JOHN A. WOODCOCK, JR., Chief Judge.
In an action by a former employee against his former employer and its representatives asserting causes of action under 42 U.S.C. § 1983, slander, intentional and fraudulent misrepresentation, breach of contract, breach of good faith and fair dealing, and promissory estoppel, and requesting punitive damages, the Defendants move for summary judgment. The Court concludes: 1) the § 1983 claims must be dismissed because, under Illinois law, the Plaintiff was an at-will employee and lacked a property interest in continued employment; 2) the slander claims must be dismissed because they are based on speculation and character evidence and because they fail to link the Defendants to the allegedly slanderous material; 3) the breach of contract, breach of good faith and fair dealing, and promissory estoppel claims must be dismissed because the employment contract made clear that the Plaintiff was an at-will employee and the employer's policies did not alter the contract; 4) the negligent and fraudulent misrepresentation claims survive to the extent they seek to recover for economic loss; and, 5) the punitive damages count survives.
On July 2, 2009, Alan D. Knowlton filed suit in Superior Court, Penobscot County, state of Maine, against a number of state of Maine Defendants.
Bankers Life hired Alan D. Knowlton in New Hampshire as a sales agent in November 1980 and in May 1985, it transferred him to Bangor, Maine as the branch sales manager. Mr. Knowlton says he was successful in Bangor. The number of sales agents grew and the office became among the top fifty Bankers Life offices in the Country. Mr. Knowlton's immediate supervisor at Bankers Life was Leroy Kunselman, a Vice President. Mr. Kunselman told Mr. Knowlton it was Bankers Life's policy and practice to continue all branch sales managers in their positions unless they failed to perform or engaged in prohibited activity, an assertion Mr. Knowlton took as a promise. Accordingly, Mr. Knowlton worked hard with the expectation he would retire from Bankers Life upon his 56th birthday.
All went well until 2000, when the state of Maine began a "Market Conduct" investigation into Bankers Life's sales practices in Maine, focusing particularly on the South Portland branch office. When Deputy Superintendent of Insurance Judith Shaw expanded the investigation to the Bankers Life Bangor branch office, the only sales practice mistake she found was the office had mistakenly distributed literature describing Bankers Life as having an A.M. Best "A" rating when in fact it had a "B +" rating. Bankers Life hired an attorney to represent Mr. Knowlton on the complaint that he had distributed inaccurate literature, and on March 28, 2005, Mr. Knowlton and the state of Maine entered into a Consent Agreement in which Mr. Knowlton agreed to pay a fine of $750 in return for the state's agreement to take no further action against him. Mr. Knowlton thought his problems with the state of Maine were over.
He was wrong. At the same time the state was negotiating with Mr. Knowlton regarding violations in the Bangor branch office, it was also negotiating with Bankers Life to resolve the systemic violations that had taken place in the South Portland branch office. The state was concerned
Bankers Life lived up to its Consent Agreement with the state of Maine. On April 14, 2005, three of Mr. Knowlton's Bankers Life superiors, James Valdez, Michael Buckley, and Bruce Jordan, told him the state of Maine had concluded that South Portland and Bangor offices could not handle the offices' improper sales practices problems and, despite the fact Bankers Life did not want to remove him, the state had insisted on his removal as the branch sales manager for the Bangor office. All three men assured Mr. Knowlton that Bankers Life had fought with the Maine Bureau of Insurance to preserve his job but that the state had insisted upon his removal. This, according to Mr. Knowlton, was a lie. They all knew full well that it had been Bankers Life, not the state of Maine, which had proposed Mr. Knowlton's termination.
From then on, the Bankers Life supervisors continued to deceive Mr. Knowlton. Reassuring him they knew he was not at fault, they told him he could work for Bankers Life in a new position in the commonwealth of Massachusetts as branch manager for the North Shore sales office; however, they said he would have to start out as a unit sales manager: in effect, a salesman. They promised the salesman position would be temporary, and as soon as the North Shore branch was up and running, Mr. Knowlton would become its branch sales manager.
Personal lines insurance sales begin with personal relationships. By transferring Mr. Knowlton from Bangor, where he had spent the last two decades, to north of Boston, where he knew no one, Bankers Life set up Mr. Knowlton for failure. This is exactly what happened. Mr. Knowlton could not succeed as an insurance salesman in Massachusetts and repeatedly requested that he be allowed to assume the promised position of North Shore branch manager. The supervisors at Bankers Life, however, lied to him again and told him that the Consent Agreement with the state of Maine prohibited him from becoming a branch manager anywhere.
Bankers Life then engaged in a series of actions to force him to resign. It promised him a salary and then unilaterally cut him off, reinstated it upon his complaint, but then cut it off again. Ultimately Bankers Life was successful in its campaign to force Mr. Knowlton out of the company. After he left, Bankers Life lied about Mr. Knowlton, disparaging his honesty and competence and falsely asserting that he had been forced out of the Bangor branch manager position by the state of Maine.
Bankers Life tells a different story. Contrary to Mr. Knowlton's claim of superior performance as the Bangor branch office manager, Bankers Life says that from January 1, 2002 to April 11, 2005, the state of Maine Bureau of Insurance received 70 formal complaints alleging violations of the Maine Insurance Code by agents appointed by Bankers Life, including agents recruited, trained and supervised by Mr. Knowlton in the Bangor
Bankers Life also disputes Mr. Knowlton's contention that it proposed his removal to avoid an audit. Instead, Bankers Life says the state of Maine insisted upon his removal and rejected Bankers Life's suggestion that he be retained and retrained. In effect, Bankers Life says it capitulated to the state's demand that it relieve Mr. Knowlton of the managerial duties in Bangor.
Despite its reluctant acquiescence to the state's non-negotiable demands, Bankers Life insists that it sought to treat Mr. Knowlton fairly. It placed him on a paid leave of absence and made him a variety of job offers. After he accepted the North Shore position, it took the unusual step of paying him $9,000 a month in temporary financial support through July 2006. Over time, however, it became clear to Bankers Life that Mr. Knowlton was a failure as a sales agent in Massachusetts; he hired very few new agents and sold almost no policies. Observing that Mr. Knowlton refused to move from Maine to Massachusetts, Bankers Life suspected his heart was not in his job. Finally, in August 2006, Bankers Life told Mr. Knowlton he could continue to work there only if he agreed to relocate to Massachusetts and conform to certain performance standards. When Mr. Knowlton refused, Bankers Life terminated him effective March 16, 2007.
On December 14, 2009, the Bankers Life Defendants moved to dismiss. Defs. Bankers Life and Casualty Co., Michael Buckley, Bruce Jordan, and James Valdez's Mot. to Dismiss Under Rule 12(b)(6) (Docket # 23) (Bankers Life Defs.' Mot. to Dismiss). On April 27, 2010, the Court granted this motion in part, denied it in part, and dismissed certain counts. Order on Mots. to Dismiss, 708 F.Supp.2d 69 (D.Me.2010) (Docket # 46). In ruling on the motion to dismiss, the Court deferred action on claims that relied upon the terms of the employment agreement between Mr. Knowlton and Bankers Life because the employment contract was not properly before the Court.
On October 29, 2010, the Bankers Life Defendants moved for summary judgment on the remaining claims. The Bankers' Life Defs.' Mot. for Summ. J. (Docket # 59) (Defs.' Mot.). Mr. Knowlton responded on November 18, 2010. Pl.'s Resp. to Bankers' Life Defs.' Mot. for Summ. J. (Docket # 61) (Pl.'s Resp.). On December 9, 2010, the Bankers Life Defendants replied. The Bankers Life Defs.' Reply (Docket # 66) (Defs.' Reply).
Bankers Life bases its motion for summary judgment on a number of theories. First, taking the next step from the Order
Mr. Knowlton first posits a choice of law issue: he says that the contract must be interpreted under Illinois state law and that the tort claims fall under Maine state law. He then claims that Bankers Life's motion must fail because it has not yet presented a complete employment contract for the Court's review. Next he contends that Illinois law creates a rebuttable presumption that an employment contract is at will and he argues that in this case, the facts generate a factual question as to whether he has successfully rebutted the Illinois presumption. In addition, he says that Illinois law recognizes the contractual obligation of good faith and fair dealing in employment contracts. Mr. Knowlton says he avoids the statute of limitations on the slander claim because the Consent Agreement is still being published and Bankers Life employees are still reiterating allegations of his supposed incompetency.
As a result of multiple requests to strike, objections, and qualified responses, the parties have presented a fractured evidentiary basis for the Court's consideration. Out of Bankers Life's fifty eight supposedly undisputed material facts, Mr. Knowlton admitted only six without qualification, objection, or requests to strike. Resp. to Defs.' Statement of Material Facts (Docket # 62) (PRDSMF). The admitted facts include only the most incontestable assertions, such as that Mr. Knowlton is a former employee of Bankers Life and that in his amended complaint, he asserted claims for slander per se against defendants Buckley and Valdez. DSMF ¶¶ 1, 48; PRDSMF ¶¶ 1, 48. Otherwise, everything is qualified, objected to, or denied. Not to be outdone, out of Mr. Knowlton's seventy-two additional supposedly undisputed material facts, Bankers Life admitted ten; again only the most unarguable, such as that Bankers Life hired Mr. Knowlton in November 1980, and vigorously contested all the rest. Pl.'s Statement of Additional Material Facts ¶ 59 (Docket # 62) (PSAMF); Resp. to Pl.'s Statement of Additional Material Facts ¶ 59 (Docket # 67) (DRPSAMF). Based on the narrow set of the admitted facts, the motion for summary judgment cannot proceed to the merits and on that basis, the Court would summarily deny Bankers Life's dispositive motion.
Obscured by the quibbling is the substantive significance of the legal issues. To reach the merits, the Court is required to cut through the thicket of the parties' motions to strike and objections to determine
Mr. Knowlton's first set of objections— based on relevance—is to Bankers Life statement of material facts paragraphs 2 through 4. PRDSMF ¶¶ 2-4. These paragraphs relate to the filing and ultimate disposition of Mr. Knowlton's original lawsuit against the Maine Attorney General and the Maine Superintendent of Insurance. The Court sustains the relevancy objection since the earlier lawsuit has no bearing on the appropriate disposition of Bankers Life's dispositive motion on this lawsuit.
Bankers Life's statement of material facts paragraph 5 states:
DSMF ¶ 5. Mr. Knowlton interposed a qualified objection, noting in essence that his second lawsuit was based on "Justice Silver's comments during oral arguments in the contract action against the State." PRDSMF ¶ 5. This is a frivolous qualification to Bankers Life's statement of material facts since the paragraph only asked Mr. Knowlton to admit he filed the lawsuit, not why he filed it. The Court refuses to accept the qualified response to Bankers Life's statement of material facts paragraph 5 and deems the fact admitted.
Bankers Life's statement of material facts paragraph 6 states:
DSMF ¶ 6. Mr. Knowlton interposed a qualified response, noting that after he "learned that Bankers had made representations to him [that] were untrue, he brought an action against them ... [and that the] action is premised on the facts of the case, the terms of the contract, the policies, procedures, and practices of Bankers Life and his understanding of his rights under Maine and Illinois law." PRDSMF ¶ 6.
The Court refuses to accept Mr. Knowlton's qualified response to Bankers Life's paragraph 6. This paragraph only asserted that Mr. Knowlton amended his complaint to include Bankers Life and three employees. Again, it did not ask why he did so. Mr. Knowlton should have admitted the assertion without qualification since it is undeniable he amended his complaint to add Bankers Life. The Court deems Bankers Life statement of material facts paragraph 6 admitted.
