aviva life insurance and
annuity
products.
Vazirani’s
producer
contract
with
Aviva
did
authorize him to sell Aviva’s Annexus products to consumers.
Vazirani and/or Vazirani & Associates received compensation from
Aviva in the form of (i) commissions for his personal sales production
and (ii) override commissions for the sales production of agents who
were contracted with Aviva as part of the Vazirani downline.
By
the
close
of
2008,
approximately
one
hundred
(100)
of
Vazirani’s downline producers were contracted with Aviva USA and
approximately
forty
percent
(40%)
of
his
commission
income
was
generated from the sale of Aviva annuities.
Aviva’s
contract
with
Vazirani
provided
that
it
could
be
terminated with or without cause by either party immediately upon
written
notice
to
the
last
known
address
of
the
other
party.
Similarly, Aviva’s contracts with Vazirani downline agents provided
that such contracts could be terminated with or without cause by
either party immediately upon written notice to the last known address
of the other party.
Vazirani Was a Top Producer for Aviva
-5-
From 2005 through 2008, Vazirani personally produced almost $10
million in annuity premiums for Aviva. In addition, his team at SFS
produced almost $100 million in annuity premiums for Aviva.
In 2008,
Vazirani began to significantly “ramp up” the business he and his team
were writing with Aviva. During the time Vazirani was contracted with
Aviva, he wrote profitable business and made contributions to Aviva’s
corporate sales goals.
Vazirani’s efforts on the behalf of Aviva did not generate a
single consumer complaint.
Jacquinot had no issues with Vazirani’s
performance in 2007 and observed no “red flags” regarding Vazirani’s
conduct that year. Jacquinot’s observation changed based on incidents
involving Vazirani in 2008.
Vazirani’s Side-Deals With Rettick/CRP
Aviva prohibited its marketing organizations and agents from
making private arrangements or side-deals for payments on Aviva
production to marketing organizations or agents not contracted with
Aviva.
In the summer of 2008, Aviva terminated its contract with a
marketing organization because that organization appeared to have a
prohibited arrangement with Covenant Reliance Producers (“CRP”), a
separate marketing organization that did not have an Aviva contract,
and its principal, Matt Rettick.
Canfield and Jacquinot had concerns that Vazirani also might have
a prohibited side deal with Rettick/CRP.
Vazirani knew in 2008 that Aviva did not want to do business with
Rettick and that Rettick/CRP did not have an Aviva contract.
Jacquinot
questioned
Vazirani
-6-
about
his
relationship
with
Rettick/CRP. In response, Vazirani emailed Jacquinot on September 6,
2008, saying: “I do not and will not cut any commission deals with
Matt
Rettick.”
In
fact,
however,
Vazirani
had
agreed
to
pay
Rettick/CRP 50 basis points (one-half of one percent) on all Aviva
premium produced under Vazirani. Vazirani estimates that he paid
Rettick/CRP
approximately
$240,000
pursuant to this agreement.
on
Aviva
production
in
2008
Vazirani’s associate, James Regan, also
understood that CRP was not to be paid on Aviva business; to his
knowledge, Vazirani also understood this.
Nevertheless, on or about
September 6, 2008, Regan sent an email to Rettick, certain others at
CRP, and Vazirani, saying: “There cannot be a paper trail at all that
leads to CRP with regard to the Aviva contract.”
In addition,
Vazirani emailed a CRP executive regarding “American Investors Aviva
– Amerus,” saying “I spoke to Matt [Rettick]; nobody needs to know
about any compensation agreement.”
The Blast Email
On August 19, 2008, Regan sent out a blast email on behalf of
Vazirani/SFS marketing Aviva’s Annexus products to other agents. The
email stated in part: “Hello all, this is Phil Graham from FIG
Marketing writing to you on behalf of VAZIRANI/SFS.”
