NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

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ING LIFE INSURANCE AND ANNUITY

COMPANY, et al.

Plaintiff,

v.

GITTERMAN, et al.

Defendants.

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Hon. Dennis M. Cavanaugh

OPINION

Civ. No. 10-4076 (DMC) (JAD)

DENNIS M. CAVANAUGH, U.S.D.J.:

This matter comes before the Court upon motion of ING Life Insurance and Annuity

Company (“ILIAC”) and ING Financial Advisors (“IFA”) (collectively, “Plaintiffs” or “ING”). On

August 10, 2010, Plaintiffs filed an Order to Show Cause, requesting that this Court enjoin Jeffrey

Gitterman,Daniel Armas, Samuel Bell, Teri Castagneto-McLeish,BrianDonnelly,MarcyGitterman,

Tara Jakubik, David Katz, Ted Kowalchyn, Elias Rauch, Stan Sattler, Dennis Schlagel, Sarah

Shipman and Lyn Tober (collectively, “Defendants” or “the Gitterman Group”) from soliciting

clients to withdrawcertain accounts from ING, Defendants’ former employer, pending the resolution

of a FINRA Dispute Resolution Proceeding. 

On August 10, this Court entered an Order preliminary enjoining Defendants or any persons

or entities acting in concert with them from (1) “soliciting, inducing or attempting to induce any

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customers of Plaintiffs (or their affiliated companies) to sell or transfer assets from any ING Life

Insurance and AnnuityCompany (“ILIAC”) account, product or security” and (2) “taking any action

designed to effectuate the sale or transfer of assets from any ILIAC account, product or security,

including, but not limited to submitting or assisting others in submitting account withdrawal forms

to ILIAC.” The Court ordered Plaintiffs to serve Defendants and to post a surety bond to pay the

costs and damages sustained by any party found to have been wrongly enjoined or restrained. The

Court scheduled a hearing on Plaintiffs’ application for August 17, 2010 at 11 am. 

For the reasons stated below, in addition to those reasons stated on the record, Plaintiffs’

motion for injunctive relief is denied, and the temporary restraints entered by this Court will be

dissolved. 

BACKGROUND1

Jeffrey Gitterman and the Gitterman Group provide financial advice and planning services

to New Jersey’s college and university employees. See Doc. No. 3, at 3. In Spring 2000, the

Gitterman Group became affiliated with Plaintiffs, and continued to provide advice regarding life

and disability insurance, long term care planning, college savings plans for their children, and all

aspects of their retirement, including 401(k)’s, and New Jersey ABP annuity accounts—which are

the subject of this action. Id. at 4. 

During the period of Defendants’ affiliation with ING, Defendants serviced ILIAC’s account

in New Jersey’s Alternative Benefit Program (“ABP”), a defined contribution retirement program

available to eligible employees of New Jersey’s public institutions on higher education. ABP

provides retirement benefits, life insurance, and disability coverage to help provide income in

 The facts in the Background Section have been taken from the parties’ submissions. 1

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retirement. Doc. No. 1-2, at 4. Participants in the ABP contribute a portion of their salary, as

determined by state law, plus a matching employer contribution, to a variable annuity issued by

ILIAC known as the “Retirement Master” contract. Until Defendants’ affiliation with ING

terminated in May 2010, Defendants were responsible for servicing the accounts of more than 2,000

ILIAC customers with assets invested in the ABP. 

Prior to April 2010, each Defendant was employed by ING either as an investment advisor,

a career agent, a registered representative, or was employed in more than one of these capacities. 

Id. at 14. In February 2010, with ING’s knowledge, the Gitterman team set up their own Registered

Investment Advisory firm (“GAWM”) and affiliated with an independent broker-dealer, Triad, as

registered representatives. As a result, many of the clients now in issue established investment

advisory and/or brokerage accounts with Defendants off of the ING platform. Id. at 14. 

In May 2010, the affiliation between the Gitterman Group and ING was terminated, with an

arrangement that would allow ING to maintain relationships with the Gitterman Group’s clients with

respect to these clients’ investment in ING’s New Jersey ABP. Id. With respect to every other

aspect of the clients’ portfolios, ING agreed to, and assisted in, facilitating their transfer from ING

to the Gitterman Group’s new broker dealer, Triad, and to GAWM (the Gitterman Group’s new

independentlyestablishedRegistered Investment Advisor), in orderto allow these clients to maintain

their various financial advisory relationships with the Gitterman Group. Id. 

