Sharpe v. American Academy of Actuaries

• Court: District Court, District of Columbia
• Decided: January 12, 2018
• Docket: Civil Action No. 2017-0258
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

TIMOTHY W. SHARPE,

Plaintiff,

v. Case No. 1:17-cv-00258 (TNM)

AMERICAN ACADEMY OF ACTUARIES,

Defendant.

U MEMORANDUM OPINION

Plaintiff Timothy W. Sharpe is an actuary and voluntary member of defendant American

Academy of Actuaries (the “Academy”), a professional accreditation association. Am. Compl.

¶¶ 26-27, 36. Mr. Sharpe’s six-count complaint seeks damages and injunctive relief from the

Academy’s alleged unlawful dissemination of information regarding Mr. Sharpe’s disciplinary

proceeding within the organization. Id. 29-39. Pending before the Court is the Defendant’s

Motion to Dismiss the Amended Complaint pursuant to Federal Rule of Civil Procedure

12(b)(6). Def.’s Mot. to Dismiss Am. Compl. Having confirmed that jurisdiction and venue is

proper in this Court, 1 and upon consideration of the pleadings, relevant law, and related legal P0F P

memoranda in opposition and in support, I find that all counts in the complaint should be

dismissed for failure to state a claim upon which relief can be granted. Accordingly, the

Defendant’s motion is GRANTED, and the complaint is DISMISSED.

1 See 28 U.S.C. §§ 1332, 1391.

1 I. BACKGROUND

Mr. Sharpe is an actuary who has been practicing the profession for nearly 30 years. Am.

Compl. ¶ 6. Among his clients are municipalities in the state of Illinois, for which he provides

services related to pension matters. Id. Throughout his professional career, Mr. Sharpe has been

a voluntary member of the Academy, a professional organization of actuaries with over 18,500

members. Id. at ¶¶ 26-27. In March 2014, Mr. Sharpe was the subject of a complaint filed with

the Academy by Tia Sawhney, also an actuary, who raised concerns about Mr. Sharpe’s alleged

failure to comply with actuarial communication standards. Id. at ¶ 92.

The Academy’s Bylaws establishes an operating unit within the Academy, the Actuarial

Board for Counseling and Discipline (“ABCD”), to consider complaints made against member

actuaries and recommend discipline to the Academy. Id. at ¶¶ 36-40. While the ABCD is part of

the Academy, it also follows its ABCD Rules of Procedure (“ABCD Rules”) setting forth its

disciplinary process, which was promulgated pursuant to, and consistent with, the Academy’s

Bylaws’ enabling provision. See Am. Compl. Ex. 2, Art. X, § 1 (establishing the ABCD and

authorizing it to establish Rules of Procedure); id. Ex. 3 (the ABCD Rules). 2 The ABCD does P1F P

not itself impose discipline on the subject actuary; rather, it makes a recommendation to the

Academy, which makes a final determination on whether to discipline the subject actuary, and, if

so, what form it should take. Id. at ¶ 40. Possible disciplinary actions include a private

reprimand, public reprimand, suspension, or expulsion. Id.

2 Where an actuary is a member of multiple actuarial professional organizations, an Agreement on Joint Discipline controls, which outlines the complaint review and disciplinary process as among the multiple professional organizations. Am. Compl. ¶¶ 44-53. Mr. Sharpe is a member only of the Academy, id. at ¶ 43, and for the reasons stated in Part III.A.1., infra, I focus on the procedures applicable to subject actuaries who are members only of the Academy.

2 Both the Academy’s Bylaws and the ABCD Rules contain provisions governing the

confidentiality of disciplinary proceedings. In the Bylaws, Article Ten provides that “[e]xcept as

otherwise provided in these Bylaws, all proceedings under this Article shall be kept confidential

by the ABCD, its staff, investigators, and advisers.” Am. Compl. Ex. 2, Art. X, § 9. In the

ABCD Rules, Section Ten similarly provides that “[t]he ABCD will make a reasonable effort to

keep confidential the facts and circumstances involved in any matter considered by the ABCD

for possible counseling or recommendations for discipline or the services of a mediator.” Id. Ex.