Graham did not send the blast email marketing Aviva’s Annexus
product on behalf of Vazirani/SFS; nor did he authorize Vazirani or
anyone else at SFS to send the blast email that purported to be from
“Phil Graham of FIG Marketing” “on behalf of VAZIRANI/SFS.”
Instead,
Graham directed Vazirani not to send out the email.
Vazirani
testified that he could not think of a legitimate reason why he
(Vazirani) would have written the email himself to make it appear that
-7-
the email was from Graham. Vazirani wrote the email to make it appear
that it was from Graham.
Graham and Canfield were concerned that the email might result
in the termination of FIG’s authorization to market Aviva’s Annexus
products.
Advisors Excel, which was one of the IMOs authorized to market
Aviva’s Annexus products to other agents, reported this incident to
Aviva and Annexus Distributors.
Ron Shurts, who was a principal of Annexus Distributors, was very
upset
when
he
learned
of
the
blast
email
sent
“on
behalf
of
VAZIRANI/SFS” marketing Aviva’s Annexus products to other agents.
Shurts urged Canfield to terminate Vazirani because of the blast email
and,
using
profanity
and
an
uncomplimentary
(but
ethnically
inaccurate) reference to Vazirani, assured Graham that Canfield
intended to terminate Vazirani.
Aviva Terminates Vazirani
In early 2008, Vazirani offered Lee Hyder, an agent whose Aviva
contract was in the Advisors Excel downline, a higher commission level
if he would join the Vazirani downline.
Advisors Excel learned of
this
it
offer
and
provided
a
copy
of
responsibilities
included
interfacing
to
with
Jacquinot,
certain
whose
marketing
organizations, including both Advisors Excel and Vazirani. Jacquinot
reported the matter to Canfield.
Both Canfield and Jacquinot viewed
Vazirani’s offer as a serious rule violation.
Canfield considered
terminating Vazirani’s contract then but decided to discipline him
instead.
In early November 2008, Canfield concluded that Aviva’s contract
-8-
with Vazirani should be terminated. Canfield reached this conclusion,
in part, due to the series of Vazirani problems that he had had to
deal with and increasing concerns he had with Vazirani’s business
practices and relationship with Rettick/CRP.
Some of the issues had
been the subject of complaints by (i) one of Aviva’s key distribution
partners, Advisors Excel, and (ii) Annexus Distributors (including its
principal, Ron Shurts), who had the exclusive rights to market and
sell all annuities issued by Aviva.
Aviva’s standard practice was that if it terminated its contract
with a marketing group or agent, it would also terminate all agent
contracts in that agent’s downline.
On or about November 6, 2008, Canfield called Vazirani and told
him that Aviva had decided to terminate its contract with Vazirani as
well as the Aviva-agent contracts that were in his downline.
On December 12, 2008, Aviva’s lawyer, John Clendenin, sent
Vazirani’s attorney a letter stating that “Aviva intends to terminate
the Contract without cause effective December 19, 2008.” However, the
December 19, 2008 termination date was inconsistent with a January 30,
2009 termination date that Canfield had referenced in his November 6,
2008 telephone conversation with Vazirani.
Aviva agreed to move back
the effective date of termination. Specifically, on Christmas Day,
December 25, 2008, Clendenin sent Vazirani’s lawyer an e-mail stating:
Following up on our Tuesday telephone call, this email will
confirm that Aviva will agree to push Anil Vazirani's
termination to be effective January 30, 2009. His
independent producer agreement with Aviva will be
terminated without cause on that date. This termination
date comports with Mr. Vazirani's allegations concerning
Jordan Canfield's November 6, 2008 telephone call.
On or about February 9, 2009, Aviva sent Vazirani formal,
-9-
effective written notice required by his Producer Agreement that Aviva
was terminating its contract with him effective April 1, 2009. Aviva
also sent to the agents in the Vazirani downline formal, effective
notice that Aviva was terminating their Aviva agent contracts as well.
