NEW ENGLAND FINANCIAL OF NORTH JERSEY LLC v. CREATIVE FINANCIAL GROUP OF NEW JERSEY

Filing 70

OPINION filed. Signed by Judge Anne E. Thompson on 7/24/2018. (km)

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
BARRETT FINANCIAL OF NORTH
JERSEY, LLC,
Plaintiff,
Civ. No. 13-5621
v.
CREATIVE FINANCIAL GROUP OF NEW
JERSEY,
Defendant.
BARRETT FINANCIAL OF NORTH
JERSEY, LLC and EDWARD P. BARRETT,
Civ. No. 14-3316
Plaintiffs/Counterclaim Defendants,
v.
OPINION
NEW ENGLAND LIFE INSURANCE
COMPANY,
Defendant/Counterclaim Plaintiff.
THOMPSON, U.S.D.J.
INTRODUCTION
This matter comes before the Court on cross-motions for summary judgment. Plaintiffs
Edward P. Barrett and Barrett Financial of North Jersey, LLC (collectively “Plaintiffs”) have
moved for partial summary judgment. (Civ. No. 13-5621, ECF Nos. 56, 57; Civ. No. 14-3316,
ECF Nos. 94, 95.) 1 Defendants Creative Financial Group of New Jersey and New England Life
Insurance Company (collectively “Defendants”) have moved for summary judgment on all of
Plaintiffs’ claims across both civil actions. (ECF Nos. 96, 97.) Both motions are opposed. The

1

Since the filings related to the Motions at issue in this Opinion appear on the Civ. No. 14-3316
docket, and only some are duplicated on the Civ. No. 13-5621 docket, all future references to
docket entries in this opinion correspond to the 14-3316 docket unless otherwise specified.

Court has decided the motions after considering the parties’ written submissions without oral
argument pursuant to Local Civil Rule 78.1(b). For the following reasons, Plaintiffs’ Motion is
denied and Defendants’ Motion is granted in part and denied in part.
BACKGROUND
These related cases arise out of a single contractual relationship and the fallout after its
termination but concern different claims and defendants. The cases were informally consolidated
for the limited purposes of discovery and case management on August 21, 2014. (See ECF No.
13.) The following core facts are undisputed, unless otherwise noted.
I.

The Contractual Relationship
Edward Barrett (“Mr. Barrett”), owner of Barrett Financial of North Jersey, LLC

(“Barrett Financial”) (formerly New England Financial of North Jersey, LLC), became an
independent contractor and Managing Partner in 2000 for New England Life Insurance Company
(“NELICO”), a life insurance and financial services company. (Defs.’ Statement of Undisputed
Material Facts (“SMF”) ¶¶ 1–5, ECF No. 96-2; Pls.’ SMF ¶ 1, ECF No. 103.) Mr. Barrett’s
governing Managing Partner Contract with NELICO (the “Contract”) was executed in December
2007. 2 (Defs.’ SMF ¶¶ 6–8; Pls.’ SMF ¶ 2; Barrett Dep. 225:16–226:20, ECF No. 97-6; see also
Defs.’ Ex. M, ECF No. 97-13; Pls.’ Ex. 1, ECF No. 95-1.) Pursuant to the Contract, Mr. Barrett
managed his own employees and payroll but utilized NELICO materials and exclusively sold its
products, primarily from a Fairfield, NJ agency location, with affiliated offices in Englewood
Cliffs, NJ; Princeton, NJ; and Silver Spring, MD. (Defs.’ SMF ¶¶ 9–10.)

2

In the Contract, Mr. Barrett is referred to as the “Corporate Manager,” his company (then called
New England Financial of North Jersey) is referred to as the “Corporate Managing Partner,” and
NELICO is referred to as the “Company.” (See Defs.’ Br. at 4 n.3, ECF No. 96-1.) This language
differs slightly from the terms used by the parties in their briefs and the Court in its discussion.
2

Section 16 of the Contract, the “Forfeiture of Contract” provision, specified that
. . . if the Corporate Managing Partner or a Corporate Manager
shall knowingly act in a fraudulent or unlawful manner as such
Corporate Managing Partner or Corporate Manager . . . the
Contract shall at once terminate without notice . . . .
(Defs.’ Ex. M § 16; Pls.’ Ex. 1 § 16.) The Contract also included provisions stating that any
debts owed by Barrett Financial (then New England Financial of North Jersey) to NELICO at the
termination of the Contract would be due within 90 days of termination, and that any NELICO
amounts payable to Barrett Financial would be paid within 90 days, subject to NELICO’s right to
offset any debt owed to NELICO from any amount payable to Barrett Financial. (Defs.’ Ex. M
§§ 17–18; see also Defs.’ SMF ¶¶ 57–58.)
The Contract did not provide for a buy-out of Barrett Financial upon termination of the
Contract nor address any equity interest transferred by virtue of the contractual relationship.
(Defs.’ SMF ¶¶ 75–78.) Further, Section 12 of the Contract provided that all payments of
renewal overrides to Plaintiffs following termination of the Contract would be made “only if all
conditions required by the Contract shall have been fulfilled . . . .” (Defs.’ SMF ¶ 69.)
Mr. Barrett asserts that, in addition to the Contract, he participated in the New England
Non-Qualified Retirement Plan for Managing Partners (the “Pension Plan” or “Managing Partner
Retirement Plan (‘MPRP’)”). (Pls.’ SMF ¶ 3.) Mr. Barrett was provided the terms of the Pension
Plan in a plan description document. (Pls.’ SMF ¶ 12; Pls.’ Ex. 2 (“2015 Program Description”),
ECF No. 95-2.) NELICO contends that Mr. Barrett never vested in the Pension Plan pursuant to
its terms. (Defs.’ Suppl. SMF ¶¶ 8–9, 15–20, ECF No. 99-1; compare Sabol Decl., Ex. A
(“Pension Plan”), ECF No. 99-7 (effective January 1, 2008, with amendments as recent as
October 15, 2013), with 2015 Program Description (effective January 2015).) Defendants assert
Mr. Barret is instead eligible for the Managing Partners Account Balance Plan, as well as the
3

Managing Partners Deferred Compensation Plan, but that benefits are not due to be paid to him
for some time. (Defs.’ SMF ¶ 72; Defs.’ Suppl. SMF ¶¶ 10–14.)
II.

