North American Insurance Agency Inc et al v. Bates
Filing
349
ORDER granting in part and denying in part #164 defendants' Motion for Summary Judgment; and denying #167 plaintiffs' Motion for Summary Judgment (as more fully set out in order). Signed by Honorable Vicki Miles-LaGrange on 8/1/2014. (ks)
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
NORTH AMERICAN INSURANCE
AGENCY, INC., d/b/a INSURICA,
ROBERT C. BATES, L.L.C., and
COMMERCIAL INSURANCE
SERVICES, L.L.C.,
Plaintiffs,
vs.
ROBERT C. BATES, COMMERCIAL
INSURANCE BROKERS, L.L.C., A
STATE OF OKLAHOMA
CORPORATION; WALT PETTIT;
KIM BUKER; W. SAM PETTIT;
DEBBIE MORRIS; WALT PETTIT
CPCU, INC.; and COMMERCIAL
BROKERAGE SERVICES, INC.,
Defendants.
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Case No. CIV-12-544-M
ORDER
This case is scheduled for trial on the Court’s August 2014 trial docket.
Before the Court is plaintiffs’ Motion for Summary Judgment, filed June 3, 2014. On July
1, 2014, defendants filed their response, and on July 8, 2014, plaintiffs filed their reply. Also before
the Court is defendants’ Motion for Summary Judgment, filed June 2, 2014. On July 1, 2014,
plaintiffs filed their response, and on July 8, 2014, defendants filed their reply. Based upon the
parties’ submissions, the Court makes its determination.
I.
Background
Defendant Robert C. Bates (“Bates”) formed Robert C. Bates, Inc. in 1977. On November
19, 1999, plaintiff North American Insurance Agency, Inc., d/b/a Insurica (“Insurica”) and Bates,
acting on behalf of Bates Holding, Inc., entered into a Purchase and Sale Agreement (“PSA”),
whereby Insurica became the 100% owner of plaintiff Robert C. Bates, L.L.C. As a part of the PSA,
Robert C. Bates, Inc. was merged into RCB, L.L.C. RCB, L.L.C. was then renamed Robert C.
Bates, L.L.C. The PSA also provided Robert C. Bates, L.L.C. the right to exclusive use of the
Robert C. Bates, L.L.C. name. Further, Bates became a member of Robert C. Bates, L.L.C., a
member of the Board of Managers, and President of Robert C. Bates, L.L.C. and served in such
capacities until his resignation on May 11, 2012. Defendant Debbie Morris (“Morris”) was also a
manager of Robert C. Bates, L.L.C. until she resigned on May 11, 2012.
On June 11, 1997, Bates entered into a written contract titled “Producer Agreement,” with
Robert C. Bates, Inc. All of the other producers also entered into substantially similar producer
agreements with Robert C. Bates, Inc.1 Pursuant to the producer agreements, the producers were
independent contractors. Under the producer agreements, Robert C. Bates, Inc. provided the
following services to the producers:
COMPANY agrees to provide [producer] with office space within the
overall offices of the COMPANY and to further provide the
following services: (a) COMPANY will have [provider] designated
and licensed as a Policy Writing Agent for any and all companies
used by COMPANY in the conduct of its insurance business,
provided, such is not contrary to the agency licensing laws of the
State of Oklahoma.
COMPANY will attempt to secure
representation with any insurance company duly licensed to engage
in the insurance business within the State of Oklahoma that
[producer] needs to have available to him for the sale and placement
of insurance. (b) COMPANY agrees to render to [producer] as soon
as possible at the end of each month a record by customer, company,
and commissions of all insurance written by [producer] during the
month. [Producer] agrees to turn over to COMPANY all checks
received from his customers for the payment of insurance premiums
written through COMPANY immediately upon receipt thereof. (c)
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Insurica’s purchase of Robert C. Bates, L.L.C. included the purchase of all of the producer
agreements.
