JORGENSEN & COMPANY v. SUTHERLAND et al
OPINION. Signed by Judge Claire C. Cecchi on 4/17/2017. (ld, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
JORGENSEN & COMPANY,
Civil Action No.: 15-7373
GARY SUTHERLAND et al.,
CECCHI, District Judge.
This matter comes before the Court on the Third Amended Complaint (styled “Amended
Complaint” but hereinafter “TAC”) filed by Jorgensen & Company (“Plaintiff’ or “Jorgensen”).
[ECF No. 81.] Pending before the Court is a motion to dismiss pursuant to Fed. R. Civ. P. 1 2(b)(6)
filed by Defendants Gary Sutherland (“Sutherland”), Stephen Vono (“Vono”), and Dogan Tuncel
(“Tuncel”, together “the Individual Defendants”). [ECF No. 76.] Defendant North American
Professional Liability Insurance Agency, LLC (“NAPLIA” or “the LLC”) is not a party to the
motion. Plaintiff opposed the motion, [ECF No. 77], and moved to have counsel for the Individual
Defendants sanctioned under Fed. R. Civ. P. 11(c) for filing the motion to dismiss. [ECF No. 86.]
The motions are decided without oral argument pursuant to Fed. R. Civ. P. 78(b).i for the
following reasons, the motion is GRANTED in part and DENIED in part.
The Court has subject matter jurisdiction pursuant to 28 U.S.C.
The Court considers any new arguments not presented by the parties to be waived. See
Brenner v. Local 514. United Bhd. of Carpenters & Joiners of Am., 927 f.2d 1283, 1298 (3d Cir.
This litigation arises out of a dispute between competitors in the professional insurance
market, specifically insurance products for accountants. [See generally TAC.] Plaintiff has been
the exclusive and sole manager of a risk purchasing group insurance program called Professional
Adviser’s Purchasing Group, Inc. with the brand name CPAGoldTM since the program’s
formation in 1998. [Id.
12.] The program is licensed for sale in all states except Alaska, and
Plaintiff is the appointed agent and program manager in all state filings. [Id.] Plaintiff registered
the CPAG01dTM program with the United States Copyright Office on May 15, 2003. [Id.
In March 1999, Plaintiff and Sutherland entered into an agreement making Sutherland an
“independent contractor producer” for Plaintiff. [TAC
10.] Sutherland agreed to “assume the
role of the local office of [Plaintiff] in [Massachusetts]” and produce clients for the CPAG01dTM
program in exchange for a higher commission rate than was given to other producers. [Id.
12.] Vono became another independent contractor producer for Plaintiff in May 1999. [Id.
In July 1999, Sutherland and Vono formed a partnership called North American Professional
Liability Insurance Agency (“NAPLIA Partnership,” not a party to this case), which primarily
produced clients for Plaintiffs CPAG01dTM program.2 [Id.] In February 2003, the NAPLIA
Partnership entered into an agreement with Plaintiffs sister company prohibiting the NAPLIA
Partnership from disclosing Plaintiffs non-public information concerning the CPAG01dTM
program. [Id. ¶31.] On May 20, 2004, Defendant NAPLIA was formed under Delaware law,
with Sutherland and Vono as initial members. [Id.
18.] NAPLIA’ s Massachusetts registration
Plaintiff formed Jorgensen & Co. Professional Liability Insurance Brokerage Inc., a
Massachusetts-based corporation, for the NAPLIA Partnership to use as “a licensed umbrella
agency.” [TAC ¶ 16.] Sutherland was and is a director of this company. [Id.]
statement states that “[t]he general character of the business of the LLC is to act exclusively as an
insurance producer.” [Id.] Tuncel “joined NAPLIA as an insurance producer” in 2004. [Id.
According to Plaintiff, the LLC indicated as late as August 11, 2015, that it, too, considered itself
bound by the terms of the 2003 confidentiality agreement. [Id.
