‹ Back to Senior Living

Legal Updates

The purpose of this web page is to provide information from the court record to facilitate fact checking statements about the recently filed lawsuit by AssuredPartners (“AP”) against Carl Swan and Alex Whipple, and AP’s Motion for Temporary Restraining Order against Mr. Swan, Mr. Whipple, Bruce Denson, Jr., and Cobbs Allen Capital, LLC d/b/a CAC Specialty. Below we have organized by party public filings made since the lawsuit was initiated. CAC invites you to review these filings and the parties’ positions, fact check what you’re hearing about the lawsuit and the actions of Mr. Swan, Mr. Whipple, Mr. Denson, and CAC, and then reach your own conclusions. Below CAC addresses some of the most frequent questions:

New Developments in the Case (1/18/22)

Q. Can Carl Swan and Shannon Holt solicit business from AP clients?

Yes. In an Order dated December 30, 2022, Judge McShane of the United States District Court for the District of Oregon found that the AssuredPartners (AP) Restrictive Covenant Agreements (RCA) with Carl Swan and Shannon Holt were unenforceable. The practical impact of this Order is that there is no limitation on Swan and Holt to solicit, do business with or service former, current or prospective AP clients.

Q. I understand that AP filed a motion for reconsideration of the Judge’s Order. Does this change anything?

No. Swan and Holt abided by their AP RCAs until the Court heard and agreed with the arguments that their AP RCAs were unenforceable. Despite the fact that AP has filed a motion for reconsideration of the Judge’s Order, the Order will remain in full force and effect until either the Court reconsiders its order and reaches another decision or an appeal court reverses the order. There is no timetable for the Court’s decision on the motion for reconsideration and any appeal would not be decided for more than a year from now. The fact that AP has asked for reconsideration suggests only that AP is unhappy with the Order and its inability to enforce restrictions on Swan and Holt. The AP motion for reconsideration has no legal consequences on the ability of Swan and Holt to compete now against AP in the market and that will not change with the filing of a motion. And AP correctly recognized in their motion that motions for reconsideration are “generally disfavored.”

Q. What motions did Carl Swan and Shannon Holt file?

A. Swan and Holt filed motions for partial summary judgement asking the Court to find that the restrictive covenants in their AP agreements contained a void and unenforceable non-competition provision under Oregon law.

Q. What did the Court find?

A. The Court found the AP restrictive covenants too broad in scope to qualify as permissible non-solicitation agreements under Oregon law: “Because section 3 of Swan’s and Holt’s agreement is an unenforceable noncompetition agreement, both Defendants’ Motions for Partial Summary Judgment are GRANTED.” Order and Opinion at 1-2.

Q. Why did the Court find the AP agreements were unenforceable under OR law?

A. The Court focused on two separate issues. First, the Court found that AP failed to provide adequate written notice that Swan and Holt would have to sign noncompetition agreements, which made the restrictive covenants in their AP agreements voidable agreements under Oregon law. Order and Opinion at 9, 12. Second, the Court found that the employees had properly voided their restrictive covenants: “Because Swan took affirmative steps to void section 3 of the RCA, the provision is unenforceable,” Order and Opinion at 11, and, “AP cannot foreclose Holt’s ability to void the agreement by simultaneously terminating Holt and seeking to enforce her RCA.” Order and Opinion at 14.

Q. What is the practical impact of the Court’s Order?

A. There is no limitation on Swan and Holt to solicit, do business with or service former, current or prospective AP clients.

Q. In a separate motion, CAC Specialty and Bruce Denson moved to dismiss the Complaint filed against them by Assured Partners. How did the Court rule on the Motion to Dismiss?

A. The Court granted the Motion to Dismiss finding: “The Court is unwilling to equate hiring Whipple and Swan—after AP unilaterally terminated them—with acquiring or using AP's trade secrets. Because the Complaint contains no factual allegations of misappropriation by Denson or Cobbs Allen, the Motion to Dismiss these claims is granted ...” Opinion and Order at 6.

