Vazirani & Associates Financial, LLC v. Heitz et al
Filing
12
MEMORANDUM AND ORDER granting in part and denying in part 7 Motion to Dismiss for Failure to State a Claim. Signed by District Judge Monti L. Belot on 6/8/2011. (rs)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
VAZIRANI & ASSOCIATES FINANCIAL,
LLC,
)
)
Plaintiff,
)
)
v.
)
)
MARK V. HEITZ and JORDAN CANFIELD, )
)
Defendants.
)
)
CIVIL ACTION
No.
11-1032-MLB-KGG
MEMORANDUM AND ORDER
This case comes before the court on defendants’ motion to
dismiss plaintiff’s complaint. (Doc. 7). The motion has been fully
briefed and is ripe for decision. (Docs. 8, 9, 10). Defendants’ motion
is granted in part and denied in part for the reasons herein.
I.
Facts
Plaintiff Vazirani & Associates Financial, LLC (“Vazirani &
Associates”) is an independent marketing organization (IMO) located
in Arizona that contracts to perform distribution and marketing
functions for insurance companies. Anil Vazirani is the president and
chief executive officer of Vazirani & Associates. Plaintiff contracted
with insurance company Aviva USA (“Aviva”) until January 30, 2009.
Defendant Mark Heitz was and is the Vice President of Sales for Aviva
and Defendant Jordan Canfield was employed by AmerUs Aviva Annuity
Group during the relevant time period. Defendants reside in Topeka,
Kansas.
On November 6, 2008, Canfield informed Vazirani that Aviva would
be terminating plaintiff’s contract and the contracts of all downline
agents. Aviva’s counsel subsequently notified plaintiff in writing
that Aviva was terminating its contract with plaintiff without cause
effective January 30, 2009. Canfield told Vazirani that Aviva had
received complaints about his business practices from the other
agents. On March 20, Aviva’s counsel sent a letter to Vazirani stating
that the termination was due to a deferred annuity sales bubble and
the desire to focus on core marketing groups and producers. After
resigning from Aviva, Canfield contracted with Advisors Excel, LLC,
a Kansas limited liability company founded by a group of men who were
fraternity brothers with Heitz.
Advisors Excel is a competitor of
plaintiff.
Plaintiff alleges that Advisors Excel exploited its relationship
with Heitz and obtained more advantageous commission splits and more
support from Aviva than other IMOs.
Plaintiff further alleges that
Advisors Excel worked with defendants to sever the relationship
between the plaintiff and Aviva to the detriment of Aviva.
Of the
various core annuity groups within Aviva, plaintiff’s allegedly was
the
only
contract
terminated.
In
addition
to
exploiting
the
relationship between the companies, plaintiff also alleges that
defendants’ actions were improperly motivated by racial animus towards
Vazirani. Plaintiff had not received any consumer complaints during
the contractual relationship with Aviva and sold more than $10 million
in annuity premiums. Plaintiff filed this action alleging claims of
tortious interference with contract and business expectations, civil
conspiracy, and aiding and abetting.
on all claims.
Defendants move for dismissal
There is a companion case, Vazirani et al. v. Heitz
and Canfield, No. 09-1311-MLB-KGG, which involves similar claims.
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By
Memorandum and Order of March 15, 2011 (Doc 62), this court granted,
in part, and denied, in part, a motion to dismiss similar to that made
in this case.
II.
The cases are ordered consolidated for all purposes.
Motion to Dismiss Standards: FRCP 12(b)(6)
The standards this court must utilize upon a motion to dismiss
are well known. To withstand a motion to dismiss for failure to state
a claim, a complaint must contain enough allegations of fact to state
a claim to relief that is plausible on its face. Robbins v. Oklahoma,
519 F.3d 1242, 1247 (10th Cir. 2008) (citing Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 127 S. Ct. 1955, 1974 (2007)).
All well-
pleaded facts and the reasonable inferences derived from those facts
are viewed in the light most favorable to plaintiff.
Archuleta v.
Wagner, 523 F.3d 1278, 1283 (10th Cir. 2008). Conclusory allegations,
however, have no bearing upon this court’s consideration.
Shero v.
City of Grove, Okla., 510 F.3d 1196, 1200 (10th Cir. 2007).
In the
end, the issue is not whether plaintiff will ultimately prevail, but
whether he is entitled to offer evidence to support his claims.
Beedle v. Wilson, 422 F.3d 1059, 1063 (10th Cir. 2005).
III.
Analysis
Defendants move to dismiss plaintiff’s complaint on the basis
that
it
fails
to
state
a
claim
interference claim is time-barred.
and
that
plaintiff’s
tortious
A federal court sitting in
diversity jurisdiction must apply the substantive law of the state in
which it sits, including that state’s choice-of-law rules.