32.] Plaintiff worked closely
with the NAPLIA Partnership and then with NAPLIA, which included sharing confidential
proprietary information and data about Plaintiffs insurance products and clients, and giving
NAPLIA authority to “pre-underwrite CPAG01dTM accounts.” [TAC ¶J 19-21.]
Plaintiffs business relationship with NAPLIA began to deteriorate in 2013. [TAC
25.] On July 24, 2015, Sutherland sent Plaintiff an e-mail “formally terminating the relationship.”
The e-mail stated that NAPLIA would no longer send Plaintiff CPAGo1dTM renewal
submissions, and was planning to tell its current CPAG01dTM customers that NAPLIA would be
offering a new insurance program instead of CPAG01dTM. [Id.] Plaintiff responded on July 29,
2015, telling Sutherland to “delete any copies of our proprietary rate worksheets that relate to our
products and any reference to our programs from your website and other materials[.]” [Id.
On August 3, 2015, Plaintiff alleges “the Individual Defendants and NAPHA [began to]
use the name ‘ProSecure’ for a newly launched accountant insurance program
on the trade secrets and copyrights belonging to Jorgensen.” [TAC
a program built
“NAPLIA and the Individual Defendants pretended to be trusted and intimate business associates
of [Plaintiff], while in truth they were collecting data and confidential information[,]” including
Plaintiffs premium calculation rate sheets, client contacts, underwriters, and other details about
the CPAG01dTM program, which they used to develop a product in direct competition with
34.] Plaintiff claims they collected this information under the guise of
developing a program that would complement, rather than compete with, CPAGoIdTM, and used
the information to further the ProSecure program, including convincing NAPLIA’s new partner
insurer, Plaza Insurance Company (“Plaza”),3 to underwrite the program. [Id.
particular, Sutherland allegedly sent Plaintiff an email in “early 2015” regarding a “non-standard”
insurance program “to elicit additional confidential information” from Plaintiff without disclosing
that NAPLIA was developing a competitor program.
Additionally, Tuncel and
Sutherland twice requested “details of CPAG01UTM confidential panel counsel list” from claims
staff, and provided this information to Plaza. [Id.
Plaintiff also claims NAPLIA and the Individual Defendants improperly solicited existing
CPAG01dTM clients, by means including the use of confidential materials. Beginning in August
2015, John Raspante—a NAPLIA employee who is not a party here—allegedly sent disparaging
letters about Plaintiff to CPAG0IdTM members just before these members were due to renew their
insurance, which Plaintiff claims would only be possible if NAPLIA were using confidential
information about the clients to know when they would be due to renew. [Id.
2, 2015, Sutherland allegedly sent an e-mail to one of Plaintiffs other producers seeking to discuss
the CPAG0IdTM program even though NAPLIA was no longer a producer for Plaintiff. [Id. ¶51.]
Tuncel allegedly told Plaintiff “I have been ‘enticing’ many clients to NAPLIA over the last couple
months and we are going full force with a pipeline full of new business to go after as well in the
coming months. We plan on being very successful with getting those clients to work with us as
well.” [Id.] Plaintiff alleges NAPLIA held a conference of Plaintiffs insurance agents on October
16, 2015, “to directly solicit and otherwise interfere with [Plaintiffs] business relationships with
its partner-producers.” [Id.
Plaza was a Defendant in this case until Plaintiff filed a Notice of Dismissal on February
25, 2017. [ECFN0. 113.]
Plaintiff claims the Individual Defendants have knowingly and willfully committed
copyright infringement because they “personally participated in the infringing activities and used
NAPLIA to carry out this deliberate infringement.”
¶ 44.] Plaintiff also claims the
Individual Defendants have violated the New Jersey Trade Secrets Act, N.J.S.A.
(“NJT$A”), in that “Defendant Sutherland and NAPLIA
in order to prepare, launch, and
underwrite under the CPA ProSecure program, used [information covered under a confidentiality
agreement] improperly.” [Id.
