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Chretien v. Berman & Simmons

Superior Court of Maine, Cumberland

December 10, 2018



          A. M. Horton, Justice.

         The Motion for Summary Judgment of Defendants Berman & Simmons, P.A. and William Robitzek (together "Defendants") is before the court for decision. Oral argument was held November 6, 2018, at which point the court took the Motion under advisement, Factual Background

         From 1987 to 2000, Plaintiff, Russell Chretien, worked as an agency manager for Allstate Insurance Company ("Allstate"). (Defendants' Supporting Statement of Material Facts) (Supp'g S.M.F.) ¶ 1.) In 2006, Mr. Chretien entered into an Exclusive Agency Agreement ("EAA") with Allstate. (Supp'g S.M.F. ¶ 3.)

         The EAA governed the work relationship between Allstate and Mr. Chretien and included a Termination Payment Provision ("TPP') in the event the EAA was terminated. (Supp'g S.M.F ¶ 4.) If triggered the TPP would provide Mr. Chretien with payment equal to his eligible earned insurance premiums multiplied by 1.5 over a 12-month period. (Supp'g S.M.F ¶ 4.) The EAA alternatively allowed for Mr. Chretien to sell his book of business to a buyer approved by Allstate instead of collecting the TPP payment. (Supp'g S.M.F ¶ 4.) The EAA placed restrictive covenants on Mr. Chretien and his employees not to disclose confidential information both before and after termination. (Supp'g S.M.F ¶ 4.) The EAA could be terminated in the following ways: l) by mutual agreement; 2) by either party, with or without cause, by providing 90-day notice; and 3) by Allstate for cause. (Supp'g S.M.F ¶ 6.)

         In 2010, Mr. Chretien planned to expand his agency by purchasing books of business from other Allstate agents. (Opposing Statement of Material Facts (Add. S.M.F.) ¶ 162.) Acquisition of these books was subject to the EAA. (Add. S.M.F. ¶ 162.)

         Prior to giving Mr. Chretien approval for these purchases, Allstate incorporated a new coverage program and discontinued its Deluxe Plus Plan. (Add. S.M.F. ¶ 164.) This new program resulted in certain Allstate insureds losing their coverage. (Add. S.M.F. ¶ 164.) The new program concerned Mr. Chretien and he shared this concern with Allstate. (Add. S.M.F. ¶ 167.) Concurrently, Mr. Chretien helped two customers whose policies had not been renewed appeal their non-renewals with the Maine Bureau of Insurance. (Add. S.M.F. ¶ 168.) These appeals were sustained in favor of the customers in June 2011. (Add. S.M.F. ¶ 168.) In light of this outcome, Allstate abandoned its new coverage program in Maine. (Add. S.M.F. ¶ 169.)

         Allstate denied Mr. Chretien's plan to purchase the additional books of business. Plaintiffs Additional Statement of Material Facts (Add. S.M.F.) ¶ 171.

         In the spring of 2011, Mr. Chretien began speaking with United Insurance Group ("United") about potentially affiliating with United rather than Allstate. (Supp'g S.M.F. ¶ 18.) On September 30, 2011 Mr. Chretien accepted a position with United as a vice-president. (Supp'g S.M.F. ¶ 23.) That same day, Mr. Chretien notified Allstate that he would no longer be an exclusive agent of Allstate by sending a 90-day written notice of termination pursuant to the EAA. (Supp'g S.M.F. ¶ 25.) In his termination notice, Mr. Chretien claimed he was the victim of whistleblower retaliation for supporting the Allstate customers in their appeals of Allstate's nonrenewals of coverage. (Supp'g S.M.F. ¶ 26.)

         On December 20, 2011, prior to the 90-day termination initiated by Mr. Chretien, Allstate terminated Mr. Chretien's Allstate agency, (Supp'g S.M.F. ¶ 38.) Allstate cited Mr. Chretien's simultaneous employment with the United as the reason for the termination.[1] (Supp'g S.M.F. ¶ 38.) Allstate's termination letter stated that Mr. Chretien was required to comply with the confidentiality and non-solicitation provisions of the EAA and immediately return all of Allstate's property. (Supp'g S.M.F. ¶ 39.) As for compensation, Allstate indicated that Mr. Chretien could either take his TPP or sell his book of business before April 1, 2012. (Supp'g S.M.F. ¶ 39.)

         On December 22, 2011, Mr. Chretien sent a letter to his Allstate customers which included information about his new United Agency Insurance business. (Supp'g S.M.F. ¶¶ 40-41.) Mr. Chretien officially opened his United Insurance branch by January 1, 2012. (Supp'g S.M.F. ¶ 44.)