3, § 10. However, both governing documents are explicit that the ABCD can provide the

complainant with information on the disciplinary proceedings. Both documents state that the

“requirement as to confidentiality shall not preclude the ABCD from [] [a]dvising complainants

and subject actuaries about the progress and outcome of matters under consideration”. Id.; id.

Ex. 2, Art. X, § 9. There is no confidentiality requirement imposed upon complainants (or, for

that matter, the subject of a complaint).

In Mr. Sharpe’s case, the Academy held a hearing on December 7, 2015 to consider the

allegations, which Mr. Sharpe was unable to attend due to a serious illness involving his mother.

Id. at ¶ 110. On January 29, 2016, the ABCD issued a written report recommending that the

Academy expel Mr. Sharpe from membership. Id. at ¶ 112. On February 9, 2016, an article

appeared on a website, WirePoints, under the headline: “Illinois Fire and Police Pension Actuary

Facing Actuarial Discipline – WP Exclusive.” Id. Ex. 1. The article, authored by Mark

Glennon, founder of WirePoints, stated that the ABCD had “recently recommended that Timothy

Sharpe, actuary to dozens of troubled Illinois fire and police pension funds, be expelled from

membership in the [Academy],” and that the “recommendation is the result of separate

complaints by two actuaries, one by actuary Tia Goss Sawhney.” Id.

3 Mr. Sharpe contends that the Academy and/or ABCD must have improperly disseminated

the ABCD’s recommendation of expulsion, and that this allegedly improper conduct has resulted

in the loss of clients. Id. at ¶¶ 131, 139. Accordingly, Mr. Sharpe sued the Academy for breach

of contract, negligence, publication of private facts, denial of due process and fair procedure,

tortious interference with contract, and tortious interference with prospective business advantage.

Id. at 29-38. The Academy responds that Mr. Sharpe fails to state a claim upon which relief can

be granted. Def.’s Mot. to Dismiss Am. Compl. For the reasons that follow, I find that each

count in the Amended Complaint fails to state a claim upon which relief can be granted, and

dismiss the complaint in its entirety.

II. LEGAL STANDARD

A party may move to dismiss a complaint on the ground that it “fail[s] to state a claim

upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). Federal Rule of Civil Procedure

8(a)(2) requires that a complaint contain “a short and plain statement of the claim showing that

the pleader is entitled to relief.” This requires the complaint to contain sufficient factual

allegations that, if true, “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v.

Twombly, 550 U.S. 544, 570 (2007). A complaint is insufficient if it merely offers “‘labels and

conclusions’” or “‘naked assertion[s]’ devoid of ‘further factual enhancement.’” Ashcroft v.

Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555, 546). Rather, “[a] claim has

facial plausibility when the plaintiff pleads factual content that allows the court to draw the

reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at

678. Plausibility “asks for more than a sheer possibility that a defendant has acted unlawfully,”

id., and pleading facts that are “merely consistent with” a defendant’s liability “stops short of the

line between possibility and plausibility.” Twombly, 550 U.S. at 545-46.

4 In evaluating a motion to dismiss pursuant to Rule 12(b)(6), the Court must construe the

complaint in the light most favorable to the plaintiff and accept as true all reasonable factual

inferences drawn from well-pled factual allegations. See In re United Mine Workers of Am.

Emp. Benefit Plans Litig., 854 F. Supp. 914, 915 (D.D.C. 1994). The Court does not accept as

true legal conclusions or “[t]hreadbare recitals of the elements of a cause of action, supported by

mere conclusory statements.” Iqbal, 556 U.S. at 678. Last, “[i]n determining whether a

complaint fails to state a claim, [the court] may consider only the facts alleged in the complaint,

any documents either attached to or incorporated in the complaint and matters of which [the

court] may take judicial notice.” Hurd v. District of Columbia Gov’t, 864 F.3d 671, 678 (D.C.

Cir. 2017) (quoting EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621, 624 (D.C. Cir.

1997)).

III. ANALYSIS

As this matter is properly before the Court based on diversity of citizenship, 3 I must first P2F P

address which state law controls Mr. Sharpe’s claims. See Erie R.R. Co. v. Tompkins, 304 U.S.

