DIETRICH & ASSOCIATES, INC. v. October Three LLC et al

Filing 14

MEMORANDUM SIGNED BY HONORABLE GERALD J. PAPPERT ON 4/26/21. 4/26/21 ENTERED AND COPIES E-MAILED.(va, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
DIETRICH & ASSOCIATES, INC.,
Plaintiff,
CIVIL ACTION
NO. 20-5002

v.
OCTOBER THREE LLC, et al.,
Defendants.
PAPPERT, J.

April 26, 2021
MEMORANDUM

Dietrich & Associates, Inc. claims October Three LLC, October Three Consulting
LLC and O3 Annuity Services LLC tortiously interfered with its business relationships
and its employment agreements with non-parties John Neison, Jill Neison and Mark
Unhoch. D&A’s suit is related to and arises out of the same facts as Dietrich &
Associates, Inc. v. John Neison, et al., Civ. A. No. 18-5034 (E.D. Pa.) (the Related
Action), pending before the Court. Defendants move to dismiss D&A’s claims as barred
by the statute of limitations. The Court denies their motion.
I
D&A assists “pension plan fiduciaries with insuring retirement benefits.”
(Compl., ECF 1, ¶ 1.) October Three “provides actuarial consulting and administrative
services to retirement plan sponsors” and used D&A’s “specialized annuity placement
services” for its existing clients’ needs and to gain new clients. (Id. ¶¶ 29, 31.) John
and Jill Neison and Unhoch worked for D&A until December 2017 or January 2018,
when they went to work for O3 Annuity, a new division of October Three. (Id. ¶¶ 3, 33.)
They had developed a business relationship with October Three while working for D&A.
D&A alleges it “learned that John Neison had solicited one or more of [its] clients

to perform work on” October Three’s behalf in February 2018. (Id. ¶ 34.) In a February
13, 2018 cease and desist letter copied to October Three’s CEO, D&A’s counsel accused
John of violating his D&A employment agreement’s non-solicitation clause. (Id. ¶ 35.)
Ten days later, October Three’s counsel responded that October Three had not asked
Mr. Neison to violate his employment agreement with D&A and it was not “aware of
any such activity.” (Id. ¶ 36.) On February 27, 2018, D&A’s counsel wrote that D&A
did not contend “October Three ha[d] requested Mr. Neison to violate his obligations of
non-disclosure and/or non-solicitation,” or that D&A was “specifically aware of any such
conduct,” but it had “reason to believe” John Neison had done so and asked for October
Three’s help with obtaining John Neison’s compliance with his employment
agreement’s requirements. (Id. ¶ 37.) October Three did not respond. (Id. ¶ 38.)
On March 12, 2018, D&A’s counsel wrote to October Three claiming Jill Neison
had solicited a D&A customer that John Neison and Unhoch had engaged with while at
D&A, an engagement “of which she was obviously aware.” (Id. ¶ 39.) D&A asked
October Three to help ensure its former employees’ compliance with their restrictive
covenants. (Id. ¶ 39.) Again, October Three did not respond. (Id. ¶ 40.)
At his June 5, 2019 deposition in the Related Action, October Three’s President
and CEO Jeff Stevenson “testified that he formed O3 Annuity specifically for [John and
Jill Neison and Unhoch] to compete with” D&A. (Id. ¶¶ 42, 45.) He said that “in or
around August 2017” he told his partner Ray Aguilera “to pursue hiring Mark Unhoch”
and “that he, Aguilera, and others at October Three met and spoke with Mark Unhoch,
Jill Neison, and John Neison multiple times between August 2017 and January 2018 as
part of the hiring process.” (Id. ¶ 48.) October Three and Stevenson were aware of the

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Neisons’ and Unhoch’s restrictive covenants before October Three offered to hire them.
(Id. ¶ 50.) Nevertheless, October Three and Stevenson instructed them “to direct their
sales and marketing efforts toward [D&A’s] clients and referral clients” on “multiple
occasions.” (Id. ¶ 54.) Stevenson approved O3 Annuity’s work for D&A’s “clients,
including on placements [John and Jill Neison and Unhoch] had been actively working
on” when they left D&A. (Id. ¶ 53.) At least once, Unhoch asked Stevenson if he should
pursue a bid for a plan sponsor that was D&A’s client and was told to “put our bid in”
and “run with it.” (Id. ¶ 55.) D&A alleges it “did not know, and had no way to know,
these facts prior to” Stevenson’s deposition. (Id. ¶¶ 44, 58.)
D&A claims October Three and Stevenson’s instructions resulted in the
diversion of annuity placements to October Three, including eight placements D&A was
working on when Jill and John Neison and Unhoch left it, and at least twenty-two
placements from October Three’s solicitation of D&A’s established referral clients. (Id.
¶¶ 63.) It maintains October Three had “the purpose or intent to divert business (and
the revenue associated therewith) away from [D&A] to October Three” and the
“interference was intentional, willful and outrageous” and “undertaken with reckless
indifference to [D&A’s] rights.” (Id. ¶¶ 66-67.) D&A asserts “October Three’s conduct
was neither justified nor privileged” and it “caused substantial harm to” D&A. (Id.
¶¶ 68-69.)
D&A also claims October Three instructed, induced, assisted and/or encouraged
the Neisons and Unhoch to breach their restrictive covenants. (Id. ¶ 74.) It contends
October Three, without privilege or justification, “intentionally and improperly
instructed [them] to perform work for [D&A’s] clients and referral clients during the