By letter dated March 20, 2009, Clendenin gave the following
explanation for Aviva’s termination of Vazirani’s producer contract:
While Aviva certainly has business reasons for terminating
Mr. Vazirani’s producer contracts, it was not required to.
As spelled out below, Mr. Vazirani’s contracts were
terminated due to a change in Aviva’s distribution strategy
and as a result of market forces that have caused Aviva to
exert control over exponential growth in annuity sales.
* * *
Aviva decided to terminate Mr. Vazirani and his downlines
in the initial stages of the deferred annuity sales bubble.
His termination was part of Aviva’s attempt to focus on
core marketing groups and producers in order to exert
control on burgeoning annuity sales.
As time has
progressed over the last two months, however, Aviva has
initiated even more significant measures to deemphasize
annuity sales and redirect sales focus to the company’s
life insurance product lines. Aviva’s actions to control
the flow of new annuity sales has [sic] nothing to do with
Mr. Vazirani or his group. Nor does it have anything to do
with alleged communications by CMIC, Annexus Group or
others.
Aviva Decides to Slow Annuity Sales
Beginning in the fourth quarter of 2008 and continuing through
the first quarter of 2009, Aviva took steps to slow its annuity sales
in
order
to
preserve
capital.
The
steps
included
terminating
thousands of agent contracts. All of those contract terminations were
effective no later than April 1, 2009.
Some of the terminated groups had had more premium production in
2008 than Vazirani and his downline agents.
Most of the Aviva production generated by Vazirani and his
-10-
downline
was
for
the
sale
of
annuities
under
Aviva’s
American
Investors distribution channel.
The groups terminated included nearly all of those contractors
who, like Vazirani, were at the highest commission level for the sale
of annuities within Aviva’s American Investors distribution channel.
Some of the terminated groups, in addition to Vazirani, were
affiliated with FIG.
Vazirani admits that he can only speculate as to whether his
Aviva contract would have remained in effect beyond April 1, 2009, but
because none of his other insurance carrier contracts had previously
been terminated, he believed his contract with Aviva would continue
“indefinitely.”
The Purported Washburn University/Sigma Phi Epsilon,
Advisors Excel and Innovation Design Connection
Heitz obtained his undergraduate degree from Washburn University
in Topeka, Kansas in 1974 where he was a member of the Sigma Phi
Epsilon fraternity.
David Callahan, Cody Foster, and Derek Thompson each graduated
from Washburn more than 25 years after Heitz graduated.
Callahan and
Foster were members of the Sigma Phi Epsilon fraternity while they
attended Washburn University.
Callahan, Foster and Thompson founded
Advisors Excel.
As of November 2008, when Canfield told Vazirani of the decision
to terminate Aviva’s contract, Canfield had not considered leaving
Aviva nor had he had any discussions with anyone about such a
possibility.
In April or May 2009 Canfield first considered leaving Aviva.
-11-
Canfield
talked
to
various
third
parties
about
employment
opportunities before he discussed with any of the Advisors Excel
founders about possibly leaving Aviva.
Canfield received employment
offers from several third parties in the summer of 2009 before he left
Aviva.
Canfield left Aviva’s employ in or about August 2009 to become
the chief executive officer of Innovation Design.
Canfield and the
three principals of Advisors Excel (Callahan, Foster and Thompson)
each owned a 25% interest.
For the first two years of its existence, Innovation Design’s
offices were located within Advisors Excel’s headquarters in Topeka.
The fact that two of Advisors Excel’s principals (Callahan and
Foster) were members of the same college fraternity as Heitz had
nothing to do with the decision to terminate Vazirani’s contract.
Disputes of Fact
The
purported
factual
disputes
must
be
viewed
perspective of what this case is, and is not, about.
not” aspect.
from
the
First, the “is
This is not a breach of an employment contact case.
Vazirani was an independent contractor of Aviva, not an employee. SFS
had no contract at all with Aviva.
