Rahman v. Allstate Insurance Company et al
ORDER AND REASONS granting 99 Motion for Summary Judgment. Signed by Judge Carl J Barbier on 11/14/23. (cg)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
IRSHAD DANIEL RAHMAN, D/B/A
RAHMAN INSURANCE, D/B/A
INSURE FOR LESS, AND D/B/A
COMPANY, ET AL.
ORDER & REASONS
Before the Court is a Motion for Summary Judgment (Rec. Doc. 99) filed by
Defendant, Allstate Insurance Company (“Allstate”). Plaintiff, Irshad Daniel
Rahman, d/b/a Rahman Insurance, d/b/a Insure for Less, and d/b/a Budget Insurance
has filed an opposition (Rec. Doc. 112) to which Allstate replied (Rec. Doc. 120).
Having considered the motion and legal memoranda, the record, and the applicable
law, the Court finds that Defendant, Allstate’s Motion for Summary Judgment (Rec.
Doc. 112) should be GRANTED.
FACTS AND PROCEDURAL BACKGROUND
Plaintiff was an insurance agent operating as an independent contractor with
Allstate until Allstate terminated his Exclusive Agency Agreement (“the EA
Agreement”) on March 25, 2021, effective June 30, 2021. Plaintiff alleged that his
contract was terminated without just cause and that Allstate improperly transferred
Plaintiff’s economic interest in his Allstate book of business to local Allstate agent,
Tim Buckley. Allstate refused to even consider in good faith, Plaintiff claimed, two
objectively qualified potential buyers of Plaintiff’s book of business. The Court
previously dismissed these claims, as well as claims for conversion, tortious
interference with contract, detrimental reliance, and unjust enrichment on October
25, 2022. (Rec. Doc. 53).
After this Court’s order granting a partial dismissal of Plaintiff’s claims, three
counts remained. In Count 1, Plaintiff claims that Allstate breached the EA
Agreement by failing to timely pay Plaintiff’s termination payment. In Counts 3 and
4, Plaintiff claims that Allstate violated the Louisiana Unfair Trade Practices Act
(“LUTPA”) and committed fraud by allegedly misrepresenting to Plaintiff that he
could no longer manage his flood book of business and misrepresenting to Plaintiff’s
customers that he could no longer service their flood and FAIR plan policies. Plaintiff
alleges that because of Allstate’s actions and misrepresentations, he was unable to
retain his flood book and was forced to sell it for far below market value. Allstate has
now moved for summary judgment on these remaining claims.
Summary judgment is appropriate when “the pleadings, the discovery and
disclosure materials on file, and any affidavits show that there is no genuine issue as
to any material fact and that the movant is entitled to judgment as a matter of law.”
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing FED. R. CIV. P. 56); see Little
v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994). When assessing whether a
dispute as to any material fact exists, a court considers “all of the evidence in the
record but refrains from making credibility determinations or weighing the evidence.”
Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398 (5th
Cir. 2008). All reasonable inferences are drawn in favor of the nonmoving party, but
a party cannot defeat summary judgment with conclusory allegations or
unsubstantiated assertions. Little, 37 F.3d at 1075. A court ultimately must be
satisfied that “a reasonable jury could not return a verdict for the nonmoving party.”
Delta, 530 F.3d at 399.
If the dispositive issue is one on which the moving party will bear the burden
of proof at trial, the moving party “must come forward with evidence which would
‘entitle it to a directed verdict if the evidence went uncontroverted at trial.’” Int’l
Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257, 1264-65 (5th Cir. 1991). The nonmoving
party can then defeat the motion by either countering with sufficient evidence of its
own, or “showing that the moving party’s evidence is so sheer that it may not
persuade the reasonable fact-finder to return a verdict in favor of the moving party.”
Id. at 1265.
If the dispositive issue is one on which the nonmoving party will bear the
burden of proof at trial, the moving party may satisfy its burden by merely pointing
out that the evidence in the record is insufficient with respect to an essential element
of the nonmoving party’s claim. See Celotex, 477 U.S. at 325. The burden then shifts
to the nonmoving party, who must, by submitting or referring to evidence, set out
specific facts showing that a genuine issue exists. See id. at 324. The nonmovant may
not rest upon the pleadings but must identify specific facts that establish a genuine
issue for trial. See id. at 325; Little, 37 F.3d at 1075.