Bankers Life statement of material facts paragraph 9 states:
DSMF ¶ 9. Mr. Knowlton asks the Court to strike this paragraph because it is "vague and ambiguous." PRDSMF ¶ 9. First, he says he does not know which contract the paragraph is referring to. Id. For purposes of this Order, the Court notes that paragraph 9 follows paragraphs 7 and 8, which refer to the two contracts Mr. Knowlton himself signed in January 1995 and January 2006, and therefore paragraph 9 must refer to the similarity of the January 2006 contract and the January 1995 contract. Second, Mr. Knowlton says that the contracts speak for themselves
Bankers Life's statement of material facts paragraph 10 reads:
DSMF ¶ 10 (internal citation omitted). Mr. Knowlton admits the first part of this assertion, namely that the 1995 contract is the relevant agreement, but asks the Court to strike the last phrase as argumentative and a conclusion of law, not a statement of fact. PRDSMF ¶ 10. As the parties agree that the 1995 contract is the operative document, the Court agrees that it is not relevant whether the January 2006 contract would produce the same result and the Court strikes the last phrase in Bankers Life's statement of material facts paragraph 10.
Bankers Life's statement of material facts paragraph 11 states:
DSMF ¶ 11. Paragraph 13 states:
DSMF ¶ 13. Paragraph 14 states:
DSMF ¶ 14. In each of his responses to these material facts, Mr. Knowlton admits that the contract contains the indicated provision. However, for each, he interposes a qualified response, noting that the Contract contains other provisions as well. The Court strikes Mr. Knowlton's qualified responses. If Mr. Knowlton wishes to posit different contractual clauses, he should do so in his statement of material facts, not as a qualification to the Bankers Life's facts, the accuracy of which he admits. The Court treats Mr. Knowlton's response to Bankers Life's statement of material facts paragraphs 11, 13, and 14 as admitted without qualification.
Bankers Life's statement of material facts paragraph 15 states:
DSMF ¶ 15. Mr. Knowlton requests that the Court strike this paragraph on the ground that it failed to comply with the Local Rule by omitting a record citation. PRDSMF ¶ 15 (citing D. Me. Loc. R. 56(b), (f)).
Mr. Knowlton's objection poses a puzzle: how a movant, who is attempting to establish the absence of a fact, cites the record to establish that certain evidence does not exist. The assertion of the lack of evidence is often more a legal argument than a statement of fact. Nevertheless, to the extent a movant wishes to establish an absence of evidence—for example an absence
However, the Court grants the motion to strike on a different basis. It is clear from Mr. Knowlton's statement of material facts that he contends Bankers Life made oral promises to him, and that these formed part of the contract since they are, in his view, "policies, practices, and procedures" of Bankers Life. Whether Mr. Knowlton is legally correct is one thing. However, Bankers Life's assertion of fact effectively asks Mr. Knowlton to admit what Bankers Life knows he denies, and thus is argumentative. To that extent, the Court grants Mr. Knowlton's request to strike Bankers Life's statement of material facts paragraph 15.
Bankers Life's statement of material facts paragraph 16 reads:
DSMF ¶ 16. Bankers Life statement of material facts paragraph 17 reads:
Based on these complaints, the Bureau reached the following conclusion:
DSMF ¶ 17. Bankers Life's statement of material facts paragraph 19 reads:
DSMF ¶ 19. Bankers Life statement of material facts paragraph 20 reads:
DSMF ¶ 20. Bankers Life statement of material facts paragraph 21 reads:
DSMF ¶ 21.
Although Mr. Knowlton admitted the content of each of these paragraphs, he
Bankers Life's statement of material facts paragraph 18 reads:
DSMF ¶ 18. Although Mr. Knowlton admitted that the Bureau and Bankers Life entered into a consent agreement, he requested the Court strike the introductory phrase "[t]o address this situation," claiming it is "vague and ambiguous." PRDSMF ¶ 18. He said he "assumes but does not know" that the phrase refers to the substance of the prior paragraph, and he complains that Defendants "offer no record citation concerning why Bankers Life `addressed this situation.'" Id.
The Court denies Mr. Knowlton's request to strike. It is abundantly clear that Bankers Life's introductory phrase incorporated the prior material fact. Furthermore, the phrase is neither vague nor ambiguous. While Banker's Life could have supplied a record for its contention that it entered the consent agreement because of the Bureau's concern with its South Portland and Bangor branch management, it is a logical inference, which requires no such citation. In any event, Mr. Knowlton effectively denied it.
Bankers Life's statement of material facts paragraph 22 reads:
DSMF ¶ 22. Mr. Knowlton interposed a qualified response, conceding that he was not present during these discussions but insisting that he had personal knowledge because he sat through the discovery depositions of the participants. PRDSMF ¶ 22.
The Court rejects the qualified response and deems paragraph 22 admitted. Even though Mr. Knowlton sat through the depositions of the Bankers Life and Bureau employees who negotiated the consent agreement, he has no personal knowledge of what the Bureau required while the agreement was being negotiated. He knows only what the Bureau and the Bankers Life employees say the Bureau required.
Bankers Life's statement of material facts paragraph 23 reads:
DSMF ¶ 23. Mr. Knowlton admitted the substance of this paragraph but requests that the Court strike the first phrase, "[b]y contrast," stating that the phrase "is argumentative and not properly part of a statement of fact." PRDSMF ¶ 23. The Court agrees that the phrase "by contrast" is not a fact, and reflects a viewpoint, not a fact. The Court strikes "by contrast."
Bankers Life statement of material facts paragraph 24 reads:
DSMF ¶ 24. Bankers Life's statement of material facts paragraph 25 reads:
DSMF ¶ 25.
Mr. Knowlton interposed qualified responses, admitting that Mr. Valdez has so testified, but denying that his testimony is either accurate or credible. PRDSMF ¶¶ 24, 25. He points to the testimony of other witnesses to support his dispute with the accuracy and credibility of Mr. Valdez's testimony. Id. The Court rejects the qualifications in Mr. Knowlton's responses. If Mr. Knowlton wished to posit the testimony of other witnesses to generate a triable fact, he was free to do so in his own statement of material facts. The Court deems Bankers Life's statement of material facts paragraphs 24 and 25 admitted.
Bankers Life's statement of material facts paragraph 26 reads:
DSMF ¶ 26. Bankers Life's statement of material facts paragraph 27 reads:
DSMF ¶ 27. Bankers Life's statement of material facts paragraph 28 reads:
DSMF ¶ 28. Bankers Life's statement of material facts paragraph 29 reads:
DSMF ¶ 29. Bankers Life's statement of material facts paragraph 30 reads:
DSMF ¶ 30 (emphasis in DSMF).
Mr. Knowlton interposed a series of similar objections to each of these proffered facts. Bankers Life cited the Roach letters, which were attached as exhibits to its statement of material facts as the record citations for paragraphs 26, 27, 28, and 30. Mr. Knowlton objected to the paragraphs since they were based on the Roach letters. First, he said that the contents of the Roach letters to the Bureau of Insurance were hearsay, and citing two Sixth Circuit cases, he observed that inadmissible hearsay must not be considered in a motion for summary judgment. PRDSMF ¶¶ 26-28, 30. Second, he claimed the letters had not been properly authenticated under Federal Rule of Evidence 901. Id. Third, he asserted a contrary fact, arguing that Bankers Life could not terminate Mr. Knowlton in any event because under its policies and practice, he could not be terminated unless he failed to meet Bankers Life numbers or unless he engaged in gross misconduct. Id. ¶ 28. He moved to strike the "during subsequent meetings" phrase in paragraph 29 because he did not know to what meetings the phrase referred. Id. ¶ 29.
The Court rejects Mr. Knowlton's qualified responses and denies his requests to strike these statements. Depending on its trial context, the Roach letter is likely admissible, and for purposes of this summary judgment motion, the Court will consider it as substantive evidence. FED. R.EVID. 801(d)(1); 803(6). Regarding the authenticity contention, Rule 901 only requires that "the matter in question is what its proponent claims." FED.R.EVID. 901(a). The copies of the attached letters are on Pierce Atwood stationery, address issues in this case, and are signed by Attorney Roach. DSMF Attachs. 8, 9. The Court concludes each letter meets the Rule 901 standard. Regarding his contention that the statement is contradicted by other evidence, Mr. Knowlton's countervailing evidence is properly placed in his responsive statement of additional material facts. The Court rejects Mr. Knowlton's request to strike the phrase "during subsequent meetings" in paragraph 29, since the period within which the meetings could have been held before his termination as manager of the Bangor office is confined and since Bankers Life's assertions can be admitted or denied without reference to a specific meeting. Finally as regards paragraph 29, the Court notes that Mr. Knowlton has denied the assertion in any event.
Bankers Life's statement of material facts paragraph 31 states:
DSMF ¶ 31 (emphasis in DSMF). Bankers Life's statement of material facts paragraph 32 states:
DSMF ¶ 32.
Mr. Knowlton says that the term, "this provision," in paragraph 31 is vague and ambiguous, but in the event the Court finds paragraph 31 admissible, Mr. Knowlton qualifies his response, asserting there is evidence to the contrary. He also offers a qualified response to paragraph 32; he "admits that the Bureau's concerns prompted the Consent Agreement but denies that the Bureau had concerns about Mr. Knowlton or that those concerns prompted his removal." PRDSMF ¶ 32.
As to paragraph 31, the Court overrules the objection. "This provision" clearly refers to paragraph fifty-one of the consent agreement. The Court also refuses to accept Mr. Knowlton's qualified responses to paragraphs 31 and 32 since the qualifications are based on separate evidence that Mr. Knowlton was free to present to the Court. The Court deems paragraphs 31 and 32 admitted.
Bankers Life's statement of material facts paragraph 34 states:
DSMF ¶ 34. Mr. Knowlton interposed a qualified response, noting that although he admitted that Mr. Black made the statement, he denied it was true, observing there is other evidence that does not support his statement. PRDSMF ¶ 34.
The Court refuses to accept the qualified response. If Mr. Knowlton wished to place countervailing evidence before the Court, he was free to do so in his statement of additional material facts. The Court deems paragraph 34 admitted.
Bankers Life's statement of material facts paragraph 35 reads:
DSMF ¶ 35. Mr. Knowlton interposed a qualified response. PRDSMF ¶ 35. He admitted that he was immediately terminated as branch manager of the Bangor branch on April 14, 2010, but says he was not placed on a paid leave of absence until May 1, 2005. Id. He then asserts other facts about the length of the leave of absence and his receipt of short-term disability benefits. Id.
The Court refuses to accept Mr. Knowlton's qualified response. The Bankers Life statement does not mention when he started on a paid leave of absence or anything about other benefits. If Mr. Knowlton wished to present additional evidence, he was free to do so in his statement of additional material facts. The Court deems Bankers Life statement of material facts paragraph 35 admitted.
Bankers Life's statement of material facts paragraph 36 reads:
DSMF ¶ 36. Mr. Knowlton interposed a qualified response to this assertion. PRDSMF ¶ 36. He says that Bankers Life first offered him the position of branch manager for the North Shore office of Bankers Life but later retracted, offering him instead the position of unit sales manager. Id.
The Court refuses to accept Mr. Knowlton's qualified response. The statement does not discuss the timing of this offer as opposed to others, only that Bankers Life made the offer. If Mr. Knowlton wished to present countervailing facts, he was free to do so in his statement of additional material facts. The Court deems paragraph 36 admitted.
