Bones v. Prudential Financial, Inc.

17 Misc. 3d 656
CourtNew York Supreme Court
DecidedAugust 20, 2007
StatusPublished
Cited by1 cases

This text of 17 Misc. 3d 656 (Bones v. Prudential Financial, Inc.) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bones v. Prudential Financial, Inc., 17 Misc. 3d 656 (N.Y. Super. Ct. 2007).

Opinion

[657]*657OPINION OF THE COURT

Richard B. Lowe, III, J.

In the instant action, plaintiff Brian D. Bones brings a cause of action for promissory estoppel against defendants Prudential Financial, Inc. and Prudential Insurance Company of America (collectively, the defendants). In the instant motion, the defendants seek to dismiss this claim pursuant to CPLR 3211 (a) (7).

Background

Bones is a New Jersey resident. In June 1997, he joined Prudential Financial as a director of group life insurance sales; his employment was at will. Prudential Financial is a New Jersey corporation, with its principal place of operations in Newark, New Jersey. It is in the mutual insurance business. Prudential Life Insurance Company of America is Prudential Financial’s subsidiary. Its primary place of business is also in New Jersey.

During Bones’ tenure at Prudential, he alleges that he was responsible for developing life insurance sales business plans. (See original complaint at 4, K 14.) He further avers that among his achievements was a new business initiative where awards were given to brokers who brought business to Prudential. (Id. at 4-5, 1ÍK 18-22.) Moreover, he purportedly had signatory authority to award special compensation to brokers, but needed to report to his supervisors and Prudential’s legal department on his activities. (Id. at 4, 111115, 17.) Everything he did allegedly met with their approval.

In his original complaint, Bones alleged that, in 2004, based upon information and belief, the New York State Attorney General began to investigate the defendants regarding illegal kickbacks and commissions, bid rigging, price fixing, and cross-subsidization. (See id. at 2, 1i 4.) At the same time, the California Insurance Department filed an action against Prudential and others in California state court for making undisclosed payments to brokers in order to induce the latter to steer clients toward the former. (Id. at 7, K 35.) In response to these investigations, a derivative action was filed against Prudential. (Id. at 8, II 37.) Bones pleaded that he conducted an internal investigation concerning the pricing differentials and cross-subsidization as well, and reported his findings to Prudential’s legal department and management. (Id. at 14, 1Í1Í 87-88.)

On January 23, 2005, after Bones made his internal inquiry known, he was suspended for an unspecified amount of time. [658]*658{Id. H 89.) The defendants aver that the reason for the suspension was his involvement in the firm’s broker compensation program. {See mem in opposition at 3.) During the suspension, Bones alleges that Prudential assured him that he would get paid his 2004 performance-based bonus, and that his employee options would continue to vest. {See original complaint at 9, 1111 46-48.) However, he could not exercise his options at that time. {Id.) On December 3, 2005, Bones was terminated as a result of the investigation. Prudential forfeited Bones’ vested stock options.

On June 7, 2006, after Prudential terminated him, Bones testified before the New York Attorney General. {Id. at 10,1i 52.) In December 2006, Prudential settled with the New York Attorney General’s office with a $19 million payout. {Id. at 8, 1139.)

Bones commenced the instant action on February 20, 2007 asserting claims for breach of contract, wrongful termination in violation of Labor Law §§ 215 and 740 (the New York whistle-blower statute), and promissory estoppel. On April 16, 2007, prior to answering the complaint, the defendants filed the instant motion to dismiss pursuant to CPLR 3211 (a) (7).

The defendants moved to dismiss the whistleblower cause of action on the grounds that it fails to state a claim, is barred by the statute of limitations, and New York County is not the proper venue for it. Moreover, they moved to dismiss the breach of contract and promissory estoppel claims premised on their argument that the whistleblower claim assertion bars these since all originate from the same factual background. They also argue that Bones fails to plead a cognizable claim for breach of contract and promissory estoppel, irrespective of the whistle-blower claim.

Subsequent to the instant motion’s service, Bones filed an amended complaint as of right pursuant to CPLR 3025 (a), which reads, “A party may amend [her/his] pleading once without leave of court within twenty days after its service, or at any time before the period for responding to it expires, or within twenty days after service of a pleading responding to it.” Bones was in accordance with this CPLR provision to file his first amended complaint because it was within the time frame allotted for him to respond to the instant motion.

In his amended complaint, Bones withdrew the whistleblower cause of action, with only those actions for breach of contract and promissory estoppel remaining. In their reply brief, the [659]*659defendants argue that since Bones initially asserted a whistle-blower cause of action that bars other claims arising from the same facts, the former’s withdrawal still does not permit the latter two.

In a letter dated August 1, 2007, Bones notified the court that he withdrew his breach of contract claim with the defendants’ consent, leaving only that for promissory estoppel. Accordingly, only two issues will be discussed: whether Bones adequately pleaded promissory estoppel and whether the now-withdrawn whistleblower claim bars it.

Discussion

I. The Promissory Estoppel Claim

“A party may move for judgment dismissing one or more causes of action asserted against him on the ground that . . . the pleading fails to state a cause of action” (CPLR 3211 [a] [7]). In a motion to dismiss, the court takes the facts as alleged in the complaint as true and accords the benefit of every possible favorable inference to the nonmovant (see AG Capital Funding Partners, L.P. v State St. Bank & Trust Co., 5 NY3d 582 [2005]). “The sole criterion is whether the pleading states a cause of action, and if from its four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law a motion for dismissal will fail.” (Urban Holding Corp. v Haberman, 162 AD2d 230, 230 [1st Dept 1990].) To avoid dismissal of a promissory estoppel claim, a plaintiff must allege (i) an unambiguous promise; (ii) reasonable and foreseeable reliance on the promise; and (iii) injury as a result of that reliance. (See id. at 231.) As to the promise, Bones alleges that he was assured, unambiguously, that his 2004 bonus was being held in abeyance pending the suspension, and that his options would continue to vest. (See amended complaint at 6, U 31; 9, 1111 54-55.) The pleading satisfies the first element because Bones identifies a specific promise made by individuals who were in the position to carry out said promise’s terms. (See Urban, supra.)

Next, Bones pleads that he “acted in accordance with any and all requests made to him by Prudential” and that he “relied on Prudential’s conditions that he would be required to cooperate fully with all [their] instruction.” (Amended complaint at 6, If 32; 9-10, 1f 57.) Moreover, “[i]n reasonable and foreseeable reliance on Prudential’s promise, [he] did not seek alternative employment for the 2005 year.” (Id. at 10, If 58.) Affording [660]

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Related

Bones v. Prudential Financial, Inc.
54 A.D.3d 589 (Appellate Division of the Supreme Court of New York, 2008)

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Bluebook (online)
17 Misc. 3d 656, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bones-v-prudential-financial-inc-nysupct-2007.