Diodato v. Wells Fargo Insurance Services, USA, Inc.

44 F. Supp. 3d 541, 2014 U.S. Dist. LEXIS 125002, 2014 WL 4411591
CourtDistrict Court, M.D. Pennsylvania
DecidedSeptember 8, 2014
DocketCivil Action No. 1:12-CV-2454
StatusPublished
Cited by39 cases

This text of 44 F. Supp. 3d 541 (Diodato v. Wells Fargo Insurance Services, USA, Inc.) is published on Counsel Stack Legal Research, covering District Court, M.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Diodato v. Wells Fargo Insurance Services, USA, Inc., 44 F. Supp. 3d 541, 2014 U.S. Dist. LEXIS 125002, 2014 WL 4411591 (M.D. Pa. 2014).

Opinion

MEMORANDUM

CHRISTOPHER C. CONNER, Chief Judge.

Presently before the court in the above-captioned matter are the motion (Doc. 63) for summary judgment by defendant and counterclaimant Wells Fargo Insurance Services, USA, Inc. (‘Wells Fargo”) and the motion (Doc. 66) for partial summary judgment by plaintiff and counterdefen-dant Darrell Diodato (“Diodato”), each pursuant to Federal Rule of Civil Procedure 56(a). These motions present manifold issues, several of which are nuanced and complex. For the reasons that follow, the court will grant in part and deny in part each motion.

I. Standard of Review

Through summary adjudication the court may dispose of those claims that do not present a “genuine issue as to any material fact” and for which a jury trial would be an empty and unnecessary formality. See Fed. R. Civ. P. 56(a). The [548]*548burden of proof is upon the non-moving party to come forth with “affirmative evidence, beyond the allegations of the pleadings,” in support of its right to relief. Pappas v. City of Lebanon, 331 F.Supp.2d 311, 315 (M.D.Pa.2004); Fed. R. Civ. P. 56(e); also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). This evidence must be adequate, as a matter of law, to sustain a judgment in favor of the non-moving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250-57, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-89, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); see also Fed. R. Civ. P. 56(a), (e). Only if this threshold is met may the cause of action proceed. Pappas, 331 F.Supp.2d at 315.

II. Statement of Material Facts 1

Darrell Diodato (“Diodato”) was employed by Wells Fargo Insurance Services USA, Inc. (“Wells Fargo”) and its predecessor entities for thirty-six years as an insurance producer. (Doc. 65 ¶ 3; Doc. 73 ¶ 3). In that role, Diodato serviced existing insurance business and originated new insurance business. (Doc. 65 ¶ 4; Doc. 73 ¶ 4). Wells Fargo paid Diodato an annual salary of approximately $230,000, provided benefits, and purportedly covered his overhead costs and business expenses. (Doc. 65 ¶¶ 5-8; Doc. 73 ¶¶ 5(a)). Diodato contends that he paid certain business expenses directly, without reimbursement, including: (1) contributions to support fundraising activities; (2) funds to entertain business contacts at annual meetings of the Bowling Proprietors Association of Pennsylvania (“BPAP”) and the Bowling Proprietors Association of America (“BPAA”); (3) a $12,000 annual deduction from his gross commission revenue to account for costs relating to the annual endorsement of the BPAP; and (4) various amounts paid to maintain the goodwill of the two Wells Fargo account executives (“AEs”) who supported him. (Doc. 73 ¶ 6).

Diodato specialized in brokering insurance for bowling alleys and family entertainment centers. (Doc. 65 ¶ 10; Doc. 73 ¶ 10). Diodato developed “numerous personal and business relationships with owners of family entertainment centers (including bowling centers)” and considers himself to be “the godfather” of the bowling alley insurance industry. (Doc. 65 ¶¶ 10-11; Doc. 73 ¶¶ 10-11). Diodato also developed relationships with the principals of four other entities who were insured as part of a captive insurance program: Car-etti, Inc., Sun Motor Cars, Inc., United Drilling, Inc., and Meckley Limestone Products, Inc. (Doc. 73 ¶ 10). Throughout his employment, Diodato gained an encyclopedic knowledge of bowling center operators and their specific insurance needs and risk management issues. (Doc. 65 ¶ 14; Doc. 73 ¶ 14). Diodato testified that approximately seventy percent (70%) of the revenue he generated was derived from bowling center owners and operators. (Doc. 65 ¶ 15; Doc. 73 ¶ 15).

At the request of his supervisor, James Voltz (“Voltz”), Diodato executed the Wells Fargo Agreement Regarding Trade Secrets, Confidential Information, NonSolici-tation, and Assignment of Inventions (the “TSA”) subject to this litigation on December 17, 2009. (See Doc. 65 ¶ 18; Doc. 73 ¶ 18; see also Doc. 65-3, Diodato Dep. Ex. A at 1-3, July 3, 2013 (“Diodato Dep.”). Diodato simultaneously executed the Wells Fargo Producer Plan (“Producer Plan”). (See Doc. 65 ¶ 19; see also Diodato Dep. Ex.’ E)). According to Diodato, Voltz [549]*549forced him to sign the TSA and Producer Plan without an opportunity to review them and verbally represented that: (1) all producers were required to sign the TSA; (2) that Diodato would be terminated if he did not sign the TSA; and (3) that Diodato would receive one percent (1%) additional compensation for his entire book of business. (Doc. 73 ¶ 18(a)). Ostensibly, at least one producer, John Ford, was not required to execute a TSA. (See Doc. 73 ¶ 45(a)).

The TSA identifies the consideration supporting the agreement as follows: “continued employment by a Wells Fargo company ..., the ability to participate in a new compensation plan containing new and additional benefits which include, but are not limited to, a guaranteed draw and an increased commission percentage for new and net new revenue generated in 2010.” (Diodato Dep. Ex. A at 1). The TSA also contains a confidentiality and non-disclosure provision. This provision expressly identifies the following information as falling within the ambit of protected trade secrets: “the names, address, and contact information for any of the Company’s customers and prospective customers, as well as other personal or financial information relating to any customer or prospect.” (Id.) The TSA further contains a non-solicitation provision, which provides, in pertinent part:

I agree that for a period of two (2) years immediately following termination of my employment for any reason, I will not do any of the following, directly or indirectly or through associates, agents, or employees:
b. solicit, participate in or promote the solicitation of any of the Company’s clients, customers, or prospective customers with whom I had Material Contact and/or regarding whom I received Confidential Information, for the purpose of providing products or services that are in competition with the Company’s products or services (“Competitive Products/Services”). “Material Contact” means interaction between me and the customer, client or prospective customer within one (1) year prior to my last day as a team member which takes place to manage, service or further the business relationship; or
c. Accept insurance business from or provide Competitive Products/Services to customers or clients of the Company:
i. with whom I had Material Contact, and/or

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44 F. Supp. 3d 541, 2014 U.S. Dist. LEXIS 125002, 2014 WL 4411591, Counsel Stack Legal Research, https://law.counselstack.com/opinion/diodato-v-wells-fargo-insurance-services-usa-inc-pamd-2014.