         On January 5, 2012, Allstate sent Mr. Chretien a cease and desist letter, alleging that he was violating the restrictive covenants of the EAA. (Supp'g S.M.F. ¶ 47.) Allstate's letter informed Mr. Chretien that if he was in violation of the EAA covenants, Allstate may "withhold any or all remaining termination payments, and £] pursue injunctive relief, monetary damages, attorney fees, and expenses." (Supp'g S.M.F. ¶ 48.)

         During the week of January 16, 2012, Mr. Chretien met with Attorney William Robitzek of Berman & Simmons to discuss Mr. Chretien's dispute with Allstate. (Supp'g S.M.F. ¶ 52.) As a result, Mr. Chretien retained the Berman & Simmons firm and attorney Robitzek to represent him in connection with claims by and against Allstate.

         On January 31, 2012, Allstate filed a complaint against Mr. Chretien and three of his employees in federal court. (Supp'g S.M.F. ¶ 54.) Allstate's complaint alleged four causes of action against Mr. Chretien: l) breach of contract, 2) misappropriation of trade secrets and confidential information, 3) unfair competition, and 4) tortious interference. (Supp'g S.M.F. ¶ 55.)

         On March 5, 2012, Mr. Chretien through attorney Robitzek answered Allstate's Complaint and asserted a counterclaim under the following theories of liability: 1) breach of contract, 2) tortious interference, 3) unfair competition, 4) conversion, 5) fraud, and 6) violation of Maine's Whistleblowers' Protection Act, 26 M.R.S. §§ 831 et seq. (Supp'g S.M.F. ¶ 59.)

         Attorney Robitzek did not file a Whistleblower Protection Act claim with the Maine Human Rights Commission (MHRC) on behalf of Mr. Chretien. (Add. S.M.F. ¶ 200.)

         By statute, as a result of attorney Robitzek's failure to file a complaint on behalf of Mr. Chretien with the MHRC within 300 days of the alleged discriminatory act, Mr. Chretien could not recover compensatory and punitive damages and attorney's fees under the Maine Whistleblowers' Protection Act in his counterclaim against Allstate. (Add. S.M.F. ¶ 201.) See 5 M.R.S. §§ 4611, 4622(1). The reason is that Whistleblowers' Protection Act claims are subject to the MHRC process, see 26 M.R.S. § 834-A ("Arbitration before the Maine Human Rights Commission"). A Whistleblowers' Protection Act claim must be filed with the MHRC, in the same way as other employment discrimination claims must be, in order to preserve the claimant's ability to recover compensatory and punitive damages and attorney fees in a subsequent action in court.

         In the summer of 2012, Allstate agreed to a confidential settlement with the three employees that were named as defendants in the January 31 Complaint, and the case proceeded between Allstate and Mr. Chretien only. (Supp'g S.M.F. ¶ 63.) Around that time, Allstate offered to settle with Mr. Chretien by paying his TPP amount minus $40, 000. In July 2012, Mr. Chretien offered to settle all of his claims for $445, 000 (Supp'g S.M.F. ¶¶ 85, 102, 109). No settlement was reached and the parties entered into mediation on November 27, 2012. (Supp'g S.M.F. ¶ 67.) No settlement was obtained during mediation. (Supp'g S.M.F. ¶¶ 68-71.)

         On December 20, 2012, Allstate amended its complaint to add an additional breach of contract claim. (Supp'g S.M.F. ¶¶ 60-61.) On January 3, 2013, and March 21, 2013, Attorney Robitzek sent letters to Mr. Chretien, warning Mr. Chretien of the risks of going to trial and encouraging him to settle for $300, 000. (Supp'g S.M.F. ¶¶ 72-77.)

         During April 2013, attorney Robitzek became aware that his failure to file a complaint with the Maine Human Rights Commission precluded Mr. Chretien from recovering compensatory and punitive damages and attorney fees on Mr. Chretien's Whistleblowers' Protection Act claim. (Add. S.M.F. ¶ 208.) However, attorney Robitzek did not inform Mr. Chretien of his realization for more than a year, until May 2014. (Add. S.M.F. ¶ 225.)

         On July 12, 2013, both parties filed for summary judgment. (Supp'g S.M.F. ¶¶ 81-82.) Magistrate Judge Kravchuk's November 2013 recommended decision on the cross-motions granted summary judgment to Mr. Chretien on Allstate's claims for unfair competition and tortious interference, and granted summary judgment to Allstate on Mr. Chretien's counterclaims for tortious interference, unfair competition, conversion, and fraud. (Supp'g S.M.F. ¶¶ 85-86.)

