FIRST BENEFITS INC et al v. AMALGAMATED LIFE INSURANCE COMPANY

Filing 57

ORDER GRANTING in part and DENYING in part 49 Amended Motion for Summary Judgment. Ordered by U.S. District Judge MARC THOMAS TREADWELL on 12/8/2014. (tlh)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
MACON DIVISION
FIRST BENEFITS, INC. and UNION
SERVICES OF AMERICA, LLC,
Plaintiffs,
v.
AMALGAMATED LIFE INSURANCE
COMPANY,
Defendant.

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CIVIL ACTION NO. 5:13-CV-37 (MTT)

ORDER
Before the Court is Defendant Amalgamated Life Insurance Company’s
(“ALICO”) amended motion for summary judgment. (Doc. 49). Plaintiffs First Benefits,
Inc. (“First Benefits”) and Union Services of America, LLC (“Union Services”) assert
various claims arising out of an alleged partnership between ALICO and the Plaintiffs.
After oral argument on ALICO’s original motion for summary judgment (Doc. 33), the
Court ordered ALICO to amend its motion to address whether the terms of the alleged
partnership agreement have been sufficiently shown so that the agreement is capable
of enforcement (Doc. 47). For the following reasons, the amended motion for summary
judgment is GRANTED in part and DENIED in part.
I. ALICO’S OBJECTIONS
A.

Failure to Disclose/Supplement Under Rule 26
1.

Damages

ALICO objects to the Plaintiffs’ evidence on their theory and computation of
damages. Rule 26 requires parties to make certain initial disclosures without awaiting a

discovery request, including “a computation of each category of damages claimed,” and
to supplement their disclosures if “in some material respect the disclosure or response
is incomplete or incorrect, and if the additional or corrective information has not
otherwise been made known to the other parties during the discovery process or in
writing.” Fed. R. Civ. P. 26(a)(1)(A)(iii), (e)(1)(A). Pursuant to Fed. R. Civ. P. 37(c)(1),
“[i]f a party fails to provide information or identify a witness as required by Rule 26(a) or
(e), the party is not allowed to use that information or witness to supply evidence on a
motion, at a hearing, or at a trial, unless the failure was substantially justified or is
harmless.” However, “[i]n addition to or instead of this sanction, the court, on motion
and after giving an opportunity to be heard: (A) may order payment of the reasonable
expenses, including attorney's fees, caused by the failure; (B) may inform the jury of the
party's failure; and (C) may impose other appropriate sanctions … .” Fed. R. Civ. P.
37(c)(1)(A)-(C).
Because of the Plaintiffs’ claim for accounting, ALICO’s objection is largely
moot.1 Nonetheless, it is clear the Plaintiffs failed to provide a computation of their lost
profits theory of damages.2 Because the Plaintiffs have not responded to ALICO’s
objection and thus have provided no explanation, the Court cannot say their failure to
disclose this information was substantially justified. Further, due to the fact discovery

1
See infra Part III.B.iv and note 2.

2

Their Rule 26(a)(1)(A)(iii) disclosure states:
Plaintiffs assert that Defendant owes commissions, profits, bonuses, accounts
and other property of Plaintiffs’ which Defendant converted to its own use and is
not entitled. Damages will be in an amount to be determined at trial. Plaintiffs
also seek [their] costs, expenses, and attorneys’ fees for pursuit of this action,
which will be calculated at the close of the action or trial.

(Doc. 43-3 at 5). This disclosure arguably contemplates that an accounting would be necessary
to determine damages.  
-2-

closed in February and it seems the Plaintiffs had not fully formulated their theory of
damages until their latest response brief,3 which was filed on September 11, 2014, the
Court cannot say the failure was harmless.
The Court could decline to consider the Plaintiffs’ evidence on damages at all.
Fed. R. Civ. P. 37(c)(1). However, the Court does not believe the exclusion sanction is
appropriate in this case due to the fact that there has been a failure to conduct
meaningful discovery on both sides.4 At the pretrial conference, the Court will
determine the appropriate sanction, most likely an instruction to the jury.
2.