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restrictive covenant periods.” (Id. ¶¶ 74, 77.) D&A maintains they followed October
Three’s instructions, resulting in the diversion of annuity placements from D&A to
October Three, causing D&A substantial and irreparable harm. (Id. ¶ 75-76, 78.)
II
To satisfy Federal Rule of Civil Procedure 12(b)(6), D&A’s Complaint “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 Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible when the
facts pled “allow[ ] the court to draw the reasonable inference that [a] defendant is
liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. “[W]here the well-pleaded
facts do not permit the court to infer more than the mere possibility of misconduct, the
complaint has alleged – but it has not ‘show[n]’ – ’that the pleader is entitled to relief.’”
Id. at 679 (quoting Fed. R. Civ. P. 8(a)(2)).
When the Complaint includes well-pleaded factual allegations, the Court “should
assume their veracity and then determine whether they plausibly give rise to an
entitlement to relief.” See Connelly v. Lane Const. Corp., 809 F.3d 780, 787 (3d Cir.
2016) (quoting Iqbal, 556 U.S. at 679). However, this “presumption of truth attaches
only to those allegations for which there is sufficient factual matter to render them
plausible on their face.” Schuchardt v. President of the U.S., 839 F.3d 336, 347 (3d Cir.
2016) (internal quotation and citation omitted). This plausibility determination is a
“context-specific task that requires the reviewing court to draw on its judicial
experience and common sense.” Id. (quoting Connelly, 809 F.3d at 786–87).
To decide a motion to dismiss without converting it into a summary judgment

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motion, courts consider only the Complaint’s allegations, matters of public record and,
where appropriate and necessary, “an undisputedly authentic document that a
defendant attaches as an exhibit to a motion to dismiss if the plaintiff's claims are
based on the document.” Pension Ben. Guar. Corp. v. White Consol. Indus., Inc., 998
F.2d 1192, 1196 (3d Cir. 1993). A plaintiff's claims are based on a document if it is
“integral to or explicitly relied upon in the complaint.” In re Burlington Coat Factory
Sec. Litig.,114 F.3d 1410, 1426 (3d Cir.1997) (emphases omitted). Lack of notice, “the
primary problem raised by looking to documents outside the complaint,” is absent when
the plaintiff has actual notice of the documents and its pleading relies on them. Id.
“Technically, the Federal Rules of Civil Procedure require a defendant to plead
an affirmative defense, like a statute of limitations defense, in the answer, not in a
motion to dismiss.” Schmidt v. Skolas, 770 F.3d 241, 249 (3d Cir. 2014) (citation
omitted); see also Fed. R. Civ. P. 8(c)(1); Wisniewski v. Fisher, 857 F.3d 152, 157 (3d Cir.
2017) (“The running of the statute of limitations is an affirmative defense.”). However,
where the time bar is “apparent on the face of the complaint” Rule 12(b)(6) dismissal is
allowed in this Circuit. Fried v. JP Morgan Chase & Co., 850 F.3d 590, 604 (3d Cir.
2017) (citation omitted). If “the pleading does not reveal when the limitations period
began to run,” then “the statute of limitations cannot justify Rule 12 dismissal.”
Barefoot Architect, Inc. v. Bunge, 632 F.3d 822, 835 (3d Cir. 2011).
III
A
Defendants argue D&A’s tortious interference claims are time-barred. It is their
burden to establish untimeliness. See Richard B. Roush Profit Sharing Plan v. New