The Contract is Terminated
Mr. Barrett’s company had long employed and sponsored foreign workers on its own

payroll, primarily from South Korea, utilizing H-1B visas. (See, e.g., Barrett Dep. 26:9–23, ECF
No. 101-8.) Mr. Barrett consulted an immigration attorney, Glenn Martin Miller, to oversee the
process of appropriately sponsoring these workers. (Pls.’ SMF ¶ 11; Barrett Dep. 26:19–23.)
Beginning in the spring of 2012, NELICO informed Mr. Barrett that NELICO was taking over
payroll (Defs.’ SMF ¶ 12); in April 2012, during this payroll transition, NELICO became aware
of Mr. Barrett’s foreign-sponsored employees, initiated an investigation, and ultimately informed
Mr. Barrett that he had to immediately end the H-1B sponsorships because their applications
were misleading and NELICO would not support continuing the sponsorships (id. ¶¶ 15–46).
NELICO asserts that Mr. Barrett knowingly submitted fraudulent or misleading H-1B
visa applications to the U.S. Citizenship and Immigration Services (“USCIS”) to sponsor foreign
workers, which, inter alia, included an invented job title to suggest greater specialization than
was required for the positions, misrepresented the degree requirements and duties of the jobs for
which they were hired, and obfuscated the hours their salaries would support, ultimately paying
these workers less than the prevailing federal minimum wage by sponsoring them for a part-time
salary but staffing them with full-time duties. (Id. ¶¶ 15–46.) After NELICO discovered these
issues, on August 1, 2012 it terminated Mr. Barrett effective September 30, 2012, suspending
him 60 days before the termination took effect pursuant to the Contract. (Defs.’ SMF ¶¶ 47–49.)
Michelle Pedigo, NELICO Regional Vice-President, informed Mr. Barrett of the termination,
which was recorded in a follow-up letter noting his termination “for the reasons we discussed.”

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(Id.; Pls.’ SMF ¶ 4; Defs.’ Ex. N, ECF No. 97-14; Pedigo Dep. 137:18–139:24, ECF No. 97-7;
Barrett Dep. 189:1–5, 236:2–239:17, ECF No. 97-6.) NELICO submitted a required U5 report to
the Financial Industry Regulatory Authority (“FINRA”) that gave “LOSS OF CONFIDENCE
(NON-SECURITIES RELATED)” as the explanation for Mr. Barrett’s termination. (Pls.’ SMF ¶
10; Pls.’ Ex. 5 at 2, ECF No. 95-5.)
III.

Post-Termination Activities and Disputes
NELICO installed Chris Furrule, Managing Partner of Creative Financial Group of New

Jersey (“Creative”), in Mr. Barrett’s place to manage the affected NELICO offices. (Defs.’ SMF
¶¶ 50–51.) With approval and oversight from NELICO, Creative issued a press release and
bought an advertisement in Forbes magazine announcing the appointment of Chris Furrule and
the “merger” of “New England Financial Group of North Jersey” and Creative. (Pls.’ SMF ¶ 6;
Pls.’ Opp’n Ex. 16, ECF No. 101-16; Pls.’ Opp’n Ex. 17, ECF No. 101-17.) 3 Under the Contract,
the phrase “New England Financial” was a registered trademark owned by NELICO. (See Pls.’
Opp’n Ex. 1, ECF No. 101-1; see also Defs.’ Ex. M § 21.) Pursuant to the terms of the Contract,
however, New England Financial of North Jersey was an independent contractor of NELICO
(Defs.’ SMF ¶¶ 71, 73), not a subsidiary entity. Further, Chris Furrule did not pay any sum to
NELICO in exchange for his increased management responsibilities (id. ¶ 78) or otherwise
obtain equity in New England Financial of North Jersey at the time of this “merger,” as that
entity remained owned by Mr. Barrett alone. (See generally Defs.’ Br. at 27, ECF No. 96-1.)

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Defendants object to the exhibits Plaintiffs submitted with their opposition brief, arguing they
were not properly authenticated. (See Defs.’ Reply at 4–6, ECF No. 104.) In order to provide as
complete an analysis as possible, the Court has consulted these exhibits and cited them where
appropriate. Defendants can renew remaining evidentiary objections at trial.
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During the transition, Mr. Barrett’s assistant and others packed up his personal items and
files and delivered them to his home within a week of the termination of the Contract. (Defs.’
SMF ¶ 52; see also id. ¶ 53.) After Creative took over the Fairfield location, Mr. Barrett’s
Controller Nancy Kennaly remained in the office for a few months to wind up and manage
Barrett Financial’s books and affairs. (Id. ¶ 54.) NELICO also conducted a reconciliation
pursuant to the Contract, determining outstanding debts and revenue owed by and between
NELICO and Barrett Financial. (Id. ¶¶ 57–58.) Ms. Kennaly inventoried the furniture and
fixtures in the Fairfield office, which Creative shared with NELICO to determine which items
belonged to Plaintiffs. (Id. ¶ 56.) Mr. Barrett came once to the Fairfield office to collect some
items, but was unable to take everything at that time. (Id. ¶ 60.) When given another opportunity
to collect additional items, Mr. Barrett declined, stating “[w]hat am I going to do with 44,000
square feet of office furniture and filing cabinets and wall furnishings?” (Id. ¶ 61.) As part of the
relief sought in Plaintiffs’ governing Complaints, Plaintiffs seek return of financial documents,
immigration files, and furnishings they believe to still be within Defendants’ possession and
control; however, NELICO asserts that the relevant documents were returned to Plaintiffs, but
financial records of the firm are the property of NELICO under the Contract. (Id. ¶¶ 84–86.)
Creative paid rent at the Silver Spring location for about a year and a half from the time it
assumed the office, ending in March 2014. (Id. ¶¶ 79–80.) NELICO eventually closed the
Englewood Cliffs and Silver Spring offices, which had been leased in Plaintiffs’ names. (Id. ¶
59.) Creative never formally took over the lease as renter, leaving Mr. Barrett to settle with the
landlord for $10,000 against a default judgment on unpaid rent for the time which remained on
the Silver Spring lease after NELICO closed the office there. (Pls.’ SMF ¶ 5; Pls.’ Opp’n Ex. 13,
ECF No. 101-13; Pls.’ Opp’n Ex. 14, ECF No. 101-14; see also Defs.’ SMF ¶ 83.) Plaintiffs also