Bankers Life's statement of material facts paragraph 37 reads:
The Court disagrees. As evidenced by context provided in the preceding two proffered facts, "[a]round this same time" obviously refers to the time period after Bankers Life removed him from his position as branch manager of the Bangor branch. The Court refuses to strike this introductory phrase.
Bankers Life's statement of material facts paragraph 38 reads:
DSMF ¶ 38. Mr. Knowlton interposed a qualified response in which he seeks to add detail to the Bankers Life assertion. PRDSMF ¶ 38. The Court refuses to accept the qualified response. If Mr. Knowlton wished to place other evidence before the Court, he was free to do so in his statement of additional material facts. The Court deems paragraph 38 admitted.
Bankers Life's statement of material facts paragraph 39 reads:
DSMF ¶ 39. Mr. Knowlton interposed a qualified response, saying that Bankers Life provided him with $4,500 every two weeks, and also supplying some additional facts. PRDSMF ¶ 39. Except for the distinction between monthly and semi-monthly payments, the Court refuses to accept Mr. Knowlton's qualified response. If Mr. Knowlton wished to present additional facts, he was free to do so in his statement of additional material facts.
Bankers Life's statement of material facts paragraph 40 reads:
DSMF ¶ 40. Mr. Knowlton interposed a qualified response, observing that the financial support continued until April and was reinstated in June after he objected. PRDSMF ¶ 40. The Court refuses to accept the qualified response because the paragraph does not assert that the financial support was continuous to July 2006, only that it continued to July 2006. If Mr. Knowlton wished to present additional facts, he was free to do so in his statement of additional material facts.
Bankers Life's statement of material facts paragraph 41 reads:
DSMF ¶ 41. Mr. Knowlton asked the Court to strike "[a]t that time" as vague and ambiguous. PRDSMF ¶ 41. The Court rejects Mr. Knowlton's request. The phrase, "[a]t that time" obviously refers to July 2006. However, anticipating that the Court might view the statement as referring to July 2006, Mr. Knowlton also denies it, saying that Bankers Life ceased its financial support because it had not opened a North Shore office. He presents additional facts surrounding Bankers Life's decision not to open a North Shore office.
Bankers Life's statement of material facts paragraph 44 reads:
DSMF ¶ 44. Mr. Knowlton asks the Court to strike this proffered fact as argumentative and otherwise denies it, asserting that "Mr. Knowlton left his home in Maine on Monday morning and was in the Boston office of Bankers Life, Monday, Tuesday, Wednesday, and Thursday." PRDSMF ¶ 44. The Court rejects Mr. Knowlton's request; the Court does not view the fact as argumentative. The Court rejects the denial as either an admission or as nonresponsive to the proffered fact. If Mr. Knowlton left his home in Maine on Monday morning and was in the Boston office through Thursday, it seems likely he commuted back on Friday. Alternatively, if it is an attempted denial, the response that Mr. Knowlton was in the Boston office Monday through Thursday, does not address Bankers Life's assertion that he commuted to Boston on Monday and returned to Maine on Friday.
Bankers Life's statement of material facts paragraph 45 reads:
DSMF ¶ 45. Mr. Knowlton asks that the Court strike this assertion as hearsay and as not properly authenticated. PRDSMF ¶ 45. The Court rejects Mr. Knowlton's request. Bankers Life's statement of material facts summarizes the contents of an August 11, 2006 letter from Michael Buckley of Bankers Life to Mr. Knowlton. DSMF Attach. 12. It is not hearsay under Rule 803(6) and it meets the authenticity requirements of Rule 901. FED.R.EVID. 803(6), 901.
Bankers Life's statement of material facts paragraph 46 reads:
DSMF ¶ 46. Mr. Knowlton requested the Court to strike this assertion as hearsay and as not properly authenticated. PRDSMF ¶ 46. The Court rejects Mr. Knowlton's request. The assertion is based on a March 16, 2007 letter from James Valdez of Bankers Life to Mr. Knowlton. DSMF Attach. 13. It is not hearsay under Rule 803(6) and it meets the authenticity requirements of Rule 901. FED.R.EVID. 803(6); 901.
Bankers Life's statement of material facts paragraph 47 reads:
DSMF ¶ 47. Mr. Knowlton interposed a qualified response, stating a specific number of job offers he has turned down and offering a separate reason for his decisions. PRDSMF ¶ 47. The Court rejects Mr. Knowlton's qualified response since he does not deny the assertion but only wishes to add certain facts. If Mr. Knowlton wished to posit additional facts, he was free to do so in his statement of additional facts. The Court accepts the denial to the extent it disputes Bankers Life's contention that he did not want to work as an insurance agent.
Bankers Life's statement of material facts paragraph 51 reads:
DSMF ¶ 51. Bankers Life's statement of material facts paragraph 52 reads:
DSMF ¶ 52. Bankers Life's statement of material facts paragraph 53 reads:
DSMF ¶ 53. Bankers Life's statement of material facts paragraph 54 reads:
DSMF ¶ 54.
Mr. Knowlton interposed qualified responses to each paragraph, noting that the consent agreement between the Bureau and Bankers Life continues to be published and that based on his past experience with Messrs. Buckley and Valdez, he "believes that Messrs. Buckley and Valdez continued to repeat the statements that he was incompetent and dishonest to other[s] after July 2007." PRDSMF ¶¶ 51-54.
The Court allows the qualified responses concerning the continuing publication of the contents of the consent agreement but rejects the qualified responses concerning Mr. Knowlton's belief about what Messrs. Buckley and Valdez may have said. The first raises the legal question of continuing publication of potential slander; the second, however, is without probative value since it essentially relies on Mr. Knowlton's understanding of the personalities of Messrs. Buckley and Valdez without any direct proof they made any such statements. Accordingly, to this extent, the qualifications in the responses are based on forbidden character evidence and are speculative. FED.R.EVID. 401, 404(a), 608.
Mr. Knowlton's qualified responses to paragraphs 53 and 54 do not appear to relate to those paragraphs and therefore the Court treats the paragraphs as admitted.
Bankers Life's statement of material facts paragraph 55 reads:
DSMF ¶ 55. Mr. Knowlton requested the Court to strike this assertion on the ground that it failed to contain the requisite record citation for the proposition "the provision on which Mr. Knowlton relies." PRDSMF ¶ 55. The Court sustains the motion to strike in part, altering the introductory phrase to "one of the provisions on which Mr. Knowlton relies."
Bankers Life's statement of material facts paragraph 56 reads:
The Contract further provides as follows:
DSMF ¶ 56. Mr. Knowlton interposed a qualified objection, stating that this provision is not controlling under Illinois or Maine law. The Court refuses to accept Mr. Knowlton's qualified response since it amounts to a legal argument and does not address the factual accuracy of the assertion.
Bankers Life's statement of material facts paragraph 57 reads:
DSMF ¶ 57. Mr. Knowlton interposed a qualified response, observing that even though each of the Bankers Life employees so testified, there is additional evidence on this point. PRDSMF ¶ 57. If Mr. Knowlton wished to posit additional facts, he was free to do so in his statement of additional material facts. The Court treats this paragraph as admitted.
Bankers Life's statement of material facts paragraph 58 reads:
DSMF ¶ 58 (emphasis in DSMF). Mr. Knowlton interposed a qualified response, acknowledging that he received compensation, to cover his travel, meals, lodging and salary when he began working in Boston in excess of his base pay, but when his travel, meals, and lodging were backed out of the compensation, his pay did not increase when he began working in Boston. PRDSMF ¶ 58. The Court allows Mr. Knowlton's qualified response to stand since it directly addressed and properly qualifies Bankers Life's paragraph 58.
The Rule 56 analysis of Bankers Life's responses to Mr. Knowlton's statement of
Mr. Knowlton's statement of additional material facts paragraph 63 reads:
PSAMF ¶ 63. Bankers Life asked that the paragraph be stricken due to lack of specificity since it fails to identify who within senior management made the statements. DRPSAMF ¶ 63. The Court rejects Bankers Life's request. Based on Mr. Knowlton's affidavit, PSAMF Attach 1 ¶ 7, he has established a barely sufficient foundation.
Mr. Knowlton's statement of additional material facts paragraph 65 reads:
PSAMF ¶ 65. Mr. Knowlton's statement of additional material facts paragraph 66 reads:
PSAMF ¶ 66. Mr. Knowlton's statement of additional material facts paragraph 67 reads:
PSAMF ¶ 67.
Bankers Life asked that the facts be stricken because they are neither relevant nor material. DRPSAMF ¶¶ 65-67. The Court denies Bankers Life's requests. The Court agrees that the facts are neither relevant nor material to Bankers Life's theory of the case, but concludes they are relevant and material to Mr. Knowlton's theory of the case. As Bankers Life failed otherwise to respond, the Court deems the facts admitted.
Mr. Knowlton's statement of additional material facts paragraph 68 reads:
PSAMF ¶ 68. Mr. Knowlton's statement of additional material facts paragraph 69 reads:
PSAMF ¶ 69. Bankers Life requested that these facts be stricken because Mr. Knowlton, whose affidavit is the sole record citation in support of these assertions, has no personal knowledge of the reasoning behind Bankers Life's compensation structure. DRPSAMF ¶¶ 68, 69. The Court rejects Bankers Life's request. Mr. Knowlton had worked for Bankers Life for nearly twenty-seven years, nearly twenty-two of which were as a branch manager. Mr. Knowlton has a sufficient personal familiarity with Bankers Life to express his view as to the purpose of its compensation structure.
Bankers Life also objects to both facts on the ground that they are neither relevant nor material. Id. The Court denies Bankers Life's request. The Court agrees that the facts are neither relevant nor material to Bankers Life's theory of the case, but concludes they are relevant and material to Mr. Knowlton's theory of the case.
Mr. Knowlton's statement of additional fact paragraph 70 reads:
PSAMF ¶ 70. Bankers Life requested that this fact be stricken because it is neither relevant nor material. DRPSAMF ¶ 70. The Court rejects Bankers Life's request. The Court agrees that the fact is neither relevant nor material to Bankers
Mr. Knowlton's statement of additional material facts paragraph 73 reads:
PSAMF ¶ 73. Mr. Knowlton's statement of additional material facts paragraphs 74, 75, 76, 77, 78, 79, 80, 81, 82, 85, 86, 87, 88, 89 and 129 contain similar assertions about the Bureau of Insurance investigation of Bankers Life. PSAMF ¶¶ 74-82, 85-89, 129.
Bankers Life requested that each of these facts be stricken because they are not based on Mr. Knowlton's personal knowledge, and to the extent he gained personal knowledge, it was obtained by inadmissible hearsay. DRPSAMF ¶¶ 73-82, 85-89, 129. Further, Bankers Life contends the facts are neither relevant nor material. Id.
The Court denies Bankers Life's requests to strike. The Court agrees with Bankers Life that the way Mr. Knowlton elected to present these facts—namely, through his own affidavit, rather than through the testimony of a Bureau of Insurance or Bankers Life employee—presents a potentially serious foundational problem for admissibility, particularly at trial. Mr. Knowlton does not reveal how he knows what the Bankers Life and Bureau employees discussed. Nevertheless, the Court will not assume for purposes of this motion that Mr. Knowlton does not know or could not testify to what he set forth in his affidavit.