¶ 42.1 Finally, Plaintiff claims the Individual Defendants have
tortiously interfered with its contractual relations and prospective economic relations by soliciting
Plaintiffs clients and producers. [Id.
Plaintiffs original Verified Complaint was filed on October 8, 2015 [ECF No. 1], the First
Amended Verified Complaint was filed the next day on October 9, 2015 [ECF No. 2], and the
Second Amended Verified Complaint (“SAVC”) was filed the next day on October 10, 2015 [ECF
No. 6]. Sutherland was a named Defendant in the SAVC; Tuncel and Vono were not.
November 12, 2015, Sutherland (along with NAPLIA) moved to dismiss the SVAC for failure to
state a claim for copyright infringement, violation of the NJTSA, and/or tortious interference with
economic relations, the same three claims at issue on the present motion. [ECF No. 22.] On June
30, 2016, the Court denied Sutherland’s motion, finding that, as to Sutherland and NAPLIA, all
three causes of action stated a claim upon which relief could be granted. [ECF No. 53.]
After the motion to dismiss the $AVC was decided, Plaintiff moved to file a third amended
complaint to add Defendants Tuncel and Vono and to reflect the Court’s dismissal of certain claims
and Defendants not relevant here. [ECF No. 61.] No opposition was filed to the motion. The
Individual Defendants represent that, during a conference on July 27, 2016, Magistrate Judge Falk
that the preferable procedure was not to file an opposition to Jorgensen’s Motion
For Leave to Amend, but to instead file a Motion to Dismiss the Third Amended Complaint.”
[ECF No. 83 at 2 (“Reply Br.”).] Plaintiff represents that Judge F alk “mentioned that he would
likely grant the pending Motion to Amend but that Defendants were free to file any motion they
including a motion to dismiss,” but characterizes Judge Falk’s statement as “casual” and
contends that it “was obviously not any sort of green light to actually file such a motion” because
“the Court is not on the bench to provide legal counsel to litigants.” [ECF No. 77 at 5
Br.”).] Judge Falk granted the motion to amend. [ECF No. 71.]
Plaintiff filed the TAC [ECF No. 81] on August 10,2016. The TAC adds Tuncel and Vono
as Defendants and a few additional factual allegations, [compare, e.g., SAVC
51], but does not significantly alter the substance of the allegations in the SAVC, either generally
or as to Sutherland in particular.
On August 26, 2016, without filing an answer, the Individual Defendants collectively
moved to dismiss the TAC on the grounds that “[e]ach count of the [TAC] lacks any allegation
that the Individual Defendants acted in their individual capacities in a manner that would justify
imposition of liability against them.” [ECF No. 76-2 at 1 (“Moving Br.”).] The Individual
Defendants contend that, under Delaware LLC law, they cannot be held liable for actions done in
their capacity as members or managers of NAPLIA. [Id. at 3 (citing 6 Del. C.
Sutherland did not raise this argument in his previous motion to dismiss.
For a complaint to avoid dismissal pursuant to Rule 1 2(b)(6), it “must contain sufficient
factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.” Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Belt Ati. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
When evaluating the sufficiency of a complaint, Courts are required to accept all well-pleaded
allegations in the complaint as true and to draw all reasonable inferences in favor of the nonmoving party. Phillips v. Cty. ofAllegheny, 515 F.3d 224, 231 (3d Cir. 200$). Furthermore, “[a]
pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of
action will not do. Nor does a complaint suffice if it tenders naked assertions devoid of further
Iqbal, 556 U.S. at 678 (internal citations and quotations omitted).
Accordingly, “a complaint must do more than allege the plaintiffs entitlement to relief. A
complaint has to ‘show’ such entitlement with its facts.” Fowler v. UFMC Shadyside, 578 F.3 d
203, 211 (3d Cir. 2009).
Effect of 6 Del. C.