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COMPANY agrees to provide [producer] with clerical and policy
writing services of the type regularly used by the COMPANY and all
the facilities of any insurance company that has licensed COMPANY
to represent it in any phase of the sale and service of any form of
insurance. (d) COMPANY shall provide a complete accounting
service which includes the preparation of customer invoices; monthly
customer statements; records of production by customer; amount of
commission; and any and all other statistical records that are
regularly provided for COMPANY and necessary for [producer’s]
conduct of business. (e) COMPANY agrees to provide [producer]
access to any and all records maintained by COMPANY that are
pertinent to the customers of [producer] and [producer] is to have
unrestricted use of any office machinery used by COMPANY in the
conduct of its insurance business. (f) COMPANY shall provide all
postage and telephone expenses, including long distance expenses,
necessary in the conduct of [producer’s] business.
Section III of Producer Agreement, an exemplar of which is attached as Exhibit 12 to Defendants’
Motion for Summary Judgment. Additionally, under the producer agreements, the producers agree
“not to engage in any competitive business which may hinder or detract from the COMPANY or its
business activities.” Section IV of Producer Agreement. The producer agreements also provide the
following as to compensation:
As compensation for the services rendered by [producer] to the
COMPANY, the COMPANY shall pay [producer] in the following
manner:
(a)
[producer] agrees to pay COMPANY a fee of
[a certain]% on Personal Lines and [a
certain]% on Commercial Lines of all
commissions earned by [producer] from the
sale and/or renewal of any insurance,
including but not limited to, any form of fire,
casualty, bonds and marine, life, health,
accident, group, or credit insurance.
Section V of Producer Agreement. Regarding policy ownership, the producer agreements provide,
in pertinent part:
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[Producer] will remain the owner of all policy copies and records of
expirations pertaining to his customers; and agrees to forward all
commissions and fees from agent/broker activities to be deposited to
the COMPANY account, for distribution in accordance with this
contract.
Section VI of Producer Agreement. Finally, with respect to termination of the producer agreements,
the agreements provide:
Either party to this Agreement may terminate this Agreement by
giving the other party ninety (90) days written notice of his or its
desire to do so. Said written notice to be postage prepaid and
addressed to the COMPANY and/or [producer] at their last known
address.
Section X of Producer Agreement.
On Friday, May 11, 2012, Bates and Morris resigned. On May 14, 2014, the remaining
producers gave Robert C. Bates, L.L.C. their individual 90-day notices of their termination of their
producer agreements. In a May 14, 2012 letter to Bates, Insurica instructed Bates to vacate his
office immediately and stated that it would not honor the 90-day termination period of his Producer
Agreement and would not provide the administrative services under the Producer Agreement.
Insurica honored the 90-day termination period with all of the other producers. After all the
producers gave their notices of termination, virtually all of the staff and employees who had been
handling the day-to-day business at Robert C. Bates, L.L.C. eventually left, sporadically over the
next few months.
On May 16, 2014, Bates formed defendant Commercial Insurance Brokers, L.L.C. (“CIB”),
an insurance company in Tulsa. CIB did not begin active operations as an insurance company until
the 90-day termination period had ended. Bates and all other producers who resigned from Robert
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C. Bates, L.L.C. have become members of CIB. Further, the staff and employees who left Robert
C. Bates, L.L.C. all began working for CIB after they resigned from Robert C. Bates, L.L.C.
On May 14, 2012, plaintiffs filed the instant action. Plaintiffs allege the following causes
of action: (1) violation of the Lanham Act under 15 U.S.C. § 1125(a), (2) unfair competition under
Oklahoma common law, (3) trademark infringement in violation of Oklahoma common law, (4)
violations of the Oklahoma Deceptive Trade Practices Act, Okla. Stat. tit. 78, § 51, et seq., (5)
violations of the Computer Fraud and Abuse Act, (6) breach of fiduciary duty, (7) breach of contract,
(8) tortious interference with prospective economic advantage, (9) unjust enrichment, and (10) civil
conspiracy. Both plaintiffs and defendants have now moved for summary judgment.
II.
Summary Judgment Standard
“Summary judgment is appropriate if the record shows that there is no genuine issue as to
any material fact and that the moving party is entitled to judgment as a matter of law. The moving
party is entitled to summary judgment where the record taken as a whole could not lead a rational
trier of fact to find for the non-moving party. When applying this standard, [the Court] examines
the record and reasonable inferences drawn therefrom in the light most favorable to the non-moving
party.” 19 Solid Waste Dep’t Mechs. v. City of Albuquerque, 156 F.3d 1068, 1071-72 (10th Cir.