The hearsay objection is less compelling. Most of the facts are not being offered for the truth but to explain the Bureau of Insurance's and Bankers Life's motivations leading to his termination as Bangor branch office manager. In fact, Mr. Knowlton disagrees vehemently with the conclusions of incompetence and dishonesty that the Bureau apparently reached and he also pointedly disputes Bankers Life's current descriptions of its reluctant acquiescence to Bureau pressure. Accordingly, only for purposes of the motion for summary judgment, the Court accepts these additional material facts.
Regarding Bankers Life's relevancy and materiality objections, the Court agrees that the facts are neither relevant nor material to Bankers Life's theory of the case, but concludes they are relevant and material to Mr. Knowlton's theory of the case.
Mr. Knowlton's statement of additional material facts paragraph 93 reads:
PSAMF ¶ 93. Bankers Life interposed a qualified response, saying that the term "repeatedly" is vague. DRPSAMF ¶ 93. The Court refuses to accept this qualification. Whenever three people all say the same thing, the thing has been said repeatedly.
Mr. Knowlton's statement of additional material facts paragraph 94 reads:
PSAMF ¶ 94. Bankers Life interposed a qualified response on the ground that the "statement is vague." DRPSAMF ¶ 94. The Court refuses to accept Bankers Life's qualified response. The fact is deemed admitted.
Mr. Knowlton's statement of additional material facts paragraph 95 reads:
PSAMF ¶ 95. Bankers Life requested that this assertion be stricken because it constitutes a legal conclusion. DRPSAMF ¶ 95. The Court rejects Bankers Life's request. Agency contains both factual and legal elements. As Bankers Life did not otherwise respond, the Court accepts Bankers Life's response as admitting the facts underlying agency but not the legal conclusion of agency.
Furthermore, the Court wonders whether Bankers Life is making this objection for the sake of making an objection. In Bankers Life's attachments to its statement of material facts, it attached the deposition transcripts of James Valdez, Michael Buckley, and Bruce Jordan and in each of the transcripts, each admits he is a Bankers Life's management employee and was so employed during the relevant time period. DSMF Attach. 7 at 5:11-6:8 (Dep. of James Valdez); DSMF Attach. 2 at 5:17-6:5 (Dep. of Michael Buckley); DSMF Attach. 11 at 5:11-7:9 (Dep. of Bruce Jordan).
Mr. Knowlton's statement of additional material facts paragraph 103 reads:
PSAMF ¶ 103. Mr. Knowlton posited a number of similar assertions relating to his conversations about a potential position as state of Maine branch manager with Combined Insurance and his decision not to accept the job offer. PSAMF ¶¶ 104, 106, 107. Bankers Life requested that each of these assertions be stricken as inadmissible hearsay. DRPSAMF ¶¶ 103, 104, 106, 107. Some are clearly not hearsay. For example, Mr. Moorehead's statement that he was in the airport and could not speak in detail is not offered for the truth. See PSAMF ¶ 104. To the extent that the statements of third parties are hearsay and are submitted for the truth, the Court sustains the objection; to the extent the statements are not for the truth but to provide context for Mr. Knowlton's personal knowledge, the Court rejects the objection. The essence of these statements, however, is that Mr. Knowlton received a job offer from Combined Insurance, and on this point, the Court accepts the facts since they fall within Mr. Knowlton's personal knowledge and are not hearsay.
Alan Knowlton's statement of additional material facts paragraph 112 reads:
PSAMF ¶ 112. His statement of material facts paragraph 113 reads:
PSAMF ¶ 113. In addition to denying and qualifying the respective facts, Bankers Life requested that the facts be struck as neither relevant nor material. DRPSAMF ¶¶ 112, 113. The Court rejects the request. The Court agrees that the facts are neither relevant nor material to Bankers Life's theory of the case, but concludes they are relevant and material to Mr. Knowlton's theory of the case.
Alan Knowlton's statement of additional material facts paragraph 114 reads:
PSAMF ¶ 114. Bankers Life requested that this paragraph be stricken on the ground that it is a legal conclusion and neither relevant nor material. DRPSAMF ¶ 114. The Court rejects Bankers Life's request and treats the paragraph solely as matters of fact, not law. Further, while the Court agrees that the fact is neither relevant nor material to Bankers Life's theory of the case, it concludes it is relevant and material to Mr. Knowlton's theory of the case.
Alan Knowlton's statement of additional material facts paragraph 115 reads:
PSAMF ¶ 115. Mr. Knowlton's statement of additional material facts paragraph 116 reads:
PSAMF ¶ 116. Bankers Life requested that the facts be stricken on the ground that they are neither relevant nor material. DRPSAMF ¶¶ 115, 116. The Court rejects the request. The Court agrees that the facts are neither relevant nor material to Bankers Life's theory of the case, but concludes they are relevant and material to Mr. Knowlton's theory of the case.
Mr. Knowlton's statement of additional material facts paragraph 121 states:
PSAMF ¶ 122. Bankers Life requested that the paragraphs be stricken because they state legal conclusions, not facts. DRPSAMF ¶¶ 121, 122. The Court agrees and strikes the two material facts.
Mr. Knowlton's statement of additional material facts paragraph 123 states:
PSAMF ¶ 123. Banker Life requested that this paragraph be stricken because it states a legal conclusion. DRPSAMF ¶ 123. The Court agrees and strikes this paragraph. Mr. Knowlton does not cite a provision of the contract itself as support; instead, he cites his own affidavit. The Court draws the conclusion that the contract does not contain such a provision but that Mr. Barker believes it should be implied as a matter of law. Whether it should be is not a matter of personal opinion but of law.
Mr. Knowlton's statement of additional material facts paragraph 127 reads:
PSAMF ¶ 127. Mr. Knowlton's statement of additional material facts paragraph 128 reads:
PSAMF ¶ 128. Mr. Knowlton's statement of additional material facts 130 reads:
PSAMF ¶ 130. Bankers Life requested that these paragraphs be stricken on the ground that they are legal conclusions. As regards paragraphs 127 and 128, the Court rejects Bankers Life's requests and treats the assertions solely as matters of fact, not law. As regards paragraph 130, the Court agrees and strikes paragraph 130.
After resolving the parties' multiple objections, viewing the evidence in the light most favorable to Mr. Knowlton, the following facts emerge:
Bankers Life hired Alan Knowlton as a Sales Agent in November 1980 in the Concord, New Hampshire office. PSAMF ¶ 59; DRPSAMF ¶ 59. In May 1985, Bankers Life promoted Mr. Knowlton to the position of Branch Sales Manager for
On January 1, 1995, and again in January 2006, Mr. Knowlton entered into written branch sales manager employment contracts with Bankers Life. DSMF ¶¶ 7-8; PRDSMF ¶¶ 7-8. Both contracts contain substantially the same provisions; however, the January 1, 1995 employment contract governs this lawsuit. DSMF ¶¶ 9-10; PRDSMF ¶¶ 9-10. The January 1, 1995 contract provides that "[e]ither party may terminate this Contract at will, without cause, by giving written notice to the other party." DSMF ¶ 11; PRDSMF ¶ 11. The contract further provides that it "supersedes and terminates all previous Contracts, any oral representations or understandings and constitutes the entire Contract between the parties." DSMF ¶ 13; PRDSMF ¶ 13. The contract also provides that it could only be "changed or modified by written consent signed on behalf of the Company." DSMF ¶ 14; PRDSMF ¶ 14.
During the twenty years he served as the Bangor office Branch Sales Manager, senior level management at Bankers Life told Mr. Knowlton: "It's your office," "It's an opportunity to build your own business," "The Branch Sales Manager is an entrepreneurial opportunity for you," "Take personal ownership of your office," "Run your office as you see fit," and "Spend your budget as you see fit, it's your office." PSAMF ¶ 63; DRPSAMF ¶ 63. All of these statements led Mr. Knowlton to believe that his position and career were secure as long as he continued to honestly and faithfully perform his work, and based on these statements, he understood that he had a contract for continued employment for as long as he wanted to work with Bankers Life. PSAMF ¶ 64; DRPSAMF ¶ 64. During his twenty years at Bankers Life, Mr. Knowlton knew several individuals who had spent their entire careers as Branch Sales Managers at Bankers Life before retiring. PSAMF ¶ 65; DRPSAMF ¶ 65. During his time at Bankers Life, Mr. Knowlton earned numerous awards for the Bangor office's performance and the quality of the business it produced. PSAMF ¶ 66; DRPSAMF ¶ 66.
Mr. Knowlton's compensation and benefit plans at Bankers Life included:
PSAMF ¶ 67; DRPSAMF ¶ 67. The purpose of Bankers Life's benefit and compensation programs was to provide employees with the expectation and security that if they performed their duties faithfully and honestly, they could expect to retire from Bankers Life. PSAMF ¶ 68; DRPSAMF ¶ 68. More specifically, the Bankers Life policies, Employee Retirement Plan and Managers Deferred Compensation Plan were structured to encourage Branch Service Managers to stay with Bankers Life until they retired. PSAMF ¶¶ 69, 70; DRPSAMF ¶¶ 69, 70. Furthermore, Mr. Knowlton understood from repeated conversations with Leroy Kunselman and Bruce Jordan that Bankers Life had a policy or practice only to terminate its branch sales managers for lack of performance or proven wrongdoing. PSAMF ¶ 71; DRPSAMF ¶ 71. Based on the benefit and compensation plan, the policies, procedures, and actions of Bankers Life, Mr. Knowlton understood that he had a guarantee of continued employment until he retired, provided he performed his duties adequately, honestly, and diligently. PSAMF ¶ 72; DRPSAMF ¶ 72.
In 2001, Mr. Van Sullivan, an employee within the Market Conduct Division of the Maine Bureau of Insurance, under the auspices of Deputy Superintendent Eric Ciopa, began an investigation into the marketing practices of Bankers Life with a specific focus on sales practices that targeted elderly consumers. PSAMF ¶ 73; DRPSAMF ¶ 73. The investigation revealed significant violations in the Bankers Life South Portland branch office. PSAMF ¶¶ 73-74; DRPSAMF ¶¶ 73-74. The investigation did not, however, reveal any evidence of significant violations in the Bangor branch office of Bankers Life. PSAMF ¶ 75; DRPSAMF ¶ 75. The Van Sullivan investigation was turned over to Judith Shaw, the Bureau's Deputy Superintendent, in 2002; however, Deputy Shaw, Assistant Attorney General Andrew Black, and Director of Consumer Healthcare for the Bureau, Glenn Griswold, never reviewed the results of the Van Sullivan report. PSAMF ¶¶ 80-81; DRPSAMF ¶¶ 80-81.
In 2002, after learning about a number of complaints against Bankers Life, Deputy Shaw instructed Director Griswold to assign investigators to determine whether Bankers Life was engaging in systemic improper sales practices. PSAMF ¶ 77; DRPSAMF ¶ 77. Mr. Griswold assigned Mike McGonigle and Linda Dion to conduct the investigation. PSAMF ¶ 78; DRPSAMF ¶ 78. Neither Mike McGonigle nor Linda Dion could identify any management or other practices that Mr. Knowlton engaged in that led to any systemic improper sales actions in the Bangor office of Bankers Life. PSAMF ¶ 79; DRPSAMF ¶ 79.