6 Del. C.
18-303(a) on Liability4
§ 18-303(a) reads in relevant part:
Except as otherwise provided by this chapter, the debts, obligations
and liabilities of a limited liability company, whether arising in
contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the limited liability company, and no member or
manager of a limited liability company shall be obligated personally
for any such debt, obligation or liability of the limited liability
company solely by reason of being a member or acting as a manager
of the limited liability company.
The Individual Defendants contend this statute shields them from all liability in this case because
“all of the allegations of the [TAC] concern allegedly wrongful conduct taken exclusively in
4 Plaintiff contends this motion is barred for all three Individual Defendants, both because
Sutherland filed a previous Rule 12(b)(6) motion that was denied, [Opp. Br. at 3-5], and because
all three Individual Defendants failed to oppose Plaintiffs motion to amend [Id. at 5]. The Court
finds Defendants’ failure to oppose the motion to amend does not bar this motion because Judge
Falk assured Defendants they would be allowed to move to dismiss after the motion to amend was
granted. [Opp. Br. at 5; accord Reply Br. at 2.] Moreover, Vono and Tuncel were not parties in
this case until after the motion to amend was granted. As for the effect of Sutherland’s previous
Rule 12 motion to dismiss the SAVC, the Court need not decide whether it prevents him from
moving to dismiss the TAC because, for reasons explained below, the Court finds the TAC states
a claim as to Sutherland, and denies the motion on the merits.
furtherance of NAPLIA’s corporate purposes[.]” [Moving Br. at 3.] The Court disagrees.
Delaware courts have noted that the word “solely” in the last clause of 6 Del. C.
3 03(a) “does imply that there are situations where LLC members and managers would not be
shielded by this provision.” Pepsi-Cola Bottling Co. ofSalisbury, lid. v. Handy, No. 1 973-S, 2000
WL 364199, at *3 (Del. Ch. Mar. 15, 2000). Indeed, under Delaware law, “corporate officials
may be held individually liable for their tortious conduct, even if undertaken while acting in their
official capacity.” Duffield Assocs., Inc. v. Meridian Architects & Eng ‘rs, LLC, No. $1 OC-03 -004
RFS, 2010 WL 2802409, at *4 (Del. Ch. July 12, 2010) (citing Donsco, Inc. v. Casper Corp., 527
f.2d 602, 606 (3d Cir. 1978); accord Gassis v. Corkeiy, No. 8868-VSG, 2014 WL 3565418, at *5
n.24 (Del. Ch. July 21, 2014) (“[A]n individual is personally liable for all torts the individual
[including] torts committed by those acting in their official capacities as officers
or agents of a corporation. It is immaterial that the corporation may also be liable.” (quoting 3A
William Meade Fletcher, Cyclopedia of the Law of Corporations
§ 1135)). This is true of LLC
members and managers as well, see DtfJield Assocs., 2010 WL 2802409, at *4 (rejecting,
individual defendants’ argument that they could not personally be held liable for fraud for actions
committed on behalf of an LLC of which they were members), notwithstanding the existence of 6
§ 18-303(a). Sewellv. Coviello, CPU5-15-001302, 2016 WL 3152567, at *2 (Del. Ct. C.P.
Kent Cty. Mar. 8, 2016) (rejecting the argument that 6 Del. C.
§ 18-303(a) bars a fraud claim
against an LLC member individually).
On the other hand, corporate officers may not be held liable “merely for acts or omissions
of the Corporation”; for this reason, “a complaint must, at a minimum, describe affirmative actions
taken by that individual directing, ordering, ratifying, approving or consenting to the tort.” Gassis,
2014 WL 3565418, at *5 Therefore, the Court must analyze the actions Plaintiff alleges the
Individual Defendants took to ascertain whether the TAC states any claims against them
To establish copyright infringement, a plaintiff must prove two elements: “(1) ownership
of a valid copyright, and (2) copying of constituent elements of the work that are original” by the
Kepner-Tregnoe Inc. v. Executive Development, Inc., 79 F. Supp. 2d 474, 484
(D.N.J. 1999) (citing Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991)).
