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Poaching spat between regional brokers dismissed

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An appeals court has upheld dismissal of litigation filed by a broker who has charged another brokerage with poaching its employees and interfering with its business relationships, stating it is all part of doing business.

From 2002 until 2013, Marshfield, Massachusetts-based Cook & Co. Insurance Services Inc. sold to municipalities a number of “injured on duty” insurance policies purchased from York, Pennsylvania-based Volunteer Firemen's Insurance Services Inc., a unit of York, Pennsylvania-based Glatfelter Insurance Group of Pennsylvania, and was its exclusive third-party claims administrator for these policies, according to court papers in Cook & Co. Insurance Services Inc. v. Volunteer Firemen's Insurance Services Inc.

Brad Preston, a principal with Westbrook, Connecticut-based Gowrie, Barden & Brett Inc., which is a Cook competitor, is VFIS' regional director, according to court papers.

In 2012, Gowrie learned from a Cook employee that Cook planned to move the “injured on duty” business away from Volunteer Firemen's Insurance to other insurers, according to court papers.

In a complaint filed in U.S. District Court in Boston in June 2015, Cook charged that, acting in concert, Volunteer Firemen's Insurance and Gowrie hired this employee and two others away from Cook to establish an in-house claims administration service at Gowrie.

Cook claims that communications by Gowrie misled customers into believing Volunteer Firemen's Insurance had replaced Cook with Gowrie as its exclusive third-party claims administrator and the ensuing confusion damaged Cook's business. It charged Volunteer Firemen's Insurance with tortious interference with contractual relations and civil conspiracy, among other charges.

The District Court dismissed the case in September 2015, stating “Cook has failed to plead any facts that would permit a reasonable interference that VFIS 'intentionally and knowingly misled' customers into believing Gowrie was to become the sole provider of VFIS claims administration.”

The ruling was unanimously upheld in Wednesday's ruling by a three-judge panel of the 1st U.S. Circuit Court of Appeals in Boston.

Cook's complaint “is long on conclusory legal allegations, but is conspicuously short of the type of factual allegations that are needed to state a plausible claim.

“From a factual standpoint, it paints a picture of Gowrie maneuvering to gain advantage over Cook in the marketplace and the use of bare-knuckle tactics to achieve that goal.

“But competitive infighting, though sometimes unattractive, is not per se unlawful and here the complaint is bereft of factual allegations adequate to show that either Gowrie or VFIS committed any tortious or wrongful acts,” said the ruling.