Affidavit of Josh Spivak

ALICO objects to Josh Spivak’s affidavit because Spivak, who is associated with
Benefit Associates,5 was not named in the Plaintiffs’ initial disclosures. See Fed. R. Civ.
P. 26(a)(1)(A)(i) (requiring the Plaintiffs to disclose the name and contact information of
“each individual likely to have discoverable information … that [they] may use to support
[their] claims or defenses”). The Plaintiffs contend their failure to disclose was harmless
because it does not surprise or prejudice ALICO. While it is true that Benefit Associates
has been mentioned throughout this litigation, there are only two references to Spivak
that the Parties have pointed to: (1) an interrogatory response where he and several
other individuals are listed, and (2) a topic noticed for ALICO’s Rule 30(b)(6) deposition

3
Even at oral argument, Plaintiffs’ counsel could not precisely articulate what damages they
were seeking.
4

ALICO elected to convene no depositions and then moved for summary judgment primarily on
the basis that there is a lack of evidence to support the Plaintiffs’ claims. Not surprisingly, the
Plaintiffs responded with affidavits that are largely unrebutted due to the lack of depositions.

5

Spivak was apparently the CEO and President of Benefit Associates. As discussed below, the
Plaintiffs contend ALICO shut them out of the partnership and allowed Benefit Associates to
service certain accounts the Plaintiffs brought to the partnership.
-3-

where he is erroneously referred to as John Spivak. (Docs. 32-1 at 8; 43-6 at 6). This
is hardly adequate notice to ALICO that Spivak might have discoverable information the
Plaintiffs intend to rely on to support their claims. Though ALICO did not conduct much
discovery, the Court cannot fault it for failing to depose someone it did not know the
Plaintiffs would rely on to support their case. Therefore, exclusion is an appropriate
sanction. See Fed. R. Civ. P. 37(c)(1). The Plaintiffs are prohibited from relying on
testimony from Spivak.
B.

Roscoe Douglas’s Affidavits

The Plaintiffs submitted two affidavits of Roscoe Douglas, who is the Plaintiffs’
sole owner. ALICO first objects to Exhibit B to Douglas’s first affidavit because it is an
incomplete string of emails. ALICO attaches the complete string of emails to its notice
of objection but also notes that even the “complete” string of emails produced to it
during discovery is missing the top portion. The Plaintiffs explain the top portion of the
email was redacted because it was forwarded to counsel and contained privileged
information. Yet, the Plaintiffs did not provide a privilege log as ALICO requested. See
Fed. R. Civ. P. 26(b)(5)(A) (explaining party claiming privilege must expressly make the
claim and “describe the nature of the documents … not produced or disclosed” to
“enable other parties to assess the claim”). ALICO’s contention that the email chain is
incomplete is not a proper basis for exclusion. Rather, ALICO may introduce other
parts “that in fairness ought to be considered at the same time.” Fed. R. Evid. 106.
ALICO did this by filing the rest of the email chain produced to it. Though the Plaintiffs
should have complied with Rule 26(b)(5)’s requirements in redacting the top portion of
the email, ALICO has not asked the Court to assess their claim of privilege.

-4-

ALICO also objects to two statements in Douglas’s first affidavit as inadmissible
hearsay: (1) “I was informed that hiring Benefit Associates to enroll the account was a
business decision”; and (2) “At this meeting I reminded Amalgamated that First Benefits
and USA had brought Boston Mutual’s account to Amalgamated; helped facilitate the
partnership between Amalgamated, Boston Mutual and USA/First Benefits; and had
continued to share the profits on all enrollments per the partnership agreement.”
(Doc. 36-1, ¶ 20). The affidavit makes it clear that representatives of ALICO made the
first statement to Douglas. Thus, it is an admission of a party-opponent and therefore
not hearsay. Fed. R. Evid. 801(d)(2). As to the second statement, it is not hearsay if
not considered for the truth of the matter asserted, i.e., that the Plaintiffs actually did the
things in the statement. Fed. R. Evid. 801(c).
Finally, ALICO objects to several statements in both Douglas’s first affidavit (Doc.
36-1, ¶¶ 6-12, 15, 16, 18, 20-22, 25) and supplemental affidavit (Doc. 51-2, ¶¶ 4-16) as
being conclusory. For the majority of these statements, the Court disagrees. Some of
the statements ALICO cites, such as those referring to the Parties as “partners” or
saying the October 22, 2004 letter “solidified the partnership,” could be deemed
conclusory in isolation. However, the statements must be read in the context of the
affidavit as a whole. The fact that Douglas calls the Parties “partners” or says they split
“profits” is certainly not enough to create a genuine issue of fact on whether there was a
partnership. But these statements, when read in conjunction with the other details
provided in both affidavits, do not make the affidavits conclusory or inappropriate to
consider on summary judgment.6

