MONTI L. BELOT, District Judge.
Before the court are the following:
The following undisputed facts were in existence during the relevant time period:
Anil Vazirani was an insurance agent. Vazirani contracted as an independent agent, also known as a producer, with life insurers to sell life insurance and annuity products of such insurers.
Mark Heitz served as President of Aviva Sales and Distribution.
Jordan Canfield served in various executive positions for sales and distribution at Aviva, including Executive Vice-President of Sales and Distribution. Canfield had direct responsibility for the management of Aviva's independent distribution and sales relationships. Canfield left Aviva in August 2009 to become CEO of Innovation Design.
Heitz and Canfield each had the authority to terminate Aviva's producer contracts, including its contracts with Vazirani and his downline agents.
Justin Jacquinot was an Aviva regional vice president of sales and marketing who reported to Canfield. One of Jacquinot's responsibilities was "interfacing" with Vazirani.
Ron Shurts was a principal of Annexus Distributions.
Secured Financial Solutions, LLC ("SFS") and Vazirani & Associates Financial, LLC ("Vazirani & Associates") were owned and operated solely by Vazirani. SFS was a marketing name only. It did not sell insurance products and had no downline producers or agents. SFS had no contractual relationship with Aviva.
Vazirani & Associates was an independent marketing organization, also known as an IMO, that worked with multiple insurance companies to perform distribution and marketing functions for one or more of such insurers' products or product lines.
Aviva Life and Annuity Company (Aviva) provided life insurance, annuity products and other services to individuals, families and businesses. Aviva used many marketing organizations to recruit agents to sell its products and to provide marketing and sales support. Aviva considers some of those organizations its "key distribution partners," but Vazirani's organization was not one of them.
Advisors Excel, LLC ("Advisors Excel") was an IMO located in Topeka, Kansas. Advisors Excel competed with other marketing organizations, including Vazirani & Associates, for downline agents. Advisors Excel was one of Aviva's key distribution partners since at least 2007.
Annexus Distributors AZ, LLC, formerly known as Shurwest Product Connection, LLC, developed with Aviva a line of annuity products ("Aviva's Annexus products") that were issued by Aviva under one of Aviva's three distribution channels. Aviva's Annexus products were marketed and distributed differently than the annuities offered under Aviva's other two distribution channels. Aviva granted Annexus Distributors the exclusive rights to market and sell Aviva's Annexus products. Annexus Distributors had the right to determine (i) what marketing organizations could market Aviva's Annexus annuities to agents and (ii) which Aviva agents could sell such annuities to consumers. The only IMOs that were authorized to market Aviva's Annexus products to agents were a small group of IMOs which had been hand-picked by Annexus Distributors. Annexus
Financial Independence Group ("FIG") was one of Aviva's "key core marketing groups" since approximately 2008. FIG and Advisors Excel were two of the select group of approximately 12 IMOs that were authorized by contract with Annexus Distributors in 2008 to: (i) market Aviva's Annexus line of products to other agents, and (ii) recruit agents to such IMO's downline to sell Aviva's Annexus products. Neither Vazirani, Vazirani & Associates nor SFS were members of the select group of IMOs contracted with Annexus Distributors.
Creative Marketing International Corporation (CMIC) was a marketing organization that performed marketing and distribution functions for several different life insurers. CMIC was a wholly-owned subsidiary of Aviva which competed with Vazirani for downline agents.
Innovation Design was a product development company that developed annuity and life insurance products. Innovation Design was not (and never has been) a marketing organization, did not have (and has never had) a downline of insurance agents, and did not sell (and never has sold) insurance products.
Aviva had in place certain rules that govern the conduct and practices of IMOs concerning the recruiting of agents to such organizations' downlines to sell Aviva products.
One of Aviva's rules governing the conduct of IMOs in recruiting agents prohibited an IMO such as Vazirani & Associates from recruiting a producer away from another IMO to sell the same Aviva distribution-channel products by offering such producer a higher commission level within the first six months of transfer.