An individual within a business entity may be held liable under a “direct” theory of infringement
if Plaintiff makes “a showing of volitional conduct—’specifically, the act constituting
inffingement’—by the [individual] himself.” Star Pac. Corp. v. Star Atl. Corp., 574 F. App’x 225,
230 (3d Cir. 2014) (quoting CoStar Grp., Inc. v. LoopNet, Inc., 373 F.3d 544, 551 (4th Cir. 2004)).
Alternatively, an individual may be held liable under a “contributory infringement” theory if the
individual, “with knowledge of the infringing activity, induces, causes or materially contributes to
the infringing activity[.]” Columbia Pictures Indus., Inc. v. Redd HQrne, Inc., 749 F.2d 154, 160
“[A]n individual’s status as a principal in an infringing venture” may be “strong evidence”
of knowing participation. See Star Pac. Corp., 574 F. App’x at 230-31; see Columbia Pictures,
749 f.2d at 160 (finding that an individual was a principal and likely a knowing participant in the
infringing activity based on evidence that he “conducted negotiations and wrote letters” regarding
the infringing activity on behalf of the direct infringer). However, “purely conclusory allegations”
without factual assertions as to the individual’s involvement are insufficient to survive a motion
to dismiss. Bradshaw v. Am. Inst. for History Educ., No. 12-1367 (RBKIKMW), 2013 WL
1007219, at *5.6 (D.N.J. Mar. 13, 2013) (citinglqbal, 556 U.S. at 680). Thus, a complaint alleging
an individual’s contributory infringement must “plead sufficient facts as to [the individual’s]
alleged role in the copyright infringement” to survive a motion to dismiss. Live Face on Web, LLC
v. Megapreventionrx, LLC, No. 15-7143 (JHR/AMD), 2016 WL 3561770, at *4 (D.N.J. June 29,
2016); see Bradshaw, 2013 WL 1007219, at *6 (“Plaintiff has alleged no fact describing exactly
what Defendant Brady did to ‘cause or materially contribute’ to the alleged infringement of
Plaintiffs copyright.” (quoting Columbia Pictures, 749 f.2d at 160)). Nor is it sufficient to plead
an individual’s role solely with reference to “Defendants” collective actions. See Live Face on
Web, LLC, 2016 LW 3561770, at *4 (claim for contributory infringement against an individual
failed under Twombty/Iqbal pleading standard because the complaint made “only one
particularized allegation as to” the individual defendant and refers collectively to individual and
business entity as “Defendants” throughout the rest of the complaint).
The Court previously held Plaintiff stated a claim for copyright infringement against
NAPLIA and Sutherland. [ECF No. 53 at 6.] Additionally, the TAC states a claim for contributory
copyright infringement against Sutherland and Tuncel. Taking the allegations in the TAC as true,
Sutherland and Tuncel would have become familiar with Plaintiffs CPAG01dTM product because
they helped market it for over a decade, [TAC
17-20], and would be familiar with NAPLIA’s
allegedly infringing ProSecure product, because of their alleged roles in marketing ProSecure to
Plaintiffs CPAG01dThI customers. [TAC ¶J 28-29, 51.] At the pleading stage, the Court finds this
gives rise to an inference that Sutherland and Tuncel knew of the allegedly infringing activity.
Furthermore, the TAC alleges Sutherland and Tuncel personally solicited proprietary information
from Plaintiff and provided it to Plaza as part of the effort to convince Plaza to underwrite
The Court finds this alleged action constitutes a “material
contribut[ion]” to the launch of ProSecure. See Columbia Pictures, 749 F.2d at 160. Indeed, had
NAPLIA been unable to convince Plaza to underwrite the program, the alleged infringement may
never have occurred.