64 (1938). In this District, the Court must first determine whether there is a conflict between the

laws of the relevant jurisdictions, and if not, apply the law of the District of Columbia. GEICO

v. Fetisoff, 958 F.2d 1137, 1141 (D.C. Cir. 1992). The Defendant argues that no “true conflict”

exists between District of Columbia law and Illinois law, Mem. of P. & A. in Support of Def.’s

Mot. to Dismiss Am. Compl. 21-24, and the Plaintiff does not address the issue in his brief.

Having reviewed the laws of both jurisdictions, I agree with the Defendant that no “true conflict”

3 The Defendant is an Illinois corporation with its principal place of business in Washington, District of Columbia. Mem. of P. & A. in Support of Def.’s Mot. to Dismiss Pl.’s Am. Compl. 21. Mr. Sharpe, although a citizen of Michigan, Am. Compl. ¶ 26, has provided services to Illinois pension funds since 1992 and has maintained a place of business in Illinois. Id. ¶¶ 32-33.

5 exists. See GEICO, 958 F.2d at 1141. Analyzing the Amended Complaint under District of

Columbia law, I find that the Plaintiff has failed to state a claim on each of the counts alleged.

A. Breach of Contract

For the Plaintiff’s breach of contract claim to survive a motion to dismiss based on

Federal Rule of Civil Procedure 12(b)(6), he must sufficiently plead that there was: (1) a valid

contract between the parties; (2) an obligation or duty arising out of the contract; (3) a breach of

that duty; and (4) damages caused by the breach. Francis v. Rehman, 110 A.3d 615, 620 (D.C.

2015). The first two elements are satisfied as the Academy does not contest that the Bylaws and

ABCD Rules form a contract between Mr. Sharpe and the Defendant. Mem. of P. & A. in

Support of Def.’s Mot. to Dismiss Am. Compl. 27. As for a breach of duty, the Amended

Complaint points to four contractual provisions that the Defendant allegedly violated—Section

Six on the Agreement on Joint Discipline; Article Nine, Section Six of the Academy Bylaws;

Article Ten, Section Nine of the Academy Bylaws; and Section Ten of the ABCD Rules. Am.

Compl. ¶¶ 183-186. Because the former two provisions do not apply to the alleged conduct, and

the latter two provisions explicitly permit disclosure to the complainant, none of these provisions

support a finding that a plausible breach of contract occurred.

1. Agreement on Joint Discipline and Article Nine of the Academy Bylaws

A plain reading of the Agreement on Joint Discipline and Article Nine, Section Six of the

Academy Bylaws foreclose the possibility that these provisions give rise to a breach of contract

claim. It is undisputed that Mr. Sharpe is a member only of the Academy and not of any other

actuarial organization, and that the ABCD issued its recommendation on January 29, 2016. See

6 Am. Compl. ¶¶ 43, 112. Therefore, the Agreement on Joint Discipline does not apply because

the agreement effective at the time the ABCD rendered a decision in his case dictates,

If a Referring Body issues a recommendation to discipline a Subject Actuary who is a member of only one (1) of the Parties, such party shall proceed in accordance with its own individually established procedures for addressing such a recommendation, and this Agreement shall have no application to such proceeding.

Id. Ex. 7 ¶ 3.A. (Amended and Restated Agreement on Joint Discipline dated December 10,

2015). 4 Therefore, as a member only of the Academy, the Agreement on Joint Discipline has no P3F P

application to Mr. Sharpe’s disciplinary action. Article Nine of the Academy Bylaws is also

inapplicable to Mr. Sharpe’s scenario. Article Nine pertains to the Academy’s process of

reviewing and taking action on a disciplinary recommendation from the ABCD. See Am.

Compl. Ex. 2, Art. IX, § 1 (referring complaints to the ABCD); id. § 3 (“govern[ing] proceedings

to consider and act upon disciplinary recommendations concerning Academy members”)

(emphasis added); id. § 4 (setting forth procedures for appeals of the Academy’s disciplinary

determinations). It is clear from the provisions of Article Nine that it relates to the Academy’s

process for referring and acting on disciplinary recommendations, and the Amended Complaint

alleges that the Academy had, at the time, not yet acted on the ABCD’s disciplinary

recommendation. See id. at ¶ 17. Therefore, Article Nine of the Academy’s Bylaws cannot form

the basis for a breach of contract claim.