Aviva never had a policy placing any restrictions on an IMO's ability to bind downline agents to non-compete covenants.
Aviva's contract with Vazirani authorized him, subject to certain terms and conditions, to sell Aviva life insurance and annuity products as an independent producer, and to recommend that Aviva contract with additional agents to sell certain Aviva products as part of the Vazirani downline.
From approximately 2005 until April 1, 2009, Vazirani contracted with Aviva and/or its predecessor entities, American Investors and AmerUs, as an independent agent to sell Aviva life insurance and annuity products. Vazirani's producer contract with Aviva did authorize him to sell Aviva's Annexus products to consumers.
Vazirani and/or Vazirani & Associates received compensation from Aviva in the form of (i) commissions for his personal sales production and (ii) override commissions for the sales production of agents who were contracted with Aviva as part of the Vazirani downline.
By the close of 2008, approximately one hundred (100) of Vazirani's downline producers were contracted with Aviva USA and approximately forty percent (40%) of his commission income was generated from the sale of Aviva annuities.
Aviva's contract with Vazirani provided that it could be terminated with or without cause by either party immediately upon written notice to the last known address of the other party. Similarly, Aviva's contracts with Vazirani downline agents provided that such contracts could be terminated with or without cause by either party immediately upon written notice
From 2005 through 2008, Vazirani personally produced almost $10 million in annuity premiums for Aviva. In addition, his team at SFS produced almost $100 million in annuity premiums for Aviva. In 2008, Vazirani began to significantly "ramp up" the business he and his team were writing with Aviva. During the time Vazirani was contracted with Aviva, he wrote profitable business and made contributions to Aviva's corporate sales goals.
Vazirani's efforts on the behalf of Aviva did not generate a single consumer complaint. Jacquinot had no issues with Vazirani's performance in 2007 and observed no "red flags" regarding Vazirani's conduct that year. Jacquinot's observation changed based on incidents involving Vazirani in 2008.
Aviva prohibited its marketing organizations and agents from making private arrangements or side-deals for payments on Aviva production to marketing organizations or agents not contracted with Aviva.
In the summer of 2008, Aviva terminated its contract with a marketing organization because that organization appeared to have a prohibited arrangement with Covenant Reliance Producers ("CRP"), a separate marketing organization that did not have an Aviva contract, and its principal, Matt Rettick.
Canfield and Jacquinot had concerns that Vazirani also might have a prohibited side deal with Rettick/CRP.
Vazirani knew in 2008 that Aviva did not want to do business with Rettick and that Rettick/CRP did not have an Aviva contract.
Jacquinot questioned Vazirani about his relationship with Rettick/CRP. In response, Vazirani emailed Jacquinot on September 6, 2008, saying: "I do not and will not cut any commission deals with Matt Rettick." In fact, however, Vazirani had agreed to pay Rettick/CRP 50 basis points (one-half of one percent) on all Aviva premium produced under Vazirani. Vazirani estimates that he paid Rettick/CRP approximately $240,000 on Aviva production in 2008 pursuant to this agreement. Vazirani's associate, James Regan, also understood that CRP was not to be paid on Aviva business; to his knowledge, Vazirani also understood this. Nevertheless, on or about September 6, 2008, Regan sent an email to Rettick, certain others at CRP, and Vazirani, saying: "There cannot be a paper trail at all that leads to CRP with regard to the Aviva contract." In addition, Vazirani emailed a CRP executive regarding "American Investors Aviva — Amerus," saying "I spoke to Matt [Rettick]; nobody needs to know about any compensation agreement."
On August 19, 2008, Regan sent out a blast email on behalf of Vazirani/SFS marketing Aviva's Annexus products to other agents. The email stated in part: "Hello all, this is Phil Graham from FIG Marketing writing to you on behalf of VAZIRANI/SFS."