On the other hand, nowhere in the TAC does Plaintiff allege facts describing Vono’s
individual role in the infringing activity, separate from NAPLTA or the other Individual
Defendants.5 On this basis, the Court cannot conclude the TAC alleges Vono himself induced,
caused, or materially contributed to the infringing activity. See Columbia Pictures, 749 f.2d at
160; Bradshaw, 2013 WL 1007219, at *6.
Therefore, the copyright claim must be dismissed as to Vono,6 but not as to Sutherland or
The NJTSA defines “misappropriation” as:
(1) Acquisition of a trade secret of another by a person who knows
s The TAC’s allegation that “[t]he Individual Defendants personally participated in the
infringing activities and used NAPLIA to carry out this deliberate infringement” is conclusory,
and insufficient on its own. See Bradshaw, 2013 WL 1007219, at *6 (finding the following
allegation to be conclusory: “Mr. Brady knowingly and willfully infringed upon Plaintiffs
copyrights. In addition, Mr. Brady was a moving, active conscious force behind the company’s
6 Plaintiff also argues that Vono can be held jointly and severally liable with the other
Defendants because he is a partner in the NAPLIA Partnership. [See Opp. Br. at 12.] The Court
disagrees. “[P]artners are liable jointly and severally for all debts, obligations, and other liabilities
of the partnership[.]” Revised Unif. P’ship Act § 306(a) (emphasis added). Here, there is no
allegation whatsoever that the NAPLIA Partnership is liable for any of the conduct alleged—
indeed, it is not a Defendant in this case—or that any of the Individual Defendants committed
tortious conduct in their capacities as partners within the NAPLIA Partnership. Rather, all of the
allegations in this case stem from a time period during which, it appears from the TAC, the
NAPLIA LLC was the entity acting as Plaintiffs insurance producer, and the Individual
Defendants were acting on behalf of the LLC. Thus, in no sense do Plaintiffs allegations, if true,
create “debts, obligations, [or] other liabilities of the partnership.” See id. As discussed above,
with exceptions not applicable here, “no member or manager of a limited liability company shall
be obligated personally for any such debt, obligation or liability of the limited liability company
solely by reason of being a member or acting as a manager of the limited liability company.” 6
Del. C. § 18-303(a).
or has reason to know that the trade secret was acquired by
improper means; or
(2) Disclosure or use of a trade secret of another without express or
implied consent of the trade secret owner by a person who:
(a) used improper means to acquire knowledge of the trade
(b) at the time of disclosure or use, knew or had reason to know
that the knowledge of the trade secret was derived or
acquired through improper means; or
(c) before a material change of position, knew or had reason to
know that it was a trade secret and that knowledge of it had
been acquired through improper means.
N.J. Stat. Ann.
§ 56:15-2. Under the NJTSA, “improper means” includes “breach or inducement
of a breach of an express or implied duty to maintain the secrecy of, or to limit the use or disclosure
of, a trade secret.” Id. The NJTSA defines a “trade secret” as:
Information, held by one or more people,.. that:
(1) Derives independent economic value, actual or potential, from
not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use; and
(2) Is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
The Court previously held that, at the pleading stage, Plaintiff adequately alleged that
“categories of information that it holds as trade secrets with respect to its products, its customers,
and its relationships[,]” were disclosed. [ECF No. 52 at 7-8.] The Court also previously held that,
as alleged, NAPLIA and Sutherland had “at least an implied duty to maintain the secrecy and
confidentiality of Plaintiffs trade secrets” based on the 2003 confidentiality agreement as well as
the “history and relationship” between Plaintiff, NAPUA, and Sutherland. [ECF No. 52 at 7.]
For purposes of the present motion, the Court finds that these determinations apply equally to the
claims against all of the Individual Defendants. Therefore, the only question at this stage is
whether each of the Individual Defendants personally are alleged to have breached or induced the
breach of the duty to maintain the secrecy of Plaintiffs information. See N.J. Stat. Ann.
