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CARFAGNO v. ACE

June 28, 2005.

PATRICK CARFAGNO, et al., Plaintiffs,
v.
ACE, LTD., et al., Defendants.



The opinion of the court was delivered by: JEROME SIMANDLE, District Judge

OPINION

Presently before this Court are two separate defense motions. Defendant ACE Ltd. or ACE Limited has filed an unopposed motion to dismiss for lack of jurisdiction. Defendant ACE American Insurance Company ("ACE American") has filed a motion to dismiss or to stay proceedings pending arbitration. Plaintiffs have opposed Defendant ACE American's motion. For the reasons discussed herein, Defendant ACE Limited's motion will be granted. Defendant ACE American Insurance Company's motion will be granted in part and denied in part.

  I. BACKGROUND

  A. The Parties

  Plaintiffs are twenty-one former employees of ACE American, who were assigned to the National Claims Facility of the ACE USA Claims division. The following twenty individuals all reside in New Jersey: Patricia Adams, Theresa Brewer, Kaye Campbell, Barbara Clark, Patrick Carfagno, Steven Dondarski, Theresa Fox, Donna Graham, Lisa Granroth, Roberta Harmon, Vicki Huseby, Mary Beth Molloie, Jean Mangold, Jennifer Oakley, Barbara Scarpa, Betsy Simpson, Susan Tiver, Rich Ventura, Janice Wick, and Fiorella Wilkins. Plaintiff Susan Shue resides in California. These twenty-one individuals are collectively referred to as "Plaintiffs." When necessary, certain Plaintiffs will be addressed by name.

  Defendant ACE American Insurance Company ("ACE American") is a Pennsylvania Corporation with its principal place of business in Pennsylvania. Defendant ACE Ltd. or ACE Limited ("ACE Limited") is a Cayman Islands corporation with its principal place of business in Hamilton, Bermuda. ACE Limited is a holding company that indirectly holds the stock of Defendant ACE American. Neither defendant is a citizen of New Jersey. B. Factual Allegations

  On or about July 2, 1999, Defendant ACE American acquired CIGNA's Property and Casualty Division. (Compl. at ¶ 28.) Eighteen of the Plaintiffs had been CIGNA employees and became ACE American employees as a result of the acquisition. (Carson Decl. ¶ 7.) Plaintiff Adams began her employment with ACE American in April 2001. (Adams Decl. ¶ 2.) Plaintiff Harmon began her employment with ACE American as a contract employee in August 2000 and became a full-time employee of ACE American in September 2000. (Harmon Decl. ¶ 3.) Plaintiff Scarpa had been a contract claims representative for CIGNA and for ACE American after its purchase of CIGNA. (Scarpa Decl. ¶ 2.) Scarpa became a full-time, non-contract claims representative with ACE American in April 2000. (Id. ¶ 3.)

  On February 21, 2000, ACE Human Resources sent an email to ACE employees notifying them that the ACE Employee Guide was available on the company's intranet. (Carson Decl. ¶ 17-18.) The email highlighted numerous ACE policies and programs but did not specifically mention the ACE American arbitration policy. (Carson Decl., Ex. 1.) The email asked each employee to review the guide and to complete the "Receipt and Agreement Form" that is accessible through a link on the Introduction page of the guide. (Carson Decl., Ex. 1.) All of the Plaintiffs except Adams signed the ACE Employee Guide Receipt and Agreement form. (Carson Decl. ¶ 24.) The on-line Employee Guide begins with an introduction page which contains two subsections. In the section labeled "About This Guide," the following paragraph appears:
After you have familiarized yourself with the contents of this guide, you must print out, date and sign the receipt and agreement form (click the underlined words to connect to the form) and return it to your supervisor. All employees must have a signed acknowledgement [sic] and agreement form in their personnel file.
(Carson Decl., Ex. 2) (emphasis in original). Further down the page is the section labeled "What's In This Guide," which describes the general contents of the guide. The second paragraph under this heading lists the only two terms of employment:
Although this guide contains descriptions of numerous ACE policies, procedures, programs and benefits, there are only two terms of your employment. . . . The second is that you agree that you will not go to court to decide any employment-related claim. Instead you must resolve all employment-related legal disputes by going to a neutral third-party arbitrator (see the Employment Dispute Arbitration Policy). Nothing in this guide changes, modifies or alters these two terms of your employment.
(Carson Decl., Ex. 2) (emphasis in original). While the discussion of the arbitration policy in the Introduction appears on page two in the exhibit submitted by Defendants, as the Court understands it, the Introduction's original form is a web page, which requires scrolling up and down to see the page in its entirety.
  As mentioned above, each employee who accessed the Employee Guide was prompted to access the "Receipt and Agreement" form through the Introduction page. The "Receipt and Agreement" form contains the following clause:
This is to acknowledge that I have received and will take the time to review the ACE Employee Guide available to me on ACE's intranet site. I agree that it is my responsibility to read the Employee Guide and to understand and abide by the rules, policies, procedures and standards set for in the Guide.
(Carson Decl., Ex. 4.) The employee must print out the form, print his or her name, sign and date the form. This form does not specifically mention ACE's arbitration policy. (Carson Decl., Ex. 4.) Plaintiffs Brewer, Carfagno, Campbell, Clark, Dondarski, Fox, Graham, Granroth, Harmon, Huseby, Mangold, Molloie, Oakley, Scarpa, Shue, Simpson, Tiver, Ventura, Wick and Wilkins each signed the "Receipt and Agreement" form. (Carson Decl. ¶ 24.)
  In addition, Plaintiffs Adams, Granroth, Harmon, and Scarpa all signed the ACE Employment Application. (Carson Decl. ¶ 25.) The application included the following paragraph just above the space for the employee signature:
I AGREE THAT IN RETURN FOR BEING CONSIDERED FOR EMPLOYMENT AND/OR RECEIVING AN OFFER OF EMPLOYMENT, I WILL RESOLVE ANY DISPUTE ABOUT MY CANDIDACY FOR EMPLOYMENT, EMPLOYMENT OR CESSATION OF EMPLOYMENT EXCLUSIVELY THROUGH THE INTERNAL AND EXTERNAL EMPLOYMENT DISPUTE RESOLUTION PROCESSES OF MY EMPLOYER, WHICH INCLUDES FINAL AND BINDING ARBITRATION WITH A NEUTRAL ARBITRATOR. I UNDERSTAND THAT MY EMPLOYER ALSO AGREES TO FOLLOW THE DISPUTE RESOLUTION PROCESSES AND THAT COPIES OF THE POLICIES AND PROCEDURES DESCRIBING THE DISPUTE RESOLUTION PROCESSES ARE AVAILABLE TO ME.
(Carson Decl., Ex. 5, 13, 14, 19) (capitalization and emphasis in original).

