Viscito v. National Planning Corporation

34 F.4th 78
CourtCourt of Appeals for the First Circuit
DecidedMay 13, 2022
Docket21-1081P
StatusPublished
Cited by12 cases

This text of 34 F.4th 78 (Viscito v. National Planning Corporation) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Viscito v. National Planning Corporation, 34 F.4th 78 (1st Cir. 2022).

Opinion

United States Court of Appeals For the First Circuit

No. 21-1081

LEONARD VISCITO,

Plaintiff, Appellant,

v.

NATIONAL PLANNING CORPORATION, JOHN JOHNSON, MAURA COLLINS,

Defendants, Appellees,

JOHN DOE, JANE DOE,

Defendants.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Mark G. Mastroianni, U.S. District Judge]

Before

Lynch, Thompson, and Kayatta, Circuit Judges.

Bart W. Heemskerk, with whom Heemskerk Business Litigation PLLC was on brief, for appellant.

Sean P. Lynch, with whom Mary Grace Patterson and Morgan, Lewis & Bockius LLP were on brief, for appellees.

May 13, 2022 THOMPSON, Circuit Judge. Leonard Viscito, a Florida-

based financial planner with a long-standing Massachusetts-based

financial services company and office, appeals from the entry of

final judgment entered in favor of his former broker-dealer on

Viscito's wage and employment misclassification claims after the

district court ruled on the parties' cross-motions for summary

judgment. In our de novo review, we are tasked with deciding

whether Massachusetts' choice-of-law principles lead to the

conclusion that the Massachusetts Wage Act, Mass. Gen. Laws ch.

149, § 148 ("MWA"), applies to the relationship between Viscito

and his former broker-dealer. For the reasons set forth below, we

agree with the district court that the MWA does not apply to the

undisputed facts in this case and affirm.

BACKGROUND

Viscito is a licensed financial advisor who has been

doing business as Viscito Financial Services ("VFS") since 1997.

He is registered with the Financial Institution Regulatory

Authority ("FINRA") and the Securities and Exchange Commission

("SEC") in several states, including Massachusetts and Florida,

and has long maintained an office with staff in Springfield,

Massachusetts. In 2008, Viscito bought a home in a part of Florida

called The Villages. He regularly worked out of his Florida home

-- meeting with clients in person or virtually, responding to

clients' questions by phone or email, placing securities' trade

- 2 - orders, and providing financial services. His staff remained in

Massachusetts, working in the Springfield office, and Viscito

sometimes met with clients in person in this office as well. To

work within the financial advice and securities industry, Viscito

had to be affiliated with a registered "Broker-Dealer" which is "a

brokerage firm that is subject[] to the supervision of [FINRA]."

Throughout his career, Viscito has been affiliated with several

such businesses, including one of the defendants in this case,

National Planning Corporation ("NPC").

NPC is both an investment advising firm and a broker-

dealer, headquartered in California. A broker-dealer "oversee[s]

the sale of securities[ and] commission-based products" whereas an

investment advisor charges fees for its advisory services. Each

side of the business has a different regulatory structure and

agency tasked with ensuring compliance with the industry's rules;

NPC was a "dual-registrant" -- meaning it was registered with both

the SEC and FINRA.

In November 2013, Viscito (in his personal capacity)

signed an Independent Contractor's Agreement with NPC and

thereafter sold securities and investment products exclusively as

an NPC investment advisor representative ("IAR").1 Viscito

1This agreement was the only contract Viscito entered into with NPC. According to NPC, all of its IARs providing services to NPC's clients were independent contractors; none were classified as employees.

- 3 - registered both his Massachusetts VFS office and his Florida home

as NPC branch offices, with the Florida office tagged by NPC

(according to Viscito) as an "office of convenience."2 In December

2014 Viscito personally became a Florida resident, meaning, in

addition to living at The Villages and working extensively from

his home, he obtained a Florida driver's license, registered to

vote in Florida, and registered with Florida as a dual resident

for securities licensing purposes.3 Thereafter, NPC's Tax Forms

1099-MISC for 2015, 2016, and 2017 reflected Viscito's Florida

address. Even so, Viscito continued to employ his staff in

Massachusetts as employees of VFS and had sole authority to

determine their rate of compensation and the situs of their office

work. In his business dealings, Viscito used VFS letterhead with

VFS contact details prominently displayed at the top and a message

at the bottom in small font that VFS services were offered through

NPC but that VFS and NPC were "separate and unrelated companies."

2 Viscito's Florida "office of convenience" meant that he could "meet with clients on a kind of ad hoc, as-needed basis, but no books or records [we]re kept there."

3 Viscito initiated these actions after Florida's Office of Financial Regulation received his application to register in Florida as an investment advisor associated with a firm, and its interest in Viscito's professional activities was piqued. The Office of Financial Regulation found that Viscito had been conducting investment advisory services and activities in Florida from January 2009 through November 15, 2013, without being properly registered in the State, which violated a Florida regulation governing this profession. Viscito stipulated to the findings and agreed to pay a $7,500 fine.

- 4 - At the time Viscito signed his contract with NPC, his

existing clients could join NPC as their new broker and continue

to be "serviced" by Viscito. That is, his book of business could

and did move with him. The bulk of Viscito's client relationships

began with individuals in Massachusetts, and he continued to meet

"at various times" (whatever that means) with some of them in

person in his Massachusetts office. Using travel records and

credit card statements, NPC asserts (and Viscito does not

meaningfully refute4) that, while Viscito was affiliated with NPC,

he spent more time in Florida than in Massachusetts or any other

location.

During Viscito's affiliation with NPC, Viscito met with

his clients without any NPC representatives also participating in

the meetings and he did not report to NPC the number of client

meetings he held or how he advised his clients. NPC did not direct

or interfere with Viscito's management of his clients' accounts or

the advice Viscito provided to his clients, but, on occasion, NPC

directed Viscito via email to sell a particular mutual fund in a

client's account.5 Once a year, NPC conducted an in-person audit

4 Viscito asserts that he was "regularly in Massachusetts for large parts of the year" but does not provide any precise detail or support other than this averment in his affidavit.

5 The record does not reveal how often or under what circumstances NPC would send these directives.

- 5 - of Viscito's Massachusetts NPC branch office and sent him a punch

list of the ways in which the branch office was out of compliance

with NPC policies. NPC conducted at least one in-person audit of

Viscito's Florida branch office, in 2015. Based on Viscito's

client transactions, NPC paid Viscito commissions and "investment

advisory fees" that were "tied to the production generated by the

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