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WOJCIK v. AETNA LIFE INS.

February 20, 1996

DAVID A. WOJCIK, Plaintiff,
v.
AETNA LIFE INSURANCE AND ANNUITIES COMPANY, EDWARD F. BACHER, and EDWARD F. SOMMER, Defendants.



The opinion of the court was delivered by: CASTILLO

 This is an action brought by plaintiff David Wojcik against defendants Aetna Life Insurance and Annuity Company (Aetna), Edward F. Bacher, and Edward F. Sommer. At the heart of Wojcik's complaint is an alleged conspiracy by the defendants to destroy Wojcik's business as an Aetna insurance agent and annuities representative. Bacher was an Aetna agent and Sommer was an Aetna officer, serving as the regional manager of annuity operations and operating out of Aetna's Columbus, Ohio office. The origins of the alleged campaign against Wojcik date back to 1988 when Sommer asked Wojcik to assign all of his client base to Bacher and to become a Bacher employee. Wojcik alleges that when he refused this request, the defendants set out to destroy him by, among other things, reassigning his client base and not assigning new business to him.

 Wojcik's complaint is a five-count complaint that charges all three defendants with tortious interference with prospective business advantage (count II), deceptive business practices (count IV), and civil conspiracy (count V). Additionally, Wojcik charges Aetna with breach of contract (count I) and he charges Bacher and Sommer with tortious interference with contract (count III). Wojcik seeks $ 11 million in damages for Aetna's alleged breach of contract and he seeks $ 15 million in compensatory damages and $ 30 million in punitive damages for defendants' allegedly unfair and tortious conduct.

 The facts of this case are amply set forth in this Court's Memorandum Opinion and Order dated August 25, 1995 (docketed August 28, 1995), Wojcik v. Aetna Life Ins. & Annuity Co., 901 F. Supp. 1282 (N.D. Ill. 1995), and shall not be repeated here except as necessary. The August 25 Order granted defendant Aetna's motion to dismiss and compel arbitration. Aetna argued that Wojcik's claims against it should be dismissed -- and arbitration compelled -- in accordance with Wojcik's agreement to arbitrate, as embodied in his application for registration with the National Association of Securities Dealers (Form U-4) and as delineated by the NASD code. Id. at 1285. This Court's August 25 ruling that Wojcik's claims against Aetna were subject to arbitration, notwithstanding the fact that the amendment to the NASD code requiring arbitration of employment disputes did not become effective until October 1, 1993 (approximately 9 3/4 years after Wojcik signed the Form U-4), was predicated in large part on the fact that Wojcik brought this action approximately 1 1/2 years after the effective date of the NASD code amendment. Id. at 1288-89. The August 25 Order, however, failed to reflect another fact that was critical to the Court's holding and we take this opportunity to supplement that Order with the following information. At the time that he filed his complaint Wojcik was (and presumably still is) associated with Aetna as an employee, agent, or broker. Moreover, Wojcik's complaint includes allegations of conduct that took place after as well as before the effective date of the amendment. See Compl. P 17. Thus, we now make clear that our earlier determination that Aetna could compel arbitration under the terms of the NASD code was based on the facts that some of the conduct that is the subject of the complaint took place after the effective date of the NASD amendment while Wojcik was employed with Aetna, and that Wojcik filed his complaint after that date.

 Having reviewed and clarified our prior Order, we next turn to the motion currently pending before the Court: Bacher and Sommer's motion for clarification of the August 25 Order. Bacher and Sommer note that the August 25 Order (1) dismissed Wojcik's claims against Aetna and concluded that those claims must be arbitrated and (2) stayed the proceedings in this case relating to the claims asserted solely against Bacher and Sommer in count III pending completion of the arbitration. Bacher and Sommer now ask the Court to clarify whether the August 25 Order considered their motion to dismiss and compel arbitration, which was not referred to in the Order. In essence, Bacher and Sommer want to know if Wojcik's claims against them are also subject to arbitration.

 We note at the outset that although Bacher and Sommer filed a motion to dismiss and to compel Wojcik to submit the claims alleged in his complaint to arbitration, they did not submit a memorandum of law arguing that the claims directed against them were also subject to arbitration. Instead, they filed a document entitled "Memorandum in Support of Motion to Dismiss and to Compel Arbitration of Defendants Edward Bacher and Edward F. Sommer," which states in pertinent part:

 
As [Aetna] explained in its Memorandum . . ., Plaintiff has agreed to arbitrate any disputes, claims, or controversies arising out of his relationship with [Aetna]. Rather than submit a separate brief that would merely reiterate [Aetna's] arguments, Defendants Bacher and Sommer adopt as their own the arguments advanced by [Aetna] . . . . For the reasons stated by [Aetna], Plaintiff's complaint should be dismissed and Plaintiff should be compelled to arbitrate his claims . . . .

 Mem. Supp. Mot. Dis. and Compel of Bacher & Sommer at 1-2.

 Aetna's motion to dismiss and accompanying memoranda, however, are silent as to whether Wojcik's claims against the other defendants are subject to arbitration. The only mention of the issue in Aetna's memoranda is to be found in a footnote in their reply brief following a sentence in which Aetna asserts that "Wojcik cannot avoid [his contractual obligation to arbitrate] by adding additional defendants with whom he has no such agreement." Aetna's Resp. to Pl.'s Opp. at 4. The footnote reads, "[Aetna] does not agree that Wojcik is not obligated to arbitrate his dispute with Defendants Edward F. Sommer and Edward Bacher; however, that issue is not relevant to [Aetna's] motion to dismiss and to compel arbitration." Id. at 4 n.3. So while Bacher and Sommer adopted Aetna's arguments, those arguments strictly related to compelling arbitration of the claims against Aetna and were not helpful to Bacher and Sommer. *fn1" Pursuant to a supplemental briefing schedule entered in connection with Bacher and Sommer's motion for clarification, the parties have now briefed the issue of whether Wojcik's claims against Bacher and Sommer are also subject to arbitration and hence dismissal in this action.

 To answer this question we return to the language of the NASD code in which the contours of the duty to arbitrate are set forth. Part 1, section 1 of the NASD Code of Arbitration Procedure states in pertinent part:

 
This Code of Arbitration Procedure is prescribed and adopted . . . for the arbitration of any dispute, claim, or controversy arising out of or in connection with the business of any member of the Association, or arising out of the employment or termination of employment of associated person(s) with any member . . . :
 
(1) between or among members;
 
(2) between or among members and associated persons; [and]
 
(3) between or among members or associated persons and public customers, or others[.] *fn ...

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