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Prudential Wins Dismissal of Tortious Interference Claim
January 22, 2020
In 2005, Ty Storlie began working as an external wholesaler in Prudential Insurance of America's annuity business. In November 2017, when Storlie was 53 years of age with 18 months remaining before he would become eligible for Prudential's pension program, his employer informed him that his sales results were deemed "unacceptable," and his employment was terminated. On Storlie's Uniform Termination Notice for Securities Industry Registration ( the "Form U5"), Prudential's narrative under "Termination Explanation" was "Did not meet management's expectations. Not compliance related." Some might think that Storlie's age and his proximity to vesting in Prudential's pension program prompted the negative review and the ensuing termination. Clearly, Storlie did.
State Court Complaint
On August 9, 2019, Storlie filed a Complaint setting out six claims against Prudential in the Colorado District Court for the City and County of Boulder
http://brokeandbroker.com/PDF/StorlieComplaintDCO190906.pdf, The claims were for Discrimination (Claims 1 and 2), Retaliation (Claims 3 and 4), Defamation (Claim 5), and Tortious Interference with Prospective Business Advantage (Claim 6). As alleged in part in his Complaint, Sorlie offered this narrative:
http://brokeandbroker.com/PDF/StorlieComplaintDCO190906.pdf, The claims were for Discrimination (Claims 1 and 2), Retaliation (Claims 3 and 4), Defamation (Claim 5), and Tortious Interference with Prospective Business Advantage (Claim 6). As alleged in part in his Complaint, Sorlie offered this narrative:
33. In 2016, the Defendants' numbers show that Storlie was in the top half of the teamin every area other than PPI (which represented less than 1% of revenue). He was 125% to goal.34. In November 2016, Ted Parker requested that Storlie take Brian Filizetti, a 38-year old External Wholesaler, with him to an upcoming regional convention. Parker did not give a reason.35. Upon information and belief, at that regional convention in November 2016,Filizetti approached one of Storlie's long-time advisors at the convention and announced that he would be purchasing a home in Colorado and taking over Storlie's territory.36. Storlie's streak of entirely positive reviews then came to an abrupt end when he received his January 2017 Performance Review.37. While the Defendants gave him an overall acceptable performance, it took a critical note about his sales acumen and abilities.38. Storlie was shocked and became immediately concerned he was being set up based on the comments in Part III of that review. Ted Parker claimed that Storlie, a 12-year top contributor and member of the exclusive Billion Dollar Club within the Defendants required "the benefit of additional experience, training and/or coaching . . ." despite being one of the leaders typically conducting such training.39. Essentially, Parker began suddenly treating Storlie like a new wholesaler.. . .44. In approximately May 2017, Storlie received a phone call from Brian Filizettidirectly informing Storlie that he had just purchased a $1.5M home in Castle Pines, Colorado saying something like, "I am moving into your territory.". . .65. On November 4, 2017, Storlie received a FedEx package with a termination letterand menial severance offer.66. In January 2018, Brian Filizetti, a 38-year old employee, took over the bulk ofStorlie's territory, including the entirety of Colorado and Wyoming. The other two smaller portions of Storlie's territory (western South Dakota and western Nebraska) were also given to younger employees.
Removal to Federal Court
On September 6, 2019, Prudential removed the case to the United States District Court for the District of Colorado citing both diversity and federal question jurisdiction. Ty Storlie, Plaintiff, v. Prudential Insurance of America, Defendant (Order Granting in Part and Denying in Part Defendant's Motion to Dismiss Plaintiff's Fifth and Sixth Claims for Relief, United States District Court for the District of Colorado ("DCO"), 19-CV-02543 / January 14, 2020)
Defamation Claim Dismissed
Defendant Prudential moved to dismiss Plaintiff Storlie's Fifth Claim (Defamation) and Sixth Claim (Tortious Interference with Prospective Business Advantage). Thereafter, the parties stipulated to the dismissal of the Fifth Claim without prejudice, which DCO granted.
