OMERT v. FREUNDT & ASSOCIATES INSURANCE SERVICES, INC. et al

Filing 34

OPINION. Signed by Judge Noel L. Hillman on 1/31/2017. (TH, )

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

EDWARD OMERT,

Civ. No. 16-2529 (NLH/KMW)

Plaintiff,

OPINION

v.
FREUNDT & ASSOCIATES INSURANCE
SERVICES, INC., et al.,
Defendants.

APPEARANCES:
DONNER LAW ASSOCIATES, LLC
By: Jeffrey A. Donner, Esq.
708 Highway 35
Neptune, New Jersey 07753
and
McCUSKER, ANSELMI, ROSEN & CARAVELLI, P.C.
By: Bruce S. Rosen, Esq.
Bianca M. Olivadoti, Esq.
210 Park Avenue, Suite 301
Florham Park, New Jersey 07932
Counsel for Plaintiff
CUTI HECKER WANG LLP
By: Alexander Goldenberg, Esq.
305 Broadway, Suite 607
New York, New York 10007
Counsel for Defendant Vincent Vitiello
DUGAN, BRINKMANN, MAGINNIS & PACE, ESQS.
By: Gerald J. Dugan, Esq.
Michael J. Lorusso, Esq.
33 South Main Street
Mullica Hill, New Jersey 08062
Counsel for Defendants Freundt & Associates Insurance
Services, Inc. and C. Kent Freundt

HILLMAN, District Judge:
This is primarily a breach of contract suit arising out of an
alleged failed business association between Plaintiff Edward Omert
and Defendant Freundt & Associates Insurance Services, Inc., trading
as The Producers Group (hereinafter “TPG”). 1

As discussed further

herein, the other two Defendants, C. Kent Freundt and Vincent
Vitiello, are employees of TPG.

Omert asserts that Freundt and

Vitiello intentionally interfered with Omert’s alleged contract with
TPG.
Vitiello moves to dismiss, pursuant to Fed. R. Civ. P.
12(b)(6), the single claim asserted against him personally. 2

For the

reasons set forth herein, the Motion will be denied.
I.
As alleged in the Complaint, Defendant TPG provides
“distribution and other marketing functions” for insurance
companies.

At all relevant times, Defendant Fruendt allegedly was

TPG’s “founder,” “principal shareholder as well as the President,
Chief Executive Officer and Manager of TPG on a daily basis.”
(Compl. ¶ 3)

Defendant Vitiello allegedly was the “Executive Vice-

1

The Court has diversity of citizenship subject matter jurisdiction
pursuant to 28 U.S.C. § 1332. The parties are completely diverse
and the amount in controversy exceeds the statutory minimum.
2

Defendants TPG and Kent Freundt answered the complaint on June 30,
2016. Magistrate Judge Williams presided over the Rule 16 initial
conference in this case on August 11, 2016. The current pretrial
factual discovery deadline is March 31, 2017.
2

President of the East Coast Division of TPG and then a principal
therein referred to as a Partner.” (Id. ¶ 4)
According to the Complaint, Vitiello contacted Omert in August
2012 to see “whether [Omert] would be interested in growing the
Annuity Division of TPG.” (Compl. ¶ 21)

Omert allegedly had been

very successful in his previous employment in the same industry, and
TPG allegedly sought out Omert for his expertise. (Compl. ¶¶ 12, 2021)
Many communications and meetings allegedly took place between
Omert, Freundt, Vitiello, and others employed by TPG, over the next
six months (Compl. ¶ 21-48), which allegedly culminated in a “Term
Sheet.”

The Term Sheet provided, among other things, that Omert

would be “both an employee of TPG and a co-owner” of TPG’s new
Annuities and Linked Benefits Products Division. (Compl. ¶ 50,
Goldenberg Decl. Ex. 1, “Term Sheet”)

The Complaint alleges that

Omert and Freundt both signed the document. (Compl. ¶ 61-62; see
also Goldenberg Decl. Ex. 1 reflecting signatures of “Ed Omert” and
someone signing on behalf of “The Producers Group.”)
Allegedly, the roll-out of the proposed new Division never
happened, and in a December 16, 2014 email, Vitiello allegedly
“advised Omert that TPG ‘will probably outsource [its] annuity
program,’ [and] further commented that ‘it was difficult to pull the
trigger in the way we planned.’” (Compl. ¶ 103)

The December 16th

email is the last alleged communication Omert received from
Defendants.
3

The Complaint alleges four counts.