6

incurred a separate debt for the unpaid lease of a Toshiba phone system in the Silver Spring
office. (See Pls.’ Opp’n Ex. 3, ECF No. 101-3.) 4
Plaintiffs assert that Creative was improperly given access to a Taleo recruiting database,
which Barrett Financial used to gather and house information on potential financial advisors.
(Defs.’ SMF ¶ 87.) NELICO had a separate company-wide Taleo database, but Barrett Financial
maintained its own secure database. (Id. ¶ 88.) Creative employees assumed that the Barrett
Financial Taleo database was paid for and owned by NELICO, and changed the password during
the transition, preventing Plaintiffs from accessing their own data for ten or eleven months. (Id.
¶¶ 89–94.) Creative stopped accessing this separate, non-NELICO database once it learned there
was a dispute over ownership. (Id. ¶ 96.)
IV.

Abbreviated Litigation History
Plaintiffs filed two separate lawsuits against Defendants with a host of contract and tort

claims. In 2013, Plaintiff Barrett Financial brought suit against Creative and in 2014, Plaintiffs
brought suit against NELICO. NELICO answered and asserted contract-based counterclaims.
The parties then engaged in discovery. All told, Plaintiffs assert, based on their expert reports,
that Mr. Barrett is owed $1,057,115.79 under the Contract (Pls.’ SMF ¶ 8) and $2,221,931.24
under the Pension Plan (id. ¶ 13). On its breach of contract counterclaim, NELICO seeks
damages of more than $800,000 for incentive compensation advances for 2011–2012 that were
paid to Mr. Barrett as loans; Home Office Accounts Receivable (“HOAR”) charges incurred by
NELICO on behalf of Plaintiffs; and other sums. (Defs.’ SMF ¶ 67.)

4

Plaintiffs’ claim regarding buying out the telephone system contract at the Silver Spring office
did not arise until after NELICO terminated the Contract and Plaintiffs had filed the original
Complaint in this lawsuit. (Defs.’ SMF ¶ 81.) The Amended Complaint reflects this claim. (Am.
Compl. ¶¶ 79–85, ECF No. 23.)
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The parties filed cross-motions for summary judgment on January 12, 2018. Plaintiffs
have moved for partial summary judgment only against Defendant NELICO, and only on
Plaintiffs’ breach of contract claim, a claim for benefits under the Pension Plan, and NELICO’s
counterclaim for breach of the implied covenant of good faith and fair dealing. (ECF Nos. 94,
95.) Defendants oppose. (ECF No. 99). Plaintiff has replied (ECF No. 102), also submitting a
late-filed Statement of Undisputed Material Facts (ECF No. 103) which the Court has considered
in its discretion (see ECF No. 115). Judge Martinotti permitted Defendants to file one extra-long
brief covering claims in the two separate lawsuits. (ECF Nos. 92, 93.) Defendants have moved
for summary judgment on all claims asserted by Plaintiffs, but not on their own counterclaims.
Their combined brief (ECF Nos. 96, 97), all opposition thereto (ECF Nos. 100, 101), and their
reply (ECF No. 104) appear only on the 14-3316 docket. These cases were reassigned to Judge
Anne E. Thompson on April 16, 2018. The Court now considers the Motions.
LEGAL STANDARD
Summary judgment shall be granted if “the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A dispute is “genuine” if it could lead
a “reasonable jury [to] return a verdict for the nonmoving party.” Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). A fact is “material” if it will “affect the outcome of the suit under
the governing law.” Id. When deciding the existence of a genuine dispute of material fact, a
court’s role is not to weigh the evidence; all reasonable “inferences, doubts, and issues of
credibility should be resolved against the moving party.” Meyer v. Riegel Prods. Corp., 720 F.2d
303, 307 n.2 (3d Cir. 1983); Curley v. Klem, 298 F.3d 271, 276–77 (3d Cir. 2002). In resolving a
motion for summary judgment, a district court considers the facts drawn from “materials in the

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record,” including depositions, documents, affidavits, and declarations. Fed. R. Civ. P.
56(c)(1)(A). The court must determine “whether the evidence presents a sufficient disagreement
to require submission to a jury or whether it is so one-sided that one party must prevail as a
matter of law.” Anderson, 477 U.S. at 251–52. However, “[s]ummary judgment is inappropriate
if an issue depends upon the credibility of witnesses, because credibility can best be determined
only after the trier of fact observes the witnesses’ demeanor.” Tunis Bros. Co. v. Ford Motor Co.,
763 F.2d 1482, 1492 n.17 (3d Cir. 1985), judgment vacated, 475 U.S. 1105 (1986). Summary
judgment is similarly inappropriate when a party’s knowledge is at issue, “because evaluating
state of mind often requires the drawing of inferences from the conduct of parties about which
reasonable persons might differ.” Justofin v. Metro. Life Ins. Co., 372 F.3d 517, 524 (3d Cir.
2004), as amended (Aug. 12, 2004).
DISCUSSION
I.

Claims Against NELICO
NELICO moves for summary judgment on all of Plaintiffs’ claims: conversion, trespass

to chattels, and unjust enrichment (Counts I, II, and IV); breach of contract and breach of the
duty of good faith and fair dealing (Counts III and VI); unlawful interference with prospective
economic advantage and tortious interference with an existing contract (Counts V, VIII, and IX);
and indemnification (Count VII). Plaintiffs move for summary judgment on their own breach of
contract claim (Count III), an un-pled breach of the Pension Plan, and NELICO’s counterclaim
for breach of the duty of good faith and fair dealing (Second Counterclaim). As an initial matter,
Defendants assert and Plaintiffs do not deny that the Contract is governed by Massachusetts law,
but all tort claims are governed by New Jersey law.