The Vazirani/Aviva independent
contractor agreement could be terminated at any time, for any reason,
by either Vazirani or Aviva.
is not a defendant.
Aviva terminated the contract and Aviva
Neither Vazirani nor SFS had a contractual
relationship of any kind with Heitz or Canfield. So, what is the case
about?
Well . . . Vazirani claims that Heitz and Canfield, acting
outside the scope of their respective employment with Aviva, conspired
-12-
to cause Aviva to terminate Vazirani’s contract in order to benefit
their own interests and/or those of Advisors Excel, its founders
(Callahan, Foster and Thompson), Creative Marketing, Annexus and
Shurts.
Vazirani attaches great significance to the fact that Heitz,
Callahan and Foster attended Washburn University where they were
members
of
the
same
social
fraternity,
albeit
25
years
apart.
Vazirani and SFS’s basic theory of recovery is that by conspiring to
advance their own interests, and the interests of others, Heitz and
Canfield tortiously1 interfered with Vazirani and SFS’s “contracts and
business expectancies with Aviva and Vazirani downline agents.”
Heitz and Canfield aver that they considered termination of
Vazirani’s contract to be in Aviva’s interest and consistent with its
goal of reducing annuity sales.
Both men deny that they received any
benefit, direct or indirect, from the termination or that they had any
personal interest in the matter.
Both men also deny ever having any
financial interest in Advisors Excel or Annexus.
Vazirani
purports
to
controvert
these
averments
with
the
following unedited responses:
On July 30, 2008, Advisors Excel principal David
Callanan demanded that defendant Canfield terminate the
contract of the independent marketing organization “Metro.”
Mr. Canfield followed Mr. Callanan’s order. In response Mr.
1
In the response to defendants’ motion, Vazirani claims that his
termination was in retaliation for his “whistleblowing” activities for
reporting to Aviva non-compliant advertisements by agents affiliated
with CMIC, an Aviva subsidiary.
Nevertheless, the pretrial order
(Doc. 120) does not mention “retaliation” either in plaintiffs’
contentions or theories of recovery or in the factual issues section.
Therefore, the court will not entertain any claim by Vazirani that
defendants retaliated against him.
-13-
Callanan thanked his fraternity brother Canfield2 for “his
support and protection”and Mr. Foster of Advisors Excel
commented that “I like the way Jordo rolls.”
By letter dated March 20, 2009, Aviva’s counsel Mr.
Clendenin finally offered this provably false explanation
for Aviva’s termination of Mr. Vazirani’s producer
contract:
While Aviva certainly has business reasons for
terminating Mr. Vazirani’s producer contracts, it
was not required to. As spelled out below, Mr.
Vazirani’s contracts were terminated due to a
change in Aviva’s distribution strategy and as a
result of market forces that have caused Aviva to
exert control over exponential growth in annuity
sales.
* * *
Aviva decided to terminate Mr. Vazirani and his
downlines in the initial stages of the deferred
annuity sales bubble. His termination was part of
Aviva’s attempt to focus on core marketing groups
and producers in order to exert control on
burgeoning annuity sales. As time has progressed
over the last two months, however, Aviva has
initiated even more significant measures to
deemphasize annuity sales and redirect sales
focus to the company’s life insurance product
lines. Aviva’s actions to control the flow of new
annuity sales has [sic] nothing to do with Mr.
Vazirani or his group. Nor does it have anything
to do with alleged communications by CMIC,
Annexus Group or others.
Aviva’s stated claims for the grounds for terminating
Mr. Vazirani’s producer contract as set forth above, are
false. In fact, Mr. Vazirani was affiliated with a key core
group of Aviva, Financial Independence Group (“FIG”).
Mr. Vazirani was never an “A” level producer with
Aviva. Rather, he was affiliated (as a “B” level producer)
with Aviva’s key core group FIG through Aviva’s Amerus
distribution channel.