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England Mut. Life Ins., 311 F.3d 581, 585 (3d Cir. 2002). In Pennsylvania, tortious
interference claims must be brought within two years of when they accrued. CGB
Occupational Therapy, Inc. v. RHA Health Servs. Inc., 357 F.3d 375, 383 (3d Cir. 2004)
(citing 42 Pa. Cons. Stat. § 5524). “[A] statute of limitations begins to run only once a
plaintiff can assert and maintain an action.” Id.; see also Fine v. Checcio, 870 A.2d 850,
857 (Pa. 2005) (holding a cause of action accrues when the plaintiff could have “first
maintained the action to a successful conclusion”). Each of D&A’s claims accrued at
“‘the occurrence of the final significant event necessary to make the claim suable.’” CGB
Occupational Therapy, Inc., 357 F.3d at 383 (quoting Barnes v. American Tobacco Co.,
161 F.3d 127, 136 (3d Cir. 1998)).
To state a tortious interference claim, D&A must show: (1) an existing
contractual or prospective contractual relation between it and a third party;
(2) Defendants’ purposeful action, specifically intended to harm the contractual
relationship; (3) the absence of privilege or justification; and (4) damages resulting from
Defendants’ conduct. See Acumed LLC v. Advanced Surgical Servs., Inc., 561 F.3d 199,
212 (3d Cir. 2009). For tortious interference with a prospective contract, D&A must
also show “a reasonable likelihood that the relationship would have occurred but for
[Defendants’] interference.” Id.
B
D&A filed its Complaint on October 9, 2020 (ECF 1), so its claims are barred if it
is apparent on the face of the Complaint that they accrued before October 9, 2018. It is
not; the Complaint does not reveal when the limitations period began to run.
Defendants contend the Court can find that D&A’s claims accrued by “no later than

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mid-May 2018” (Defs.’ Br., ECF 4-6, at 17) by considering the Complaint and other
documents incorporated into it, including the Related Action’s complaint, the cease and
desist correspondence between the parties and a string of emails between Kurt
Dietrich, D&A’s President and CEO, and Geoffrey Dietrich, its Executive Vice
President. (Id. at 10-22.) They argue the Neisons’ and Unhoch’s solicitations for
October Three caused D&A “actual legal harm” (Defs.’ Reply Br., ECF 11 at 5) and
D&A knew or should have known after receiving October Three’s May 11, 2018 letter
that October Three intended to “continue to solicit entities [it] considered to be its
customers.” (ECF 4-6, at 19-20 (arguing the “letter dots the ‘I’s’ and crosses the ‘T’s’ as
to when Plaintiff knew it had suffered a legal injury”)).
D&A knew the Neisons and Unhoch were going to work for October Three by
December 2017 or January 2018 and Defendants contend it believed John Neison was
engaging in tortious conduct by January 2018. (Id. at 17 citing Compl. ¶¶ 33, 133, 136.)
In Defendants’ view, D&A’s cease and desist letters “directly evidence [its] knowledge of
injury.”1 (Id. at 18.) Further, they maintain a May 1, 2018 email exchange between
Kurt and Geoffrey Dietrich discussing Jill Neison’s alleged targeting of a D&A
relationship supports the conclusion that D&A’s knew by then that the Neisons and
Unhoch had diverted at least one of its customers. (Id. at 20.) They contend “simple
application of respondeat superior principles” means there was “potentially . . . a legal
injury to [D&A] once D&A became aware of” the Neison’s and Unhoch’s activities. (Id.
at 23-24 (emphasis added).)

At the same time, Defendants argue the letters indicate D&A’s belief “that October Three
was possibly engaged in improper conduct,” not that, in fact, it was doing anything improper. (ECF
4-6 at 18 (emphasis added).)
1

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D&A counters that it would be premature to determine the applicability of
Defendants’ limitations defense on a motion to dismiss. It contends the Court should
not base its decision on a “handful” of “cherry-picked” documents from the “voluminous
record” in the Related Action that were “not attached to or referenced in the instant
Complaint.” (Pl’s. Opp’n Mem., ECF 8, at 1.) It argues it “sustained harm at the
earliest when October Three closed annuity transactions for D&A clients and
commissions that rightfully should have been paid to D&A were instead paid to October
Three.” (Id. at 21.) It maintains October Three’s stated “intent to commit a future
wrong” in the May 11, 2018 letter is not enough to bar their claims. (Id.) Instead, it
only knew of threatened future harm, and did not have an “actionable injury that
triggered the limitations period to run” until October Three consummated annuity
placements with its clients or prospective clients “and received commissions at closing
for doing so.” (Id.)
In the context of its claim for tortious interference with its business
relationships, D&A also argues “each diverted annuity placement was a separate,
stand-alone transaction” and it sustained a distinct injury “each and every time that
October Three brokered and closed a placement for a D&A client or referral client and
received a commission at closing that rightfully should have been paid to D&A . . . .”2

