DIETRICH & ASSOCIATES, INC. v. October Three LLC
2:20-cv-05002
| E.D. Pa. | Apr 26, 2021Background
- Dietrich & Associates (D&A) provides specialized annuity placement services to pension plan fiduciaries; October Three created an O3 Annuity division.
- Three D&A employees (John Neison, Jill Neison, Mark Unhoch) left for O3 between Dec. 2017 and Jan. 2018.
- D&A sent cease-and-desist letters in Feb.–Mar. 2018 alleging solicitation and asking October Three to ensure compliance with restrictive covenants; October Three did not respond.
- At a June 5, 2019 deposition, October Three’s CEO testified he formed O3 to compete for D&A business, recruited the three employees despite knowing their covenants, and directed them to solicit D&A clients.
- D&A alleges October Three intentionally induced breaches and diverted numerous annuity placements and commissions; defendants moved to dismiss as time-barred.
- The Court denied dismissal, concluding the Complaint and integral records do not make the limitations bar apparent and factual issues (discovery rule/continuing tort) preclude resolution on Rule 12(b)(6).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether D&A’s tortious-interference claims accrued before the limitations cutoff (i.e., are time-barred) | Accrual occurred only when October Three closed diverted annuity placements and received commissions; many closures occurred within two years of the complaint | Accrual occurred by mid-May 2018 (or earlier) based on employees’ departures, cease-and-desist letters, and internal emails showing knowledge of diversion | Denied dismissal: accrual date not apparent on face of the complaint; factual dispute exists whether actual legal injury had occurred by Oct. 9, 2018 |
| Whether the Court may treat related-action documents/letters/emails as proving accrual on a 12(b)(6) motion | Court should not rely on “cherry-picked” voluminous external records not integral to this complaint | Related-action filings, correspondence, and emails demonstrate D&A knew or should have known of injury by mid-2018 | Court limited consideration to documents integral to the complaint; record does not establish time bar as a matter of law |
| Applicability of the discovery rule and continuing-tort doctrine to toll accrual | Discovery rule and continuing-tort theory postpone accrual until D&A knew of actual legal injury (e.g., after October Three closed placements or after CEO deposition) | D&A reasonably knew of injury earlier and thus cannot rely on tolling doctrines | Court held discovery rule/continuing-tort assertions raise factual issues for later resolution; tolling may apply, so dismissal premature |
| Whether the complaint plausibly states tortious-interference claims notwithstanding limitations defense | Complaint alleges purposeful inducement, lack of privilege, and damages from diverted placements (plausibly pleaded) | Defendants argue claims are time-barred or speculative | Court found the pleading sufficiently plausible and denied dismissal on statute-of-limitations grounds |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard: complaint must state a plausible claim).
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for complaints).
- CGB Occupational Therapy, Inc. v. RHA Health Servs. Inc., 357 F.3d 375 (3d Cir. 2004) (tortious-interference accrual requires actual legal damage).
- Fine v. Checcio, 870 A.2d 850 (Pa. 2005) (discovery rule and accrual standards under Pennsylvania law).
- Schmidt v. Skolas, 770 F.3d 241 (3d Cir. 2014) (statute-of-limitations is an affirmative defense; dismissal only when time bar is apparent on complaint).
- Fried v. JP Morgan Chase & Co., 850 F.3d 590 (3d Cir. 2017) (Rule 12 dismissal appropriate only when limitations bar is clear on face of complaint).
- Acumed LLC v. Advanced Surgical Servs., Inc., 561 F.3d 199 (3d Cir. 2009) (elements for tortious-interference claims).
- Pension Benefit Guaranty Corp. v. White Consol. Indus., Inc., 998 F.2d 1192 (3d Cir. 1993) (when courts may consider documents outside the complaint on a motion to dismiss).
- In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410 (3d Cir. 1997) (documents integral to the complaint may be considered on a motion to dismiss).
- Cowell v. Palmer Twp., 263 F.3d 286 (3d Cir. 2001) (continuing-tort doctrine tolls limitations while a continuing pattern of misconduct persists).