Counts 1 through 3,

asserted against TPG only, are breach of contract, breach of the
duty of good faith and fair dealing, and unjust enrichment.

At

issue in this motion is the last count, Count 4-- intentional
interference with prospective economic advantage, asserted against
Freundt and Vitiello individually.
II.
When considering a motion to dismiss a complaint for failure to
state a claim upon which relief can be granted pursuant to Federal
Rule of Civil Procedure 12(b)(6), a court must accept all wellpleaded allegations in the complaint as true and view them in the
light most favorable to the plaintiff. Evancho v. Fisher, 423 F.3d
347, 351 (3d Cir. 2005).

It is well settled that a pleading is

sufficient if it contains “a short and plain statement of the claim
showing that the pleader is entitled to relief.” Fed. R. Civ. P.
8(a)(2).
Under the liberal federal pleading rules, it is not necessary
to plead evidence, and it is not necessary to plead all the facts
that serve as a basis for the claim. Bogosian v. Gulf Oil Corp., 562
F.2d 434, 446 (3d Cir. 1977).

However, “the Federal Rules of Civil

Procedure . . . do require that the pleadings give defendant fair
notice of what the plaintiff’s claim is and the grounds upon which
it rests.” Baldwin Cnty. Welcome Ctr. v. Brown, 466 U.S. 147, 149-50
n.3 (1984) (quotation and citation omitted).
A district court, in weighing a motion to dismiss, asks “‘not
4

whether a plaintiff will ultimately prevail but whether the claimant
is entitled to offer evidence to support the claim.’” Bell Atlantic
v. Twombly, 550 U.S. 544, 563 n.8 (2007) (quoting Scheuer v.
Rhoades, 416 U.S. 232, 236 (1974)); see also Ashcroft v. Iqbal, 556
U.S. 662, 684 (2009)(“Our decision in Twombly expounded the pleading
standard for ‘all civil actions’ . . . .”); Fowler v. UPMC
Shadyside, 578 F.3d 203, 210 (3d Cir. 2009)(“Iqbal . . . provides
the final nail in the coffin for the ‘no set of facts’ standard that
applied to federal complaints before Twombly.”).
III.
The instant motion to dismiss presents one discreet issue: does
the Complaint adequately plead facts supporting a plausible
conclusion that Vitiello acted outside the scope of his employment
such that, if proven, Vitiello can be held liable for intentionally
interfering with his own employer’s alleged contract with Omert
(i.e., the Omert-TPG Term Sheet)?

Vitiello argues no; Omert argues

yes.
The parties agree on the applicable legal standard.

When the

alleged interference is done by an employee “acting ‘on behalf of’
[the contracting employer]” there can be no liability. Varrallo v.
Hammond Inc., 94 F.3d 842, 849 n.11 (3d Cir. 1996)(applying New
Jersey law).

However, an employee can be liable for intentionally

interfering with his employer’s contract with a third party if that
employee “acts for personal motives, out of malice, beyond his

5

authority, or otherwise not in good faith in the corporate
interest.” Id. (internal citations and quotation omitted). 3
In support of his Motion to Dismiss, Vitiello emphasizes that
the Complaint alleges many actions that Vitiello took on behalf of
TPG, “or at the very least, in significant part for the benefit of
the company.” (Reply Brief, p. 7)

Vitiello argues that the

Complaint does not plead facts plausibly supporting a conclusion
that Vitiello “transformed from being a representative of TPG to
being a rogue free agent acting solely for his own personal gain.”
(Id. p. 7)
In opposition, Omert articulates his theory of his case against
Vitiello: “Vitiello took [Omert’s] ideas and told Freundt in a
secret presentation that they could dispense with Omert’s contract
and individually profit greater in the absence of Omert’s percentage
share and ownership interest, even though TPG would earn less