1998) (internal citations and quotations omitted).
“Only disputes over facts that might affect the outcome of the suit under the governing law
will properly preclude the entry of summary judgment. Furthermore, the non-movant has a burden
of doing more than simply showing there is some metaphysical doubt as to the material facts.
Rather, the relevant inquiry is whether the evidence presents a sufficient disagreement to require
submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.”
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Neustrom v. Union Pac. R.R. Co., 156 F.3d 1057, 1066 (10th Cir. 1998) (internal citations and
quotations omitted).
III.
Discussion
A.
Lanham Act Claim
Under the Lanham Act,
Any person who, on or in connection with any goods or services, or
any container for goods, uses in commerce any word, term, name,
symbol, or device, or any combination thereof, or any false
designation of origin, false or misleading description of fact, or false
or misleading representation of fact, which –
(A) is likely to cause confusion, or to cause mistake, or to deceive as
to the affiliation, connection, or association of such person with
another person, or as to the origin, sponsorship, or approval of his or
her goods, services, or commercial activities by another person,
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shall be liable in a civil action by any person who believes that he or
she is or is likely to be damaged by such act.
15 U.S.C. § 1125(a)(1). To prevail in an action for unfair competition under the Lanham Act, a
plaintiff must establish: (1) its mark is protectable, and (2) the defendant’s use of an identical or
similar mark is likely to cause confusion among consumers. See Donchez v. Coors Brewing Co.,
392 F.3d 1211, 1215 (10th Cir. 2004).
Plaintiffs and defendants both move for summary judgment as to plaintiffs’ Lanham Act
claim. Having carefully reviewed the parties’ submissions, the Court first finds that the name Robert
C. Bates, L.L.C. is protectable. Second, the Court finds that the name Commercial Insurance
Brokers, L.L.C. is not an identical or similar mark to the name Robert C. Bates, L.L.C. Thus, any
use of the name Commercial Insurance Brokers, L.L.C. by defendants would not be a violation of
the Lanham Act.
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Plaintiffs, however, assert that certain defendants have used the name Robert C. Bates,
L.L.C. and that such use violates the Lanham Act. Specifically, plaintiffs identify the following
specific instances of use of the name Robert C. Bates, L.L.C.: (1) a certificate of insurance
identifying defendant Walt Pettit as an authorized agent of Robert C. Bates, L.L.C., (2) an email
from an account manager to an insurance company regarding customers of Bates in which the
account manager utilized a signature block for Robert C. Bates, L.L.C., (3) a letter relating to lease
options for Robert C. Bates Insurance, (4) correspondence to customers that Commercial Insurance
Brokers, L.L.C. constituted a “name change” or “simply a change of address,” and (5) outlining and
relying upon the history and quality of Robert C. Bates, L.L.C.’s services in presentation material
to potential CIB customers. As the letter relating to lease options was written by Joe Brandt with
Brandt Commercial Properties, Inc., and not by any of the defendants, the Court finds that this letter
cannot support any finding of a violation of the Lanham Act because it does not involve a use of the
name Robert C. Bates, L.L.C. by any of the defendants.
Plaintiffs bear the burden of proving likelihood of confusion. See Utah Lighthouse Ministry
v. Found. for Apologetic Info. and Research, 527 F.3d 1045, 1055 (10th Cir. 2008).
Though likelihood of confusion is a question of fact, it is amendable
to summary judgment in that [c]ourts retain an important authority to
monitor the outer limits of substantial similarity within which a jury
is permitted to make the factual determination whether there is
likelihood of confusion.
Id. (internal quotations and citations omitted). Further,
[l]ikelihood of confusion is typically evaluated according to a sixfactor test in which the court considers: (1) the degree of similarity
between the marks; (2) the intent of the alleged infringer in using the
mark; (3) evidence of actual confusion; (4) similarity of products and
manner of marketing; (5) the degree of care likely to be exercised by
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purchasers; and (6) the strength or weakness of the marks. No one
factor is dispositive.
Id. (internal citation omitted).