Q. Did the Court find any support for AP’s allegations that CAC Specialty or Bruce Denson had acted in an inappropriate fashion in hiring former AP employees?

A. No. The Court concluded “The Complaint is void of any allegations demonstrating misconduct by Denson or Cobbs Allen.” Order and Opinion at 10. The Court also found that “merely hiring a competitor's employee does not constitute misappropriation of a trade secret.” Opinion and Order at 7.

Q. Is there someone at CAC I can contact if I have additional questions?

A. Please contact John Tanner, CAC Chief Legal Officer, at john.tanner@cacspecialty.com.

Questions and Answers

Q. What is the status of the Motion for Temporary Restraining Order filed by AP on June 3, 2022?

A. The Judge denied AP’s motion for TRO on June 9. After receiving hundreds of pages of briefs, exhibits and sworn statements and hearing argument from counsel at a hearing on June 8, the Judge denied the TRO finding that AP “has not met its burden of showing a likelihood of success on the merits.”

Q. Did the Judge provide more explanation for his decision?

A. Yes. On June 17, 2022 Judge McShane issued a 12 page Order and Opinion explaining his decision to deny the TRO requested by Assured Partners. The Order and Opinion states that “[g]enerally speaking, AP’s claims … each require some evidence of wrongdoing by Defendants,” but found that “[t]he evidence, however, does not support AP’s allegations.” (p. 5)

Q. What did the Order and Opinion find with respect to Assured’s allegations against Mr. Swan?

A.The Opinion and Order found: “AP’s evidence falls short of demonstrating that Swan breached his [restrictive covenants] by accessing confidential information and using it to solicit clients and employees. At the outset, it is unclear whether Swan did in fact access confidential information. … AP further does not demonstrate that Swan improperly used the information to violate his Confidentiality and Non-Solicitation [restrictive covenants]. AP believes Swan is involved in the solicitation of AP clients through his close relationship with Whipple, … but AP’s contentions are entirely speculative at this point.” (p. 7) And: “AP’s misappropriation claim fails for the same reasons as its breach of contract claim. AP has not demonstrated that Swan actually accessed trade secret information after his termination.” (p. 9)

Q. What did the Order and Opinion find with respect to Assured’s allegations against Mr. Whipple?

A. The Opinion and Order found: “That some AP clients have recently left AP for [CAC] with Whipple as their broker, by itself, does not establish wrongdoing by Whipple. AP’s trade secret misappropriation claim against Whipple therefore fails.” (p.10)

Q. What did the Order and Opinion find with respect to Assured’s allegations against Mr. Swan and Mr. Whipple related to AP’s claims against Scott Reese?

A. The Opinion and Order found “AP merely relies on the close relationship between Reese, Swan, and Whipple to support its allegations without providing any actual evidence showing Swan and Whipple’s involvement in Reese’s side business. AP’s breach of contract claim against Swan based on his alleged self-dealing prior to his termination therefore fails.” (pp. 5-6) And: “AP merely speculates that Swan and Whipple were engaged in self-dealing with Reese.” (p. 8)

Q. What did the Order and Opinion find with respect to Assured’s allegations against CAC and Mr. Denson?

A. The Opinion and Order found “AP cannot demonstrate that Swan and Whipple acquired any trade secrets. Further, even if Swan and Whipple had acquired AP’s trade secrets, nothing suggests that Denson or [CAC] assisted them in doing so or later misused AP’s trade secrets. The evidence in support of the claims against Denson and [CAC] is virtually nonexistent. … Swan and Whipple’s subsequent employment with [CAC] does not on its own establish that [CAC] had access to or misused AP’s trade secrets.” (pp. 10-11)

Q. Does this end the lawsuit?

A. No. The lawsuit will proceed in the normal course.

Q. AP makes serious allegations that Mr. Whipple and Mr. Swan stole “hundreds of thousands of dollars” from AP by diverting “captive” clients to Scott Reese and “pocketing” the proceeds. Is this accurate?