Mr. Vazirani was also at the “W” level under FIG
(which received a production bonus for Mr. Vazirani’s team)
for Aviva’s American Investors distribution channel.
2
There is nothing in the record to show that Canfield and
Callahan were “fraternity brother[s].”
-14-
In other words, Mr. Vazirani was, on multiple levels,
part of a key core group of Aviva (FIG) that Aviva had made
the decision to “focus on.” Moreover, Mr. Vazirani has the
strong support and backing of FIG’s Chief Sales Officer,
Phil Graham. As such, his producer contract never should
have been terminated pursuant to Aviva’s new marketing
strategy as outlined in attorney Clendenin’s March 20, 2009
letter.
The Aviva point person for Mr. Vazirani, and the
individual with the most knowledge regarding issues with
Mr. Shurts and Advisors Excel, Aviva Vice President of
Sales and Recruiting Justin Jacquinot, did not recommend
termination of Mr. Vazirani’s producer.3
At 4:02 p.m. that same day Defendant Canfield
instructed Mr. Vazirani’s point person at Aviva, Justin
Jaquinot, as follows: “We need to cancel Anil … next week.
I told Shurts and Advisors that we would. JC”
Defendant Canfield left Aviva’s employ in or about
August 2009 to become the Chief Executive Officer of
Innovation Design Group.
Canfield and the three principals of Advisors Excel
formed Innovation Design in or around August 2009, with
each of them owning a 25% interest.
For the first two years of its existence, Innovative
[sic] Design Group’s offices were located within Advisor
Excel’s headquarters in Topeka, Kansas.
Vazirani additionally repeats his reliance on the Washburn/Sigma
Phi Epsilon “connection.”
Vazirani’s remaining disputes with defendants’ facts, again
unedited, are as follows:
26.
agent
In early 2008, Vazirani offered Lee Hyder, an
whose
Aviva
contract
was
in
the
Advisors
Excel
downline, a commission level if he would join the Vazirani
downline that was higher than Hyder was at in the Vazirani
downline.
3
Jacquinot’s actual testimony on this point was: “I didn’t make
a recommendation either way.”
-15-
Defendants Fact No. 26.
Controverted. Mr. Vazirani
told Mr. Hyder that if he met certain sales levels with
insurance company approval, he may in the future receive a
higher commission level. Mr. Vazirani did not promise a
guaranteed higher commission level.
Moreover, the entire
Hyder affair was a ruse. Hyder never intended to join Mr.
Vazirani’s team; rather, he was sent by Advisors Excel to
talk with Anil to try to “set him up”for termination.
35. In fact, Vazirani had agreed to pay Rettick/CRP 50
basis points (one-half of one percent) on all Aviva premium
produced under Vazirani.
Defendants Fact No. 35.
Controverted. Mr. Vazirani
was clear in his deposition testimony that he did not split
commissions with Mr. Rettick/CRP on Aviva business but
rather paid him a marketing reimbursement to help cover
their cost of supporting Vazirani’s advisors (by providing
training,
trips,
gift
programs,
and
incurring
other
marketing expenses) on the contracts where CRP was Mr.
Vazirani’s upline producer.
102. SFS has never had downline producers or agents.
103. SFS has not lost any revenue because of the
terminations.
Defendants Facts Nos. 102 and 103
SFS did have and does have contracts with Plaintiffs’
downline agents.
Defendants’ contention that, as to SFS,
there was no contract or business expectancy with which to
interfere is simply not true.
-16-
As a result of Aviva’s termination of Mr. Vazirani’s
producer contract, many of his downline agents have elected
to end their business relationship with SFS. In addition,
the termination has made it more difficult for Mr. Vazirani
and for SFS to recruit new downline agents and has damaged
the SFS “brand”through which Plaintiffs direct all of their
marketing efforts. This has caused both Mr. Vazirani and
SFS to suffer substantial damages, including damages to
SFS’s reputation.
