Rohr v. Allstate Financial Services
Filing
33
MEMORANDUM DECISION and Order-granting 22 Motion for Summary Judgment and Mr. Rohrs Compliantis dismissed. IT IS SO ORDERED. See Order for details. Signed by Judge David Sam on 8/28/12. (jmr)
THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH
CENTRAL DIVISION
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
JOHN C. ROHR,
)
Plaintiff,
Case No.
2:10CV00296 DS
)
vs.
)
MEMORANDUM DECISION
AND ORDER
)
ALLSTATE FINANCIAL SERVICES,
LLC,
)
Defendant.
)
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
I. INTRODUCTION
Beginning in August of 2006, Plaintiff John Rohr began working
with Allstate Financial Services (“Allstate”) in Florida as an
Exclusive
Financial
Specialist
(“EFS”)
selling
and
servicing
Allstate life insurance policies and other financial services
products.
Because he was going through issues in his personal
life, and because he wanted to live near the mountains for skiing
and hiking, and because his wife had a job opportunity in Utah, Mr.
Rohr expressed to Allstate a desire to work as an EFS in Utah.
Mr. Rohr relocated to Utah at his own expense in January of 2008.
On February 4, 2008, after moving to Utah, Mr. Rohr signed the
Allstate
L2000S
Exclusive
Financial
Specialist
Independent
Contractor Agreement (the “Agreement”), which contains the
following integration clause.
“This Agreement is the sole and entire agency agreement between the
Company [Allstate] and you, and it supersedes and
replaces any
prior employment agency, or other agreement between the Company
[Allstate] and you. This Agreement also supersedes any prior oral
statements and representations by the Company [Allstate] to
you....”
Agreement, ¶ I.B., attached to Mem. Supp. as Ex. B.
Mr.
Rohr
failed
to
meet
Allstate’s
minimum
production
requirement during 2008, and elected to resign his position rather
than be terminated by Allstate.
This litigation followed.
Mr. Rohr claims that various oral statements regarding his
potential success and guaranteeing him $100,000 in annual income,
allegedly
made
by
Allstate
employee
Mark
Anderson
before
he
relocated to Utah, constituted an oral agreement in addition to the
parties’ written agreement. The Complaint contains five claims:
(1)breach of contract, (2)breach of the duty of good faith and fair
dealing, (3)promissory estoppel, (4)negligent misrepresentation,
and
(5)fraudulent
inducement/intentional
misrepresentation.
Allstate moves for summary judgment (Doc. #22) under Fed. R. Civ.
P. 56 on all five claims of the Complaint.
II.
SUMMARY JUDGEMENT STANDARD
Under Fed. R. Civ. P. 56, summary judgment is proper only when
the pleadings, affidavits, depositions or admissions establish
there is no genuine issue regarding any material fact and the
moving party is entitled to judgment as a matter of law.
The
burden of establishing the nonexistence of a genuine issue of
2
material fact is on the moving party.1
Catrett, 477 U.S. 317 (1986).
components:
E.g., Celotex Corp. v.
This burden has two distinct
an initial burden of production on the moving party,
which burden when satisfied shifts to the nonmoving party, and an
ultimate burden of persuasion, which always remains on the moving
party.
See 10A C. Wright, A. Miller & M. Kane, Federal Practice
and Procedure § 2727 (2d ed. 1983).
The central 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."
Id.
If the nonmoving party cannot muster sufficient evidence to
make out a triable issue of fact on his claim, a trial would be
useless and the moving party is entitled to summary judgment as a
matter of law.
Celotex, 477 U.S. 242.
III. DISCUSSION
A. Breach of Contract (Claim I); Breach of the Covenant of
Good Faith and Fair Dealing (Claim II).
By failing to contest Allstate’s motion for summary judgment
as to his claims for breach of contract (Claim I) and breach of the
covenant of good faith and fair dealing (Claim II), the Court
agrees with Allstate that Mr. Rohr concedes those claims.
1
Whether a fact is material is determined by looking to
relevant substantive law. Anderson v. Liberty Lobby, Inc., 477
U.S. 242.
3
It is undisputed that the Agreement contains an integration
clause and that the Agreement could only be modified by an express
written document.
Because no such modification of the Agreement
exists, the Agreement is the only contract between Allstate and Mr.
Rohr relating to his appointment as an EFS.
Mr. Rohr admits that
his breach of contract claim is based only on the alleged oral
contract which would modify the terms of the Agreement.
Because
the alleged oral statements were made before Mr. Rohr signed the
Agreement, his breach of contract claim must fail.
Similarly, Mr Rohr’s breach of the covenant of good faith and
fair dealing claim also fails.
The covenant of good faith and fair
dealing cannot be construed to establish new, independent rights or
duties that are inconsistent with express contractual terms. Young
Living Essential Oils, LC v. Marin, 266 P.3d 814 (Utah 2011).
Because there is no enforceable oral agreement, Mr. Rohr’s claim
for breach of the covenant of good faith and fair dealing must
fail.
B. Promissory Estoppel (Claim III), Negligent
Misrepresentation (Claim IV), Fraudulent
Inducement/Intentional Misrepresentation (Claim V).