         Allstate's motion for summary judgment sought judgment as well on Mr. Chretien's whistleblower counterclaim, based on Allstate's contention that Mr. Chretien was not an employee of Allstate and therefore not entitled to protection under the Act, but Magistrate Judge Kravchuk recommended denying Allstate's motion in that regard, based on her conclusion that independent contractors could be protected by the Act. (Add. S.M.F. ¶ 228 & Tab 9).

         Judge Hornby affirmed and adopted Magistrate Judge Kravchuk's recommended decision in December 2013. (Supp'g S.M.F. ¶ 86.)

         Shortly after this on May 22, 2014, Attorney Robitzek advised Mr. Chretien in a letter that he had not filed the Whistleblower Protection Act claim with the Maine Human Rights Commission within the 300-day deadline. (Supp'g S.M.F. ¶ 94); see (Def's Tab(B).) Attorney Robitzek's letter explained that this would likely result in Mr. Chretien losing his ability to make a claim for compensatory and punitive damages, and attorney fees on the Whistleblowers' Protection Act counterclaim. (Supp'g S.M.F. ¶ 94.) Attorney Robitzek's letter also addressed the potential conflict of interest this created and informed Mr. Chretien that he could seek new counsel. (Supp'g S.M.F. ¶ 94.) Mr. Chretien decided to continue with Attorney Robitzek and proceed to trial, which was scheduled to begin in less than two weeks. (Supp'g S.M.F. ¶98.)

         On June 2, 2014, during a conference, the trial judge, Magistrate Judge John Nivison, decided to allow Mr. Chretien to proceed and present evidence on his Whistleblowers' Protection claim, but only for limited equitable relief, including front pay and back pay, and not for compensatory damages, punitive damages, and attorney's fees. (Supp'g S.M.F. ¶ 100.)

         On June 5, 2014, after three days of trial, Attorney Robitzek gave Mr. Chretien a letter discussing settlement. (Supp'g S.M.F. ¶ 107; Tab 1 (S)) In this letter Attorney Robitzek explained the state of the whistleblower claim (limitation on damages and attorney's fees), advised Mr. Chretien to obtain independent counsel for settlement, discussed what damages could be awarded to both Mr. Chretien and Allstate at trial and the risks associated with continuing the trial. (Supp'g S.M.F. ¶¶ 108-111; Tab l(S) at 2-3) The letter indicated that best case outcome for Mr. Chretien would be a verdict in the one million dollar range and the worst case outcome would be a verdict for Allstate of several hundred thousand dollars. Tab1 (S) at 3. However, Mr. Chretien claims that there was little downside risk in an adverse verdict because he was prepared to declare bankruptcy if the verdict went against him, although he had also been working to avoid bankruptcy. (Add. S.M.F. ¶ 260); Defendant's Reply Statement of Material Facts (Rep. S.M.F.) ¶ 260.

         On June 6, 2014, two of the trial jurors reported to Judge Nivison, what they believed to be inappropriate behavior by Mr. Chretien during his testimony. (Supp'g S.M.F. ¶¶ 114-16). Judge Nivison interviewed each juror individually about the juror's report with counsel present. (Supp'g S.M.F. ¶ 117.) The jurors appeared not to have a favorable impression of Mr. Chretien, but it was not clear that the jury was leaning against Mr. Chretien. (Add. S.M.F. ¶ 117).

         On June 6, 2014, the parties attended a settlement conference with Judge Kornreich. (Supp'g S.M.F. ¶ 119.) Attorney Paul Brown attended the settlement conference as a representative of Mr. Chretien. (Supp'g S.M.F. ¶ 119.) Judge Kornreich recommended a specific dollar payment by Allstate to Mr. Chretien for purposes of settling all claims and counterclaims between them. (Supp'g S.M.F. ¶ 124.) He told Mr. Chretien that "he had to push Allstate hard to get up to that offer and that Allstate would not go any higher than [the recommended amount]-that was Allstate's "final number." (Id.) It was understood by Judge Kornreich and the parties that Mr. Chretien could not recover compensatory and punitive damages and attorney fees on his whistleblower claim. (Add. S.M.F. ¶ 247.)

         Mr. Chretien and Allstate agreed to settle all claims and counterclaims between them for the dollar payment by Allstate to Mr. Chretien that Judge Kornreich had recommended and for a release and dismissal of all ...

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