On April 5, 2005, the Bureau—through Deputy Shaw and Director Griswold—entered
Between January 1, 2002 and April 11, 2005, the Bureau of Insurance received 70 formal complaints alleging violations of the Maine Insurance Code by agents appointed by Bankers Life, including agents recruited, trained, and supervised by Mr. Knowlton in the Bangor branch office. DSMF ¶ 16; PRDSMF ¶ 16. Based on these complaints, the Bureau reached the following conclusion:
DSMF ¶ 17; PRDSMF ¶ 17. To address this situation, the Bureau and Bankers Life entered into a Consent Agreement on April 11, 2005. DSMF ¶ 18; PRDSMF ¶ 18. Among other provisions, the Consent Agreement required that "Bankers Life shall relieve the managers of its South Portland and Bangor branch offices of their positions as branch managers" and that, until these staffing changes were made, Bankers Life would "suspend the sale of all deferred annuity products in the State of Maine." DSMF ¶¶ 19, 20; PRDSMF ¶¶ 19, 20. Deputy Shaw testified that the removal of the branch managers "was predicated on the Bureau's position" that the two branch offices were not being competently managed and that Bankers Life was required to take "serious measures" to change the culture in those offices. DSMF ¶ 21; PRDSMF ¶ 21.
Although there is contradictory evidence as to whether Bankers Life attempted to convince the Bureau to allow it to retain Mr. Knowlton as Bangor Branch Sales Manager, the Court recites the evidence in the light most favorable to Mr. Knowlton. Mr. Knowlton says that as part of the negotiations that led to the April 11, 2005 Consent Agreement, the Bureau originally proposed that Bankers Life agree to an audit of the managers' practices in the Bangor and South Portland offices, a process that would have allowed Mr. Knowlton to defend himself. PSAMF ¶¶ 87, 129; DRPSAMF ¶¶ 87, 129. In response, Bankers Life asked the Bureau to insert language in the Consent Agreement that confirmed that the Bureau had investigated the complaints involving the South Portland and Bangor branch managers, but the Bureau refused to do so because it had not performed such an investigation. PSAMF ¶¶ 88-89; DRPSAMF ¶¶ 88-89. At that point, Mr. Knowlton says it was
After Bankers Life entered into the April 11, 2005 Consent Agreement, it approached Mr. Knowlton on April 14, 2005. The Bankers Life supervisors told Mr. Knowlton that the Bureau had insisted upon his removal as Bangor Branch Sales Manager and that Bankers Life had fought with the Bureau to preserve his position since they knew that he was not at fault. PSAMF ¶¶ 96-99; DRPSAMF ¶¶ 96-99. They assured him that Bankers Life would take care of him. PSAMF ¶ 99; DRPSAMF ¶ 99. Even so, the Bankers Life supervisors told him that the Bureau had insisted that he no longer serve as a branch manager not only in Maine but anywhere else in the United States. PSAMF ¶¶ 101, 102; DRPSAMF ¶¶ 101, 102. Mr. Knowlton later learned that these representations were untrue. PSAMF ¶ 130; DRPSAMF ¶ 130.
After Bankers Life removed Mr. Knowlton from the position of Bangor Branch Manager, it placed Mr. Knowlton on short-term disability. DSMF ¶ 37; PRDSMF ¶ 37. Mr. Knowlton continued to receive short-term disability until November 2005, when he began to work as a unit sales manager in the Bankers Life Boston office. DSMF ¶ 38; PRDSMF ¶ 38. However, Bankers Life continued to pay Mr. Knowlton $4,500 every other week until July 2006. DSMF ¶¶ 39-40; PRDSMF ¶¶ 39-40.
On July 1, 2005, Bankers Life told Mr. Knowlton that it had a great opportunity for him in Massachusetts to build a branch sales office on the North Shore. PSAMF ¶ 100; DRPSAMF ¶ 100. They told him that he would have to start as a unit sales manager at the Bankers Life Boston office as it would take a little time to set up the North Shore office. PSAMF ¶ 109; DRPSAMF ¶ 109. Mr. Knowlton relied on these representations and believing his move to Branch Manager of the North Shore office was imminent, he accepted the demotion to be Unit Sales Manager on a temporary basis. PSAMF ¶ 109; DRPSAMF ¶ 109.
On December 15, 2005, after Mr. Knowlton began work in Boston for Bankers Life, he responded to an advertisement for a branch manager position for an insurance company. PSAMF ¶ 103; DRPSAMF ¶ 103. On December 16, 2005, Mike Moorehead of Combined Insurance ("Combined") contacted Mr. Knowlton and told him that someone from Combined would be in touch with him. PSAMF ¶ 104; DRPSAMF ¶ 104. On January 4, 2006, John Morrison of Combined interviewed Mr. Knowlton for the position of Branch Manager for Combined's Maine offices. PSAMF ¶ 105; DRPSAMF ¶ 105. On January 23, 2006, Mr. Morrison and Kay (Mr. Morrison's boss) met with Mr. Knowlton and offered him the position of Territorial Manager for Combined. PSAMF ¶ 107; DRPSAMF ¶ 107. Mr. Knowlton rejected Combined's offer because he felt personal loyalty to Bankers Life based on its prior representations that it had fought for him with the Bureau of Insurance and based on its promise to make him the Branch Office Manager for
During his time as Unit Sales Manager in Boston, Mr. Knowlton recruited a number of new agents, was assigned to train them, and although he sold numerous policies, he gave all his sales to the agents in an attempt to retain them. PSAMF ¶ 111; DRPSAMF ¶ 111. Bankers Life did not raise any issues with his job performance in Boston. PSAMF ¶ 112; DRPSAMF ¶ 112. Mr. Knowlton continued to live in Hampden, Maine during this time. DSMF ¶¶ 43-44; PRDSMF ¶¶ 43-44. In June and July 2006, James Valdez and Michael Buckley disparaged Mr. Knowlton, stating that he was not competent to be a branch manager, suggesting that he was incompetent and dishonest, and asserting that he had engaged in improper and dishonest sales practices. PSAMF ¶¶ 113-18; DRPSAMF ¶¶ 113-18. By July 2006, Bankers Life had not opened the branch office on the North Shore. PSAMF ¶ 110; DRPSAMF ¶ 110. In July 2006, Bankers Life ended its financial support of Mr. Knowlton and in August 2006, it offered Mr. Knowlton the opportunity to return to work if he would agree to certain performance requirements and relocate to Massachusetts within one month. DSMF ¶ 45; PRDSMF ¶ 45. Mr. Knowlton refused and Bankers Life terminated his employment effective March 16, 2007. DSMF ¶ 46; PRDSMF ¶ 46.
Summary judgment is appropriate "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). A fact is "material" if it "has the potential to change the outcome of the suit under the governing law if the dispute over it is resolved favorably to the nonmovant." McCarthy v. Nw. Airlines, Inc., 56 F.3d 313, 315 (1st Cir.1995); accord Buchanan v. Maine, 469 F.3d 158, 166 (1st Cir.2006); Seaboard Sur. Co. v. Town of Greenfield, 370 F.3d 215, 218-19 (1st Cir.2004). An issue is genuine if "the evidence about the fact is such that a reasonable jury could resolve the point in favor of the nonmoving party." McCarthy, 56 F.3d at 315 (quoting United States v. One Parcel of Real Prop. with Bldgs., Appurtenances, and Improvements, Known As Plat 20, Lot 17, Great Harbor Neck, New Shoreham, Rhode Island, 960 F.2d 200, 204 (1st Cir. 1992)); accord Seaboard Sur. Co., 370 F.3d at 218-19. Once this evidence is supplied by the moving party, the nonmovant "must point to `competent evidence' and `specific facts' to stave off summary judgment." Tropigas de Puerto Rico, Inc., 637 F.3d at 56; accord ATC Realty, LLC v. Town of Kingston, 303 F.3d 91, 94 (1st Cir.2002).
The Court "afford[s] no evidentiary weight to `conclusory allegations, empty
The contract between Bankers Life and Mr. Knowlton has a choice of law provision:
DSMF Attach. 1 Ex. A-1 (Branch Sales Manager Contract) ¶ 25. Mr. Knowlton argues and Bankers Life agrees that Illinois substantive law controls his contractual claims. Pl.'s Resp. at 5-6; Def.'s Reply at 2 (stating that "both the Contract and controlling Illinois law refute Mr. Knowlton's argument"). Similarly, the parties agree that Maine law controls the tort claims. Pl.'s Resp. at 6; Def.'s Reply at 5-7 (analyzing tort claims under Maine law).
In Count XV of his Amended Complaint, Mr. Knowlton says that on July 27, 2006, James Valdez told a person named Lucy Karl "Quite to the contrary, the investigation by the investigation by (sic) the Maine Bureau of Insurance led the Bureau to conclude that Mr. Knowlton was not competent to manage the Bangor office, nor remain in any management capacity in any Maine branch operated by Bankers Life and Casualty Company."
In Count XVIII of his Amended Complaint, Mr. Knowlton alleges that on July 7, 2006, Michael Buckley "told Gerald Glynn among other things, that the State of Maine had determined that Alan Knowlton could not be a Branch Sales Manager in Maine [or in any state] because of Alan Knowlton's improper/dishonest sales practices." Id. ¶¶ 212, 213. Mr. Knowlton alleges "[u]pon information and belief that Michael Buckley has repeated that statement to other third parties. Id. ¶ 214.
On December 14, 2009, Bankers Life moved to dismiss Counts XV and XIII on statute of limitations grounds, Bankers Life Defs.' Mot. to Dismiss, and on April 27, 2010, applying Maine's two-year statute of limitations for slander claims, the Court granted the motion in part, specifically as
Bankers Life's motion for summary judgment seeks to eliminate these claims altogether by challenging Mr. Knowlton's basis for contending that Mr. Valdez and Mr. Buckley repeated these statements since July 2, 2007, two years prior to the filing of his claim. Defs.' Mot. at 4-5. In his response, Mr. Knowlton contends that the statute of limitations does not run if the Defendant's conduct constitutes a continuing tort. Pl.'s Resp. at 19. He points out that the Bankers Life Consent Agreement is "still being published today" and that it terminated Mr. Knowlton because his work represented an "unacceptable level of incompetence" and because he lacked "adherence to the legal requirements." Id. Claiming these statements were slanderous, Mr. Knowlton says that "the Bankers Life Defendants specific recitation of that slander subjects them to liability for the damages sustained by Mr. Knowlton. In other words, the slander is a continuing tort, negatively impacting Mr. Knowlton's ability to find employment." Id.
To the extent Mr. Knowlton continues to rely on his prior position that slander is a continuing tort, the Court rejected that position in its Order on the Motions to Dismiss and does so again for precisely the same reasons. To repeat, "[c]ourts almost universally decline to apply the doctrine [of continuing tort] in defamation cases." Murphy v. Maine, CV-06-62-B-W, 2006 WL 2514012, at *5, 2006 U.S. Dist. LEXIS 61638, at *18 (D.Me. Aug. 29, 2006).
To withstand summary judgment on these Counts, Mr. Knowlton must raise a genuine issue of material fact as to whether either Mr. Valdez or Mr. Buckley repeated the allegedly slanderous statements after July 2, 2007. To that end, the Court has carefully reviewed the statements of material facts to determine whether they refer to any allegedly slanderous statements by either Defendant within the applicable period. The Court has found two references to slander in Bankers Life's statement of material facts:
DSMF ¶ 51. And:
DSMF ¶ 52. Mr. Knowlton posited the same response to both assertions:
PRDSMF ¶¶ 51-52. In his Response, Mr. Knowlton did not refer to any evidence of slander in his separate statement of material facts, and the Court carefully reviewed
The question, then, is whether Mr. Knowlton's qualified responses generate a genuine issue of material fact as to whether either Mr. Buckley or Mr. Valdez slandered him during the applicable statute of limitations period. To the extent Mr. Knowlton is relying on his past knowledge of how other individuals who were terminated at Bankers Life were treated, his belief that Messrs. Buckley and Valdez would have continued to repeat these statements would not be admissible evidence, and for the reasons earlier stated, the Court has declined to allow Mr. Knowlton to enter a qualified response that attempts to generate an issue of material fact based on forbidden speculation and character evidence. See supra Part I.D.3.z; FED.R.EVID. 401, 404(a), 608.