6
ALICO also objects to the portions of Douglas’s supplemental affidavit where he relies on two
exhibits for the proposition that a certain number of enrollments took place at certain times and
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ALICO’s objection is sustained with regard to the statement in Douglas’s first
affidavit: “Based on my experience with these accounts, the loss resulting to First
Benefits and [Union Services] is approximately $700,000.” (Doc. 36-1, ¶ 25). Douglas
provides no detail regarding how he calculated that amount, nor does he say the
accounts on which it is based.
C.

Plaintiffs’ Additional Material Facts7

After responding to each of ALICO’s material facts, the Plaintiffs included
additional material facts to which ALICO has objected. ALICO’s objections can be
grouped into the following categories: (1) objecting to the Plaintiffs’ citing the amended
complaint in support of a fact because the amended complaint is not evidence; (2)
objecting that a fact is not “material to the issues raised on summary judgment”; (3)
objecting that the evidence used to support certain facts contradicts the Plaintiffs’ prior
interrogatory responses; (4) objecting that the evidence used to support certain facts
was not previously disclosed in the Plaintiffs’ prior interrogatory responses; and (5)
objecting that the fact is not supported by the record citation.
As to the first category of objections, the Court agrees the amended complaint is
not evidence, but the Plaintiffs never solely cite the amended complaint for any of their
material facts. As to the second category of objections, the Court will not rely on any

that the Parties split the profits. While the exhibits do not show that the Parties actually split any
profits, they do support that certain enrollments took place and show the dollar amount of
premiums. One is a memo from Douglas to John Mason dated October 19, 2005, summarizing
premiums written at four locations. (Doc. 51-2 at 8-10). The other is an email from Mark Lane
at Union Services to John Mason dated June 22, 2006, summarizing enrollments at four
locations. (Doc. 51-2 at 11-15l).

7

Because the Plaintiffs’ responses to ALICO’s statement of material facts do not have any
bearing on the outcome of the motion, the Court does not separately discuss ALICO’s
objections to them.
-6-

fact that is not “material” in order to determine whether summary judgment should be
granted. Further, some of the facts to which ALICO objects contain background
information that, while not material to a dispositive issue, nonetheless provides helpful
context. As to the third category of objections, the contradictions ALICO points to are
not material. While a party may not create a genuine issue of fact on summary
judgment by submitting an affidavit that contradicts a prior sworn statement, none of the
contradictions ALICO points to falls into that category.8 As to the fourth category of
objections, the Court will not exclude details of the partnership agreement not previously
disclosed in interrogatory responses for the reasons discussed above in conjunction
with the Plaintiffs’ damages evidence.9 However, the Court will determine whether a
lesser sanction is appropriate at the pretrial conference. As to the fifth category of
objections, the Court will not rely on either ALICO or the Plaintiffs’ statements of facts
without confirming there is record support for them.

8
The additional details Douglas provides in his affidavits about the partnership do not directly
contradict any of the interrogatory responses. The only direct contradiction is where Douglas
states in his first affidavit that the Parties agreed to split profits on Boston Mutual products
66 2/3% and 33 1/3%, whereas the Plaintiffs’ interrogatory responses say profits from Boston
Mutual products were split 60% and 40%. (Docs. 32-1 at 5; 32-2 at 7; 36-1, ¶ 9). However, the
difference in percentage is not material and is more properly impeachment material.