The court initially will consider whether Vazirani’s responses
to Heitz and Canfield’s averments create issues for trial.
The
relevance of the termination of the “Metro” contract is unexplained.
Callahan and Canfield are not fraternity brothers.
Callahan and
Foster
of
are
fraternity
brothers
but
the
relevance
Foster’s
compliment about Canfield, who is not Foster’s fraternity brother, is
a mystery.
The “falsity” of the Clendenin letter is unsupported by
facts. Vazirani has never challenged the facts pertaining to Aviva’s
change of strategy.
His point, apparently, is that he was a good
producer who, as he puts it, should not have been terminated. But the
undisputed facts are that Aviva also terminated other good producers
for the same reasons.
In other words, Vazirani was not singled out.
Vazirani disingenuously states that Jacquinot “did not recommend”
termination.
Canfield did leave Aviva to start Innovation Design
which had offices in Advisors Excel’s building.
So what?
None of
Vazirani’s responses refute Heitz and Canfield’s reasons for the
termination.
They provide no facts at all that Heitz and Canfield
benefitted financially or had any personal interest in the termination
-17-
or that either man had any financial interest in Advisors Excel or
Annexus.
Finally, Vazirani’s denials of defendants’ facts 26 and 35 do not
create genuine issues of material fact.
with
a
twist
favorable
to
Rather, they are admissions
Vazirani.
Vazirani’s
responses
to
defendants facts 102 and 103 are conclusory and devoid of factual
support.
Applicable Law
The rules applicable to the resolution of this case, now at the
summary judgment stage, are well-known and are only briefly outlined
here.
Federal Rule of Civil Procedure 56(c) directs the entry of
summary judgment in favor of a party who "show[s] that there is no
genuine issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law."
Fed. R. Civ. P. 56(c).
An issue is “genuine” if sufficient evidence exists so that a rational
trier of fact could resolve the issue either way and an issue is
“material” if under the substantive law it is essential to the proper
disposition of the claim.
Adamson v. Multi Community Diversified
Svcs., Inc., 514 F.3d 1136, 1145 (10th Cir. 2008).
When confronted
with a fully briefed motion for summary judgment, the court must
ultimately determine "whether there is the need for a trial–whether,
in other words, there are any genuine factual issues that properly can
be resolved only by a finder of fact because they may reasonably be
resolved in favor of either party."
477 U.S. 242, 250 (1986).
judgment.
Anderson v. Liberty Lobby, Inc.,
If so, the court cannot grant summary
Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).
Discussion
-18-
The parties agree that all substantive issues are governed by
Arizona law.
Tortious Interference
By Memorandum and Order dated March 15, 2011 (Doc. 62), the court
denied
Heitz
and
interference,
considering
Canfield’s
conspiracy
Vazirani’s
and
motion
aiding
tortious
dismiss
and
Vazirani’s
abetting
interference
tortious
claims.
claims4
the
In
court
observed:
Under Arizona law, an officer of a corporation cannot
interfere with the corporation’s contracts. Southern Union
Co. v. Southwest Gas Corp., 165 F. Supp.2d 1010, 1038 (D.
Ariz. 2001). Plaintiffs may proceed with their claims
against defendants, however, if they establish defendants
actions’ were so contrary to Aviva’s interests that they
could only have been motivated by personal interests. Id.
Plaintiffs alleged several facts regarding their
performance while under contract with Aviva. Plaintiffs
sold millions of dollars in policies for Aviva and
allegedly never received a complaint from a customer. While
defendants assert that plaintiffs were no longer a part of
Aviva’s business model, the court must look at the facts
alleged in the amended complaint in a light most favorable
to plaintiffs. The court finds, at this stage in the
pleadings, that defendants’ actions were contrary to
Aviva’s interests. Moreover, plaintiffs have alleged
sufficient personal interests for defendants’ actions.