The question narrows to whether the continued publication of the Consent Agreement constitutes slander. If, as Mr. Knowlton claims, Bankers Life continued to publish the Consent Agreement, he has not put forth any evidence that either Mr. Valdez or Mr. Buckley was linked to the Bankers Life publication. His record support is limited to his own deposition:
PSAMF Attach. 15 208:23-209:5 (Dep. of Alan Knowlton). Mr. Knowlton's testimony does not raise a genuine issue of material fact that either Mr. Valdez or Mr. Buckley continued to slander him after July 2, 2007. Excluding the testimony relating to statements that Mr. Valdez "would have had to" have made—which the Court rejected as speculative—Knowlton refers only to postings on the Bankers Life website but fails to connect the posting to Messrs. Valdez or Buckley. See Tropigas de Puerto Rico, 637 F.3d at 56. This record evidence is insufficient to create a triable issue as to whether Mr. Valdez or Mr. Buckley made any slanderous statements about Mr. Knowlton after July 2, 2007. The Court concludes that Messrs. Valdez and Buckley are entitled to summary judgment on Counts XV and XVIII of the Amended Complaint.
Relying on the contractual provision that "[e]ither party may terminate this Contract at will, without cause, by giving written notice to the other party," Bankers Life seeks summary judgment against Mr. Knowlton's contractual claim because in its view, the contract was terminable at will. Defs.' Mot. at 5-8. Mr. Knowlton counters that Illinois law presumes all contracts to be "at will" but allows a party to overcome this presumption by showing that the employer policies demonstrate an intent to agree to a definite term. Pl.'s Resp. at 9. Mr. Knowlton argues that the Bankers Life had policies and practices that create a genuine issue of material fact as to whether it had guaranteed him future employment subject to his meeting its performance goals and otherwise performing his duties faithfully and honestly. Id. at 8-13.
The seminal case for the duration of an employment contract in Illinois is Duldulao v. St. Mary of Nazareth Hospital Center, 115 Ill.2d 482, 106 Ill.Dec. 8, 505 N.E.2d 314 (1987). In Duldulao, the Illinois Supreme Court observed that "an employment relationship without a fixed duration is terminable at will." Id. 115 Ill.2d at 489, 106 Ill.Dec. 8, 505 N.E.2d at
Duldulao remains good law in Illinois, but subsequent Ilinois Supreme Court rulings have limited its reach. See Dopkeen v. Whitaker, 399 Ill.App.3d 682, 688, 339 Ill.Dec. 319, 926 N.E.2d 794, 800 (2010) (citing Duldulao as controlling law "under proper circumstances"). The Dopkeen Court explained that the Illinois Supreme Court limited its holding in Duldulao "by stating that only `under proper circumstances' may an employee handbook be contractually binding" and it is "plaintiff's burden to explain why his case fell `under proper circumstances' and [is] not controlled by the general rule." Id. (quoting Unterschuetz v. City of Chicago, 346 Ill.App.3d 65, 73, 281 Ill.Dec. 367, 803 N.E.2d 988, 995 (2004)). To satisfy this burden, the employee must demonstrate: 1) "the language of the policy statement . . . contain[s] a promise clear enough that an employee reasonably believe[s] that an offer has been made," 2) "the statement must be disseminated to the employee in such a manner that the employee is aware of its contents and reasonably believes it to be an offer," and 3) "the employee must accept the offer by commencing or continuing to work after learning of the policy statement." Duldulao, 115 Ill.2d at 490, 106 Ill.Dec. 8, 505 N.E.2d at 318; accord Wood v. Wabash Cnty. Health Dep't., 309 Ill.App.3d 725, 728, 243 Ill.Dec. 107, 722 N.E.2d 1176, 1179 (1999). Furthermore, in Stoll v. United Way of Champaign County, Illinois, Inc., the Ilinois Appellate Court noted an additional restriction in Duldulao: the employee handbook was created by the employer and the handbook expressly stated that it was "designed to clarify your rights and duties as employees." 378 Ill.App.3d 1048, 1052-53, 318 Ill.Dec. 344, 883 N.E.2d 575, 579 (2008).
Significantly, however, as the Illinois Appellate Court observed, Duldulao addressed a situation where there was no written employment contract. McWhorter v. Realty World-Star, Inc., 171 Ill.App.3d 588, 593, 121 Ill.Dec. 898, 525 N.E.2d 1205, 1208 (1988) (explaining that Duldulao was distinguishable because "in Duldulao there was no express employment contract" while in McWhorter "an express employment contract was entered into between the parties"). Similarly, interpreting Illinois law, the Seventh Circuit observed in Lashbrook v. Oerkfitz that "unlike the plaintiffs in Duldulao and its progeny . . ., [the employee] had an express contract that governed his employment relationship with the Park District, and the instant case is distinguishable on that ground alone." 65 F.3d 1339, 1346 (7th Cir.1995). Where there is an employment contract and an argument is being made that the contract incorporated another document, the rule in Illinois is that "the reference must show . . . an intention to incorporate the document and make it a part of the contract." Arneson v. Bd. of Trs., 210 Ill.App.3d 844, 849-50, 155 Ill.Dec. 252, 569 N.E.2d 252, 256 (1991).
Under Illinois law, the terms of the written employment contract between Mr.
Even if Duldulao applied, Mr. Knowlton would still not prevail. Under Duldulao, Bankers Life is entitled to the presumption that its employment agreement with Mr. Knowlton was terminable at will. See 115 Ill.2d at 489, 106 Ill.Dec. 8, 505 N.E.2d at 318. The January 1, 1995 contract governing this lawsuit provides that "[e]ither party may terminate this Contract at will, without cause, by giving written notice to the other party." DSMF ¶ 11; PRDSMF ¶ 11. The contract further provides that it "supersedes and terminates all previous Contracts, any oral representations or understandings and constitutes the entire Contract between the parties." DSMF ¶ 13; PRDSMF ¶ 13. By its terms, the contract could only be "changed or modified by written consent signed on behalf of the Company." DSMF ¶ 14; PRDSMF ¶ 14.
The question, then, is whether Mr. Knowlton has created a genuine issue of material fact to sustain his contention that Bankers Life incorporated its policies and practices into Mr. Knowlton's employment agreement by stipulating in the agreement that the "Manager agrees to abide by all policies, practices and procedures adopted by the Company." Branch Sales Manager Contract ¶ 5(b). Mr. Knowlton asserts that he has met the three Illinois prerequisites for application of the Duldulao Court's exception to employment at will: 1) the language of the policy contains a promise clear enough that an employee reasonably believes that an offer has been made, 2) the policy statement was disseminated to the employee so that he was aware of the promise and believed it to be an offer, and 3) Mr. Knowlton continued to work after learning of the policy statement. Pl.'s Resp. at 9-11 (citing Wood, 309 Ill.App.3d at 728, 243 Ill.Dec. 107, 722 N.E.2d at 1179).
The Court disagrees. First, by its precise terms, the employment contract does not create an obligation on the part of Bankers Life; it requires the "Manager," namely Mr. Knowlton, not the Company, to "abide by all policies, practices and procedures." It is difficult to conclude that Mr. Knowlton could have reasonably interpreted this language to impose a corresponding enforceable obligation on Bankers Life. However, to the extent Mr. Knowlton could have gathered from this language that Bankers Life was similarly bound by its policies and procedures, the employment contract expressly states that "[e]ither party may terminate this Contract at will, without cause, by giving written notice to the other party." DSMF ¶ 11; PRDSMF ¶ 11. Reading the contract
Second, the Duldulao Court was discussing an employee handbook, which it concluded created legal obligations on the employer before discharging an employee. Id. at 490-91, 106 Ill.Dec. 8, 505 N.E.2d at 318-19. Here, Mr. Knowlton initially points to verbal statements made by his supervisors over the years that he interpreted as promising employment until retirement: "It's your office"; "It's an opportunity to build your own business"; "The Branch Sales Manager is an entrepreneurial opportunity for you"; "Take personal ownership of your office"; "Run your office as you see fit"; and "Spend your budget as you see fit, it's your office." PSAMF ¶ 63; DRPSAMF ¶ 63. These are general words of encouragement, not the kind of employer promises about pre-termination disciplinary procedures contained in the written employee handbook in Duldulao.
Mr. Knowlton also points to testimony from Bankers Life Vice Presidents Kunselman and Jordan that Bankers Life had a policy of only terminating branch managers based on a lack of performance or proven wrongdoing. Pl.'s Resp. at 10-11. However, there is no evidence that Bankers Life reduced this general policy to a written promise to its branch managers, and the Court views this type of statement more as an aspirational goal than a binding amendment to the written employment contract. Mr. Knowlton's references to the Bankers Life benefit programs do not change this analysis. The Court views the Bankers Life benefit and compensation programs as garden variety employee benefit and compensation programs, many of which encourage seniority.
In sum, under Illinois law, Mr. Knowlton has not stated a contractual claim against Bankers Life. Under McWhorter and Lashbrook, the employment contract by its terms is terminable at will, without cause, and by written notice, and the contract does not expressly incorporate any Bankers Life policies or procedures guaranteeing Mr. Knowlton employment until retirement. The Court concludes that Duldulao does not apply, but if it did, Mr. Knowlton has not produced evidence that generates a genuine issue of material fact as to whether the so-called promises of employment until retirement are binding on Bankers Life.
Citing Illinois law, Bankers Life argues that there is no implied covenant of good faith and fair dealing in a contract that is terminable at will. Def.'s Reply at 5. By contrast, also citing Illinois law, Mr. Knowlton claims that every Illinois contract, including employment contracts, contains a covenant of good faith and fair dealing. Pl.'s Resp. at 13-14.
Mr. Knowlton is correct that in Illinois "[e]very contract implies good faith and fair dealing between the parties to it." Mid-West Energy Consultants, Inc. v. Covenant Home, Inc., 352 Ill.App.3d 160, 163, 287 Ill.Dec. 267, 815 N.E.2d 911, 914 (2004) (quoting Martindell v. Lake Shore Nat'l Bank, 15 Ill.2d 272, 286, 154 N.E.2d 683, 690 (1958)). "The duty of good faith and fair dealing, however, is used only as a construction aid to determine the intent of the contracting parties." Bank of Am., N.A. v. Shelbourne Dev. Group, Inc., No. 09 C 4963, 2011 WL 829390, at *4, 2011 U.S. Dist. LEXIS 21258, at *10 (N.D.Ill.
In Illinois, the "parties to a contract are entitled to enforce the terms to the letter and an implied contract of good faith cannot overrule or modify the express terms of a contract." Cromeens, Holloman, Sibert, Inc. v. AB Volvo, 349 F.3d 376, 395 (7th Cir.2003). Specifically, as applied to employment contracts, in Mid-West, the Illinois Appellate Court wrote:
352 Ill.App.3d at 163, 287 Ill.Dec. 267, 815 N.E.2d at 914 (quoting Jespersen v. Minnesota Mining & Mfg. Co., 288 Ill.App.3d 889, 895, 224 Ill.Dec. 85, 681 N.E.2d 67, 71 (1997)).
Under Illinois law, therefore, because the employment contract is terminable at will, Mr. Knowlton cannot maintain a separate cause of action for Bankers Life's breach of duty of good faith and fair dealing.