4 The Plaintiff argues that an earlier version of the agreement governs instead, Am. Compl. ¶¶ 160-166, but this, too, is countered by the explicit language of the document. The agreement dated December 10, 2015 specifies that it shall be effective for “cases in which a Referring Body recommends disciplinary action on or after December 10, 2015,” and that “the terms and conditions of the Original Agreement shall have no further force and effect for any case in which a recommendation of disciplinary action is issued by a Referring Body on or after December 10, 2015.” Id. Ex. 7 ¶¶ 10, 13. Parties are, of course, free to contract a certain date to be the effective date of an agreement, regardless of the actual date of execution. See, e.g., Sweetman v. Strescon Indus., 389 A.2d 1319, 1322 (Del. 1978).

7 2. Article Ten of the Academy Bylaws and Section Ten of the ABCD Rules

Turning to Article Ten, Section Nine of the Academy Bylaws and Section Ten of the

ABCD Rules, neither of these provisions support a claim for breach of contract because both

explicitly allow the ABCD to advise complainants “about the progress and outcome of matters

under consideration.” See id. Ex. 2, Art. X, § 9; id. Ex. 3, § 10. The Plaintiff makes several

arguments about why this language is not fatal to his claim, but none meet Rule 12(b)(6)’s

pleading standard.

The Plaintiff first argues that it is not clear who informed WirePoints about the ABCD’s

recommendation of expulsion. Id. at ¶¶ 140-142. But this is no whodunit. Based on the

Amended Complaint and its attachments, the reasonable inference to draw is that the ABCD—

per its policies—provided its recommendation to Ms. Sawhney, the complainant, who then

disclosed the recommendation to further third parties. 5 The WirePoints article mentions P4F P

Ms. Sawhney and the fact of her complaint by name. Am. Compl. Ex. 1. Further, Ms. Sawhney

herself declared her intention to publicize the complaint and outcome. In her complaint to the

ABCD, she announced, “since these are my opinions and they concern public work, I claim the

right to share them in the public domain” and “I do not intend to abide with the ABCD’s request

to keep my complaint or the ABCD’s response to my complaint confidential.” Id. at ¶¶ 96-97.

5 The Defendant argues that I should only give effect to the Plaintiff’s Original Complaint, wherein he alleged that the Academy “informed Ms. Sawhney of the ABCD’s confidential recommendation” and that she, in turn, informed WirePoints of ABCD’s recommendation. Compl. ¶¶ 98-99. In the Defendant’s view, the apparent about-face in the Plaintiff’s position means that I should only accept as true the factual inference that the Defendant disclosed the ABCD’s recommendation to Ms. Sawhney. Def.’s Mot. to Dismiss Am. Compl. 25-26 (citing Hourani v. Mirtchev, 943 F. Supp. 2d. 159 (D.D.C. 2013)). Because I find that even under the Amended Complaint, the Plaintiff fails to state a claim upon which relief can be granted, I need not reach this question, but note that the Original Complaint alleges that “the Academy leaked the confidential ABCD recommendation to one or more third parties outside of the Academy”. Compl. ¶ 100.

8 A few months after submitting her complaint to the ABCD, she authored an article for

WirePoints disclosing that she “filed an [ABCD] report against [certain Illinois police funds’]

actuary, Mr. Timothy Sharpe.” Id. at ¶¶ 99-100. The following month, Ms. Sawhney contacted

a reporter about her complaint against Mr. Sharpe. Id. at ¶ 102. Ms. Sawhney’s clear intention

and actions taken to publicize her complaint against the Plaintiff, coupled with the WirePoints

article’s citation to her complaint, lead to the inevitable inference that she provided the ABCD’s

recommendation to WirePoints. While there remains a possibility that the Academy or ABCD

improperly disclosed the ABCD’s recommendation to someone other than Ms. Sawhney, a

“sheer possibility” does not constitute plausibility. See Twombly, 550 U.S. at 545-46.

The Plaintiff next argues that the ABCD flouted its responsibility to “make a reasonable

effort to keep confidential the facts and circumstances involved in any matter considered by the

ABCD for possible counseling or recommendations for discipline” because Ms. Sawhney made

clear to the ABCD that she did not intend to keep its response to her complaint confidential.