  In August of 2002, ACE American decided to relocate the National Claims Facility from Cherry Hill, New Jersey to Wilmington, Delaware. (Shilow Decl. ¶ 9.) According to the Plaintiffs, each was forced to resign between November 22, 2002 and May 23, 2003 based on the "hardship of their commutes, the lack of functioning facilities and the lack of support personnel in those ACE offices in Wilmington, Delaware." (Compl. at ¶¶ 26, 34.) Upon termination of their employment, Plaintiffs had worked for ACE American and its predecessors for varying periods of time, ranging from two years to over thirty years. (Compl. at ¶ 26.) Plaintiffs allege that Defendants' decision to relocate the National Claims Facility to Wilmington, Delaware was a calculated move aimed at forcing workers over the age of forty to retire. (Compl. at ¶ 31.) C. Complaint

  On October 29, 2004, Plaintiffs filed their original Complaint in the Superior Court of New Jersey, Law Division, Burlington County, followed by an Amended Complaint on November 5, 2004. On November 15, 2004, Plaintiffs filed this Second Amended Complaint again in the Superior Court of New Jersey, Law Division, containing nine counts stemming from events surrounding Defendant ACE American's alleged constructive termination of Plaintiffs. (Compl. at ¶ 33.) On December 16, 2004, Defendants filed a timely Notice of Removal in this Court based on diversity of citizenship under 28 U.S.C. § 1332(a)(1). While the Second Amended Complaint does not list specific damages sought, Plaintiffs did not dispute Defendants' contention that the amount in controversy exceeded $75,000. Twenty of the twenty-one Plaintiffs are New Jersey residents. The final Plaintiff is a resident of California. Defendant ACE American is a Pennsylvania corporation, while ACE Limited is a Cayman Islands corporation. Neither Defendant is a corporate citizen of New Jersey.

  Counts One through Six and Count Nine of the Amended Complaint sound in state common law. Count One alleges that Defendants breached their commitment to provide job security and severance packages as contained in ACE American's personnel policy manual. (Compl. at ¶¶ 47-49.) In Count Two, labeled "Promissory Estoppel," Plaintiffs allege that they were damaged by their reasonable reliance upon Defendants' promise of severance. (Compl. at ¶¶ 52-55.) Count Three alleges that Defendants violated the covenant of good faith and fair dealing implied in Defendants' employment relationship with Plaintiffs. (Compl. at ¶¶ 57-59.) Count Four alleges that Defendants were unjustly enriched through withholding the Plaintiffs' rightful severance packages. (Compl. at ¶¶ 61-62.) Plaintiffs claim in Count Five that Defendants made misrepresentations about Plaintiffs' guaranteed compensation and severance packages in order to secure Plaintiffs' assistance in the transition from CIGNA to ACE American. (Compl. at ¶¶ 64-67.) Count Six, labeled "Tortious Interference with Prospective Contractual Relations," alleges that Defendants conspired with unknown others to cause Plaintiffs' constructive discharge through relocation of their office from Cherry Hill, New Jersey to Wilmington, Delaware. (Compl. at ¶¶ 69-71.) Count Nine states that Defendants conspired with unknown others to commit unlawful acts against Plaintiffs. (Compl. at ¶¶ 89-91.)

  Counts Seven and Eight claim Defendants violated state and federal statutes, respectively. In Count Seven, Plaintiffs claim that Defendants discriminated against Plaintiffs because of their age, in violation of the New Jersey Law Against Discrimination ("NJLAD"), N.J.S.A. 10:5-1 et seq. (Compl. at ¶¶ 73-84.) Count Eight alleges that Defendants violated their fiduciary duty to Plaintiffs under the Employment Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 10001 et seq., which covers their promised severance packages. (Compl. at ¶¶ 86-87.)

  D. Motions to Dismiss

  1. Defendant ACE Limited's Motion to Dismiss for Lack of Personal Jurisdiction

  On January 10, 2005, Defendant ACE Limited filed its motion to dismiss for lack of personal jurisdiction pursuant to Fed.R.Civ. Pro. 12(h), claiming it is not a New Jersey corporation, does not have any offices in New Jersey, does not conduct business in New Jersey, and has not designated any agent or public official to accept service of process in New Jersey. (Def. ACE Limited Br. at 2-3.) While ACE Limited indirectly owns stock in ACE American, a company that conducts business in New Jersey, it claims that the actions of this ...


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