Having carefully reviewed the parties’ submissions, and viewing the evidence in the light
most favorable to plaintiffs and viewing all reasonable inferences in favor of plaintiffs, the Court
finds plaintiffs have not shown that the above-referenced uses of the name Robert C. Bates, L.L.C.
are likely to cause confusion among consumers. Specifically, the Court finds that upon review of
the correspondence to customers and the presentation materials (items 4 and 5), it is clear that CIB
is a new entity separate from Robert C. Bates, L.L.C. For example, in an August 8, 2012 email from
Sandy Ballantyne to Steven Wubbenhorst (APP 106), Ms. Ballantyne specifically states that “Robert
C. Bates, LLC will still be in existence as a part of Insurica Insurance. . . .” Regarding the certificate
of insurance and the email from an account manager utilizing a signature block that included “for
Robert C. Bates, L.L.C.”, the Court, having considered the factors set forth above, finds these two
isolated instances are not sufficient to establish a likelihood of confusion among consumers. The
evidence indicates that the use of the signature block was a simple mistake by the account manager
and that the certificate was amended within a short period of time with the correct agent listed for
Robert C. Bates, L.L.C.
Accordingly, the Court finds that summary judgment should be granted in favor of
defendants as to plaintiffs’ Lanham Act claim.
B.
Unfair Competition Claim
In order to establish an unfair competition claim based upon use of names and/or protected
marks, a plaintiff must show such similarity of names that the ordinary buyer, exercising ordinary
intelligence and observation in business matters, will certainly or probably be deceived. See
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Coalgate Abstract Co. v. Coal County Abstract Co., 67 P.2d 37, 38 (Okla. 1937). Plaintiffs base
their unfair competition claim upon the same facts and arguments as those used in support of their
Lanham Act claim. For the same reasons set forth above in relation to plaintiffs’ Lanham Act claim,
the Court finds that summary judgment should be granted in favor of defendants as to plaintiffs’
unfair competition claim.
C.
Trademark Infringement Claim
The elements of common law trademark or service mark
infringement are similar to those required to prove unfair competition
under § 43(a) of the Lanham Act. Among other things, a plaintiff
must establish a protectable interest in its mark, the defendant’s use
of that mark in commerce, and the likelihood of consumer confusion.
Donchez, 392 F.3d at 1219.
Plaintiffs also base their trademark infringement claim upon the same facts and arguments
as those used in support of their Lanham Act claim. For the same reasons set forth above in relation
to plaintiffs’ Lanham Act claim, the Court finds that summary judgment should be granted in favor
of defendants as to plaintiffs’ trademark infringement claim.
D.
Oklahoma Deceptive Trade Practices Act Claim
Plaintiffs assert that defendants Bates, Walt Pettit, Kim Buker, and CIB violated the
Oklahoma Deceptive Trade Practices Act (“ODTPA”) by: (1) passing off services provided by CIB
as services provided by Robert C. Bates, L.L.C.; (2) knowingly making a false representation as to
the source of such services; and (3) disparaging the services or business of Robert C. Bates, L.L.C.
through false or misleading representations of fact. Defendants assert that plaintiffs have not shown
any act which would constitute a deceptive trade practice under the ODTPA.
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Having carefully reviewed the parties’ submissions, the Court finds there are disputed issues
of material fact regarding the circumstances surrounding the acts upon which plaintiffs base their
ODTPA claim such that summary judgment should not be granted in favor of either plaintiffs or
defendants. Viewing the evidence in the light most favorable to plaintiffs, the Court finds that the
representations made in emails that the change from Robert C. Bates, L.L.C. to CIB was a “name
change” and/or change in office location and/or “new office,” the statements regarding the history
and quality of Robert C. Bates, L.L.C.’s services in presentation materials to potential CIB
customers, and the representations by CIB to carriers that Robert C. Bates, L.L.C./Insurica is “not
capable of the service requirements of customers” and other similar statements2 could be considered
acts that would constitute deceptive trade practices. On the other hand, viewing the evidence in the
light most favorable to defendants, the Court finds that these same acts could be found not to be acts
that would constitute deceptive trade practices.
Accordingly, the Court finds that summary judgment should not be granted as to plaintiffs’
ODTPA claim.
E.