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A. Contract-Related Claims: Breach of Contract (Counts III), Unjust Enrichment (Count
IV), and Breach of the Duty of Good Faith and Fair Dealing (Count VI)
Plaintiffs seek summary judgment and damages for breach of contract based on
NELICO’s failure to pay amounts Plaintiffs believe are due and owing under the Contract,
particularly vested renewal overrides under Section 12. (See Pls.’ Br. at 5–13, ECF No. 95.)
Defendants argue that Plaintiffs’ breach of contract claim fails, and therefore summary judgment
must be entered for Defendants, because Plaintiffs’ conduct allowed them to lawfully void the
contract by its express terms. 5 (Defs.’ Br. at 20–24.) Alternatively, Defendants argue their right
to a setoff under Section 18 precludes summary judgment in favor of Plaintiff.
The reason for Mr. Barrett’s termination is hotly contested by the parties and material to
their contract-related disputes. Plaintiffs argue that NELICO never indicated that Mr. Barrett was
fired for cause or for engaging in fraud and, instead, Mr. Barrett’s termination was motivated by
Defendants’ desire to forego having to pay him a vested benefit under the Pension Plan. (Pls.’
Br. at 7–9, ECF No. 95; Pls.’ Opp’n Br. at 7–10, ECF No. 100.) Defendants argue that, though
not fired for cause because of NELICO’s longstanding professional relationship with Mr. Barrett,
Mr. Barrett was fired for misleading, unlawful conduct under Section 16 of the Contract, which
allowed Defendants to cancel the Contract. (See Defs.’ Opp’n Br. at 11–13, ECF No. 99.)
The “forfeiture of contract” language in Section 16 is broad-textured, triggered when the
Corporate Managing Partner or Corporate Manager “knowingly act[s] in a fraudulent or unlawful

5

Section 16 of the Contract enshrines the general contract law principle that a material breach of
the contract by one party excuses the other party’s subsequent performance under the contract,
see, e.g., Lease-It, Inc. v. Mass. Port Auth., 600 N.E.2d 599, 602 (Mass. App. Ct. 1992). The
Contract re-styles this principle by voiding the Contract in the face of one party’s knowing
fraudulent or unlawful conduct, instead of merely excusing performance. While material breach
would therefore traditionally appear as a defense to enforcement, here it appears as a claim to
enforce the contract.
10

manner . . . .” (Defs.’ Ex M at 7; Pls.’ Ex. 1 at 7.) At least part of the provision is subject to “the
opinion of the Company” on whether the manager “has engaged in the behavior described in this
Section . . . .” (Defs.’ Ex M at 7; Pls.’ Ex. 1 at 7.) Defendants assert that Mr. Barrett “knowingly
act[ed] in a fraudulent or unlawful manner” in sponsoring H-1B visa holders who were not
eligible for those visas on two scores: (1) their positions did not require Bachelor’s degrees, but
Mr. Barrett represented that they did in order to meet federal requirements for the visa
sponsorships, and (2) they were hired as full-time employees, but Mr. Barrett sponsored them as
part-time employees in order to comply with federal prevailing wage standards. Plaintiffs argue
that Defendants cannot raise a fraud defense at this stage when it was never pled with
particularity as an affirmative defense or counterclaim. (Pls.’ Opp’n Br. at 12–14, ECF No. 100.)
First, the phrase “fraudulent or unlawful manner” is not defined in the Contract. Nothing
in the Contract requires Defendants to have pled fraud as an affirmative defense or to have
brought an action charging Plaintiff with fraud in order to invoke this provision. Thus, Plaintiffs’
argument is unavailing. (See Defs.’ Opp’n Br. at 10, ECF No. 99.) Indeed, Defendants do not
argue that Plaintiffs perpetrated a fraud against Defendants. Rather, Defendants argue that
Plaintiffs engaged in fraudulent conduct directed toward USCIS by submitting false or
misleading H-1B visa applications. The Court does not interpret the Contract to require that a
Corporate Managing Partner or Corporate Manager be charged with fraud, or served with a fraud
claim, to trigger this provision. The appropriate standard seems to be whether NELICO
reasonably believed Mr. Barrett had acted dishonestly, misrepresented a fact material to his job
duties, or otherwise acted unlawfully in the performance of the managerial role. 6

6

Black’s Law Dictionary defines “fraud” as “[a] knowing misrepresentation of the truth or
concealment of a material fact to induce another to act to his or her detriment.” Fraud, Black’s
Law Dictionary (9th ed. 2009). Further, it defines “fraudulent act” as “[c]onduct involving bad
11

Second, this section also specifies that the Contract would be forfeited and voided only
when the Corporate Managing Partner or Corporate Manager “knowingly” acted in a fraudulent
or unlawful manner. (Defs.’ Ex M at 7; Pls.’ Ex. 1 at 7.) The question of whether Mr. Barrett
knew that the immigration forms were misrepresentations or were unlawful is a genuinely
disputed material fact. Mr. Barrett avers that he relied on the advice of counsel in preparing the
visa applications as well as verbal representations, application reviews, and a generally
permissive policy by NELICO’s corporate staff in determining that the company would permit
him to hire Korean nationals. (See Pls.’ Opp’n Br. at 8; Pls.’ Opp’n Ex. 18, ECF No. 101-18.)
NELICO avers that it maintained a policy of not soliciting or sponsoring H-1B visa candidates
and would never have approved Mr. Barrett’s sponsorships if it understood the manner by which
he documented and obtained the visas.
This dispute is dispositive to the parties’ rights under the Contract and its centrality
precludes summary judgment. The parties’ respective claims for breach of the implied covenant
of good faith and fair dealing, a claim sounding in contract law, are likewise genuinely disputed.
Therefore, summary judgment is denied on Plaintiffs’ breach of contract and good faith and fair
dealing claims (Am. Compl., Counts III, VI, ECF No. 23) and NELICO’s good faith and fair
dealing counterclaim (Second Counterclaim, ECF Nos. 9, 28).
Plaintiffs also make a claim for unjust enrichment against NELICO, which sounds in tort
but arises under the Contract. Defendants assert this claim is barred by the economic loss
doctrine. “[T]he economic loss doctrine prohibits plaintiffs from recovering in tort economic
losses to which they are entitled only by contract. . . . Whether a tort claim can be asserted