See ORI,
Inc. v. Lanewala, 147 F. Supp.2d 1069, 1078 n. 9 (D. Kan. 2001).
Plaintiffs have alleged tort claims against defendants.
The Kansas
Supreme Court has held that the law of the state where the tort occurs
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controls.
See Lemons v. Lewis, 963 F. Supp. 1038, 1050 (D. Kan.
1997)(citing Ling v. Jan’s Liquors, 237 Kan. 629, 635, 703 P.2d 731,
735 (1985)).
All of the acts alleged by plaintiff occurred in the
state of Arizona.
Accordingly, Arizona law controls.
A. Tortious Interference1
Plaintiff alleges that defendants tortiously interfered with
both the Aviva contract and the plaintiff’s business expectancies with
its agents and customers. To prevail on these claims, plaintiff must
establish the following: 1) the existence of a valid contractual
relationship or business expectancy; 2) interferer’s knowledge of the
relationship or expectancy; 3) intentional interference inducing or
causing a breach or termination of the relationship or expectancy; and
4) resultant damage to the party whose relationship or expectancy has
been disrupted.
Neonatology Associates, Ltd. v. Phoenix Perinatal
Associates, Inc., 216 Ariz. 185, 187, 164 P.3d 691, 693-64 (Ariz. Ct.
App. 2007).
Defendants respond that plaintiff’s claims are barred by
the applicable statute of limitations.
Defendants assert that plaintiff’s tortious interference claims
accrued in November 2008, when plaintiff was informed that Aviva would
be terminating the contractual relationship. Plaintiff argues that the
injury did not occur until the actual termination of the Aviva
relationship, at the earliest January 30, 2009. Even though Arizona
1
Although tortious interference with contract and tortious
interference with business expectancy are separate causes of action,
the elements to prove each are virtually identical. See Southern Union
Co. v. Southwest Gas Corp., 180 F. Supp.2d 1021, 1047 n. 41 (D. Ariz.
2002). Thus, the analysis for both will be combined in this
subsection. Defendants did not raise a statute of limitations defense
in case No. 09-1311.
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provides the substantive law in this case, Kansas generally “applies
its own statutes of limitations to actions before it.” Muzingo v.
Vaught, 18 Kan. App. 2d 823, 859 P.2d, 977, 979 (1993). Under K.S.A.
60-513(4), the statute of limitations for tortious interference claims
is two years.
In Kansas, a cause of action accrues “at the time of the
occurrence of the act giving rise to the cause of action, unless the
fact of injury is not reasonably ascertainable.” See v. Hartley, 257
Kan. 813, 820, 896 P.2d 1049, 1054 (Kan. 1995). The running of the
statute of limitations starts as soon as the right to maintain a legal
action arises. Johnston v. Farmers Alliance Mutual Ins. Co., 218 Kan.
543, 548, 545 P.2d 312, 317 (1976).
In Johnston v. Farmers Alliance
Mutual Ins. Co., the Kansas Supreme Court determined that the statute
of
limitations
began
running
for
a
terminated
employee
when
he
received notice of his termination even though his damages accrued
once the termination became effective. Id.
The court affirmed this
decision in Whye v. City Council for the City of Topeka by holding
that the cause of action accrued and the statute of limitations began
to run when an employee tendered resignation or announced plans to
retire and not when the resignation became effective. 278 Kan. 458,
464, 102 P.3d 384, 387 (2004).
Aviva notified plaintiff of the termination of their contractual
relationship,
as
well
as
the
termination
of
all
downline agents, during the November 6, 2008 call.
contracts
with
Although the
injury did not occur until the termination became effective on January
30, 2009, the injury was reasonably ascertainable to plaintiff in
November because the damages associated with the contract terminations
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were known at that time.
The statute began to run as soon as
plaintiff received notice of termination and could maintain a legal
action, not when the termination became effective.
Because this
action was filed on January 28, 2011 and the two year statute of
limitations ended on November 6, 2010, plaintiff’s claim of tortious
interference is time-barred. Therefore, defendants’ motion to dismiss
plaintiff’s claim of tortious interference is granted.
B.
Civil Conspiracy
A civil conspiracy claim requires an agreement between two or
more persons to accomplish an underlying tort. Wells Fargo Bank v.
Ariz. Laborers, Teamsters and Cement Masons Local No. 395 Pension
Trust Fund, 201 Ariz. 474, 498, 38 P.3d 12,36 (2002).
Plaintiff
claims defendants conspired to tortiously interfere with plaintiff’s
Aviva
contract
and
plaintiff’s
business
expectancies.
