389 F.3d 475 (5th Cir. 2004), 03-60801, Robinson v. Guarantee Trust Life Ins. Co.

Docket Nº:03-60801.
Citation:389 F.3d 475
Party Name:Mike ROBINSON, Mark Yoder, Jerry King, Herbert Jones, James Smith, Lee Scott Herron, Keith Fletcher, Diana Smith, Darryl Hassan and Ted Dupin, Plaintiffs-Appellants, v. GUARANTEE TRUST LIFE INSURANCE COMPANY; Doe Defendants A-Z, Defendants-Appellees.
Case Date:October 27, 2004
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

Page 475

389 F.3d 475 (5th Cir. 2004)

Mike ROBINSON, Mark Yoder, Jerry King, Herbert Jones, James Smith, Lee Scott Herron, Keith Fletcher, Diana Smith, Darryl Hassan and Ted Dupin, Plaintiffs-Appellants,


GUARANTEE TRUST LIFE INSURANCE COMPANY; Doe Defendants A-Z, Defendants-Appellees.

No. 03-60801.

United States Court of Appeals, Fifth Circuit

October 27, 2004

Page 476

Michael S. Allred (argued), Kathleen Hughes Eiler, The Allred Law Firm, William

Page 477

David Ross, Ross Law Firm, Jackson, MS, for Plaintiffs-Appellants.

Jeffrey S. Dilley (argued), Henke-Bufkin, Lyon, MS, for Defendants-Appellees.

Appeal from United States District Court for the Northern District of Mississippi.

Before SMITH, WIENER and PICKERING, Circuit Judges.

PICKERING, Circuit Judge:


Plaintiffs were selling agents for Commonwealth National Life Insurance Company ("Commonwealth") when Commonwealth entered into an Assumption Reinsurance Agreement (the "Reinsurance Agreement") with Guarantee Trust Life Insurance Company ("GTL") on January 1, 1996. Under the Reinsurance Agreement, GTL assumed all of Commonwealth's medicare supplement policies in Mississippi and Commonwealth's obligation to pay continuing commissions on existing policies to the qualifying selling agents. At the time the Reinsurance Agreement was executed, the Appellants were plaintiffs in a state court suit in Mississippi against Commonwealth for alleged improper practices in replacing policies in an effort to cut them out of commissions. This litigation was settled in October 1997, and memorialized in a confidential settlement agreement. GTL was not a party to that litigation or settlement; likewise, Commonwealth is not a party to this litigation. Plaintiffs exempted from the settlement with Commonwealth any claims they might have against GTL or Allen Stevens, a GTL agent and former Commonwealth agent.

GTL contends that it continued to pay commissions due plaintiffs under the commission scheme that was in force at Commonwealth pursuant to a schedule supplied by Commonwealth. Plaintiffs disagreed and commenced this litigation in the Circuit Court for the Second Judicial District of Bolivar County, Mississippi, on September 29, 2000, by each filing a multi-count complaint asserting at least eighteen causes of action including entitlement to an accounting, torts arising out of contract, breach of contract, wilful breach of contract, breach of covenants of good faith and fair dealing, slander of business and commercial disparagement, conversion or civil theft, tortuous or fraudulent conspiracy, common law fraud, fraud of concealment, intentional infliction of emotional distress, twisting, tortuous interference with contractual relations, tortuous interference with prospective business advantage, misappropriation of trade secrets, violation of Mississippi's consumer protection laws/unfair and deceptive trade practices, violation of the Mississippi Uniform Trade Secrets Act and negligence.

GTL removed all of the state court cases to the district court where a joint scheduling order was entered on February 9, 2001. The district court formally consolidated the ten cases for trial on February 26, 2002. On February 28, 2002, GTL moved for summary judgment, which was granted on August 28, 2002. Plaintiffs filed a Motion for Reconsideration under Rule 59(e), Federal Rules of Civil Procedure, which was denied on August 15, 2003. This appeal followed.

Each of the plaintiffs was appointed as a selling agent for Commonwealth at different times, from the late 1980's to the early 1990's. Commonwealth offered a range of insurance products, including medicare supplement policies, all of which these agents were authorized to sell. The agents derived their commissions from

Page 478

premiums paid on policies they sold which remained in force. They also derived some commissions as overrides on policies sold by subagents operating under each of them.

At some point in the early to mid-1990's, Commonwealth appointed Allen Stevens as a selling agent and provided him a list of all of its medicare supplement policyholders with the express purpose of canceling the existing policies and converting them to new standardized medicare supplement policies. Stevens and his subagents were then receiving the commissions and overrides on the new policies to the exclusion of the agents who had sold the original (replaced) policies. This resulted in the state court litigation against Commonwealth by many of its agents, including at least nine of the ten here, which settled in October 1997. 1

The district court found that only Paragraph 4.07 of the Reinsurance Agreement addressed the commission issue. After reviewing the Reinsurance Agreement and the evidence adduced in support of and in opposition to summary judgment, the district court concluded that "There is no evidence that GTL was obligated to pay plaintiffs commissions on inactive or replaced Commonwealth policies or on replacement policies. Further, there is no evidence that GTL was contractually restricted from offering replacement coverage to its insureds."

The district court found that subsequent to the Reinsurance Agreement, Stevens was also appointed a selling agent for GTL, and that he was encouraged to continue to contact Commonwealth policyholders in an effort to replace those policies with newer GTL...

To continue reading