COUNT 1: BREACH OF CONTRACT AS TO TERMINATION PAYMENTS
Plaintiff’s first remaining claim is that Allstate breached the EA Agreement by
failing to pay the termination payment owed to him. However, in his opposition to
Allstate’s motion for summary judgment, Plaintiff does not contest that he has
received the termination payments and states that he does not oppose dismissal of
this claim. Therefore, summary judgment is GRANTED as to Count 1.
II. COUNTS 3 AND 4: UNFAIR TRADE PRACTICES AND FRAUD
Plaintiff’s final remaining claims are that Allstate committed fraud and
engaged in unfair trade practices when it allegedly misrepresented to Plaintiff that
he could not manage his flood book of business after his termination and sent written
communications to customers that Plaintiff could no longer service their flood and
FAIR plan policies. The Louisiana Unfair Trade Practices Act (“LUTPA”) prohibits
“[u]nfair methods of competition and unfair or deceptive acts or practices in the
conduct of any trade or commerce.” La. Rev. Stat. § 51:1405(A). It affords a private
right of action to “[a]ny person who suffers any ascertainable loss” as a result of the
unlawful conduct. § 51:1409(A). “To recover, the plaintiff must prove some element of
fraud, misrepresentation, deception or other unethical conduct.” IberiaBank v.
Broussard, 907 F.3d 826, 839 (5th Cir. 2018) (internal quotation marks and citations
omitted). A practice is unfair under LUTPA only when “the practice offends
established public policy and is immoral, unethical, oppressive or unscrupulous.” Id.
(internal quotations omitted); see also Monroe v. McDaniel, 207 So.3d 1172, 1180 (La.
App. 5 Cir. 2016) (“[T]he range of prohibited practices under LUTPA is extremely
narrow and includes ‘only egregious actions involving elements of fraud,
misrepresentation, deception, or other unethical conduct.’” (quoting Cheramie Servs.,
Inc. v. Shell Deepwater Prod., Inc., 35 So. 3d 1053, 1060 (La. 2010))). “What
constitutes an unfair trade practice is determined by the courts on a case-by-case
basis.” IberiaBank, 907 F.3d at 839
As to Plaintiff’s claim that Allstate misrepresented to him that he could no
longer manage his flood book of business following his termination, Allstate argues
that Plaintiff cannot show that Allstate offended established public policy because he
“has not identified a single misrepresentation” made to him. Allstate argues that it
was merely following the policies set forth in the EA manual regarding former agents’
flood books. (Rec. Doc. 99, at 14). The EA Manual lays out three options for a
terminated agent to dispose of his or her flood book of business: a terminated agent
may (1) sell the flood book to another Allstate agent, (2) rewrite the flood customers
directly with the National Flood Insurance Program, or (3) if the agent becomes
employed with another insurance carrier, seek to write the flood customers with a
policy serviced by that new carrier. (EA Manual, Rec. Doc. 99-4, at 11).
Plaintiff does not dispute that he had access to this policy, nor does he assert
that Allstate ever lied to him about his ability to choose between these three options
for his flood book. However, Plaintiff claims that Allstate represented to him that if
he did not pick one of these options within thirty days, a deadline which does not
appear in any of Allstate’s written policies, his flood book would be reassigned to a
new Allstate agent for servicing, forcing him to sell these policies at far below market
value. (Rec. Doc. 21, ¶¶ 42, 45). Plaintiff asserts that “it is undisputed that the written
agreement between Allstate and Mr. Rahman mandates no deadline within which
Mr. Rahman must sell his flood book of business following his termination.” Plaintiff
is correct that neither the flood offboarding checklist nor the EA Manual specifies a
thirty-day timeline before an agent’s flood book is transferred. However, Plaintiff is
incorrect that no deadline exists. The flood offboarding checklist states that
“Customers will be assigned to Ivantage Select Agency upon agency termination if a
[Book of Business] Transfer Form has not been received.” (Rec. Doc, 99-10, at 21).
Therefore, the deadline in Allstate’s documents is the date of termination which took
effect approximately three months after Plaintiff was first notified of his termination.