Computer Fraud and Abuse Act Claim
Plaintiffs assert that producers of CIB, including defendants Walt Pettit, W. Sam Pettit, and
Kim Buker, and those obtaining imminent employment at CIB deleted thousands of emails and
documents from Robert C. Bates, L.L.C.’s computers. Plaintiffs further assert that defendants were
not authorized to delete any emails, data, or other information from the computers and that many
of the deletions occurred after the producer defendants had received a litigation hold letter expressly
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Defendants contend the statements made were true and truth is a defense to any allegation
of misrepresentation. Having reviewed the parties’ submissions, the Court finds there is a genuine
issue of material fact as to whether these statements were, in fact, true.
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directing them not to delete any documents or information, including emails, from their business
email accounts and computers. Plaintiffs also assert that defendants’ conduct caused damage to
plaintiffs by impairing the integrity and/or availability of data and information contained in the
Robert C. Bates L.L.C. computer system that was necessary for the company to continue fulfilling
business obligations to its customers. Finally, plaintiffs assert that defendants’ conduct resulted in
a loss to plaintiffs that exceeds $5,000.
Defendants contend that the Computer Fraud and Abuse Act (“CFAA”) does not provide a
civil cause of action under 18 U.S.C. § 1030(a)(5)(A), and, therefore, plaintiffs’ claim fails as a
matter of law. Defendants further contend that plaintiffs have presented no evidence that any of the
defendants accessed and/or deleted any information on their computers which they were not
authorized to access.
Under the CFAA, a person who
(5)(A) knowingly causes the transmission of a program, information,
code, or command, and as a result of such conduct, intentionally
causes damage without authorization, to a protected computer;
violates the CFAA. 18 U.S.C. § 1030(a)(2)(5)(A). Additionally, 18 U.S.C. § 1030(g) provides, in
pertinent part:
Any person who suffers damage or loss by reason of a violation of
this section may maintain a civil action against the violator to obtain
compensatory damages and injunctive relief or other equitable relief.
A civil action for a violation of this section may be brought only if
the conduct involves 1 of the factors set forth in subclauses
[subclause] (I), (II), (III), (IV), or (V) of subsection (c)(4)(A)(i).
18 U.S.C. § 1030(g).3
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Subsection (c)(4)(A)(i) provides:
(c) The punishment for an offense under subsection (a) or (b) of this
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Upon review of § 1030(g), the Court finds that the plain language of the statute allows a
private cause of action for a violation of § 1030(a)(5)(A). Subsection (g) references a violation of
“this section,” which refers to § 1030 as a whole, as subsection (g) does not proscribe any conduct
itself. Further, the Court finds that although § 1030(g) refers to subsection (c)(4)(A), the statute
does not limit civil suits to violations of § 1030(a)(5)(B). If Congress had intended to limit civil
actions in this manner, it could have simply provided that civil actions may only be brought for
violations of subsection (a)(5); instead, the statute provides that a claim brought under any of the
subsections of § 1030 must involve one of the factors listed in the numbered clauses of subsection
section is –
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(4)(A) except as provided in subparagraphs (E) and (F), a fine
under this title, imprisonment for not more than 5 years, or
both, in the case of –
(i) an offense under subsection (a)(5)(B), which does
not occur after a conviction for another offense under this
section, if the offense caused (or, in the case of an attempted
offense, would, if completed, have caused) –
(I) loss to 1 or more persons during any 1-year period
(and, for purposes of an investigation, prosecution, or
other proceeding brought by the United States only,
loss resulting from a related course of conduct
affecting 1 or more other protected computers)
aggregating at least $5,000 in value;
(II) the modification or impairment, or potential
modification or impairment, of the medical
examination, diagnosis, treatment, or care of 1 or
more individuals;
(III) physical injury to any person;
(IV) a threat to public health or safety;
(V) damage affecting a computer used by or for an
entity of the United States Government in furtherance
of the administration of justice, national defense, or
national security; . . . .
18 U.S.C. § 1030(c)(4)(A)(i).
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(c)(4)(A). Further, numerous courts have found that the private cause of action under subsection
(g) is not limited to violations of § 1030(a)(5)(B). See, e.g., Fiber Sys. Int’l, Inc. v. Roehrs, 470 F.3d
1150 (5th Cir. 2006); Yonkers, Inc. v. Celebrations The Party And Seasonal Superstore, LLC, 428
F.3d 504 (3d Cir. 2005); Theofel v. Farey-Jones, 359 F.3d 1066 (9th Cir. 2004).