faith, dishonesty, a lack of integrity, or moral turpitude.” Fraudulent Act, Black’s Law
Dictionary (9th ed. 2009).
12

alongside a breach of contract claim depends on whether the tortious conduct is extrinsic to the
contract between the parties.” Arcand v. Brother Int’l Corp., 673 F. Supp. 2d 282, 308 (D.N.J.
2009) (citation omitted). Plaintiffs allege that NELICO was unjustly enriched because it has yet
to pay Plaintiffs under the Contract. (Am. Compl. ¶¶ 48–50.) The Amended Complaint as pled
admits that the alleged tortious conduct is not “extrinsic to the contract between the parties” but
in fact directly arises from it. (Defs.’ Br. at 20.) Therefore, summary judgment is granted in favor
of NELICO on Count IV of Plaintiffs’ Amended Complaint.
B. Pension Benefits
Without having pled a separate Count or cause of action under the Pension Plan in the
Amended Complaint against NELICO, Plaintiffs also move for summary judgment for the
benefits allegedly due to Mr. Barrett under the Pension Plan. Assuming without deciding that
Plaintiffs have sufficiently pled a claim regarding benefits (compare Defs.’ Opp’n Br. at 17–19,
with Pls.’ Reply at 2, ECF No. 102), it is clear that Mr. Barrett never vested in the Pension Plan.
The Pension Plan document which appears to have governed during the time of Mr.
Barrett’s contractual relationship with NELICO states unequivocally, “The Participant shall vest
in her/his Accrued Benefit upon the later of: (1) reaching age 55 and (2) attaining 5 years of
Credited Service.” (Pension Plan ¶ 6.1, ECF No. 99-7.) The parties agree that Mr. Barrett was
terminated at age 49, with 18 years of service. (See, e.g., Defs.’ Suppl. SMF ¶ 17.) Since he had
already attained five years of Credited Service, the later of the two trigger events would be
attaining age 55. He was still six years away and therefore did not vest in the Pension Plan before
the Contract terminated. His accrued benefit is therefore forfeited. (Defs.’ Opp’n Br. at 20.) Even
under the draft 2015 Program Description on which Plaintiffs rely, the “At A Glance” table on
page two explains in the “Vesting and Forfeitures” column: “You will vest in your accrued

13

benefit upon the later of the date you attain age 55 while working as a Managing Partner (or,
after December 31, 2014, in a MetLife Sales Management Role) or complete 5 years of Credited
Service or Vesting Service.” (Pls.’ Ex. 2 at 2, ECF No. 95-2 (emphasis added).) 7
Plaintiffs ignore this provision and rely on the later description under the heading
“Vesting,” which reads: “Your accrued benefit under the Plan will vest when you: (i) attain age
55 while you are a Managing Partner or work in a Sales Management Role; or (ii) complete 5
years of Credited Service or Vesting Service, whichever occurs later.” (Id. at 8.) Plaintiffs argue
that this use of punctuation—a semicolon separating the two triggering events, with only a
comma separating the phrase “whichever occurs later”—suggests that the phrase “whichever
occurs later” does not modify the options separated by semicolons, but rather applies to the
alternatives of “Credited Service” and “Vesting Service” in the second clause. (Pls.’ Br. at 14–
16, ECF No. 95.) This grammatical argument follows standard principles of contract
interpretation. (See id. at 15–16.) Following Plaintiffs’ logic, Mr. Barrett vested because he had
18 years of service.
Plaintiffs’ interpretation fails for two reasons: (1) it is inconsistent with the above-quoted
language from the At A Glance of the same document, and (2) the definition of Vesting Service
clarifies the drafters’ intent. The paragraph immediately following the language on which
Plaintiffs rely explains, “‘Vesting Services’ [sic] means service with MetLife in a Sales
Management Role after a Managing Partner Contract terminated. Vesting Service only applies to
individuals whose roles converted directly from a Managing Partner role to a Sales Management

7

The Court notes that the 2015 Program Description explains, “Since this Program Description
provides a summary of the Plan, it neither replaces the official Plan documents that legally
govern the Plan, nor does it cover all aspects of the Plan. The applicable Plan documents will
govern in every respect.” (Pls.’ Ex. 2 at 3.) The paragraph continues by providing a phone
number from which a participant can request a copy of the Plan documents.
14

Role between January 1, 2014, and January 31, 2015.” (Pls.’ Ex. 2 at 8.) Since Mr. Barrett had
no contractual relationship with MetLife during the definitional period, he had no Vesting
Service. (But see Pls.’ Br. at 14 (“Mr. Barrett had both 5 years of credited service and vesting
service.” (emphasis in original).) It appears the phrase Vesting Service was added to reflect a
transition in roles at NELICO, not to be an alternative path of vesting in the Pension Plan which
could happen “later” than one’s Credited Service.
The Court finds the phrase “whichever occurs later” applies to the semicolon-separated
alternatives—reaching age 55 or attaining 5 years of Service (whether Credited or Vesting). Mr.
Barrett thus never vested in the Pension Plan and has no claim to benefits. (See Pls.’ Ex. 2 at 8
(“If your accrued benefit under the Plan is not vested at the time your Managing Partner
relationship with the Company . . . terminates for any reason other than death, your entire
accrued benefit under the Plan will be forfeited.”).) Summary judgment is denied to Plaintiff
Barrett on any claims regarding the Pension Plan, and to the extent they were sufficiently pled,
these claims may not proceed.
C. Tort-Based Claims
1. Counts I and II: Conversion and Trespass to Chattels
The companion torts of conversion 8 and trespass to chattels 9 boil down to wrongful
interference with an individual’s possession or use of their own property. In the Amended