9

ALICO focuses on how the only “change” to the terms of the October 22, 2004 letter (which the
Plaintiffs contend forms the basis of the partnership between the Parties) Union Services
discloses in its interrogatory response is that “Plaintiffs would retain ownership of previously
enrolled Union accounts.” (Doc. 32-2 at 6). Thus, ALICO contends the terms of the alleged
partnership agreement are limited to the October 22 letter plus the one change disclosed in
Union Services’ response. In addition to asking Union Services to describe any “changes” in
the October 22 letter, ALICO also asked each Plaintiff to “[d]escribe the terms of the
partnership.” (Docs. 32-1 at 5; 32-2 at 7). Both responses begin with: “In addition to the facts
and information contained in the Complaint as amended … .” Id. Though these interrogatory
responses may have been unartfully drafted, the Court will not sanction the Plaintiffs for coming
forward with “new” information regarding the terms of the partnership agreement if the
information is alleged in the amended complaint, which the interrogatory responses
incorporated.

-7-

II. BACKGROUND
First Benefits and Union Services are suing ALICO for breach of partnership
agreement, breach of fiduciary duty, misappropriation of business opportunity of the
partnership, breach of private duty, accounting, constructive trust and breach, attorneys’
fees, and punitive damages.10 ALICO provides life, accident, disability, stop loss, and
voluntary insurance products. (Doc. 50-1 at 12:10-12). First Benefits and Union
Services sell insurance products to employees. (Doc. 36-1, ¶ 3). It is clear from the
record that the Parties had some sort of business relationship, but the nature and terms
of that relationship are heavily disputed.11
In 2004, John Mason, a representative of ALICO, contacted Mark Lane and
Roscoe Douglas and invited them to meet at ALICO’s home office and discuss ALICO’s
insurance products. (Docs. 8, ¶ 8; 24, ¶ 8). At the time, Douglas and Lane each owned
50% of Union Services and served as officers of Union Services. Douglas was the sole
owner and officer of First Benefits. Douglas is now the sole owner and officer of both
Union Services and First Benefits. After this meeting, Mason sent Douglas and Lane a
letter dated October 22, 2004, confirming an agreement reached between the Parties
(“October 22 letter”). (Doc. 8-1). ALICO contends this letter was confirmation of a
limited agreement between ALICO and Union Services regarding upcoming insurance
enrollments in Florida. The Plaintiffs agree the letter describes logistics for three joint
enrollment visits with UNITE HERE local unions in Florida, but they also contend the

10
The Plaintiffs have conceded summary judgment should be granted on their fraud and
conversion claims. Therefore, ALICO’s motion is GRANTED as to those claims.
11

ALICO disputes it had any sort of business relationship with First Benefits and maintains the
only business relationship it had was with Plaintiff Union Services.
-8-

October 22 letter was the basis of a partnership between the Parties. Neither side
contends the letter itself is a written partnership agreement.
According to the Plaintiffs, after the 2004 meeting with Mason, the Parties had
“multiple conversations” and decided to form a partnership. (Doc. 36-1, ¶ 9).12 While it
is unclear exactly when and where these conversations took place, Douglas does
describe the basic terms of the partnership the Parties allegedly agreed to. The
Plaintiffs and ALICO would work together to conduct insurance enrollments for
employees represented by unions at specific locations (“accounts”)—either former
clients of one of the Parties or other clients the Parties decided would be subject to the
agreement.13 (Docs. 36-1, ¶¶ 8-9; 51-2, ¶¶ 4-6). The Parties sold both ALICO
insurance products and Boston Mutual insurance products. (Doc. 36-1, ¶ 9). However,
the majority of products sold were Boston Mutual. (Doc. 51-2, ¶ 16).
The Plaintiffs’ role was to “provide introductions into its accounts, service the
accounts, provide sales expertise, conduct enrollments, and obtain authorizations from
employees to set up payroll deductions for products that were sold.” (Doc. 36-1, ¶ 10).
Though the Plaintiffs appear to claim in their statement of additional material facts that
the Parties shared the expenses of enrollment (Doc. 51-3, ¶ 72), Douglas makes it clear
that the Plaintiffs paid the enrollment expenses. (Doc. 36-1, ¶ 9). ALICO’s role was to