Additionally, having carefully reviewed the parties’ submissions, the Court finds there are
disputed issues of material fact as to whether defendants accessed and/or deleted any information
on their computers which they were not authorized to delete such that summary judgment should
not be granted in favor of either plaintiffs or defendants. Plaintiffs have presented evidence that
defendants deleted emails from Robert C. Bates, L.L.C.’s computers which they were not authorized
to delete and/or after they were advised of the litigation hold; defendants have presented evidence
that no defendant deleted emails from Robert C. Bates, L.L.C.’s computers which they were not
authorized to delete and/or after they were advised of the litigation hold.
Accordingly, the Court finds that summary judgment should not be granted as to plaintiffs’
CFAA claim.
F.
Breach of Fiduciary Duty Claim
Plaintiffs have alleged a breach of fiduciary duty claim against both defendant Bates and
defendant Morris. In Oklahoma, in order to recover on a claim for breach of fiduciary duty, a
plaintiff must establish: (1) a fiduciary relationship existed between the plaintiff and the defendant
that created a fiduciary duty that the defendant owed to the plaintiff; (2) the defendant breached the
fiduciary duty to the plaintiff; and (3) the breach of the fiduciary duty was the direct cause of
damages to plaintiff. See OUJI-Civil – Instr. No. 26.1.
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Defendants contend that Bates did not violate any fiduciary duty owed to Robert C. Bates,
L.L.C.4 Plaintiffs, on the other hand, contend that Bates did violate his fiduciary duty and that the
evidence presented is sufficient to support an award of summary judgment in favor of plaintiffs.
Having carefully reviewed the parties’ submissions, the Court finds there is a genuine issue of
material fact as to whether Bates violated the fiduciary duty he owed to Robert C. Bates, L.L.C.
Specifically, the Court finds there are disputed facts as to whether Bates contacted the producers
about leaving Robert C. Bates, L.L.C. and forming a new insurance company prior to his
resignation. Accordingly, the Court finds that summary judgment should not be granted as to
plaintiffs’ breach of fiduciary duty claim against defendant Bates.
Defendants also contend that defendant Morris did not violate any fiduciary duty owed to
Robert C. Bates, L.L.C. In their response, plaintiffs offer no argument in response to defendants’
contention. Having carefully reviewed the parties’ submissions, and viewing the evidence in the
light most favorable to plaintiffs, and construing all reasonable inferences in favor of plaintiffs, the
Court finds that plaintiffs have presented no evidence that defendant Morris violated the fiduciary
duty she owed to Robert C. Bates, L.L.C. Specifically, the Court finds that plaintiffs have presented
no evidence that defendant Morris had any prior knowledge of any plans – by Bates or anybody else
– to form CIB and have presented no evidence that defendant Morris did anything to assist Bates
in forming CIB prior to her resignation. Accordingly, the Court finds that summary judgment
should be granted in favor of defendant Morris as to plaintiffs’ breach of fiduciary duty claim.
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Defendants do not dispute that Bates owed a fiduciary duty to Robert C. Bates, L.L.C. prior
to his resignation.
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G.
Breach of Contract Claim
Plaintiffs have alleged a breach of contract claim against defendants Bates, Walt Pettit, W.
Sam Pettit, and Kim Buker. Specifically, plaintiffs allege defendants Bates, Walt Pettit, and W. Sam
Pettit breached Section IV of the Producer Agreement, which provides as follows: “[Producer]
agrees not to engage in any competitive business which may hinder or detract from the COMPANY
or its business activities.” Plaintiffs further allege defendant Kim Buker breached the provision of
her contract with Robert C. Bates, L.L.C. which provided that she would “perform her services and
devote her full time and attention to the performance of her responsibilities to promote the best
interests of the company. And shall at no time become involved with any matters or take any action
which will adversely affect or reflect on Company or in any way adversely affects its insurance
business.”
In order to recover on a breach of contract claim, a plaintiff must prove: (1) formation of a
contract, (2) breach of the contract, and (3) damages as a direct result of the breach. See Digital
Design Grp., Inc. v. Info. Builders, Inc., 24 P.3d 834, 843 (Okla. 2001). Having carefully reviewed
the parties’ submissions, the Court finds there is a genuine issue of material fact as to whether
defendants Bates, Walt Pettit, and W. Sam Pettit breached their producer agreements and as to
whether defendant Kim Buker breached her contract with Robert C. Bates, L.L.C. Accordingly, the
Court finds that summary judgment should not be granted as to plaintiffs’ breach of contract claim.
