Federated Mutual Imp. & H. Ins. Co. v. Steinheider

• Citation: 268 F.2d 734
• Decision Date: 22 July 1959
• Docket Number: No. 16176.,16176.
• Parties: FEDERATED MUTUAL IMPLEMENT AND HARDWARE INSURANCE COMPANY, a corporation, Appellant, v. Roy STEINHEIDER, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

268 F.2d 734 (1959)

FEDERATED MUTUAL IMPLEMENT AND HARDWARE INSURANCE COMPANY, a corporation, Appellant, v. Roy STEINHEIDER, Appellee.

No. 16176.

United States Court of Appeals Eighth Circuit.

July 22, 1959.

J. A. C. Kennedy, Jr., Omaha, Neb. (Cassem, Tierney, Adams, Kennedy & Henatsch, Omaha, Neb., were with him on the brief), for appellant.

Yale C. Holland, Omaha, Neb. (Kennedy, Holland, DeLacy & Svoboda and Thomas R. Burke, Omaha, Neb., were with him on the brief), for appellee.

Before SANBORN, VOGEL and VAN OOSTERHOUT, Circuit Judges.

SANBORN, Circuit Judge.

This is an appeal from an order dismissing this action for lack of jurisdiction upon the ground that the plaintiff (appellant) had failed to sustain the burden of proving that "the matter in controversy exceeds the sum or value of $10,000, exclusive of interest and costs." 28 U.S.C. § 1332 as amended. Defendant (appellee) raised that issue by denying, in its answer, the allegation in the amended complaint that the jurisdictional amount was in controversy. The correctness of the District Court's ruling in that regard is the sole question for decision.

The Federated Mutual Implement and Hardware Insurance Company, a Minnesota corporation, has its principal place of business at Owatonna, Minnesota, and is licensed to sell insurance in Nebraska. It brought this action on October 10, 1958, for injunctive relief and for damages against Roy Steinheider, a citizen of Auburn, Nebraska, who formerly had been employed by the Company as an insurance salesman.

The first claim stated in the amended complaint is that the defendant, Steinheider, had been an insurance salesman for the plaintiff Company from September 28, 1948, to August 1, 1958, and had worked a territory, assigned him by the Company, consisting of eleven later reduced to eight counties in Nebraska; that on August 1, 1958, the defendant voluntarily terminated his employment with the Company; that his last contract with it was executed February 26, 1957, and contained the following provisions:

"4. Salesman expressly agrees and states that any and all insurance business at any time or times procured by the Salesman while employed by the Company is and shall be the permanent and exclusive property of the Employer and for the Employer\'s exclusive benefit; that the records, use and control of expirations on all such insurance business shall be and remain the absolute and exclusive property of the Employer.

"5. Salesman agrees that he will not, within a period of two years following the date of the voluntary or involuntary termination of his employment with Employer, either directly or indirectly, by and for himself, or as the agent of another, or through others as his agent:

"(a) Engage in, or in any way be connected with, the fire, casualty and accident and health insurance business in the territory assigned to him or worked by him under this or under any other previous Contracts of Employment, if any, with Employer;

"(b) Divulge the names of Employer\'s policyholders and accounts to any other person, firm or corporation;

"(c) In any way seek to induce, bring about, promote, facilitate or encourage the discontinuance of, or in any way solicit for and in behalf of himself or others, or in any way quote rates, accept, receive, write, bind, broker or transfer any renewal or replacement of any of the insurance business, policies, risks, or accounts, written, issued, covered, obtained (whether through the efforts of the Salesman or not) or carried by the Employer in any territory or territories assigned to the Salesman under this or under any other previous Contracts of Employment, if any, with Employer.";

that since terminating his relationship with the Company the defendant, Steinheider, has violated the above quoted contract provisions by engaging in the insurance business, in which he had agreed not to engage for two years, in the territory formerly assigned him by the Company, and by soliciting renewals and renewing and replacing policies, formerly carried by the Company, in other competing companies, and is continuing such activities; that the Company has annual premiums of approximately $60,000 in defendant's former territory which are jeopardized by his unlawful activities; and that the defendant's violations of his contract with the Company were willful and will be continued to its damage unless enjoined.

The second claim stated in the amended complaint is that "As the result of defendant's actions aforestated plaintiff has suffered and will continue to suffer damages, the exact amount of which cannot at this time be accurately stated but which will aggregate more than $10,000.00."

The Company prayed for an injunction to prevent the defendant from violating the restrictive covenants of his contract of employment and from engaging, during the two-year period specified in the contract, in competition with the Company.

The Company also asked for damages "adequate to compensate plaintiff for its loss of premiums, present and future, and injury to plaintiff's reputation, good will, and name resulting from defendant's act in violation of his contract with plaintiff," plus costs and attorney's fees.

In its amended complaint, the Company alleged diversity of citizenship and that "The amount in controversy in each of the causes of action stated herein exceeds the sum of $10,000.00 exclusive of interest and costs," and that the court has jurisdiction.

The defendant in his answer, filed on November 19, 1958, to the plaintiff's amended complaint, filed November 14, 1958,...