12
The precise onset of the alleged partnership is unclear. In Douglas’s first affidavit, he initially
describes the October 22 letter as “solidifying the partnership” but then states two paragraphs
later that he and Lane proposed forming a partnership with ALICO after the enrollments
described in the October 22 letter were performed. (Doc. 36-1, ¶¶ 6, 8). Nonetheless,
Douglas’s position that the Parties agreed to form a partnership in 2004, whether before or after
the October 22 letter enrollments, is virtually uncontroverted due to the minimal discovery done
on both sides.
13

Prior to the submission of Douglas’s supplemental affidavit, it was not at all clear that the
“partnership accounts” included anything more than accounts that were former clients of the
Plaintiffs.
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“set[ ] up one-on-one enrollment sessions with companies/unions found by either
partner, set[ ] up payroll deductions, and process[ ] the information received at
enrollments.” (Doc. 36-1, ¶ 10). Each had authority to “manage” the enrollment staff,
but it was “primarily the duty of” the Plaintiffs. (Doc. 36-1, ¶ 7).
According to the Plaintiffs, the Parties agreed to split “profits” on both ALICO and
Boston Mutual products sold, with “profits” apparently meaning a certain percentage of
the premiums written for the products sold at the agreed upon locations. (Doc. 51-2,
¶ 6). The Parties would split the profits on Boston Mutual products with either 60% or
66 2/3% going to the Plaintiffs and either 40% or 33 1/3% going to ALICO.14 It is not
clear how the Parties would split profits on ALICO products sold. The Plaintiffs say they
were to be split the same way as in the October 22 letter, but all the letter says
regarding compensation for ALICO products sold is: “We have mutually agreed to the
following enrollment compensation schedule with [Union Services]. ALICO’s Worker
Life (Decreasing Term) 20% level first year and all renewal years (2-10) commission.”
(Doc. 8-1 at 4). Besides ALICO’s objections discussed above, there is nothing in the
record contradicting Douglas’s sworn statement that the Parties did in fact agree to
those terms.
The Plaintiffs claim that ALICO breached their agreement by not setting up oneon-one meetings. (Doc. 36-1, ¶ 18). The Plaintiffs further claim ALICO began allowing
another enrollment company, Benefit Associates, or in-house enrollment agents to
service the accounts the Plaintiffs brought to the partnership. (Docs. 36-1, ¶¶ 19, 21,

14
As discussed above, there is a contradiction between the Plaintiffs’ interrogatory responses
and Douglas’s affidavit regarding the percentage. See supra note 8.
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22; 51-2, ¶¶ 14, 15). On June 3, 2011, the Plaintiffs sent ALICO a letter purporting to
terminate the partnership. (Doc. 36-1, ¶ 26).15
III. DISCUSSION
A.

Summary Judgment Standard

A court must grant summary judgment “if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(a). “A factual dispute is genuine only if ‘a reasonable
jury could return a verdict for the nonmoving party.’” Info. Sys. & Networks Corp. v. City
of Atlanta, 281 F.3d 1220, 1224 (11th Cir. 2002) (quoting United States v. Four Parcels
of Real Prop., 941 F.2d 1428, 1437 (11th Cir. 1991)). The movant may support its
assertion that a fact is undisputed by “citing to particular parts of materials in the record,
including depositions, documents, electronically stored information, affidavits or
declarations, stipulations (including those made for purposes of the motion only),
admissions, interrogatory answers, or other materials.” Fed. R. Civ. P. 56(c)(1)(A). But
if the nonmoving party bears the burden of proof at trial, “the moving party is not
required to ‘support its motion with affidavits or other similar material negating the
opponent's claim.’” Four Parcels of Real Prop., 941 F.2d at 1437 (quoting Celotex
Corp. v. Cartrett, 477 U.S. 317, 323 (1986)). The moving party “simply may show …
that there is an absence of evidence to support the nonmoving party’s case.” Id. at
1438 (internal quotation marks and citation omitted).
“Assuming the moving party has met its burden, the non-movant must then show
a genuine dispute regarding any issue for which it will bear the burden of proof at trial.”