The 5 Points of Tortious Intererence
As to the remaining Motion to Dismiss the claim of tortious interference with prospective business advantage, DCO characterized Colorado law as requiring five points be alleged in support of such a claim:
(i) there was a prospective contractual relation with a third party that was reasonably likely to result in the formation of a contract; (ii) Defendant interfered with that prospective relation, thereby preventing the formation of the contract; (iii) such interference was intentional; (iv) the interference was accomplished by the use of improper means; and (v) harm was suffered as a result.
Page 4 of the DCO Order
3 Out of 5 Doe Not Cut It
In applying Colorado's five-point test, DCO found that Plaintiff Storlie failed to establish the first two points and dismissed without prejudice the sixth claim:
The first required element for a claim of tortious interference with prospective business advantage is the existence of a prospective contractual relationship with a third party. Wolf Auto Ctr. Sterling, LLC, 2016 WL 10570867, at *2. Plaintiff alleges that Defendant engaged in conduct intended to prevent Plaintiff from continuing to work in the annuities industry and that Defendant's conduct was designed to, and actually has, induced or caused third parties not to enter into an employment relationship with Plaintiff. (Doc # 4 ¶¶ 108-09.) However, Plaintiff alleges no facts to suggest the existence of any such prospective contract. Plaintiff makes no mention of a specific third party with whom a prospective contractual relationship existed. Plaintiff makes only a broad assertion that Defendant intentionally interfered with unnamed third parties in order to prevent him from working in the annuities industry. (Id.) Plaintiff's formulaic recitation of this element, without specific factual allegations, is insufficient. See Iqbal, 556 U.S. at 668 (citing Twombly, 550 U.S. at 555).Moreover, the second element of a tortious interference claim requires a plaintiff to allege that a defendant interfered with a prospective contractual relationship, thereby preventing the formation of a contract. Wolf Auto Ctr. Sterling, LLC, 2016 WL 10570867, at *2. Plaintiff, unable to demonstrate the existence of a prospective contractual relationship, consequently has not established that Defendant interfered with or prevented any prospective contract. Plaintiff's allegation that Defendant filed Form U5 to harm his chances at finding future work is conclusory and insufficient. Plaintiff fails to allege any specific occurrence in which Defendant's conduct interfered with a prospective contractual relationship between Plaintiff and a third party or prevented the formation of a contract between Plaintiff and a third party. Plaintiff thus fails to satisfy the second element of a tortious interference with business advantage claim
Pages 5 - 6 of the DCO Order
Bill Singer's Comment
Before you prepare a wake, keep in mind that Storlie filed six claims; and after withdrawing one and losing the other via the above Motion to Dismiss, he still goes forward with the remaining four discrimination and retaliation claims.
In my law practice, clients frequently insist that they have tortious interference claims -- which they insist they know because they came upon that term on the Internet, and, you know, the Internet is that great repository of all facts, both known and unknown. So . . . let me share with you a bit of wisdom that I've acquired during some four decades of practicing law: Tortious interference does not arise within the context of every wrongful employment termination. As the DCO Order explains, there are numerous elements of the tort that need to be proven, and such elements of tortious interference often vary from state to state.
A key element in a tortious interference case is the threshold requirement to prove the existence of a prospective contract. Moreover, as DCO admonished, after you prove that there was a "prospective contractual relationship" with a third-party, you often need to prove that your former employer interfered with that relationship to the extent that the formation of the prospective contract was prevented. When you think those pre-conditions through, you realize that you are tasked with a difficult task. After all, what the hell is a "prospective" contractual relation anyway? Who's to say what my or your prospects are -- and how do we go about proving that something was more likely than not to go to a contract? On top of that, you have to prove that your former employer interfered with that so-called prospective relation to the extent of preventing the formation of the anticipated contract. Wow, that's one helluva a lot of circular logic.! You need to prove that there was a relationship that seemed to anticipate an ensuing contract, notwithstanding that no contract ever ensued, and, further, you have to show that some third party interfered with the realization of that contract, which, again, never came into being. I'm thinking of a number between 1 and 10. Guess what it is. Sorry, you're wrong. Now, go ahead, prove that I'm lying!