Through this allegation, D&A appears to contend the continuing tort or continuing violation
doctrine applies to its interference claims, another exception to the rule that “under normal
circumstances, the statute of limitations begins to run as soon as the right to institute and maintain
a suit arises.” Fine, 870 A.2d at 857. The continuing tort doctrine applies “when a plaintiff alleges a
continuing pattern of misconduct,” making an action “timely so long as the last act evidencing the
continuing practice falls within the limitations period” and allows a court “to grant relief for . . .
earlier related acts that would otherwise be time barred.” Cowell v. Palmer Twp., 263 F.3d 286, 292
(3d Cir. 2001). At this point all the Court need decide is whether or not the time bar is apparent on
the face of D&A’s Complaint. It is thus premature to determine the possible applicability of any
continuing violation theory.
2

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(Id. at 16.) D&A contends the Complaint does not identify the specific dates of any
alleged injury because October Three has yet to provide it with the closing dates for
each placement. (Id. at 16.) It argues “many if not all of the diverted placements closed
within two years of the Complaint being filed, and thus accrued within the limitations
period.” (Id. at 17.)
D&A also argues the limitations period for its claim for tortious interference
with its employment agreements did not begin when the Neisons and Unhoch joined
October Three. (Id. at 18-19.) D&A asserts that what matters is when the Neisons’ and
Unhoch’s solicitations resulted in diverted annuity placements, dates which are not
clear from the Complaint. (Id. at 18-20.) In D&A’s view, Stevenson’s instructions to
“disregard the[ir] restrictive covenants and close placements for D&A clients” triggered
its claim, and it did not learn of those until Stevenson’s 2019 deposition. (Id. at 19.)
C
There is no question John and Jill Neison and Unhoch had left D&A for October
Three before October 2018. On D&A’s own allegations, it had some awareness by then
that Defendants sought to use the Neisons’ and Unhoch’s relationships with D&A
clients or prospective clients for their benefit. However, this is not enough to make it
clear from the face of the Complaint – or from any external documents that are integral
to it – whether the final significant event necessary to make D&A’s tortious
interference claims suable had occurred before then. See CGB Occupational Therapy,
357 F.3d at 384 (“[A] tortious interference claim does not accrue until, at least, the
plaintiff suffers injury (i.e., ‘actual legal damage’) as a result of the defendant’s
conduct.”). The parties’ conflicting arguments raise fact questions that are not

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appropriate for resolution on a motion to dismiss. Cf. Aetna Life Ins. Co. v. Huntingdon
Valley Surgery Ctr., No. 13-03101, 2015 WL 1954287, at *15 (E.D. Pa. Apr. 30, 2015)
(denying motion to dismiss Huntington Valley’s tortious interference claim as timebarred where Aetna argued the claims accrued when it sent allegedly interfering letters
and Huntington Valley argued they accrued not when the letters were sent, but when it
was injured from them). Further, even if D&A must invoke the discovery rule to bring
some or all its claims within the limitations period, it has set forth enough facts to show
the rule may apply to its claims.3 D&A has plausibly alleged reasonable minds could
differ as to whether it knew or should have known it had suffered the “actual legal
harm” required to trigger the statute of limitations for its tortious interference claims
by October 2018.
An appropriate Order follows.
BY THE COURT:

/s/ Gerald J. Pappert
GERALD J. PAPPERT, J.

“[T]he discovery rule applies to toll the statute of limitations in any case where a party
neither knows nor reasonably should have known of his injury and its cause at the time his right to
institute suit arises.” Fine, 870 A.2d at 859. Whether a party was able, in the exercise of reasonable
diligence, to know of his injury and its cause involves a factual determination that is ordinarily for a
jury to decide unless “reasonable minds would not differ” as to the outcome. Id. at 858. The Court
“‘may not allocate the burden of invoking the discovery rule in a way that is inconsistent with the
rule that a plaintiff is not required to plead, in a complaint, facts sufficient to overcome an
affirmative defense.’” Stephens v. Clash, 796 F.3d 281, 288 (3d Cir. 2015) (quoting Schmidt v.
Skolas, 770 F.3d 241, 251 (3d Cir. 2014)); see also Fine, 870 8.2d at 858 (“The application of the
discovery rule is a factual issue that cannot be resolved at the Preliminary Objection stage.”).
“Because a potential plaintiff cannot discover his injury before it has occurred, the discovery rule
only postpones the accrual date of a claim ‘where the [plaintiff] is unaware of the injury.’” Disabled
in Action of Pa. v. Se. Pa. Transp. Auth., 539 F.3d 199, 214 (3d Cir. 2008) (quoting CGB Occupational
Therapy, 357 F.3d at 384. “It does not accelerate the accrual date ‘when the [plaintiff] becomes
aware that he will suffer injury in the future.’” Id. (quoting CGB Occupational Therapy, 357 F.3d at
384.)
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