15
Though it does not affect the outcome of the motion, the Court notes that the Plaintiffs purport
to attach a copy of this letter as “Exhibit D” to Douglas’s first affidavit but failed to attach it.
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Info. Sys. & Networks Corp., 281 F.3d at 1224-25 (citing Celotex Corp., 477 U.S. at
324). The non-moving party must rebut the movant’s showing “by producing … relevant
and admissible evidence beyond the pleadings.” Josendis v. Wall to Wall Residence
Repairs, Inc., 662 F.3d 1292, 1315 (11th Cir. 2011). The non-moving party does not
satisfy its burden “if the rebuttal evidence ‘is merely colorable, or is not significantly
probative’ of a disputed fact.” Id. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 249-50 (1986)). However, “[c]redibility determinations, the weighing of the
evidence, and the drawing of legitimate inferences from the facts are jury functions, not
those of a judge. … The evidence of the non-movant is to be believed, and all justifiable
inferences are to be drawn in his favor.” Anderson, 477 U.S. at 255.
B.

ALICO’s Amended Motion for Summary Judgment16
1.

Terms of the Contract

ALICO argues that the terms of the Parties’ agreement are too indefinite to be
enforced, which was the concern expressed by the Court in the August 7, 2014 Order
directing ALICO to amend its motion for summary judgment. (Doc. 47). One problem
with this argument is ALICO ignores evidence the Plaintiffs submitted in response to its
initial motion for summary judgment—specifically Douglas’s first affidavit. Additionally,
the Plaintiffs have submitted a supplemental affidavit in response to ALICO’s amended
motion that provides further detail about the alleged partnership agreement. Douglas
describes specific accounts the Parties agreed would be subject to their business
arrangement, the amount of premiums written and the money split on enrollments for
specific years for some of these accounts, and the roles each Party was supposed to

16
ALICO reiterates its position in both its original and amended motions for summary judgment
that all of the Plaintiffs’ claims are barred by the statute of limitations. The Court previously
rejected this argument in denying ALICO’s motion to dismiss. (Doc. 23).
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perform regarding the accounts. (Doc. 51-2). Therefore, the Court cannot find as a
matter of law that the contract between the Parties is too indefinite to be enforced.
2.

Existence of a Partnership

ALICO next contends, as it did in its original motion, that even if the terms of the
Parties’ contract are definite enough to be enforced, there is no evidence the Parties
formed a partnership.17 Under Georgia law, “[a] partnership is an association of two or
more persons to carry on as co-owners a business for profit.” O.C.G.A. § 14-8-6(a). “A
partnership results from a contract, which may be either express or implied.” Durkin v.
Platz, 920 F. Supp. 2d 1316, 1334 (N.D. Ga. 2013) (citing Clark v. Schwartz, 210 Ga.
App. 678, 436 S.E.2d 759, 760 (1993)). In the absence of an express partnership
agreement, “[f]actors that indicate the existence of a partnership include a common
enterprise, the sharing of risk, the sharing of expenses, the sharing of profits and
losses, a joint right of control over the business, and a joint ownership of capital.” Jerry
Dickerson Presents, Inc. v. Concert S. Chastain Promotions, 260 Ga. App. 316, 323,
579 S.E.2d 761, 768 (2003) (footnote omitted). Additionally,
The receipt by a person of a share of the profits of a business is
prima-facie evidence that he is a partner in the business; provided,
however, that no such inference shall be drawn if profits were received in
payment of the following, even though the amount of payment varies with
the profits of the business: … (B) Wages, salary, or other compensation to
an employee or independent contractor.