A. Soon after the lawsuit was filed, Mr. Reese filed a sworn declaration attesting: “[t]he Amended Verified Complaint (the “AVC”) filed in this matter [by AP] alleges that I shared or split consulting fees from my consulting business related to captives … with my colleagues Carl Swan and Alex Whipple. This is untrue. I did not pay Swan or Whipple any portion of the consulting fees related to those customers.” (Reese Decl. 3). Mr. Swan and Mr. Whipple have also filed declarations swearing under oath that they did not receive a dime from Mr. Reese’s captive consulting agreements. (Swan Decl. 13; Whipple Decl. 13).

Q. Can Alex Whipple solicit clients and employees of AP?

A. Yes. Mr. Whipple has submitted a sworn declaration that he did not sign an employment agreement with post-employment restrictive covenants when he rejoined AP in 2017 and that he has no agreement with AP that restricts him from soliciting. (Whipple Decl. 4.) AP acknowledges this in its Second Amended Complaint “Whipple’s [previous] non-solicitation and non-interference provisions … expired on April 16, 2018…” (AP Second Amended Complaint 51.)

Q. Did Mr. Swan or Mr. Whipple bring any AP confidential information with them to CAC as alleged by AP?

A. CAC President Bruce Denson filed a sworn declaration that neither Mr. Whipple nor Mr. Swan disclosed to CAC or discussed with CAC any confidential information relating to AP’s customers or customer financial information, AP’s financial information, or any other topic that might be considered confidential or proprietary, nor did CAC ask or encourage them to do so. (Denson Decl. ⁋ 5.) Mr. Swan and Mr. Whipple also submitted sworn declarations that they knew to not take AP files or confidential company documents after being fired and have been careful not to do so. (Swan Decl. 15; Whipple Decl. 16.)

Q. Have Mr. Swan and Mr. Whipple violated their agreements with AP?

A. Mr. Swan and Mr. Whipple categorically deny that they have violated any contractual or other legal obligations that they owe to AP. Mr. Whipple submitted sworn testimony that he has no AP post-employment restrictive covenants. (Whipple Decl. 4.) According to their Answer in the lawsuit, they have stated: “AP makes these allegations despite having zero evidence that Whipple and Swan received a penny from the captive clients; they did not. AP fired Whipple and Swan “for cause” without interviewing them or asking a single question about the alleged captive scheme or whether they received money from the transactions.” (Carl Swan’s Answer and Affirmative Defenses to Plaintiff’s Amended Complaint and Counterclaims p.2). “Given that neither Whipple nor Swan received a penny from the alleged scheme, it makes no sense that the men would divert clients away from AP (where they would earn commissions) to [Mr.] Reese, where they would earn nothing. But AP never bothered to find out before firing them and filing a lawsuit riddled with speculation and untruths.” (Alex Whipple’s Answer and Affirmative Defenses to Plaintiff’s Amended Complaint and Counterclaims p.2). Finally, Mr. Swan and Mr. Whipple have stated in sworn declarations they knew to not take AP files or confidential company documents after being fired and have been careful not to do so. (Swan Decl. 15; Whipple Decl. 16.)

Q. A May 25, 2022 article in the publication Business Insurance claims “On May 18, the court granted [AP] a preliminary injunction calling for the defendants to turn over all documents, material and data relating to AP’s business, and refraining from using or disclosing confidential information to any third party, among other orders.” Is this accurate as to Defendants Swan, Whipple, Denson, and CAC?

A. No. The Stipulated Preliminary Injunction referenced was agreed to by AP and Scott Reese, Susan Reese, and S&S Investments Management, LLC only; Carl Swan and Alex Whipple did not agree to the Stipulated Preliminary Injunction and are not enjoined from the actions referred to in the Business Insurance article. And Mr. Denson and CAC were not added as defendants to the lawsuit until June 3, after the Business Insurance article came out.