Pl.’s Mem. in Opp. to Def.’s Mot. to Dismiss Am. Compl. 36. This argument is unpersuasive

because the ABCD’s obligation with respect to making a reasonable effort to keeping

information confidential is cabined by the very next sentence, which unequivocally states that the

requirement “shall not preclude the ABCD from [] [a]dvising complainants and subject actuaries

about the progress and outcome of matters under consideration.” See id. Ex. 2, Art. X, § 9

(emphasis added); id. Ex. 3 § 10 (emphasis added). Although neither the Academy’s Bylaws nor

the ABCD Rules seem to require or compel the disclosure of any information to a complainant,

and the Plaintiff may fairly argue that it would be in poor taste to disclose the ABCD’s

recommendation in an instance where a complainant has so clearly made known her intention to

disclose the recommendation, these provisions cannot support a claim for breach of contract in

9 light of the explicit provisions permitting the disclosure of certain information to the

complainant.

Last, the Plaintiff contends that the ABCD’s recommendation was not an “outcome of [a]

matter[] under consideration” and was therefore ineligible to be provided to the complainant

under the Academy’s Bylaws and the ABCD Rules. Pl.’s Mem. in Opp. to Def.’s Mot. to

Dismiss Am. Compl. 30-31. Instead, the Plaintiff suggests that “matter” is a broad term that

encompasses both the ABCD’s investigative work and recommendation, as well as the

Academy’s determination on whether to implement the ABCD’s recommendation. Id. Under

this interpretation, it would be premature to inform the complainant of the ABCD’s

recommendation. Id. This argument, too, falls short on account of the plain language and

structure of the Academy’s Bylaws and the ABCD Rules. As previously discussed, the

Academy’s Bylaws describe the handling of disciplinary proceedings in Article Nine (governing

the Academy’s process) and Article Ten (governing the ABCD’s process). Article Ten

establishes the basic procedures and principles for the ABCD’s investigative and disciplinary

recommendation process, and it is pursuant to Article Ten that the ABCD Rules were

established. See Am. Compl. Ex. 2 Art. X, § 1 (“The ABCD is authorized to establish Rules of

Procedure and operating guidelines not inconsistent with the requirements of this Article.”).

Within Article Ten, cases before the ABCD are referred to as “matter[s]” on multiple occasions.

Article Ten, Section One requires that “[n]otice of the inquiry along with the factual basis for the

inquiry and an opportunity to comment on the matter before the ABCD determine whether an

investigation should be initiated.” (emphasis added). Article Ten, Section Five states that “[t]o

review a matter, the Chairperson shall appoint a primary Investigator and may appoint additional

10 Investigators.” (emphasis added). Thus, it is consistent that a case before the ABCD would be

referred to as a “matter under investigation” in Article Ten, Section Nine.

The Plaintiff’s interpretation fares no better within the ABCD Rules, for the very

provision on which he relies for his breach of contract claim, Section 10, clearly indicates that a

“matter” is a case that results in the ABCD’s disciplinary recommendation. Indeed, the section

starts: “The ABCD will make a reasonable effort to keep confidential the facts and circumstances

involved in any matter considered by the ABCD for possible counseling or recommendations for

discipline . . . . The requirement as to confidentiality shall not preclude the ABCD from[]

[a]dvising complainants and subject actuaries about the progress and outcome of matters under

consideration”. Id. Ex. 3 § 10 (emphasis added).

Defining an “outcome of [a] matter[] under consideration” as the ABCD’s disciplinary

recommendation is also consistent with the ABCD’s and Academy’s roles in the disciplinary

process. As previously established, the ABCD does not impose discipline on an actuary itself,

but makes a recommendation of discipline to the Academy. Thus, the ABCD’s role ends when it

issues its recommendation and report, and the “outcome of [a] matter[] under consideration” by

the ABCD is necessarily its disciplinary recommendation.