On May 4, 2010, in conjunction with the Gitterman representatives’ new association with

Triad, ILIAC and Triad entered into a limited selling agreement which authorized Gitterman

representatives to continue servicing and soliciting New Jersey ABP clients. As noted above, the

agreement between ING and Defendants permitted clients to maintain the relationship with ING

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insofar as the Gitterman Group wished to continue to represent ING’s Group Annuity contract in the

New Jersey Alternative Benefit Plan under a limited selling broker agreement. Id. On or about May

26, Mr. Gitterman received an addendum to the limited selling agreement then already in effect. Id.

at 6. The addendum contained, among other provisions, certain restrictive covenants prohibiting

Defendants from soliciting ING ABP clients to new ABP plans. On June 30, Mr. Gitterman advised

ING that Triad would not sign the addendum and asked ING to consider allowing the Gitterman

Group to continue operating under the executed Limited Selling Agreement signed on May 4. ING

refused and severed its relationship with the Gitterman Group. Id. at 6.

Although Defendants did not sign the restrictive covenants contained in the addendum, when

Defendants first became affiliated with ING, they signed contracts with ILIAC and/or IFA that

contained a non-solicitation clause. See Doc. No. 1-2, at 3. The contracts contained a provision

providing that Defendants “shall not for a period of [one or] two years thereafter, directly or

indirectly by or through any partner, associate, agent, employer, employee or firm action on the

Agent’s behalf: (i) advise, induce or attempt to induce any contract-holder of the Company [ILIAC]

to cancel, replace or allow to lapse any annuity contract or security issued by the Company or its

affiliates . . . ” All of the Defendants signed covenants substantially similar to this provision.

DISCUSSION

A. APPLICABLE LAW

Injunctive relief is an “extraordinary remedy, which should be granted only in limited

circumstances.” Novartis Consumer Health, Inc. v. Johnson & Johnson-Merck Consumer Pharms.

Co., 290 F.3d 578, 586 (3d Cir. 2002) (quotation and citation omitted).

To determine whethertemporary restraints or a preliminaryinjunction is appropriate, a court 

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must consider (1) the likelihood of success on the merits of the underlying claim; (2) whether the

movant will be irreparably injured if such relief is not granted; (3) the possibility of harm to other

interested persons from the grant or denial of the injunction; and (4) whether the public interest will

be served by the preliminary relief. See Opticians Ass'n of Am. v. Ind. Opticians of Am., 920 F.2d

187, 191-92 (3d Cir. 1990). The Court should issue injunctive relief “only if the plaintiff produces

evidence sufficient to convince the district court that all four factors favor preliminary relief.” 

AT&T Co. v. Winback & Conserve Program, Inc., 42 F.3d 1421, 1427 (3d Cir. 1994) (citation

omitted); see The Nutrasweet Co. v. Vit-Mar Enters., Inc., 176 F.3d 151, 153 (3d Cir. 1999).

The Third Circuit “has placed particular weight on the probability of irreparable harm and

the likelihood of success on the merits elements of the standard for preliminary injunction, stating

that . . . we cannot sustain a preliminary injunction ordered by the district court where either or both

of these prerequisites are absent.’” Scholastic Funding Group, LLC v. Kimble, 2007 U.S. Dist.

LEXIS 30333, at *28 (D.N.J. Apr. 24, 2007).

B. ANALYSIS

1. Likelihood of Success on the Merits

Plaintiffs assert that they are likely to prevail on the merits of their underlying claims for

breach of the non-solicitation covenant. Plaintiffs claims, then, are for breach of Defendants’

employment contracts.

To “establish a breach of contract claim, a plaintiff has the burden to show that the parties

entered into a valid contract, that the defendant failed to perform his obligations under the contract

and that the plaintiff sustained damages as a result.” Esquire Deposition Servs., LLC v. Boutot, 2009

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U.S. Dist. LEXIS 52207, at *19-20 (D.N.J. June 19, 2009) (citing Murphy v. Implicito, 392 N.J.

Super. 245, 920 A.2d 678, 689 (N.J. Super. Ct. App. Div. 2007)); H & R Block Eastern Tax Servs.

v. Brooks, 2000 U.S. Dist. LEXIS 19369, at *7 (D. Ct. October 12, 2000). A non-compete covenant

will be “given effect if it is reasonable in view of all the circumstances of the particular case. It will

generally be found to be reasonable where it simply protects the legitimate interests of the employer,

imposes no undue hardship on the employee, and is not injurious to the public.” Solari, 264 A.2d

at 56.

Defendants assert that they have not solicited Plaintiffs’ clients, and therefore, are not in

breach of the contracts (assuming a valid contract exists). Although Defendants acknowledge that

they have a continuing and ongoing relationship with the clients in question—as they providing

financial planning, investment advisory/wealth management, and other retirement services to

them—Defendants assert that they have not solicited clients to withdraw from Plaintiffs’ ABP

Annuity Plan. Defendants emphasize, however, that they must necessarily, as fiduciaries, consider

the whole of their clients’ assets including the ABP accounts when rendering investment advice. As

such, they must discuss their clients’ ING ABP accounts (which presumably will now be

independently managed by a new ING representative).