8

“The elements of common law conversion under New Jersey law are (1) the existence of
property, (2) the right to immediate possession thereof belonging to plaintiff, and (3) the
wrongful interference with that right by defendant.” Ricketti v. Barry, 2015 WL 1013547, at *8
(D.N.J. Mar. 9, 2015)
9
“A trespass to chattel may be committed by ‘intentionally (a) dispossessing another of the
chattel, or (b) using or intermeddling with a chattel in the possession of another.’” Exxonmobil
Oil Corp. v. Wakile & Sons, Inc., 2009 WL 3818151, at *3 (D.N.J. Nov. 13, 2009) (citations
omitted).
15

Complaint, Plaintiffs allege that Defendants wrongfully retained possession of Plaintiffs’ files,
furnishings, and fixtures, “including [Barrett Financial’s] financial records, personal client files,
employee files (including immigration files related to work visa sponsorships) and Barrett’s
personal files containing confidential information about Barrett and his family, balance sheets
and tax returns, office equipment and furnishings, databases, and systems purchased by Barrett
and/or [Barrett Financial].” (Am. Compl. ¶ 27.) Defendants argue that Plaintiffs’ property tort
claims fail because (1) Plaintiffs have not identified the wrongfully possessed property with
sufficient specificity, (2) Plaintiffs voluntarily abandoned the property, and (3) the claims are
barred by the economic loss doctrine. (Defs.’ Br. at 17–20; see also Defs.’ Reply at 10–12, ECF
No. 104 (focusing on economic loss doctrine).) At summary judgment, Plaintiffs supported their
allegations with documentary evidence, including a copy of an office inventory created by Mr.
Barrett, and Mr. Barrett’s deposition testimony. (See, e.g., Pls.’ Opp’n Ex. 5, ECF No. 101-5.)
Based on this record evidence, Plaintiffs have sufficiently specified the disputed property.
The Court next considers whether Plaintiffs abandoned the property, which is a complete
defense to these torts. See, e.g., Taffaro v. Taffaro, 2015 WL 3511932, at *3 (N.J. Super. Ct.
App. Div. June 5, 2015) (“Property is abandoned when its possessor voluntarily relinquishes ‘all
right, title, claim and possession,’ of the property ‘with the intention of not reclaiming it.’ It
follows then that abandonment is a complete defense to conversion.” (citation omitted)). Citing
Mr. Barrett’s deposition, Defendants argue that Mr. Barrett’s failure to retrieve the property he
believes was wrongfully withheld from him absolves them of any liability in tort. (Defs.’ Br. at
18–19 (citing Barrett Dep. 273:6–8).) However, Defendants selectively parse Mr. Barrett’s
testimony, failing to note that he was told and believed he would be arrested if he returned to the
office premises. (See generally Barrett Dep. 271:9–274:13.) Therefore, the Court does not find

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that Defendants have met their burden to prove that Mr. Barrett voluntarily relinquished the
property with the intention of not reclaiming it. At the very least, his intention is a disputed fact.
Whether Defendants demonstrated intent to deprive Plaintiffs of their property is also a disputed
fact.
Finally, the Court considers the applicability of the economic loss doctrine, see supra
Section I.A. (determining that economic loss doctrine bars Plaintiffs’ claim of unjust
enrichment). Some of the items for which Plaintiffs now seek compensation may have been
subject to the Contract. (See Defs.’ Ex. M (Section 8, which governs books, records and bank
deposits of the firm; and Section 9, which governs office supplies, furniture, equipment and
fixtures “furnished by the Company”).) Although Defendants argue the Contract deals
sufficiently with “physical assets” (see Defs.’ Br. at 27), and therefore precludes tort remedies,
the Contract is silent as to office supplies, furniture, equipment, and fixtures supplied by
Plaintiffs, as well as Barrett Financial’s employee personnel files and personal client files—the
bulk of the property Plaintiffs seek. The Contract was drafted to protect NELICO, and specifies
NELICO’s ownership rights post-termination, without commenting on Plaintiffs’ rights to
property that Plaintiffs had furnished for company use, including before Plaintiffs had a
contractual relationship with NELICO. Much of the property in question is arguably extrinsic to
the Contract, and the Court denies summary judgment on the basis of the economic loss doctrine.
The conversion and trespass to chattels claims (Counts I and II) survive summary judgment.
2. Count V: Unlawful Interference with Prospective Economic Advantage
Under New Jersey common law, “[a]n action for tortious interference with a prospective
business relation protects the right to pursue one’s business, calling or occupation free from . . .
[t]he luring away, by devious, improper and unrighteous means, [] the customer of another.”

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Printing Mart-Morristown v. Sharp Elecs. Corp., 563 A.2d 31, 36 (N.J. 1989) (internal citations
and quotations omitted). A plaintiff must prove (1) the existence of a protectable right leading to
a reasonable expectation of economic advantage; (2) that the defendant interfered with that right
intentionally and with malice; (3) that the interference caused the loss of the prospective gain;
and (4) that the injury caused damage. Id. at 37.
Plaintiffs assert that NELICO interfered with Plaintiffs’ prospective economic advantage
and attempted to coopt Plaintiffs’ customer goodwill through the post-termination announcement
of a “merger” between Creative and the entity which became Barrett Financial. (See Pls.’ Opp’n
Br. at 14–16; see also Am. Compl. ¶¶ 51–57.) Defendants argue that Plaintiffs’ claim for
unlawful interference with prospective economic advantage is barred as a matter of law because
of the contractual relationship between Plaintiffs and NELICO. (See Defs.’ Br. at 28 (citing
Printing Mart-Morristown, 563 A.2d at 37 (“Where a person interferes with the performance of
his or her own contract, the liability is governed by principles of contract law.”)).) However, this
rule of law is inapposite to Plaintiffs’ claim, because Plaintiffs assert NELICO interfered with
Plaintiffs’ prospective business relationships with clients and business partners after the Contract
was terminated. (See Pls.’ Opp’n Br. at 15.)
Nevertheless, a claim for tortious interference with prospective economic advantage
requires a plaintiff to identify more than a potential relationship, but rather one that would
deliver “a reasonable expectation of economic benefit.” Printing Mart-Morristown, 563 A.2d at
38; see also Diversified Indus., Inc. v. Vinyl Trends, Inc., 2016 WL 6897783, at *9 (D.N.J. Nov.
22, 2016) (“To prevail on such a claim, ‘a plaintiff must show that if there had been no
interference[,] there was a reasonable probability that the victim of the interference would have
received the anticipated economic benefits.’” (quoting Printing Mart-Morristown, 563 A.2d at

