FIRST FINANCIAL USA, INC. v. Steinger

• Decision Date: 14 June 2000
• Docket Number: No. 4D98-3143.,4D98-3143.
• Citation: 760 So.2d 996
• Parties: FIRST FINANCIAL USA, INC., a Nevada corporation, Appellant, v. Les STEINGER, Appellee.
• Court: Florida District Court of Appeals

760 So.2d 996

FIRST FINANCIAL USA, INC., a Nevada corporation, Appellant, v. Les STEINGER, Appellee.

No. 4D98-3143.

District Court of Appeal of Florida, Fourth District.

June 14, 2000.

Alan P. Dagen of Law Offices of Alan Dagen, P.A., Fort Lauderdale, for appellant.

Kenneth E. Keechl of Brinkley, McNerney, Morgan, Soloman & Tatum, LLP, Fort Lauderdale, for appellee.

TAYLOR, J.

First Financial USA, Inc. ("First Financial") appeals from an order granting appellee Les Steinger's motion for judgment on the pleadings. We reverse the order because the third amended complaint sufficiently stated a cause of action against Steinger individually for fraud in the inducement.

Steinger is the owner and president of Mutual Benefits Corporation ("Mutual"). Mutual purchases and brokers life insurance policies from terminally ill people with qualified insurance policies under a program known in the insurance industry as a "viatical settlement." Under this program, an insured party sells the death benefits of his or her insurance policy to a third party, such as Mutual, at a discount in exchange for an immediate cash settlement. This action arises from an alleged breach of an agreement between Mutual and James A. Hollis & Associates ("Hollis") regarding Hollis' exclusive right to represent Mutual in selling these viatical settlement agreements. Before the lawsuit was filed, Hollis assigned all of its claims, suits, demands, rights, and causes of action against Mutual to First Financial.

First Financial sued Mutual for breach of contract, breach of fiduciary duty, unjust enrichment, quantum meruit, fraud, and tortious interference with a business relationship. It sued Les Steinger individually for fraud in the inducement. The third amended complaint alleges that Mutual contacted Hollis to introduce Hollis to the viatical settlement business. At that time Hollis was operating an insurance business in Orlando. Its principal, James P. Hollis, had significant contacts and experience in the area of sales, marketing, and promotion of insurance-related products. At a meeting held in Fort Lauderdale, Steinger represented to Hollis that Hollis would be Mutual's exclusive sales agent for the entire United States, except California. The parties entered into an agency sales agreement, whereby Hollis was given the exclusive right to solicit and take orders for all Mutual's products (viatical settlements).

The complaint further alleges that Steinger's representation regarding Hollis' exclusive territory was false, because Mutual had previously engaged other agents in Hollis' territory to sell and market viatical settlements and it continued to conduct business with these competing sales agents after executing the agreement with Hollis. According to the complaint, these false representations were knowingly made by Steinger with the intent to induce Hollis to enter into the agreement for Mutual's benefit. Hollis relied upon the false representations of exclusivity in executing the agreement and spent time, effort, and money producing marketing strategies, literature, and sales agreements and recruiting and training its own sales agents to service Mutual's products. As a result of Hollis' sales and marketing activities, Mutual benefitted from an increase in profits and Hollis suffered damages.

Steinger filed a motion for judgment on the pleadings, asserting that the complaint failed to state a cause of action against him in his individual capacity, because it alleged that he committed the wrongful conduct in his capacity as an officer and/or director of the corporation. The trial court, without a hearing, granted the motion and dismissed Steinger, individually, as a defendant.

Judgment on the pleadings may be granted only if, upon admitted facts, the moving party is clearly entitled to judgment as a matter of law. The standards for ruling on a motion for judgment on the pleadings are as follows:

In ruling on a motion for judgment on the pleadings material allegations of the moving party which have been denied are taken as false. Conclusions of law also are not deemed admitted for purposes of the motion. The court must accept

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