H.
Tortious Interference with Prospective Economic Advantage Claim
Plaintiffs allege that certain defendants tortiously interfered with plaintiffs’ legitimate
business relationships with their producers, their employees, and their customers. Thus, plaintiffs
are asserting a tortious interference with contractual relations claim with respect to contractual
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relationships with their producers and employees and a tortious interference with prospective
economic advantage claim with respect to relationships with customers. Both plaintiffs and
defendants move for summary judgment as to these claims.
Under Oklahoma law, a tortious interference with contractual relations claim requires a
plaintiff to prove that: (1) the plaintiff had a business or contractual right with which there was
interference; (2) the interference was malicious and wrongful, and that such interference was neither
justified, privileged, nor excusable; and (3) damage was proximately sustained as a result of the
complained of interference. See Green Bay Packaging, Inc. v. Preferred Packaging, Inc., 932 P.2d
1091, 1096 (Okla. 1996). Having carefully reviewed the parties’ submissions, the Court finds with
respect to plaintiffs’ contractual relationships with their producers, there is a genuine issue of
material fact as to whether there was tortious interference by Bates. Specifically, the Court finds
that there are disputed facts as to whether Bates, prior to his resignation, spoke with the other
producers about leaving Robert C. Bates, L.L.C. and had them execute a letter regarding their intent
to disassociate with Robert C. Bates, L.L.C. With respect to plaintiffs’ contractual relationships
with their employees, the Court finds there is a genuine issue of material fact as to whether there was
interference by the named defendants. While plaintiffs have submitted less evidence to support a
finding of interference in relation to their employees, the Court finds, viewing the evidence in the
light most favorable to plaintiffs and construing all reasonable inferences in favor of plaintiffs, that
plaintiffs have submitted sufficient evidence to create a genuine issue as to whether there was
tortious interference. Accordingly, the Court finds that summary judgment should not be granted
as to plaintiffs’ tortious interference with contractual relations claims regarding their producers and
employees.
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Under Oklahoma law, a tortious interference with prospective economic advantage claim
requires a plaintiff to prove: (1) the existence of a valid business relation or expectancy, (2)
knowledge of the relationship or expectancy on the part of the interferer, (3) an intentional
interference inducing or causing a breach or termination of the relationship or expectancy, and (4)
resultant damage to the party whose relationship has been disrupted. See Gonzalez v. Sessom, 137
P.3d 1245, 1249 (Okla. Civ. App. 2006). Having carefully reviewed the parties’ submissions, and
viewing the evidence in the light most favorable to plaintiffs, and construing all reasonable
inferences in favor of plaintiffs, the Court finds that plaintiffs have not produced sufficient evidence
to create a genuine issue of material fact as to whether plaintiffs had a valid business relation or
expectancy with the customers. While the parties dispute who “owned” the commissions from the
insurance policies, the evidence is not disputed as to whom the customers belonged. The producer
agreements, as well as the deposition testimony of plaintiffs, all clearly show that the customers
belonged to the producers. Because the customers were the producers’ customers, the Court finds
that plaintiffs cannot establish the first element of their tortious interference with prospective
economic advantage claim. Accordingly, the Court finds that summary judgment should be granted
in favor of defendants as to plaintiffs’ tortious interference with prospective economic advantage
claim regarding the customers.
I.
Unjust Enrichment Claim
Defendants contend that plaintiffs’ unjust enrichment claim is barred by the statute of
limitations. Specifically, defendants contend that because plaintiffs’ unjust enrichment claim is
premised on the PSA and because the PSA expired by its terms no later than January 21, 2006, any
claim premised upon the PSA must have been asserted no later than January 21, 2011. Plaintiffs
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contend that their claim is not barred by the statute of limitations. Specifically, plaintiffs assert that
the discovery rule applies in this case and the statute of limitations was tolled until such time as a
reasonable person under the circumstances of the case would have discovered the injury and the
resulting claim. Plaintiffs further assert that the harm that serves the basis for plaintiffs’ unjust
enrichment claim – receipt of producer commissions – did not occur until August 10, 2012 and
continued thereafter. Having carefully reviewed the parties’ submissions, the Court finds that it is
unclear at this stage of the proceedings when, exactly, plaintiffs discovered the harm that serves as
the basis for plaintiffs’ unjust enrichment claim. Therefore, the Court finds that defendants are not
entitled to judgment as to plaintiffs’ unjust enrichment claim based upon the statute of limitations
at this time.