Graham did not send the blast email marketing Aviva's Annexus product on behalf of Vazirani/SFS; nor did he authorize Vazirani or anyone else at SFS to send the blast email that purported to be from "Phil Graham of FIG Marketing" "on behalf of VAZIRANI/SFS." Instead, Graham directed Vazirani not to send out the email. Vazirani testified that he could not think of a legitimate reason why he (Vazirani) would have written the email himself to make it appear that the email was from
Graham and Canfield were concerned that the email might result in the termination of FIG's authorization to market Aviva's Annexus products.
Advisors Excel, which was one of the IMOs authorized to market Aviva's Annexus products to other agents, reported this incident to Aviva and Annexus Distributors.
Ron Shurts, who was a principal of Annexus Distributors, was very upset when he learned of the blast email sent "on behalf of VAZIRANI/SFS" marketing Aviva's Annexus products to other agents. Shurts urged Canfield to terminate Vazirani because of the blast email and, using profanity and an uncomplimentary (but ethnically inaccurate) reference to Vazirani, assured Graham that Canfield intended to terminate Vazirani.
In early 2008, Vazirani offered Lee Hyder, an agent whose Aviva contract was in the Advisors Excel downline, a higher commission level if he would join the Vazirani downline. Advisors Excel learned of this offer and provided a copy of it to Jacquinot, whose responsibilities included interfacing with certain marketing organizations, including both Advisors Excel and Vazirani. Jacquinot reported the matter to Canfield. Both Canfield and Jacquinot viewed Vazirani's offer as a serious rule violation. Canfield considered terminating Vazirani's contract then but decided to discipline him instead.
In early November 2008, Canfield concluded that Aviva's contract with Vazirani should be terminated. Canfield reached this conclusion, in part, due to the series of Vazirani problems that he had had to deal with and increasing concerns he had with Vazirani's business practices and relationship with Rettick/CRP. Some of the issues had been the subject of complaints by (i) one of Aviva's key distribution partners, Advisors Excel, and (ii) Annexus Distributors (including its principal, Ron Shurts), who had the exclusive rights to market and sell all annuities issued by Aviva.
Aviva's standard practice was that if it terminated its contract with a marketing group or agent, it would also terminate all agent contracts in that agent's downline.
On or about November 6, 2008, Canfield called Vazirani and told him that Aviva had decided to terminate its contract with Vazirani as well as the Aviva-agent contracts that were in his downline.
On December 12, 2008, Aviva's lawyer, John Clendenin, sent Vazirani's attorney a letter stating that "Aviva intends to terminate the Contract without cause effective December 19, 2008." However, the December 19, 2008 termination date was inconsistent with a January 30, 2009 termination date that Canfield had referenced in his November 6, 2008 telephone conversation with Vazirani. Aviva agreed to move back the effective date of termination. Specifically, on Christmas Day, December 25, 2008, Clendenin sent Vazirani's lawyer an e-mail stating:
On or about February 9, 2009, Aviva sent Vazirani formal, effective written notice required by his Producer Agreement that Aviva was terminating its contract with him effective April 1, 2009. Aviva
By letter dated March 20, 2009, Clendenin gave the following explanation for Aviva's termination of Vazirani's producer contract:
Beginning in the fourth quarter of 2008 and continuing through the first quarter of 2009, Aviva took steps to slow its annuity sales in order to preserve capital. The steps included terminating thousands of agent contracts. All of those contract terminations were effective no later than April 1, 2009.
Some of the terminated groups had had more premium production in 2008 than Vazirani and his downline agents.
Most of the Aviva production generated by Vazirani and his downline was for the sale of annuities under Aviva's American Investors distribution channel.
The groups terminated included nearly all of those contractors who, like Vazirani, were at the highest commission level for the sale of annuities within Aviva's American Investors distribution channel.
Some of the terminated groups, in addition to Vazirani, were affiliated with FIG.
Vazirani admits that he can only speculate as to whether his Aviva contract would have remained in effect beyond April 1, 2009, but because none of his other insurance carrier contracts had previously been terminated, he believed his contract with Aviva would continue "indefinitely."
Heitz obtained his undergraduate degree from Washburn University in Topeka, Kansas in 1974 where he was a member of the Sigma Phi Epsilon fraternity.