17
Rather than respond to ALICO’s argument for a second time, the Plaintiffs refer to their
response to ALICO’s original motion. For reasons not apparent to the Court, the Plaintiffs felt
the need to attach all documents submitted in response to ALICO’s first motion as a 162-page
exhibit even though these documents are already on the docket.
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O.C.G.A. § 14-8-7(4). Because the Parties agree there is not an express
partnership agreement,18 the Court must determine if the Plaintiffs have created
a genuine issue of fact on the existence of a partnership based on the above
factors.19
At the very least, the Plaintiffs have created a genuine issue of fact on whether
the Parties split profits from their business venture, which under Georgia law is
prima-facie evidence of the existence of a partnership. Though ALICO contends the
“profit” split should really be characterized as compensation to an independent
contractor, there is some evidence this was not the case. Namely, the Parties
purportedly agreed to split certain revenue gained not only from the sale of ALICO’s
products, but also from the sale of Boston Mutual products. According to the Plaintiffs,
prior to their arrangement with ALICO they kept 100% of the money they earned selling
Boston Mutual products. This certainly cuts against finding that the 60% or 66 2/3%

18
Based on the wording of Douglas’s affidavits, the Plaintiffs’ position might more aptly be
characterized as conceding there was no express written agreement but contending there was
an express oral agreement. See Ghee v. Kimsey, 179 Ga. App. 446, 446-47, 346 S.E.2d 888,
889 (1986). However, the Plaintiffs did not make this argument.

19

Contrary to ALICO’s argument, the Court does not interpret Georgia law to require that each
factor above be present to find an implied partnership. First, O.C.G.A. § 14-8-7(4) explicitly
states that sharing profits, one of the above factors, is prima-facie evidence of a partnership.
Second, Georgia cases describe these characteristics as factors which indicate the existence of
a partnership—not as essential elements that must be present for a partnership to exist. See,
e.g., Jerry Dickerson Presents, Inc., 260 Ga. App. at 323, 579 S.E.2d at 768; Aaron Rents, Inc.
v. Fourteenth St. Venture, L.P., 243 Ga. App. 746, 747, 533 S.E.2d 759, 761 (2000); see also
Hayes v. Irwin, 541 F. Supp. 397, 415 (N.D. Ga. 1982) (“Given the variety of relationships that
have been deemed to be partnerships, it is difficult, if not impossible, to formulate an allencompassing definition of partnership.”). In Larson v. Tandy Corp., the case ALICO cites for
the proposition that all the above factors must be present, the Georgia Court of Appeals stated,
“While it is true that a partnership exists where there is a joint enterprise, a joint risk, a joint
sharing of expenses, and a joint interest in the profits and losses, a partnership is not created
solely by an agreement to share profits.” 187 Ga. App. 893, 894, 371 S.E.2d 663, 665 (1988)
(citation omitted). (Obviously, this statement is modified by O.C.G.A. § 14-8-7(4).) The court
did not say there must be evidence of a joint enterprise, joint risk, joint sharing of expenses, and
a joint interest in profits and losses for a partnership to exist.
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“profit” was in fact compensation paid to them as independent contractors. Additionally,
the Plaintiffs did not merely service accounts ALICO directed them to, which would point
in favor of them being independent contractors. Instead, they serviced accounts which
all Parties agreed would be subject to their business arrangement. Even if the revenue
split was a commission paid by Boston Mutual based on the Parties’ selling its products,
it could still be a profit from the Parties’ business arrangement.
3.

Evidence Contradicting the Existence of a Partnership

ALICO argues that not only is there no evidence the Parties formed a
partnership, but the evidence contradicts this notion. Specifically, ALICO points to: the
October 22 letter’s reference to “commissions,” emails from Douglas that ALICO
contends show the Parties had a typical enrollment provider-insurance provider
relationship as opposed to a partnership, and an agent agreement Douglas executed
agreeing to serve as an independent contractor to procure applications for ALICO
products. Even if the evidence suggests the Parties’ business relationship was
something other than a partnership, it does not change the fact that there is a genuine
dispute on the existence of a partnership. Thus, summary judgment is not appropriate
on this basis.
4.