Plaintiffs respond that the evidence demonstrates that Defendants have solicited clients,

relying on various communications with their clients. Through a declaration submitted to this Court,

Plaintiffs assert that a number of clients were instructed by Defendants that they would have lower

fees if they moved their assets from ING’s financial product ABP Accounts), to a new, competing

product. In fact, Plaintiffs assert that a number of clients were directly asked by Defendants to move

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as a result of the termination of the relationship between Plaintiffs and Defendants. Plaintiff also 2

note that a move to a new non-ING ABP would permit Defendants to earn a commission, which they

currently will not earn if the clients remain with ING. Additionally, Plaintiffs argue that the shear

number of withdrawal requests (over 200) in a short period of time indicate that a mass solicitation

must have occurred. With these facts in mind, Plaintiffs asserts that “[i]t strains credulity to suggest

that these ILIAC customers, with no solicitation or encouragement from Defendants, all

independently decided to withdraw their assets from ILIAC, just a few weeks after Defendants had

lost their ability to receive commissions on the sale and servicing of ILIAC products.” Doc. No. 5,

at 6. 

This Court cannot agree that Plaintiffs have sufficiently demonstrated that there is a

likelihood of success on the merits of their claims at this time. Merely being in contact with former

clients does not constitute solicitation. See Mona Elec. Group, Inc. v. Truland Service Corp., 56

Fed.Appx. 108, 110 (4th Cir. 2003); Prudential Securities, Inc. v. Plunkett, 8 F. Supp. 2d 514, 520

(E.D. Va. 1998); Bayly, Martin & Fay, Inc. v. Pickard, 780 P.2d 1168, 1175 (Okl.. 1989); Aetna

Bldg. Maintenance Co. v. West, 39 Cal. 2d 198 (1952). This rule is of particular significance where,

as here, there is no question that Defendants must be in contact with Plaintiffs’ clients, as they

provide financial advice to these clients on many non-ABP investments unrelated to ING’s business

interests. The only evidence of solicitation Plaintiffs have provided is a single affidavit from an ING

employee indicating that, through her communications with clients, it appears that Defendants’ have

recommended that Plaintiffs’ clients switch to a different, competing ABP product. Plaintiffs’

declaration summarily refers to client communications, without indicating the number of such

 See Declaration of Nancy Gathers, signed August 8, 2010 (“Gathers Decl.”), at ¶¶5-6. 2

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communications or providing documentation of such communications. 

The current evidence of record is insufficient to demonstrate that there is a substantial

likelihood that Plaintiffs will succeed on their claims. See Cancer Genetics, Inc. v. Hartmayer, 2008

U.S. Dist. LEXIS 8260, at *10-12 (D.N.J. Feb. 4, 2008) (denying application for injunction, where

that plaintiff did not present a witness with firsthand knowledge, and relied only upon a summary

affidavit in support of injunction relief). Moreover, Defendants have provided the Court with a

number of apparently unsolicited correspondences from clients indicating that they sought to remain

with the Gitterman Group after the split from ING. While such evidence is anecdotal, it directly

contradicts Plaintiffs’ assertions and weighs in this Court’s consideration as to whether Plaintiffs

have met their heavy burden in establishing that injunctive relief is proper. See P.C. Yonkers, Inc.

v. Celebrations the Party and Seasonal Superstore, LLC., 428 F.3d 504, 508 (3d Cir. 2005) (“The

burden lies with the plaintiff to establish every element in its favor, or the grant of a preliminary

injunction is inappropriate.”).

Nor does this Court believe that the circumstantial evidence relied upon by

Plaintiffs—namely, the withdrawal of many client accounts in a short time frame—necessarily

indicates that they were solicited or encouraged to leave. For example, these clients may have

determined, upon learning of the termination of the Gitterman-ING relationship, that they no longer

wanted to remain with ING. A non-soliciting statement from the Gitterman Group or ING, then,

could have triggered clients to defect, and they are entitled to do so.

In addition to finding that Plaintiffs have not met their burden of proof in demonstrating that

injunctive relief is proper, the Court has questions about the scope of relief sought by Plaintiffs. In

particular, the broad language requested by Plaintiffs restricts Defendants from “taking any action

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designed to effectuate the sale or transfer of assets from any ILIAC account, product or security,

including, but not limited to submitting or assisting others in submitting account withdrawal forms

to ILIAC.” This relief, the Court believes, may be overly broad, as it could prevent Defendants from

taking certain actions on their clients’ behalf, even if Defendants were not involved in soliciting

these clients away from their ING ABPs. 

2. Remaining Factors

In light of the Court’s decision with respect to the likelihood of success on the merits, it will

not consider the remaining factors relevant to issuance of injunctive relief. 

CONCLUSION

For the reasons stated herein, as well as those stated on the record on August 17, 2010,

Plaintiffs’ motion for injunctive reliefis denied, and the Court will dissolve the temporary restraints

entered on August 10, 2010. 

 S/ Dennis M. Cavanaugh 

Dennis M. Cavanaugh, U.S.D.J.

Date: August 18 , 2010

Original: Clerk’s Office

cc: All Counsel of Record

Hon. Joseph A. Dickson, U.S.M.J.

File

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