According to Maine law on promissory estoppel, "[a] promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise." Martin v. Scott Paper Co., 511 A.2d 1048, 1050 (Me. 1986) (quoting RESTATEMENT (SECOND) OF CONTRACTS § 90 (2010)). Mr. Knowlton contends there is sufficient evidence in this record that Bankers Life executives:
Pl.'s Resp. at 14-15. He argues that there is "ample evidence" to create a material fact "as to whether Mr. Knowlton relied on those representations to his detriment." Id. at 15. Bankers Life disagrees. It says that promissory estoppel is not available when the plaintiff is an at will employee. Def.'s Mot. at 9-10; Def.'s Reply at 5. Furthermore, it contends that Mr. Knowlton's promissory estoppel theory is barred by the statute of frauds. Def.'s Mot. at 9-10; Def.'s Reply at 5.
In Roy v. Runyon, Magistrate Judge David Cohen deftly addressed relationship under Maine law between promissory estoppel and the statute of frauds in an employment context. 954 F.Supp. 368, 379-80 (D.Me.1997). The Roy Court makes it clear that a plaintiff does not "automatically shed the [statute of frauds'] requirements by invoking promissory estoppel." Id. at 379. According to Roy, in Stearns v. Emery-Waterhouse Co., 596 A.2d 72, 74 (Me.1991), the Law Court declared that, as a matter of Maine law, "the doctrine of promissory estoppel would not be available to defeat the requirement of a
Judge Cohen's analysis is echoed with a slightly different emphasis in Lockrow v. Biddeford-Saco County Club, No. CV-01-320, 2002 WL 1335870, at *1, 2002 Me.Super. LEXIS 116, at *1 (Me.Super. May 30, 2002). There, the Superior Court Justice observed:
Id. These cases are consistent with the proposition that in Maine, an at-will employee may not maintain a promissory estoppel claim. See Bradley v. Kryvicky, 574 F.Supp.2d 210, 223 (D.Me.2008) (concluding that "[p]romissory estoppel is unavailable in this case where an enforceable contract governs the same topic as the alleged oral promise"); Popanz v. Peregrine Corp., 710 A.2d 250, 251 (Me.1998); Hodgkins v. New England Tel. Co., 82 F.3d 1226, 1233 (1st Cir.1996) ("An employee cannot avoid the statute of frauds `based solely upon his detrimental reliance on an employer's oral promise of continued employment'" (quoting Stearns, 596 A.2d at 74)).
Mr. Knowlton has not stated a viable promissory estoppel claim under Maine law.
To recover under 42 U.S.C. § 1983, "a plaintiff must prove that a deprivation of `rights, privileges, or immunities secured by the Constitution and laws' of the United States was carried out by persons acting under color of state law." Clark v. Boscher, 514 F.3d 107, 112 (1st Cir.2008) (quoting 42 U.S.C. § 1983). This standard breaks down into two overriding inquiries: "(1) whether the conduct complained of was committed by a person acting under the color of state law; and (2) whether this conduct deprived a person of rights, privileges, or immunities secured by the Constitution or laws of the United States." Gutierrez-Rodriguez v. Cartagena, 882 F.2d 553, 559 (1st Cir.1989) (quoting Parratt v. Taylor, 451 U.S. 527, 535, 101 S.Ct. 1908, 68 L.Ed.2d 420 (1981)).
Turning to the first requirement—color of state law—Mr. Knowlton contends that Bankers Life conspired with state officials to deprive him of his employment, and in doing so, that Bankers Life cloaked itself with state authority, making it susceptible to a § 1983 claim. Pl.'s Resp. at 17-18. Mr. Knowlton correctly asserts that under First Circuit law, "private parties who conspire with immune officials may be sued under § 1983." Slotnick v. Staviskey, 560 F.2d 31, 32-33 (1st Cir.1977); accord Kermit Constr. Corp. v.
He stumbles on the next. "[T]o state a cognizable claim for a violation of due process pursuant to 42 U.S.C. § 1983, a plaintiff must show a deprivation of a constitutionally protected property or liberty interest." Krennerich v. Inhabitants of the Town of Bristol, 943 F.Supp. 1345, 1352 (D.Me.1996). Mr. Knowlton relies on the incorporation of Bankers Life's policies and practices into his written employment contract to establish his property interest in continued employment with Bankers Life. However, the Court has rejected this contention and has concluded that under Illinois law he was an at-will employee.
In his Amended Complaint, Mr. Knowlton alleges that Bankers Life and its supervisory employees either made
In its motion, Bankers Life says that the misrepresentation claims fail as a matter of law for the following reasons: 1) the statements about the Bureau were true—the Bureau had concluded Mr. Knowlton was incompetent and dishonest and had to be removed as Branch Manager; the Bureau had in fact required Bankers Life to remove Mr. Knowlton as Branch Manager; and Bankers Life did have a great opportunity for Mr. Knowlton in Massachusetts; 2) even if the Bureau's conclusions about Mr. Knowlton could be deemed untrue, the Bureau's statements about Mr. Knowlton were statements of opinion, which do not give rise to a misrepresentation claim; 3) the statements were immaterial; 4) Mr. Knowlton did not justifiably rely on the statements; 4) he cannot demonstrate proximate cause; 5) he did not suffer any damages as a consequence of the misrepresentations; 6) that the Bankers Life Defendants did not make these representations intentionally or negligently; and, 7) that Mr. Knowlton cannot recover damages for emotional distress from the misrepresentations. Def.'s Mot. at 11-19.
In response, Mr. Knowlton disputes whether the Bureau required Bankers Life to terminate Mr. Knowlton as Branch Manager, whether Bankers Life fought for him, and whether Bankers Life ever intended to make him the North Shore Branch Manager. Pl.'s Resp. at 16-17. Mr. Knowlton says that he relied on these representations to his detriment and refused an employment offer from Combined Insurance. Id. at 17. Finally, although Mr. Knowlton concedes that he cannot recover emotional distress damages for the intentional misrepresentation claims, he contends that Maine law permits recovery for the negligent misrepresentation claims. Id. at 20.
In reply, Bankers Life reiterates its view that Maine limits recoverable damages to pecuniary loss for negligent misrepresentation claims. Def.'s Reply at 7.
Maine allows causes of action for both intentional
The Maine tort of negligent misrepresentation
In the Court's view, Mr. Knowlton has generated a sufficient record in this case to withstand summary judgment on the fraudulent and negligent misrepresentation claims against the Bankers Life Defendants. In effect, Mr. Knowlton charges that Bankers Life was engaged in a double game: assuring him that it was acting as his advocate before the Bureau while at the same time, offering him up as a scapegoat to the Bureau in hope that the Bureau would be lenient with Bankers Life. The intended effect of this double dealing, from Mr. Knowlton's perspective, was to mollify him, retaining his good will, during a period of intense governmental scrutiny. Then, acting on the false assumption that he should return to Bankers Life because of the loyalty he thought it had shown him, Mr. Knowlton turned down a potentially lucrative position with another insurance company.
The Court acknowledges that Bankers Life emphatically rejects Mr. Knowlton's version of these events; however, for purposes of summary judgment, the Court is required to accept the non-movant's version of the facts to the extent they are supported by the record evidence. As the Maine Supreme Judicial Court wrote in Rand, in negligent misrepresentation cases, the inquiry as to whether the defendant committed the tort "is a question for the fact-finder." 2003 ME 122, ¶ 13, 832 A.2d at 774. The Court draws a similar conclusion on the fraudulent misrepresentation claim.
Mr. Knowlton generally survives summary judgment on Counts XII, XIII, XIV, XVI, XVII, XIX and XX. On one point, however, he does not. Mr. Knowlton has conceded that he is not entitled to emotional distress damages for an intentional misrepresentation claim. Pl.'s Resp. at 20. However, he contends that he is entitled to emotional distress damages for emotional
Maine law on punitive damages is controlled by Tuttle v. Raymond, 494 A.2d 1353 (Me.1985). In Tuttle v. Raymond, the Maine Supreme Judicial Court limited the availability of punitive damages to cases involving either "`express' or `actual' malice" or "deliberate conduct by the defendant, [which,] although motivated by something other than ill will toward any particular party, is so outrageous that malice toward a person injured as a result of that conduct can be implied." Id. at 1361.
In its motion, Bankers Life argues that the punitive damages award cannot be sustained because "there is absolutely no evidence that the Bankers Life Defendants acted with malice." Def.'s Mot. at 19-20. In response, Mr. Knowlton only says that whether Bankers Life's actions meet the Tuttle v. Raymond standard "is a factual question which is best left to the jury." Pl.'s Resp. at 20.
Based solely on the argument that Bankers Life has raised, the Court concludes that the punitive damages count survives summary judgment. If the Bankers Life Defendants engaged—as Mr. Knowlton claims—in a double game, appeasing the Bureau while mollifying him, then a jury could find that even though not motivated by actual malice, malice could be implied.
The Court GRANTS in part and DENIES in part the Bankers Life Defendants' Motion for Summary Judgment (Docket # 59). The Court GRANTS summary judgment in favor of Bankers Life and Casualty Company, James Valdez, Michael Buckley, and Bruce Jordan on Counts I, III, VI, XV, XVIII, XXI, XXII and XXIII. The Court GRANTS in part summary judgment in favor of Bankers Life and Casualty, James Valdez, Michael Buckley, and Bruce Jordan and DENIES in part summary judgment against Alan Knowlton on Counts XII, XIII, XIV, XVI, XVII, XIX and XX; the Court GRANTS summary judgment on each Count only to the extent Alan Knowlton is claiming non-pecuniary damages; otherwise, the Court DENIES summary judgment on each Count. Finally, the Court DENIES summary judgment against Alan Knowlton on his punitive damages claim.
SO ORDERED.
On June 13, 2011, the Court issued a seventy-nine page opinion in which it granted in part and denied in part the Defendants' motion for summary judgment.
The Defendants are perturbed that, in ruling on their motion, the Court did not parse each asserted misrepresentation and resolve each statement in their favor. They say the First Circuit requires no less of each trial judge; they assert that, on pain of manifest legal error, in order to properly appraise any motion for summary disposition of a misrepresentation claim, the district court must hold each statement up, expressly examine it, and explicitly discuss its contours, its context, and its supposed misrepresentational quality, and then move studiously to the next dissection. Otherwise, the Defendants claim, the Court is not doing its job and is manifestly wrong.
The Court disagrees. The Defendants rely on Uncle Henry's, Inc. v. Plaut Consulting Co., 399 F.3d 33, 42-43 (1st Cir. 2005) for the proposition that, in a misrepresentation claim, the Court must expressly analyze each individualized statement when it rules on a motion for summary judgment. On this point, Plaut was critical of appellant having "presented its challenge to these rulings at so high a level of generality, and in such an all-or-nothing manner, as to render any individualized assessment of each of the magistrate judge's specific rulings an exercise in guesswork." Id. at 42. It emphasized the need for counsel to make a specific, not general argument, since "[s]uch an individualized assessment of the various statements is critical, as the various representations are of different types and were made at different times, and some could conceivably qualify as actionable under the relevant legal standards while others may not." Id. at 42-43. The First Circuit maintained its often-repeated admonition to counsel that the failure to present more than a perfunctory argument amounts to a waiver. Id. at 43. The Plaut opinion is consistent with a long line of First Circuit caselaw that warns litigants that an undeveloped
The Court is not convinced that the First Circuit's admonition to counsel is also an appellate warning to trial judges about the absolute need to engage in recipe jurisprudence. More specifically, the Court does not read Plaut as directing the trial courts that, in denying a motion for summary judgment on a misrepresentation claim, the failure to make a similar detailed checklist explanation of a denial amounts to reversible error.