B. Negligence; Publication of Private Facts; Tortious Interference

Given the reasonable inference drawn from the facts pled in the Amended Complaint—

namely, that the ABCD provided Ms. Sawhney, the complainant, with its disciplinary

recommendation as permitted by the Academy’s Bylaws and the ABCD Rules—the majority of

the Plaintiff’s other claims also fail. The Plaintiff’s Amended Complaint fails to state a claim for

negligence because even assuming, arguendo, that the Defendant owed a duty to the Plaintiff,

there could not have been a breach of the Defendant’s duty under these circumstances. See

11 Aguilar v. RP MRP Washington Harbour, LLC, 98 A.3d 979, 982 (D.C. 2014) (explaining that

negligence requires a showing that the defendant owed a duty to the plaintiff, the defendant

breached that duty, and injury resulted to the plaintiff proximately caused by the breach of duty).

The Plaintiff’s claim for publication of private facts fails to adequately allege critical

elements of the tort: publication absent any waiver. See Wolf v. Regardie, 553 A.2d 1213, 1220

(D.C. 1989) (requiring publication of private facts to require publicity, absent any waiver or

privilege, given to private facts, in which the public has no legitimate concern, and which would

be highly offensive to a reasonable person of ordinary sensibilities). The Amended Complaint

has not sufficiently pled that the Academy and/or the ABCD improperly published Mr. Sharpe’s

disciplinary proceeding as the Bylaws and ABCD Rules unambiguously provide for the

disclosure of the “outcome of [a] matter[] under consideration”—i.e., the ABCD’s

recommendation—to a complainant.

Additionally, the Plaintiff’s tortious interference with contract and tortious interference

with prospective business advantage claims fail because he has not sufficiently alleged that the

Defendant intentionally interfered with any business relationship or expectancy. See Onyeoziri

v. Spivok, 44 A.3d 279, 286 (D.C. 2012) (listing the elements of intentional interference with

business relations as the existence of a valid contract or business relationship; knowledge of the

contract or relationship; intentional interference with the contract or relationship; and damages

caused by the interference); Brown v. Carr, 503 A.2d 1241, 1247 (D.C. 1986) (explaining that

the elements for intentional interference with a prospective business advantage “runs ‘parallel’”).

The Amended Complaint does not sufficiently plead facts from which to plausibly infer that the

Defendant intentionally interfered with the Plaintiff’s business or business expectancy, nor does

it plead the specific contracts or expectancies that the Plaintiff claims were interfered with, as he

12 is required to do. See, e.g., Nyambal v. Alliedbarton Sec. Servs., LLC, 153 F. Supp. 3d 309, 316

(D.D.C. 2016) (“tortious interference claims are routinely dismissed where the plaintiff fails to

name specific contractual relationships that the defendant allegedly interfered with, or to identify

any facts related to future contracts compromised by the alleged interferer.”).

C. Denial of Due Process

The Plaintiff’s remaining claim for denial of due process also fails to meet Rule 12(b)(6).

Courts ordinarily do not interfere with the internal disciplinary process of voluntary, private

associations absent a failure of the association to follow its own rules, see, e.g., Levant v.

Whitley, 755 A.2d 1036, 1043-44 (D.C. 2000), and should the process be reviewed, a

“fundamental fairness” standard governs. See, e.g., Blodgett v. University Club, 930 A.2d 210,

227 (D.C. 2007). As I have already determined, the Plaintiff has not sufficiently pled that the

Academy and/or ABCD violated the confidentiality provisions in their Bylaws and ABCD Rules.

The Plaintiff also argues that the Academy failed to refer the matter to a Joint Disciplinary

Committee pursuant to the Agreement on Joint Discipline; however, this argument is a nonstarter

pursuant to my prior determination that the Agreement on Joint Discipline does not apply to

Mr. Sharpe’s case. Last, the Plaintiff seeks an order enjoining the Academy from taking further

action in his disciplinary matter until this litigation is resolved. By reason of a lack of sufficient

showing that the Defendant failed to follow its own rules—either by violating the confidentiality

provision or by not referring the matter to a Joint Disciplinary Committee—and this Court’s

dismissal of all counts in the Amended Complaint, I find that this remedy is unwarranted.

13 IV. CONCLUSION

For the foregoing reasons, it is hereby ORDERED that the Defendant’s Motion to

Dismiss is GRANTED. A separate order will issue.

SO ORDERED.

/s/ U

Dated: January 12, 2018 TREVOR N. MCFADDEN United States District Judge