David Callahan, Cody Foster, and Derek Thompson each graduated from Washburn more than 25 years after Heitz graduated. Callahan and Foster were members of the Sigma Phi Epsilon fraternity while they attended Washburn University. Callahan, Foster and Thompson founded Advisors Excel.
As of November 2008, when Canfield told Vazirani of the decision to terminate Aviva's contract, Canfield had not considered leaving Aviva nor had he had any discussions with anyone about such a possibility.
Canfield left Aviva's employ in or about August 2009 to become the chief executive officer of Innovation Design. Canfield and the three principals of Advisors Excel (Callahan, Foster and Thompson) each owned a 25% interest.
For the first two years of its existence, Innovation Design's offices were located within Advisors Excel's headquarters in Topeka.
The fact that two of Advisors Excel's principals (Callahan and Foster) were members of the same college fraternity as Heitz had nothing to do with the decision to terminate Vazirani's contract.
The purported factual disputes must be viewed from the perspective of what this case is, and is not, about. First, the "is not" aspect. This is not a breach of an employment contact case. Vazirani was an independent contractor of Aviva, not an employee. SFS had no contract at all with Aviva. The Vazirani/Aviva independent contractor agreement could be terminated at any time, for any reason, by either Vazirani or Aviva. Aviva terminated the contract and Aviva is not a defendant. Neither Vazirani nor SFS had a contractual relationship of any kind with Heitz or Canfield. So, what is the case about?
Well ... Vazirani claims that Heitz and Canfield, acting outside the scope of their respective employment with Aviva, conspired to cause Aviva to terminate Vazirani's contract in order to benefit their own interests and/or those of Advisors Excel, its founders (Callahan, Foster and Thompson), Creative Marketing, Annexus and Shurts. Vazirani attaches great significance to the fact that Heitz, Callahan and Foster attended Washburn University where they were members of the same social fraternity, albeit 25 years apart. Vazirani and SFS's basic theory of recovery is that by conspiring to advance their own interests, and the interests of others, Heitz and Canfield tortiously
Heitz and Canfield aver that they considered termination of Vazirani's contract to be in Aviva's interest and consistent with its goal of reducing annuity sales. Both men deny that they received any benefit, direct or indirect, from the termination or that they had any personal interest in the matter. Both men also deny ever having any financial interest in Advisors Excel or Annexus.
Vazirani purports to controvert these averments with the following unedited responses:
Vazirani additionally repeats his reliance on the Washburn/Sigma Phi Epsilon "connection."
Vazirani's remaining disputes with defendants' facts, again unedited, are as follows:
The court initially will consider whether Vazirani's responses to Heitz and Canfield's averments create issues for trial. The relevance of the termination of the "Metro" contract is unexplained. Callahan and Canfield are not fraternity brothers. Callahan and Foster are fraternity brothers but the relevance of Foster's compliment about Canfield, who is not Foster's fraternity brother, is a mystery. The "falsity" of the Clendenin letter is unsupported by facts. Vazirani has never challenged the facts pertaining to Aviva's change of strategy. His point, apparently, is that he was a good producer who, as he puts it, should not have been terminated. But the undisputed facts are that Aviva also terminated other good producers for the same
Finally, Vazirani's denials of defendants' facts 26 and 35 do not create genuine issues of material fact. Rather, they are admissions with a twist favorable to Vazirani. Vazirani's responses to defendants facts 102 and 103 are conclusory and devoid of factual support.
The rules applicable to the resolution of this case, now at the summary judgment stage, are well-known and are only briefly outlined here. Federal Rule of Civil Procedure 56(c) directs the entry of summary judgment in favor of a party who "show[s] that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). An issue is "genuine" if sufficient evidence exists so that a rational trier of fact could resolve the issue either way and an issue is "material" if under the substantive law it is essential to the proper disposition of the claim. Adamson v. Multi Community Diversified Svcs., Inc., 514 F.3d 1136, 1145 (10th Cir. 2008). When confronted with a fully briefed motion for summary judgment, the court must ultimately determine "whether there is the need for a trial-whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). If so, the court cannot grant summary judgment. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
The parties agree that all substantive issues are governed by Arizona law.