Defendants
respond that because the tortious interference claim fails based on
the statute of limitations, the civil conspiracy claim must also fail
because there is no underlying tort.
Here, unlike Wells Fargo, the
court dismissed the underlying tort because it was time barred and not
because the alleged tort had not been accomplished.
The court has not
decided the tortious interference claim on the merits.
claim
is
dismissed
because
of
the
statute
of
Although the
limitations,
the
underlying tort might still have been accomplished and a claim for
civil conspiracy could still exist.2
Defendants also argue that plaintiff did not plead facts making
2
If the court had considered the plaintiff’s claim for tortious
interference on the merits, it would have denied defendants’ motion
to dismiss for failure to state a claim based on the analysis in Case
No. 09-1311-MLB, Doc. 62.
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it plausible that defendants entered into an agreement to tortiously
interfere
with
the
contract
or
business
expectancies.
A
civil
conspiracy claim requires an agreement between two or more persons to
accomplish an unlawful purpose or a lawful purpose by unlawful means.
See Dawson v. Withycombe, 216 Ariz. 84, 163 P.3d 1034, 1053 (Ariz. Ct.
App. 2007).
A plaintiff does not need to show an express agreement to
prevail on a civil conspiracy claim; however, there must be at least
a tacit understanding and a plaintiff must allege specific facts that
support the inference of an agreement.
S. Union Co. v. Sw. Gas Corp.,
165 F. Supp.2d 1010, 1021 (D. Ariz. 2001).
A conspiracy “may
sometimes be inferred from the nature of the acts done, the relations
of the parties, the interests of the alleged conspirators, and other
circumstances.”
Id.
After a review of the allegations, the court finds that plaintiff
has alleged sufficient facts to support an inference of an agreement
between
defendants
and
Advisors
Excel.
Plaintiff
has
alleged
defendants purposefully deteriorated their relationship with Aviva and
bolstered the relationship of Aviva and Advisors Excel for the purpose
of gaining agents from other IMOs and SFS.
Plaintiff has further
alleged that an agreement was made towards the end of 2008.
At this stage in the pleadings, defendants’ motion to dismiss the
conspiracy claim is denied.
C.
Aiding and Abetting
Plaintiff alleged that defendants aided and abetted one another
in the tortious interference with a contract and business expectancy.
Defendants respond that the underlying tort fails because of the
statute of limitations and that allegations are not sufficient to
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state a claim. This case is again distinguished from Wells Fargo
because the tort was time barred and not dismissed because the tort
was never accomplished.
Because this court has not decided the
tortious interference claim on the merits, the aiding and abetting
claim does not fall because the underlying tort is time-barred.
Claims of aiding and abetting tortious conduct must establish the
following: 1) a primary tortfeasor committed a tort that caused injury
to the plaintiff; 2) the defendant knew that the primary tortfeasor’s
conduct
constituted
a
tort;
and
3)
the
defendant
substantially
assisted or encouraged the primary tortfeasor in accomplishing the
tort. Wells Fargo, 201 Ariz. 474 at 485, 38 P.3d 12 at 23. After a
review of the allegations, the court finds that plaintiff has alleged
sufficient facts to support its aiding and abetting claim. Plaintiff
has alleged defendants improperly interfered with the Aviva contracts
and
relationships
with
downline
producers
and
customers,
that
defendants lied about the termination of the Aviva contracts and
defendants exploited their relationship with Advisors Excel to receive
preferential
treatment
and
later
employment
with
plaintiff’s
competitor. The court finds that the facts are sufficient to state a
claim of aiding and abetting.
At this stage in the pleadings, defendants’ motion to dismiss the
aiding and abetting claim is denied.
IV.
Conclusion
Defendants’ motion to dismiss is granted in part and denied in
part.
(Doc. 7).
tortious
Defendants’ motion to dismiss plaintiff’s claim of
interference
is
granted.
Defendants’
motion
to
dismiss
plaintiff’s claim of conspiracy and aiding and abetting is denied.
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A motion for reconsideration of this order is not encouraged.
The standards governing motions to reconsider are well established.
A motion to reconsider is appropriate where the court has obviously
misapprehended a party's position or the facts or applicable law, or
where the party produces new evidence that could not have been
obtained through the exercise of reasonable diligence. Revisiting the
issues already addressed is not the purpose of a motion to reconsider
and advancing new arguments or supporting facts which were otherwise
available for presentation when the original motion was briefed or
argued is inappropriate.
1992).
Comeau v. Rupp, 810 F. Supp. 1172 (D. Kan.
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.
No reply shall be filed.
IT IS SO ORDERED.
Dated this
8th
day of June 2011, at Wichita, Kansas.
s/ Monti Belot
Monti L. Belot
UNITED STATES DISTRICT JUDGE
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