The TAC alleges Sutherland and Tuncel acquired “details of [the] CPAG01dTM confidential
panel counsel list” and disclosed them to Plaza as part of the effort to convince Plaza to underwrite
the ProSecure program. [TAC
This is sufficient to withstand a motion to dismiss. On
the other hand, there are no allegations that Vono personally did anything with respect to Plaintiffs
proprietary information, including acquiring it or disclosing it to anyone.
Therefore, this claim must be dismissed as to Vono, but not as to Sutherland or Tuncel.
The law protects a person’s interest in a contract already made and in the reasonable
expectations of economic advantage. Harris v. Pen, 41 N.J. 455, 462 (1964). To prove a claim
for tortious interference with contractual relations and prospective economic relations, a plaintiff
must show that it had a reasonable expectation of economic advantage that was lost as a direct
result of the defendant’s malicious interference, and that it suffered losses thereby. Baldasarre v.
Butler, 132 N.J. 278, 293 (1993). The relevant inquiry is whether the conduct crosses the line
from competition to tortious injury. See Ideal Daiiy Farms, Inc. v. Farmland Daiiy Farms, Inc.,
282 N.J. Super. 140, 199 (App. Div. 1995).
The Court previously held that Plaintiff alleged “numerous acts of improper solicitation
taken by [NAPLIA and Sutherland] with respect to Plaintiffs customers.” [ECF No. 52 at 9.]
Indeed, Sutherland allegedly sent an e-mail to another one ofPlaintiffs producers asking to discuss
CPAG01dTM after NAPLIA had ceased to market this program, and Tuncel allegedly admitted to
Plaintiff, after this lawsuit was filed, that he had been “enticing’ many clients to NAPLIA over
the last couple months.” [TAC ¶51.] Read in the light most favorable to Plaintiff, the TAC alleges
Sutherland and Tuncel have personally participated in the improper solicitation of Plaintiffs
customers. Once again, however, there are no allegations specific to Vono, or any indications of
Vono’s role in the alleged tortious interference.
Therefore, this claim must be dismissed as to Vono, but not as to Sutherland or Tuncel.
RULE 11 SANCTIONS
The Court denies Plaintiffs motion for sanctions pursuant to Rule 11. [ECF No. 86.] The
decision to grant a motion for sanctions is within the discretion of the trial judge and is awarded
under Rule 11 “only in the exceptional circumstances where a claim or motion is patently
unmeritorious or frivolous.” Goldenberg v. Indel, Inc., No. 09—5202, 2011 WL 1134454, at *2
(D.N.J. Mar. 25, 2011) (citing Watson v. City of Salem, 934 F. Supp. 643, 662 (D.N.J. 1995);
accord Thomas & Betts Corp. v. Richards Mfg. Co., 342 F. App’x 754, 762 (3d Cir. 2009). The
standard used in the Third Circuit to determine when sanctions are appropriate is “reasonableness
under the circumstances.” Brubaker Kitchens, Inc. v. Brown, 280 F. App’x 174, 184 (3d Cir. 200$)
(internal citations omitted). Reasonableness is “an objective knowledge or belief at the time of
filing a challenged paper that the claim was well grounded in law and fact.” Ford Motor Co. v.
Summit Products, Inc., 930 F.2d 277, 289 (3d Cir. 1991).
The Court does not find the Individual Defendants’ motion to be unreasonable under the
Indeed, the Court has held in this Opinion that several of the Individual
Defendants’ arguments Plaintiff identifies as frivolous [sec ECF No. 86 at 2-8] are in fact
meritorious. The balance of the Individual Defendants’ arguments are not so lacking in merit as
to warrant sanctions.
For the reasons described herein, Defendants’ motion to dismiss is GRANTED as to Vono
but DENIED as to Sutherland and Tuncel. However, the Court grants Plaintiff 30 days from the
date of this Opinion to file a fourth amended complaint to address the pleading deficiencies
An appropriate order accompanies this Opinion.
CLAIRE C. CECCHI, U.S.D.J.
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