By Memorandum and Order dated March 15, 2011, 2011 WL 915377 (Doc. 62), the court denied Heitz and Canfield's motion dismiss Vazirani's tortious interference, conspiracy and aiding and abetting claims. In considering Vazirani's tortious interference claims
(Doc. 62 at 5-7).
Despite this clear statement of what Arizona law requires in order to prove intentional interference, Vazirani cites no facts, much less disputed facts, which would defeat summary judgment.
Vazirani's first "fact" demonstrating intentional interference relates to the Clendenin letter of March 20, 2009. Vazirani asserts that the reasons given for termination are false. As he puts it, "Aviva lied." But whether or not Aviva lied is not relevant (assuming Aviva can lie). Neither Heitz or Canfield is mentioned in the letter. There are no facts in the record that Heitz or Canfield communicated with Clendenin about the letter or, for that matter, that they were even aware of the letter. Vazirani proceeds to assert that Aviva had "no cause" for terminating his contractual relationship and extols his successes as evidence that the true but unstated
Vazirani's second "fact" demonstrating intentional interference is what he describes as a "quid pro quo": Canfield's decision in August of 2009 to form Innovation Design with the three members of Advisors Excel. Heitz is not mentioned. Vazirani asserts that a "reasonable juror" could find that the founding of Innovation Design, along with the fact that it had office space at Advisors Excel, was a quid pro quo for Canfield's "protection of Advisors Excel" during his term at Aviva and for his termination of "Vazirani's contract." This assertion is completely lacking in factual support.
Vazirani's third "fact" demonstrating intentional interference is so lacking in support and common sense that it hardly deserves mention: "Defendants' university and fraternity ties override Aviva's best interests in retaining Vazirani, one of their top minority advisors." Minority advisors? Where did that come from? Defendants'? There is no evidence that Canfield is a fraternity brother of anyone in this case, much less of Heitz. There is no evidence that Canfield attended Washburn. Vazirani's obsession with the Washburn/Sigma Phi Epsilon "connection" is probative of nothing, much less that Canfield intentionally interfered with his contract with Aviva.
In short, even though this court gave Vazirani the requisite benefit of the doubt in denying defendants' motion to dismiss, plus a list of the factors which Arizona law requires to prove his claims, Vazirani has offered only the same allegations and conclusory statements unsupported by relevant and material facts. He has not disputed Aviva's decision to change its business model with respect to annuity sales. He has not shown that the change was made to secure the termination of only his contract, nor has he challenged the facts that the change affected many other similarly-situated independent contractors. He has not shown that Canfield benefitted financially from leaving Aviva to start Innovation Design, nor has he brought out any facts that Heitz's involvement in the termination of his contract (assuming Heitz had any), was motivated by his desire to benefit Callahan and Foster or, to put it another way, that Callahan and Foster benefitted from Heitz's actions. In other words, Vazirani has come forth with no evidence that Heitz and Canfield's actions were motivated solely by personal reasons, nor has he shown that their actions were improperly intended to interfere with his contract with Aviva.
Defendants' motion for summary judgment on Vazirani's tortious interference
Vazirani's position is that because his tortious interference claims will survive summary judgment, his conspiracy and aiding and abetting claims likewise will survive (Doc. 132 at 26). Vazirani is wrong but his methodology is correct. Because his tortious interference claims do not survive, the same fate applies to conspiracy and aiding and abetting.
Defendants' motion for summary judgment (Doc. 121) is granted. The clerk is directed to enter judgment in favor of defendants pursuant to Fed.R.Civ.P. 58.
A motion for reconsideration of this order pursuant to this court's Rule 7.3 is not encouraged. Any such motion shall not exceed three pages and shall strictly comply with the standards enunciated by this court in Comeau v. Rupp. The response to any motion for reconsideration shall not exceed three pages. No reply shall be filed.
IT IS SO ORDERED.