Be this as it may, the Court will do as the Defendants wish and explain its denial of their motion more thoroughly. To begin, taking the facts in the light most favorable to the Plaintiff, the Defendants played a brazen and dishonest double game with a loyal and productive employee, a scheme that itself was built on a fundamental misrepresentation: the Defendants knew that Alan Knowlton was not involved in the scheme to defraud Bankers Life customers in Maine but they also knew that senior state of Maine bureau-crats who were fully capable of causing significant economic damage to Bankers Life were out to get him. The higher ups at Bankers Life knew that Mr. Knowlton had done nothing wrong and there was no legally justifiable reason to terminate or even transfer him; yet, they made the conscious decision to placate the vindictive state officials by handing up Mr. Knowlton, firing him from his Maine position, and transferring him to an imaginary job in Boston, Massachusetts, where they knew he was doomed to failure, and thus could be justifiably axed. During this unseemly process, the Bankers Life officials made repeated misrepresentations to Mr. Knowlton in an effort to play on his sense of company loyalty, to take advantage of his naive belief that they were telling him the truth, and to ultimately unload him, a man who had—through no fault of his own—become a liability to Bankers Life. This in sum is Mr. Knowlton's complaint against Bankers Life, a complaint that resonates in a multi-layered series of misrepresentations.
In their motion, the Defendants high-light the statement that Mr. Knowlton says it made to him to encourage him to take the Massachusetts job: that the position represented a "great opportunity for him in Massachusetts to build a Branch Sales Office on the North Shore." Pl.'s Statement of Additional Material Fact ¶ 100 (Docket # 62); Defs.' Resp. to Pl.'s Statement of Additional Material Fact) ¶ 100 (Docket # 67). The Defendants insist that "the alleged statement that Bankers Life had a `great opportunity' for Plaintiff in Massachusetts clearly constitutes `puffery,' which is not actionable fraud." Defs.' Mot. to Recons. at 2. They cite Schott Motorcycle Supply, Inc. v. American Honda Motor Co., 976 F.2d 58, 65 (1st Cir.1992) for the proposition that puffery cannot constitute misrepresentation. Id.
Schott, however, is a markedly different case. In Schott, a failed motorcycle dealership sued American Honda Motor Co., Inc., claiming that Honda had "reduced its commitment to the motorcycle market after its representatives had promised otherwise." Id. at 60. The dealer pointed to statements from Honda that it "would continue to be just as committed to the motorcycle market as it had been in the past in terms of support for dealerships and advertising" and that despite the loss of the Harley Davidson and golf cart businesses, "the products that Honda was coming forward with, including motorcycles, scooters and other products would definitely cause an increase in sales over previous years." Id. at 65. The First Circuit concluded that these general statements were "nothing
The Schott Court itself differentiated between business projections subject to uncontrollable economic influences and "fraudulent misrepresentations of past or existing facts on which plaintiff justifiably relied to its detriment." Id. (quoting Kelly Tire Serv. Inc. v. Kelly-Springfield Tire Co., 338 F.2d 248, 253 (8th Cir.1964)). The difference here is apparent. Mr. Knowlton says that Bankers Life's decision to transfer him to Boston was part of a cynical plot to remove him from the state of Maine where he had become a problem, place him in unfamiliar territory where he was sure to fail, and fire him when he did. In that context, the statement that Massachusetts was a "great opportunity" and that he had the chance to build a "branch office" were, arguably, not mere puffery about future events but affirmative statements about existing facts, which were false and upon which a reasonable person would justifiably rely.
A second aspect of a "puffery" analysis is the relative positions of the parties and "the opportunity afforded for an investigation and the reliance." Plaut, 399 F.3d at 43 (quoting Veilleux v. Nat'l Broadcasting Co., 206 F.3d 92, 120 (1st Cir.2000)). Here, Bankers Life was dealing with its employee, not a competing or independently viable business, and it was making representations about matters uniquely within its control to a person whose job was on the line.
The Defendants go on to say that even Mr. Knowlton admitted that the statement was true. Id. (citing Defs.' Statement of Material Fact ¶ 54 (Docket # 60)). This assertion, like so much of this motion, is clouded in confusion. In its Statement of Material Fact 53, Bankers Life made the following assertion:
Defs.' Statement of Material Fact ¶ 53 (Docket # 60) (DSMF). Bankers Life then asserted:
Id. ¶ 54. Mr. Knowlton's identical responses to these statements were non-responsive:
Pl.'s Resp. to Def's Statement of Material Fact ¶ 54 (Docket # 62) (PRDSMF). The Plaintiffs response makes no sense. The Court could hold the Plaintiff to his nonresponsive answer, accept his admission, and conclude that Bankers Life made no misrepresentation. However, rather than hold the Plaintiff to an obvious mistake, the Court has resolved to dig deeper.
To determine what to make of Bankers Life's assertion, the Court reviewed the Bankers Life record citation: Mr. Knowlton's deposition, Exhibit F page 152. DSMF ¶ 54. During his July 29, 2010 deposition, counsel for Bankers Life pointed to the allegation in paragraph 154 of his Complaint, which alleged that Mr. Buckley told him that Bankers Life had a great opportunity for him in Massachusetts to
These answers are problematical for Mr. Knowlton since they strike at the very heart of his contentions about the North Shore job offer.
Unaided by any explanation from Mr. Knowlton, the Court does not know what to make of the stark contrast between Mr. Knowlton's admission that the Buckley statement was true and the entire rest of his argument. It is possible that Mr. Knowlton understood the question to ask whether it was true that Mr. Buckley made the statement, rather than whether the Buckley statement was true. The difference between the accuracy and truth of a statement sometimes eludes witnesses. This is suggested at least by his response that "[t]hat was the statement he made to me that primarily motivated me to go to Massachusetts." Here, viewing the evidence in the light most favorable to Mr. Knowlton, the Court will not conclude that Mr. Knowlton's admission effectively waives his misrepresentation claim against Bankers Life.
In sum, analyzing Mr. Buckley's statement under Plaut in the manner the Defendants demand, the result is the same. Viewing his statement as an integral part of Bankers Life's plot against Mr. Knowlton, Mr. Buckley's promise of a "great opportunity" to build a branch office on the North Shore was neither innocuous puffery nor true; it was cynically intended as a first step in a deliberate process to remove Mr. Knowlton from the state of Maine, to place him in a disadvantageous position in Massachusetts, and to terminate him once he failed to perform an impossible and fictitious assignment. None of this is to say that a jury will agree with Mr. Knowlton's version of these hotly contested facts. But it is to reiterate that Mr. Knowlton has presented sufficient evidence to create a jury question on this and other factual issues. See Rand v. Bath Iron Works, 2003 ME 122, ¶ 13, 832 A.2d 771, 775 (stating that whether a misrepresentation has been made "is a question for the fact-finder").
In its motion for reconsideration, the Defendants re-emphasize to the Court the familiar standard for punitive damages under Maine law:
Defs.' Mot. for Recons. at 3 (quoting Galarneau v. Merrill, Lynch, Pierce, Fenner & Smith, 504 F.3d 189, 204 (1st Cir.2007) (emphasis added in Defendants' motion)). Bankers Life relies heavily on Galarneau which it says is a case "very analogous to the present one." Id.
In Galarneau, the First Circuit overturned a punitive damages award against a brokerage firm which had filed a form with the National Association of Securities Dealers called a U-5 that it knew contained false information about the plaintiff and the events that led to her termination. Galarneau, 504 F.3d at 192, 204-05. What differentiates this case from Galarneau, however, is that in Galarneau, the First Circuit concluded there was "no evidence that Merrill Lynch made the statement in the U-5 with the intent to deprive Galarneau of a job." Id. at 205.
Here, the situation is markedly different. Viewing Mr. Knowlton's case from his perspective, he has demonstrated that Bankers Life acted intentionally in setting about to destroy him in order to save itself from Maine regulators. Mr. Knowlton has plausibly alleged that Bankers Life engaged in an elaborate conspiracy, involving lies to him about what it was saying to state officials, lies to the state officials about Mr. Knowlton, lies to him about the restrictions the state officials had imposed on him, lies to him about a non-existent job in Massachusetts, lies to others about his competence and honesty, and lies to him about his performance as an employee both in Maine and Massachusetts. Mr. Knowlton has presented sufficient evidence to create a jury question as to whether Bankers Life did in fact engage in this multi-layered course of deception to save Bankers Life's skin in Maine by easing him out of state and forcing his resignation in order to rid itself of the inconvenience of his continued employment. If the jury concludes that Mr. Knowlton has made out this case, it seems beyond argument that Bankers Life's conduct fits well within the Maine standard for the imposition of punitive damages. The question here is not whether Mr. Knowlton will be successful in proving his claims but whether he should be allowed to present them to a jury. The Court concludes, once again, that he should.
The Defendants claim that the Court misapplied its own local rule when it refused to consider additional statements of material fact that they submitted with their reply statement of material fact. Def.'s Mot. for Recons. at 3 n.1. Here, the Defendants filed a statement of material facts in support of their motion, consisting of fifty-eight paragraphs, and the Plaintiff responded with seventy-two paragraphs of his own. The Defendants then replied to the Plaintiff's response but added six new facts. The Plaintiff did not respond to the new facts because there is no provision in the Rule for a sur-reply. Applying Local Rule 56 and noting that "by the time of the reply, everything that should have been said, has been said," the Court refused to accept the Defendants' last set of facts. Order at 44 n.4.
Surprisingly, despite the Court's ruling, the Defendants insist that "these facts fall squarely within Rule 56(d) and should be considered by the Court." Defs.' Mot. for
The Defendants are flat-out wrong. The full text of Local Rule 56(d) reads:
D. ME. Loc. R. 56(d). The clear language of Local Rule 56(d) requires the movant to limit its reply statement to admitting, denying or qualifying the responsive statement. It does not allow the movant to add new facts at this late stage.
The overall rationale of the rule is clear: there must be an end point. The Rule requires the movant for summary judgment to set forth those undisputed facts it contends entitle it to summary judgment; it permits the non-movant to put into play any facts, which the non-movant contends require trial. Finally, it permits the movant to respond to the non-movant's facts. But the Rule does not permit the movant to add yet another set of facts. If the movant were allowed to posit new facts in its reply, the movant's final document would be an unanswered set of factual assertions, which would run contrary to the requirement that the facts must be interpreted in a manner most congenial to the non-movant. In other words, if the rule were interpreted in the Defendants' fashion, to comply with Rule 56, the Local Rule would have to permit the non-movant to sur-reply. However there is no provision in the local rule for the non-movant to file a sur-reply precisely because the movant is not allowed to posit a new set of facts with its reply statement. Finally, movants would be encouraged to hide their most salient statements of fact until the very end of the point-counterpoint process so that there would be no counter to their final point.
The Court emphatically rejects the Defendants' contention as contrary to the express language of the local rule, contrary to the design of the local rule, and contrary to the local rule's implementation of Federal Rule 56. Its prior ruling on the Defendants' unauthorized set of new facts stands.
The Court DENIES the Defendants' Motion for Reconsideration of Motion for Summary Judgment Ruling (Docket # 69).
SO ORDERED.
The identity and significance of "Lucy Karl Counsel" is a mystery. She is not mentioned further in the parties' memoranda or in their statements of facts.