Under Oklahoma law, “before a party may recover unjust enrichment, there must be an
enrichment to another coupled with a resulting injustice.” Teel v. Pub. Serv. Co. of Okla., 767 P.2d
391, 398 (Okla. 1985) (superseded by statute on other grounds). Both plaintiffs and defendants have
moved for summary judgment as to plaintiffs’ unjust enrichment claim. Because there are numerous
disputed issues of fact regarding the circumstances surrounding the producers leaving Robert C.
Bates, L.L.C. and forming CIB and regarding the circumstances involved in the purchase of Robert
C. Bates, L.L.C. by Insurica, and specifically what Insurica believed it was purchasing, the Court
finds that summary judgment as to plaintiffs’ equitable unjust enrichment claim is inappropriate at
this time.
Finally, defendants contend that plaintiffs are estopped from asserting an unjust enrichment
claim. Specifically, defendants assert, without citing any statutory or case law, that plaintiffs waived
any unjust enrichment claim by continuing to deposit the commissions into the producers’ accounts.
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Having carefully reviewed the parties’ submissions, the Court finds defendants have not set forth
any basis for finding estoppel in this case. Accordingly, the Court finds that plaintiffs are not
estopped from asserting their unjust enrichment claim.
J.
Civil Conspiracy Claim
Actionable civil conspiracy is a combination by two or more persons
to accomplish an unlawful purpose or to accomplish a lawful purpose
by unlawful means. The essential elements are: (1) two or more
persons; (2) an object to be accomplished; (3) a meeting of minds on
the object or course of action; (4) one or more unlawful, overt acts;
and (5) damages as the proximate result.
Schovanec v. Archdiocese of Okla. City, 188 P.3d 158, 175 (Okla. 2008) (internal quotations and
citations omitted).
Defendants contend that plaintiffs cannot establish the first three elements of a civil
conspiracy claim. Specifically, defendants contend that the evidence establishes that there was no
discussion or communication among them concerning any specific goal aimed at causing any injury
to plaintiffs and certainly no pre-resignation agreement among them to establish a competing
agency. Having carefully reviewed the parties’ submissions, and viewing the evidence in the light
most favorable to plaintiffs, and construing all reasonable inferences in favor of plaintiffs, the Court
finds that plaintiffs, although barely, have submitted sufficient evidence to create a genuine issue
of material fact as to whether defendants conspired to establish a competing insurance agency.
Plaintiffs have presented evidence that Bates spoke with the other producers some time prior to his
resignation about leaving Robert C. Bates, L.L.C. and starting their own insurance agency.
Accordingly, the Court finds that summary judgment should not be granted as to plaintiffs’ civil
conspiracy claim.
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IV.
Conclusion
For the reasons set forth above, the Court:
(A)
DENIES plaintiffs’ Motion for Summary Judgment [docket no. 167], and
(B)
GRANTS IN PART and DENIES IN PART defendants’ Motion for Summary
Judgment [docket no. 164] as follows:
(1)
The Court GRANTS defendants’ Motion for Summary Judgment as to
plaintiffs’ Lanham Act claim, unfair competition claim, trademark
infringement claim, breach of fiduciary duty claim against defendant Debbie
Morris, and tortious interference with prospective economic advantage claim
regarding the customers, and
(2)
The Court DENIES defendants’ Motion for Summary Judgment as to
plaintiffs’ Oklahoma Deceptive Trade Practices Act claim, Computer Fraud
and Abuse Act claim, breach of fiduciary duty claim against defendant Bates,
breach of contract claim, tortious interference with contractual relations
claims regarding plaintiffs’ producers and employees, unjust enrichment
claim, and civil conspiracy claim.
IT IS SO ORDERED this 1st day of August, 2014.
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