Plaintiff cannot argue that he was not on notice that his flood book would be
transferred upon his termination unless he selected one of the three options provided
to him in the EA Manual and flood offboarding checklist. Plaintiff has provided no
evidence beyond his own testimony that Allstate told him he would only have thirty
days from his termination date to sell his flood book, and in fact, if Plaintiff was so
instructed, these thirty days would constitute a grace period beyond the deadline
specified in the Allstate documentation provided to him which stated the transfer
would take place upon his termination.
Furthermore, although the Supplement to the EA Agreement does provide that
“unless sold, the agent maintains a commission interest in agency bound Flood
policies produced until the first policy renewal after the agent’s termination date”
this does not provide any sort of guarantee that a terminated agent retains the right
to manage these policies. Allstate cannot simply allow policies to go un-serviced
indefinitely while a terminated agent decides what to do with his or her flood book.
These policies must be transferred in order to properly protect customer interests.
Plaintiff chose to sell his flood book of business rather than transfer or rewrite
these policies, and by doing so, Plaintiff voluntarily gave up his commission interest
in his flood book. Although Plaintiff may be unhappy with his compensation for these
policies, he cannot point to any instances of Allstate or any of its agents lying to him
about his options regarding his flood book. In fact, in the sole exhibit provided by
Plaintiff evidencing a communication between himself and Allstate, the Allstate
representative Doug Caminita provided a screenshot to Plaintiff of the official flood
offboarding checklist. Therefore, the Court cannot find any evidence of fraudulent or
unfair dealings with regards to communications between Plaintiff and Allstate.
As to Plaintiff’s claim that Allstate told customers that Plaintiff could no longer
service their flood and FAIR plan policies, Plaintiff has been unable to produce a
single written communication containing false information sent to Plaintiff’s flood or
FAIR plan customers. Plaintiff attempts to expand the scope of his remaining claims
to include oral as well as written communications by citing paragraph 49(a) of his
Amended Complaint which states that Tim Buckley, Inc. and/or Tim Buckley
“directed oral communications to Plaintiff’s customers encouraging them to change
agents.” (Rec. Doc. 21, at 13). However, the portions of the Amended Complaint
pertaining to claims against Tim Buckley and Tim Buckley, Inc. were explicitly
stricken from the record by this Court on October 19, 2022. (Rec. Doc. 52). Therefore,
Plaintiff’s allegations regarding oral communications are no longer a part of this
lawsuit. Plaintiff might have amended his complaint to raise allegations concerning
oral communications about his flood or FAIR plan books of business. However,
Plaintiff did not do so. Therefore, Plaintiff must rely on his sole example of a written
communication to support this claim: a form email which would be automatically sent
to anyone who tried to contact Plaintiff at his Allstate email address which read
Thank you for choosing Allstate to help with your insurance needs.
Please note, I am no longer with Allstate, but Allstate is still here for
you. Making sure your needs are handled in a timely manner is very
important to me, so please send your request to TIM BUCKLEY, at
A0A6725@ALLSTATE.COM or 1 (504) 464-3533. It is my pleasure
serving you and you will continue to be in good hands with Allstate.
(Rec. Doc. 112-23). There are no falsehoods in this form email. Plaintiff was no longer
active with Allstate, and a customer attempting to reach him through his Allstate
email needed to be informed of that fact. Additionally, Allstate points out that
Plaintiff was informed that Allstate would create an out-of-office reply to be sent
automatically from his email upon his termination, a fact which Mr. Rahman
acknowledged in his deposition. (Rec. Doc. 99-5, at 23); (Rec. Doc. 99-1, at 114).
A viable LUTPA claim requires “egregious actions involving elements of fraud,
misrepresentation, deception, or other unethical conduct.” Monroe, 207 So.3d at 1180.
The Court cannot find that Allstate committed such a violation when all it did was
follow its written policies which had been provided to Plaintiff well in advance of his
termination and correctly informed customers that Mr. Rahman was no longer with
the agency. For the same reasons that the LUTPA claim fails, this Court cannot find
that Allstate committed fraud in its dealings with Plaintiff. Therefore, summary
judgment is GRANTED as to Claims 3 and 4 of Plaintiff’s amended complaint.
IT IS HEREBY ORDERED that Allstate’s Motion for Summary Judgment
(Rec. Doc. 99) is GRANTED.
New Orleans, Louisiana, this 14th day of November, 2023.
CARL J. BARBIER
UNITED STATES DISTRICT JUDGE
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