(1) reasonable reliance
The essence of Mr. Rohr’s material allegations is that
Anderson represented to him that he could easily make $100,000 per
year
working
as
an
ESF
in
Utah,
4
that
there
were
sufficient
referrals to allow him to make $100,0002, and that Anderson would
do everything possible to ensure Rohr’s success after he moved. Mr.
Rohr’s lawsuit is based on Allstate’s purported violation of the
alleged oral agreement arising from Anderson’s representations.
For purposes of the present motion, Allstate does not dispute these
material allegations.
See
Reply, pp 11-18.
As Allstate notes, each of Mr. Rohr’s remaining claims
requires
that
statements.3
he
reasonably
relied
on
Anderson’s
alleged
Based on the undisputed facts presented, the Court
agrees with Allstate that Mr. Rohr’s reliance on Anderson’s alleged
misrepresentations was unreasonable as a matter of law.
Standard,
Inc.
v.
Getty
Oil
Co.,
915
P.2d
1060,
See Gold
1067
(Utah
1996)(courts may hold that reliance was not reasonable as a matter
of law).
2
To facilitate sales of their financial services products,
Allstate assigns EFS’s to work with specific property and casualty
insurance agencies so that EFS’s can cross-sell financial products
to existing customers.
3
To prevail on a claim for promissory estoppel, a plaintiff
must establish, among other elements, that “[t]he plaintiff acted
with prudence and in reasonable reliance on a promise made by
defendant”. Youngblood v. Auto-Owners Ins. Co., 158 P. 3d 1088,
1092
(Utah 2007)(citation omitted). A claim for negligent
misrepresentation, among other things,
“require[s] reasonable
reliance on a misrepresentation of material fact.”
Olsen v.
University of Phoenix, 244 P.3d 388, 390 (Utah App. 2010). And to
prove fraudulent inducement, Mr. Rohr must establish, among other
elements, that he acted reasonably and in ignorance of the falsity
of the alleged representation. Daines v. Vincent, 190 P.3d 1269,
1279 (Utah 2008).
5
The Agreement by express language was the only agreement
between
the
parties.
It
replaced
and
superseded
any
other
agreement that may have existed between the parties. The Agreement
contains no provision that Mr. Rohr would be guaranteed income of
$100,000 per year. Indeed, the Agreement specified that Mr. Rohr’s
sole compensation under the Agreement would be commissions based on
sales.
Mr. Rohr acknowledged that he had read the Agreement and
understood and agreed to its terms and conditions.
Mr. Rohr makes
much of the fact that he did not sign the Agreement until he
arrived in Utah.
But it is un-controverted that the Agreement is
identical to the one he signed when he became an ESF for Allstate
in Florida in 2006.
Therefore, he was aware of the substance of
the contract before he came to Utah.
See Gold Standard, Inc. v.
Getty Oil Co., 915 P.2d 1060, 1068 (Utah 1996)(“a party cannot
reasonably rely upon oral statements by the opposing party in light
of contrary written information”).
Moreover, because Mr. Rohr had worked on commission as an EFS
for Allstate in Florida he was aware that his income in Utah
likewise would be based on the sales he made.
He had to have known
and understood that income based on commissioned sales is subject
to a variety of factors, that it is inherently uncertain, and that
it is anything but guaranteed. Indeed, the Agreement provides that
commissions
may
decrease
or
increase
6
“due
to
the
inherent
uncertainty of business conditions”.
Agreement, ¶ XV, attached to
Mem. Supp. as Ex. B.
Furthermore, Mr. Rohr was given access to representatives for
at least some of the insurance agencies that he would be assigned.
After visiting with representatives from several agencies, he
concluded that their production numbers were “fairly low”.
Dep. 60:7-15; 61:10-11; 63:14-25; 64:23-24.
Yet he failed to
further investigate the production potential of
agencies where he would be working.
Rohr
the Utah County
Although he disputes that he
“did not ultimately know which agents or agencies he would be
assigned”,
information
Opp’n Mem. at 14, there is no viable evidence that such
was
circumstances,
unobtainable.
Mr.
Rohr
was
Based
on
notice
on
to
the
totality
conduct
of
further
investigation regarding Allstate’s alleged misrepresentations as to
commission income potential and agency support. Because he did not
investigate further, his reliance on the alleged misrepresentations
was not reasonable.
See Condor v. A.L. Williams & Assoc., Inc.,
739 P. 2d 634, 638 (Utah App. 1987)(a plaintiff cannot rely on
assertions of fact “where under the circumstances, the facts should
make it apparent to one of his knowledge and intelligence, or he
has discovered something which should serve as a warning that he is
being deceived...” and in such situations, “a plaintiff is required
to make his own investigation”).
7
Based on the forgoing, the Court concludes as a matter of law
that
it
was
not
representations
reasonable
alleged
to
for
the
Mr.
Rohr
effect
to
that
rely
on
the
Allstate
was
specifically promising him $100,000 in annual income.
IV CONCLUSION
For the reasons stated, as well as for those additional
reasons outlined by Allstate in its pleadings, Allstate’s Motion
for Summary Judgment (Doc. #22) is granted and Mr. Rohr’s Compliant
is dismissed.
IT IS SO ORDERED.
DATED this 28th day of August, 2012.
BY THE COURT:
DAVID SAM
SENIOR JUDGE
UNITED STATES DISTRICT COURT
8
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