Ability to Prove Damages

ALICO initially contended there was no evidence of damages, to which the
Plaintiffs responded by submitting Douglas’s supplemental affidavit listing (1) the
amount of premiums written on four different accounts for the sale of Boston Mutual
products during specific enrollment times; (2) the amount of money split from those
enrollments; and (3) the length of time the Plaintiffs were prevented from enrolling those

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accounts as previously agreed. (Doc. 51-2, ¶¶ 8-13). Based on the numbers in
Douglas’s supplemental affidavit, the Plaintiffs contend there is sufficient evidence from
which a jury could calculate damages at least as to those four accounts. In addition to
its objection to the new evidence not previously disclosed, ALICO contends the lost
profit damages are speculative as to causation and amount because there is no
evidence of what revenues (if any) were earned on these accounts during the years for
which the Plaintiffs are seeking damages. ALICO also maintains that, at most, the
evidence shows an agreement to split gross profits because there is no evidence of
what the enrollment expenses were in order to calculate the actual profit, if any.
What neither side specifically addresses is the effect of the Plaintiffs’ request for
an accounting on their ability to prove the amount of damages for their other claims.
The most the Plaintiffs say is that their different claims have different measures of
damages: “[W]ith regard to claims for accounting and constructive trust, Plaintiffs are
entitled to that which they were wrongfully excluded from in the partnership business.”
(Doc. 51 at 8).20 All ALICO says is that it is entitled to summary judgment on the
Plaintiffs’ remedial claims—including the claim for an accounting—because it is entitled
to summary judgment on the Plaintiffs’ substantive claims.
Pursuant to O.C.G.A. § 14-8-22, a partner has the right to a formal accounting of
partnership affairs “[i]f he is wrongfully excluded from the partnership business or
possession of its property by his copartners … [or] [i]f the right exists under Code
Section 14-8-21.” According to section 14-8-21, “[e]very partner must account to the
partnership for any benefit, and hold as trustee for it any profits derived by him without

20
An accounting is more properly described as an equitable remedy rather than a separate
claim.
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the consent of the other partners from any transaction connected with the formation,
conduct, or liquidation of the partnership or from any use by him of its property.”
O.C.G.A. § 14-8-21(a). The Plaintiffs have shown a genuine dispute on both the
existence of a partnership and whether they were wrongfully excluded from the
partnership business.
Recently, the Eleventh Circuit addressed the converse of this situation and held
the district court erred in denying the plaintiff’s request for an accounting on the basis
that the plaintiff had an adequate remedy at law in the form of its breach of contract
action. Zaki Kulaibee Establishment v. McFliker, ___ F.3d ___, 2014 WL 6434857, at
*10 (11th Cir.) (“[W]ithout the foundational information that an accounting would have
provided, Zaki was incapable of quantifying its damages, and was thereby precluded
from obtaining any meaningful relief.”). Applying Florida law, the Eleventh Circuit found
that establishing the existence of a fiduciary relationship between the parties
(consignor-consignee in that case) was sufficient to establish the plaintiff’s right to an
accounting. Id. In the present case, the Plaintiffs have shown a genuine issue on
whether they are entitled to an accounting.
If the Plaintiffs ultimately prove they are entitled to an accounting, the accounting
may show what amounts of premiums, if any, were written for Boston Mutual products
for the partnership accounts. In turn, the results of the accounting may afford a basis
for the fact finder to determine what damages the Plaintiffs would be entitled to.
Whether the fact finder would be able to determine that amount with reasonable
certainty is unclear. However, it is clear summary judgment is not appropriate on the
basis of the Plaintiffs’ inability to prove damages at this point.

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IV. CONCLUSION
ALICO’s amended motion for summary judgment (Doc. 49) is GRANTED in part
and DENIED in part.21 ALICO is only entitled to summary judgment on the Plaintiffs’
fraud and conversion claims. The Court will determine the appropriate sanction for the
Plaintiffs’ failure to disclose certain information in discovery at the pretrial conference.
SO ORDERED, this 8th day of December, 2014.

S/ Marc T. Treadwell
MARC T. TREADWELL, JUDGE
UNITED STATES DISTRICT COURT

21
Because ALICO’s arguments raised in its initial motion are discussed above, ALICO’s initial
motion for summary judgment (Doc. 33) is DENIED.
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