3

See also Cataldo v. Moses, 2006 N.J. Super. Unpub. LEXIS 2950 at
*29 (App. Div. 2006)(“where an employee is acting outside the scope
of his employment, he may be liable in tort for his own conduct. An
employee will be found to fall outside the scope of employment where
he acts ‘for personal motives, out of malice, beyond his authority,
or otherwise not in good faith in the corporate interest.’”)(quoting
Varrallo); DiMaria Constr., Inc. v. Interarch, 351 N.J. Super. 558,
568 (App. Div. 2001)(“clear-cut consensus has emerged that . . . if
the employee or agent is acting outside the scope of his or her
employment agency, then an action for tortious interference will
lie.”)(citing Varrallo); A&M Wholesale Hardware Co., Inc. v. Circo
Instrumentation Technologies, Inc., 2014 U.S. Dist. LEXIS 23032 at
*27-28 (D.N.J. Feb. 24, 2014)(“Significantly, the Third Circuit has
advised that an agent or ‘employee who acts for personal motives,
out of malice, beyond his authority, or otherwise not in good faith
in the corporate interest’ is acting outside the scope of his or her
agency or employment.”)(quoting Varrallo).
6

without Omert’s leadership and marketing skills.” (Opposition Brief,
p. 12)

In support of this theory, Omert cites the following

allegations in the Complaint:
1. From August 2012 to June 2013 Plaintiff, working very
closely with Vitiello, proposed and thoroughly discussed
his innovative plans to roll out TPG’s Annuities Division,
see generally Compl. at ¶¶ 21-76;
2. In or around May 2013, Plaintiff entered into the Term Sheet
Agreement with TPG through which he would receive no salary
but a revenue split of any profits that the Annuities
Division made, see id. at ¶¶ 50, 61;
3. At the beginning of June 2013, Vitiello admitted to
Plaintiff that he did not come to TPG to earn $200,000 per
year and that his priority was to become a full partner,
see id. at ¶ 78;
4. In or around June 2013, Vitiello – inarguably knowing the
terms and conditions of the Term Sheet Agreement – made a
presentation to Freundt which included products that, per
the Term Sheet Agreement, were contractually obligated to
be in Plaintiff’s domain, see id. at ¶ 77;
5. Vitiello, despite numerous requests, suspiciously withheld
this presentation from Plaintiff, see id. at ¶¶ 82-84;
6. In or around July 2013, Vitiello, acting well beyond his
authority, told Plaintiff that TPG would not act on the Term
Sheet Agreement until Vitiello had been fully integrated as
a partner, see id. at ¶ 94;
7. In or around September 2013, notably before Plaintiff
launched the expanded Annuities Division, the e-mail
announcement publicizing Vitiello’s promotion stated that
TPG offered “creative insight that c[ould] help [agents]
find solutions for [their] clients in Life Insurance,
Annuities, Long Term Care, and Disability Insurance,” see
id. at ¶ 96 (emphasis added);
8. In or around December 2013, Vitiello informed Plaintiff that
TPG was going to be outsourcing its Annuities Division; see
id. at ¶ 103.
(Opposition Brief, p. 11-12)
7

The Court concludes that these allegations are sufficient to
withstand the instant motion.

As the Supreme Court has instructed,

the district court must decide “not whether a plaintiff will
ultimately prevail but whether the claimant is entitled to offer
evidence to support the claim.” Twombly, 550 at 563 n.8.

Omert has

pled sufficient facts to allow further factual inquiry into
Vitiello’s motives and alleged “malice.”

Varrallo, 94 F.3d at 849

n.11.
Accordingly, Vitiello’s Motion to Dismiss Count IV of the
Complaint will be denied.
IV.
For the foregoing reasons, Defendant Vitiello’s Motion to
Dismiss will be denied.
An appropriate order accompanies this opinion.

Dated: January 31, 2016
At Camden, New Jersey

s/ Noel L. Hillman ___
NOEL L. HILLMAN, U.S.D.J.

8