Plaintiffs allege that Canfield benefitted financially
because he left Aviva’s employment shortly after the
termination of the contract and began employment with
Advisors Excel.5 Plaintiffs further assert that Heinz
benefitted from the termination of the contract because he
4
The court recognized that plaintiffs had asserted claims of both
interference with a contract and interference with a business
expectancy.
Under Arizona law, the elements of these claims are
virtually identical. See Southern Union Co. v. Southwest Gas Corp.,
180 F. Supp.2d 1021, 1047 n. 41 (D. Ariz. 2002). Therefore, as was
done in the order on the motion to dismiss, the analysis for both
claims will be combined in this subsection.
5
This information was taken from the complaint. It turns out to
be
inaccurate.
Canfield left Aviva to become CEO of Innovation
Design.
-19-
wanted to pass business to his fraternity brothers. These
allegations are sufficient to find that defendants’ action
were motived solely by personal reasons. See Chanay v.
Chittenden, 115 Ariz. 32, 563 P.2d 287 (1977)(reversing the
decision to grant summary judgment on a tortious
interference claim in which the plaintiff, an insurance
agent, was fired after another agent caused the termination
and gained all of the plaintiff’s business).
Arizona law also requires that the interference must
be intentional and improper. Mann v. GTCR Golder Rauner,
LLC., 483 F. Supp.2d 864, 871 (D. Ariz. 2007). “The tort is
intentional in the sense that defendant must have intended
to interfere with the plaintiffs' contract or have known
that this result was substantially certain to be produced
by its conduct.” Id. at 872. Plaintiffs have sufficiently
plead intentional and improper actions. The allegations are
that defendants acted with the intent of causing
plaintiffs’ contract to be terminated by Aviva. Plaintiffs
have also alleged improper conduct by defendants, including
their
attempt
to
set
up
plaintiff
by
recording
conversations, intentionally straining relationships with
Aviva and their alleged racial animus towards Vazirani.
After viewing the facts in a light most favorable to
plaintiffs, the court finds that plaintiffs have alleged
sufficient facts to support a finding that defendants
interfered with their contract and business expectancy.
Finally, defendants assert that these claims must fail
because plaintiffs have failed to establish that they had
a future interest in the at-will contract with Aviva. The
Supreme Court of Arizona has held that a plaintiff may
state a cause of action for tortious interference even if
the contract is an at-will contract. Chanay, 563P.2d at 292
(“until it's terminated, the contract is a subsisting
relation, of value to the parties and presumably to
continue in effect.”)
(Doc. 62 at 5-7).
Despite this clear statement of what Arizona law requires in
order to prove intentional interference, Vazirani cites no facts, much
less disputed facts, which would defeat summary judgment.
Vazirani’s first “fact” demonstrating intentional interference
relates to the Clendenin letter of March 20, 2009.
that the reasons given for termination are false.
Vazirani asserts
As he puts it,
“Aviva lied.” But whether or not Aviva lied is not relevant (assuming
-20-
Aviva can lie). Neither Heitz or Canfield is mentioned in the letter.
There are no facts in the record that Heitz or Canfield communicated
with Clendenin about the letter or, for that matter, that they were
even aware of the letter.
Vazirani proceeds to assert that Aviva had
“no cause” for terminating his contractual relationship and extols his
successes as evidence that the true but unstated reason for his
termination was the Washburn/Sigma Phi Epsilon “connection.” Vazirani
ignores the fact that his contract did not require “cause” for
termination. The undisputed evidence is that Vazirani’s conduct gave
Aviva “cause” to terminate the contract.
The fact that Aviva chose
not to go that route, but instead exercised its prerogative under the
terms of the contract, hardly makes the reasons given in the Clendenin
letter a “lie.”
Vazirani’s second “fact” demonstrating intentional interference
is what he describes as a “quid pro quo”: Canfield’s decision in
August of 2009 to form Innovation Design with the three members of
Advisors Excel.
Heitz is not mentioned.
