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Howes v. New York Life Insurance Co.

United States District Court, D. Maryland, Southern Division

March 30, 2017

THOMAS HOWES, Plaintiff,


          Paul W. Grimm United States District Judge.

         For a five-year period, Plaintiff Thomas Howes worked as an insurance agent for Defendant New York Life Insurance Company (“NY Life”) selling the company's insurance products to a robust client base that he established during his 24-year career as an insurance agent and financial planner. In March 2016, NY Life terminated its relationship with Howes because he allegedly failed to disclose and concealed a tax lien against him. Subsequently, NY Life sent notices to Howes's customers who owned NY Life products, notifying them that Howes had been terminated as a NY Life agent. Howes alleges that these notifications defamed him and interfered with his business relationship with his clients and seeks declaratory and injunctive relief to force NY Life to cease its actions. Pending before the Court are Howes's Motion for Injunctive and Declaratory Relief, ECF No. 19, and NY Life's Motion to Dismiss, ECF No. 14. The Motions are fully briefed, Def.'s Mem., ECF No. 14-1; Pl.'s Opp'n, ECF No. 18; Pl.'s Mem., ECF No. 19-1; Def.'s Reply & Opp'n, ECF No. 20; Pl.'s Reply, ECF No. 21, and no hearing is necessary, Loc. R. 105.6 (D. Md.). Because Howes fails to plead the necessary elements of any claim, I will grant NY Life's Motion to Dismiss, which renders moot Howes's Motion for Injunctive and Declaratory Relief.


         During his 24-year career as an insurance agent and financial planner, Howes established a large client base whose business he values at $70 million. Compl. ¶¶ 13-14, ECF No. 2. In 2011, Howes signed a Contract with NY Life to receive commissions for selling the insurance company's products to his customers. Id. ¶ 22; Agent's Contract ¶¶ 6, 9, J.A. Ex. C.[1] The Contract characterized Howes as an independent contractor and authorized either party to terminate the relationship with or without cause. Agent's Contract ¶¶ 7, 19-20. In March 2016, NY Life terminated its relationship with Howes. Compl. ¶ 32. In a public disclosure required by the Financial Industry Regulatory Authority (“FINRA”), NY Life stated that it terminated its relationship with Howes because he “failed to timely disclose a 2012 federal tax lien.” Thomas W Howes, FINRA BrokerCheck, (last visited Mar. 29, 2017); see also FINRA By-Laws art. V, § 3, FINRA Rules 4530(a)(2), 8312(b)(2)(A); FINRA Regulatory Notice 10-39.[2]

         Following the termination of the Contract, NY Life mailed letters to Howes's customers to whom he had sold NY Life products. See, e.g., Letter from Scott W. Weinstein, Vice President, N.Y. Life Ins. Co., to Kimberly Ann Scott (July 11, 2016), J.A. Ex. A. These letters informed the customers that Howes, “who served as your agent, is no longer associated with New York Life” and sought confirmation that the company had a complete list NY Life policies and accounts owned by the customers. Id. The letters also directed customers to FINRA's BrokerCheck webpage for “additional information about registered representatives, including this agent [Howes].” Id. By searching Howes's name on the webpage, it is possible for any member of the public to find NY Life's publicly-disclosed reason for terminating its relationship with Howes. Thomas W Howes, FINRA BrokerCheck, supra. In addition, sometime after NY Life terminated Howes's Contract, one of Howes's customers spoke to a NY Life employee at a tennis court who told the customer that Howes had been “fired” and speculated that “whatever [he] did must have been egregious to be terminated so quickly.” Text Message, J.A. Ex. B.

         In June 2016, Howes initiated FINRA arbitration against the company and ten other individuals, leveling many of the same allegations against NY Life that he does in the Complaint filed in this Court. FINRA Arbitration Submission Agreement, J.A. Ex. D. Two months later, he filed the instant Complaint in the Circuit Court for Montgomery County and sought a Temporary Restraining Order prohibiting NY Life from contacting his clients. Compl.[3] NY Life then removed the case to this Court, Notice of Removal, ECF No. 1, where the Parties filed the pending motions.

         Standard of Review

         Federal Rule of Civil Procedure 12(b)(6) provides for “the dismissal of a complaint if it fails to state a claim upon which relief can be granted.” Velencia v. Drezhlo, No. RDB-12-237, 2012 WL 6562764, at *4 (D. Md. Dec. 13, 2012). This rule's purpose “is to test the sufficiency of a complaint and not to resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.” Id. (quoting Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006)). To that end, the Court bears in mind the requirements of Fed.R.Civ.P. 8, Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), when considering a motion to dismiss pursuant to Rule 12(b)(6). Specifically, a complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief, ” Fed.R.Civ.P. 8(a)(2), and must state “a plausible claim for relief, ” as “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice, ” Iqbal, 556 U.S. at 678-79. See Velencia, 2012 WL 6562764, at *4 (discussing standard from Iqbal and Twombly). “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.


         NY Life argues that the Complaint should be dismissed because Howes “has not alleged the prima facie elements of any legal claim.” Def.'s Mem. 8. The Complaint best can best be described as an unguided missile, with components evocative of consumer-fraud, defamation, declaratory-judgment, false-light, tortious-interference-with-contract, misappropriation-of-trade- secrets, and wrongful-termination claims, but devoid of any allegations establishing the elements of any of those claims.[4]

         Maryland Consumer Protection Act

         Most concretely, Howes alleges (in conclusory terms)-but does not explain how-NY Life's “conduct . . . constitutes unfair and deceptive trade practices in violation of” the Maryland Consumer Protection Act (“MCPA”), Md. Code Ann., Com. Law §§ 13-101 to -501. Compl. ¶ 3. That statute provides a cause of action for victims of unfair and deceptive trade practices, as defined by the law, to seek money damages, Md. Code Ann., Com. Law, § 13-408, a form of relief that Howes does not and cannot seek outside of arbitration, Agent's Contract ¶ 24.a (“[A]ny dispute, claim or controversy arising between the Parties . . . shall be resolved by an arbitration proceeding administered by FINRA . . . .”); Compl. ¶ 1 (“This is an action for a declaratory judgment and Injunctive Relief . . . . No money damages are sought.”). “[D]eclaratory and injunctive relief is not available under the . . . MCPA.” Horowitz v. Cont'l Cas. Ins. No. DKC 14-3698, 2015 WL 9460111, at *6 (D. Md. Dec. 28, 2015) (quoting Bradshaw v. Hilco Receivables, LLC, 765 F.Supp.2d 719, 733 (D. Md. 2011)).

         Moreover, as the statute's title suggests, the MCPA provides a remedy to injured consumers, not vendors. This is further illustrated by the elements of an MCPA claim, which Howes neither enumerates nor alleges facts to support. To establish a MCPA claim, a plaintiff must allege “(1) an unfair or deceptive practice or misrepresentation that (2) is relied upon, and (3) causes them actual injury.” Stewart v. Bierman, 859 F.Supp. 2d. 754, 768 (D. Md. 2012) (emphasis added) (citing Lloyd v. Gen. Motors Corp., 916 A.2d 257 (Md. 2007)). Even if NY Life's public disclosure of its reason for terminating its Contract with Howes constituted an unfair or deceptive practice, Howes could not have relied upon the representations made by the company. He knew the ...

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