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37)). Beyond broad, speculative statements (see, e.g., Pls.’ Opp’n Br. at 15 (suggesting Plaintiffs
“could have continued [to operate] through a contract with another insurance company[,]” but
were prevented from doing so by the announcement of the merger)), Plaintiffs have not
identified for the Court any prospective or nascent client or contractual relationship harmed by
the “merger” announcement. Indeed, because Plaintiffs could no longer sell NELICO products
once the Contract ended, their economic prospects were far more speculative. On this record,
Plaintiffs have not adduced sufficient evidence to demonstrate a genuine dispute of material fact
with respect to their own economic prospects. 10 Therefore, summary judgment will be granted
for Defendant NELICO on Count V.
3. Counts VII, VIII, and IX: Express and Implied Indemnification and Tortious
Interference with an Existing Contract
Plaintiffs’ claims for indemnification and tortious interference with an existing contract
relate to the same underlying facts. Plaintiffs aver that they were forced to settle claims against
their lease in the Silver Spring office and against phone system contracts for both the Silver
Spring and Fairfield offices due to NELICO’s intentional interference with those contracts;
alternatively, NELICO is liable to indemnify because it effectively took over those contracts by
paying the rent and deriving contractual benefits owed to Plaintiffs. (See Am. Compl. ¶¶ 61–85.)

10

At the time of the announcement Mr. Barrett’s company was named New England Financial of
North Jersey—a name which included the registered trademark “New England Financial,”
owned by NELICO pursuant to the Contract. (See Pls.’ Opp’n Ex. 1, ECF No. 101-1; see also
Defs.’ Ex. M § 21.) The “merger” announcement therefore presents complicated questions about
whether Defendant NELICO was within its rights under the Contract or whether the
announcement was extrinsic to the Contract and interfered with Plaintiffs’ rights. (See, e.g., Pls.’
Opp’n Ex. 17, ECF No. 101-17 (email records among MetLife personnel discussing the language
and timing of the merger announcement, including an email dated 9/12/12 in which Michelle
Pedigo noted “Due to legal constraints, we can’t use the North Jersey name.”).) However, these
questions are not material to Plaintiffs’ reasonable expectations of economic benefit.
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“Under New Jersey law, to establish a claim of tortious interference with contract a
plaintiff must show (1) it was a party to an existing contractual relationship; (2) the defendant
intentionally interfered with that contractual relationship; (3) the interference was undertaken
with malice; and (4) plaintiff suffered damages resulting from the interference.” Diversified
Indus., Inc., 2016 WL 6897783, at *6 (citing Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153,
1167 (3d Cir. 1992); Printing Mart-Morristown, 563 A.2d at 37). Although Plaintiffs introduced
evidence to support the existence of the contractual relationships and damages suffered (see Pls.’
Opp’n Ex. 3, ECF No. 101-3; Pls.’ Opp’n Ex. 11, ECF No. 101-11; Pls.’ Opp’n Ex. 13, ECF No.
101-13; Pls.’ Opp’n Ex. 14, ECF No. 101-14), they have voluntarily abandoned these claims (see
Pls.’ Opp’n Br. at 1 n.1, 21 n.10). Therefore, summary judgment is granted in favor of Defendant
NELICO on Counts VIII and IX.
Under the parallel indemnification theories, Plaintiffs argue that NELICO is obligated
under the Contract to indemnify Barrett Financial or, alternatively, that Plaintiffs are entitled to
equitable indemnification for the amount paid on the leased space occupied by and leased phone
systems utilized by NELICO. Turning first to express indemnification, Defendants compellingly
argue that the indemnification provision of the Contract in Section 6 does not apply to the
circumstances here. (See Defs.’ Br. at 34–36 (citing Defs.’ Ex. M § 6).) By a plain reading of the
Contract, the indemnification provision ceased to govern the conduct of the parties when the
Contract terminated. The events which led to the debts that Plaintiffs seek to have indemnified
transpired more than a year after the contractual relationship terminated. NELICO cannot be held
liable under the Contract for conduct that transpired post-termination, when it was no longer
acting pursuant to the Contract. Summary judgment is granted in favor of Defendant NELICO on
Plaintiffs’ express indemnification claim in Count VII (Compl. ¶¶ 65–69).

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Plaintiffs argue in the alternative that NELICO is liable under equitable or implied in fact
indemnification because a “special relationship” exists between NELICO and Plaintiffs arising
from the fact that “Defendants opted to seize the business of [Plaintiffs].” (See Pls.’ Opp’n Br. at
18; see also Am. Compl. ¶¶ 61–64). “[I]mplied indemnification by way of a special relationship
is a ‘narrow doctrine’ that is not frequently stretched beyond the examples of principal-agent,
employer-employee, lessor-lessee, and bailor-bailee.” Katz v. Holzberg, 2013 WL 5946502, at
*3 (D.N.J. Nov. 4, 2013) (citation omitted). Defendants argue that Plaintiffs cannot benefit from
this doctrine, as “Plaintiffs have offered no legal justification to expand this narrow doctrine to
the instant independent contractor relationship.” (Defs.’ Reply at 13; see also Defs.’ Br. at 32–
33.) This retort is a red herring—Plaintiffs do not base implied indemnification on the
contractual relationship, but rather on post-termination events. In essence, Plaintiffs argue that
NELICO impliedly took over Plaintiffs’ lease contracts and should not be able to have made
decisions affecting Plaintiffs’ liability on the leases, without any advanced warning to Plaintiffs,
without having to bear the financial consequences for those decisions. Construing all facts in
Plaintiffs’ favor, the post-Contract state of affairs may be akin to a lessor-lessee relationship.
Noting that the other elements of Plaintiffs’ claim remain disputed, the equitable indemnification
theory may proceed. Summary judgment is denied on Count VII (Compl. ¶¶ 61–64).
II.