Vazirani asserts that a
“reasonable juror” could find that the founding of Innovation Design,
along with the fact that it had office space at Advisors Excel, was
a quid pro quo for Canfield’s “protection of Advisors Excel” during
his term at Aviva and for his termination of “Vazirani’s contract.”
This assertion is completely lacking in factual support.6
There is
no evidence from which a “reasonable juror” could find any connection
between Canfield’s decisions in the fall of 2008 concerning Vazirani
and his decision, many months later, to join Innovation Design.
6
The fact supposedly supporting this claim is the “I like the way
Jordo rolls” email, supra, which does not mention Vazirani.
-21-
Indeed, there is no evidence that Canfield had any involvement with
or concerning Vazirani after November 2008.
Vazirani’s third “fact” demonstrating intentional interference
is so lacking in support and common sense that it hardly deserves
mention: “Defendants’ university and fraternity ties override Aviva’s
best interests in retaining Vazirani, one of their top minority
advisors.”
Minority
advisors?
Where
did
that
Defendants’?
There is no evidence that Canfield is a fraternity
brother of anyone in this case, much less of Heitz.
evidence that Canfield attended Washburn.
come
from?
There is no
Vazirani’s obsession with
the Washburn/Sigma Phi Epsilon “connection” is probative of nothing,
much less that Canfield intentionally interfered with his contract
with Aviva.
In short, even though this court gave Vazirani the requisite
benefit of the doubt in denying defendants’ motion to dismiss, plus
a list of the factors which Arizona law requires to prove his claims,
Vazirani
has
offered
only
the
same
allegations
and
statements unsupported by relevant and material facts.
conclusory
He has not
disputed Aviva’s decision to change its business model with respect
to annuity sales. He has not shown that the change was made to secure
the termination of only his contract, nor has he challenged the facts
that the change affected many other similarly-situated independent
contractors.
He has not shown that Canfield benefitted financially
from leaving Aviva to start Innovation Design, nor has he brought out
any facts that Heitz’s involvement in the termination of his contract
(assuming Heitz had any), was motivated by his desire to benefit
Callahan and Foster or, to put it another way, that Callahan and
-22-
Foster benefitted from Heitz’s actions.
In other words, Vazirani has
come forth with no evidence that Heitz and Canfield’s actions were
motivated solely by personal reasons, nor has he shown that their
actions were improperly intended to interfere with his contract with
Aviva.
Defendants’ motion for summary judgment on Vazirani’s tortious
interference claims is sustained.7
Conspiracy and Aiding and Abetting
Vazirani’s position is that because his tortious interference
claims will survive summary judgment, his conspiracy and aiding and
abetting claims likewise will survive (Doc. 132 at 26).
wrong
but
his
interference
methodology
claims
do
not
is
correct.
survive,
the
Because
same
Vazirani is
his
fate
tortious
applies
to
conspiracy and aiding and abetting.
Conclusion
Defendants’ motion for summary judgment (Doc. 121) is granted.
The clerk is directed to enter judgment in favor of defendants
pursuant to Fed. R. Civ. P. 58.
A motion for reconsideration of this order pursuant to this
court's Rule 7.3 is not encouraged.
Any such motion shall not exceed
three pages and shall strictly comply with the standards enunciated
by this court in Comeau v. Rupp.
The response to any motion for
reconsideration shall not exceed three pages.
7
No reply shall be
Defendants’ motion for summary judgment on SFS’ claim of
tortious interference is also sustained. First, SFS did not have a
contract with Aviva.
Second, with respect to any claim of
interference of business expectancy, plaintiffs have failed to
establish that defendants acted outside the scope of their employment
in the termination of that expectancy.
-23-
filed.
IT IS SO ORDERED.
Dated this
27th
day of June 2012, at Wichita, Kansas.
s/ Monti Belot
Monti L. Belot
UNITED STATES DISTRICT JUDGE
-24-
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