Claims Against Creative
As an initial matter, Plaintiff Barrett Financial “does not oppose dismissal of Claim VIII

against [Defendant Creative] (Violation of the Computer Fraud and Abuse Act) . . . .” (Pls.’
Opp’n Br. at 18 n.9.) Accordingly, summary judgment is granted in favor of Defendant Creative
on Count VIII of Plaintiff Barrett Financial’s Complaint (Civ. No. 13-5621, ECF No. 1).

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A. Counts I & II: Conversion & Trespass to Chattels
1. As to Physical Property
Much of the above analysis of conversion and trespass to chattels with respect to
Defendant NELICO (see supra Section I.C.1; see also supra notes 8 and 9) applies with equal
force to Plaintiff Barrett Financial’s claims against Defendant Creative with respect to physical
property. The parties genuinely dispute Creative’s intent to exercise dominion over or to interfere
with Plaintiff’s use of the physical property, as well as Barrett Financial’s intent to voluntarily
abandon the property. Summary judgment is denied to Defendant Creative on Counts I and II
with respect to physical property (Civ. No. 13-5621, Compl. ¶¶ 15–26, ECF No. 1).
2. As to Data
Under New Jersey law, “[c]onversion requires interference with tangible rather than
intangible property.” Argush v. LPL Fin. LLC, 2014 WL 3844822, at *6 (D.N.J. Aug. 5, 2014)
(internal quotations omitted). New Jersey law does not accommodate a claim for conversion of
data, which constitutes intangible property. See, e.g., Bellak v. Wells Fargo & Co., 2017 WL
6496563, at *5 (D.N.J. Dec. 19, 2017) (citing Mu Sigma, Inc. v. Affine, Inc., 2013 WL 3772724,
at *11 (D.N.J. July 17, 2013) (“[C]lient lists, pricing information and the like . . . are not
considered tangible objects for the purposes of conversion.”)); see also Syngy, Inc. v. ZS Assocs.,
Inc., 2015 WL 899408, at *40 n.13 (E.D. Pa. Mar. 3, 2015) (collecting cases under New Jersey
law on conversion’s required element of tangible property). Therefore, summary judgment is
granted in favor of Defendant Creative with respect to data on Count I.
New Jersey courts have not squarely addressed whether the tort of trespass to chattels can
apply to intangible property that has been wrongfully possessed or used. Defendants cite a single
case out of the Western District of Tennessee which dismissed a trespass to chattels claim under

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Florida law on this basis. (Defs.’ Br. at 43 (citing Inventory Locator Serv., LLC v. Partsbase,
Inc., 2005 WL 2179185, at *11–12 (W.D. Tenn. Sept. 6, 2005)).) Further, Plaintiff “fails to cite
any support for the proposition that anything other than tangible personal property, or tangible
evidence of title to intangible or real property[,] is subject to [trespass to chattels] so that a cause
of action may lie.” Cameco, Inc. v. Gedicke, 690 A.2d 1051, 1058 (N.J. Sup. Ct. App. Div.
1997), aff’d as modified and remanded, 724 A.2d 783 (N.J. 1999). The Court is left to consult
the Restatement (Second) of Torts, which dictates that, like conversion, trespass to chattels
requires tangible personal property over which one can have physical control. See Restatement
(Second) of Torts §§ 216–217; see also Chattel, Black’s Law Dictionary (9th ed. 2009)
(“Movable or transferable property; personal property; esp., a physical object capable of manual
delivery and not the subject matter of real property.”). Without a broadened understanding of the
term “chattel” from the New Jersey legislature or Supreme Court, the Court enters summary
judgment in favor of Defendant Creative with respect to data on Count II.
3. Counts III–VII: Remaining Claims Regarding Data
In two final sections of their brief, Defendants move for summary judgment on all of
Barrett Financial’s remaining claims: Count III (misappropriation of trade secrets), Count IV
(fraud/misrepresentation); Count V (unjust enrichment), Count VI (intentional interference with
contractual relations), and Count VII (unlawful interference with prospective economic
advantage). (Defs.’ Br. at 47–58.) Barrett Financial has asserted these claims based on
“Creative’s password change request for the [Barrett Financial]-specific Taleo database, Oracle’s
refusal to grant [Barrett Financial] access thereafter, and the resulting 10–11 months before
access was fully restored.” (Defs.’ Br. at 47.) In their opposition brief, Plaintiffs “do not contest
dismissal” of these claims. (See Pls.’ Opp’n Br. at 1 n.1; see id. at 21 n.10); thus, Defendants

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argue on reply that Barrett Financial has abandoned these claims (see Defs.’ Reply at 1, 14).
“[W]here a properly filed and supported summary judgment motion is unopposed, it would be an
exceptional case where the court concludes that summary judgment should nonetheless be denied
or withheld, although the Court has discretion to do so if unsatisfied that the law and facts point
to judgment as a matter of law.” Ruth v. Selective Ins. Co. of Am., 2017 WL 592146, at *3
(D.N.J. Feb. 14, 2017). Having reviewed Defendants’ arguments on all five claims, the Court
finds Plaintiffs have failed to demonstrate even the existence of genuinely disputed material facts
with respect to required elements on all claims, and Creative merits judgment as a matter of law.
(See Defs.’ Br. at 47–51 (highlighting lack of evidence that Creative misappropriated the Taleo
database data, benefitted from use of the data, intended to defraud or misrepresent ownership of
the Taleo database, or that Barrett Financial suffered any concrete or estimable damages as a
result of temporary lack of access to the database).) Accordingly, summary judgment is granted
in favor of Defendant Creative on Counts III–VII.
CONCLUSION
For the reasons stated herein, Plaintiffs’ Motion is denied and Defendants’ Motion is
granted in part and denied in part. An appropriate order will follow.

Date:

July 24, 2018

/s/ Anne E. Thompson
ANNE E. THOMPSON, U.S.D.J.

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