Clemente v. Allstate Ins. Co.

• Decision Date: 28 December 2022
• Docket Number: 2:22-CV-00056-CCW
• Parties: ROBERTO CLEMENTE, JR., KIMBERLY DSCHUHAN, RYAN NORTON, KAILEE CLEMENTE, THE ROBERTO CLEMENTE JR. FAMILY AGENCY LLC, Plaintiffs, v. ALLSTATE INSURANCE COMPANY, TOMAINO INSURANCE AGENCY, JOHN TOMAINO, Defendants.
• Court: U.S. District Court — Western District of Pennsylvania

ROBERTO CLEMENTE, JR., KIMBERLY DSCHUHAN, RYAN NORTON, KAILEE CLEMENTE, THE ROBERTO CLEMENTE JR. FAMILY AGENCY LLC, Plaintiffs,
v.
ALLSTATE INSURANCE COMPANY, TOMAINO INSURANCE AGENCY, JOHN TOMAINO, Defendants.

No. 2:22-CV-00056-CCW

United States District Court, W.D. Pennsylvania

December 28, 2022

OPINION

CHRISTY CRISWELL WIEGAND UNITED STATES DISTRICT JUDGE

This case arises from the breakdown of the relationship between the Roberto Clemente Jr. Family Agency, LLC (the “Clemente Agency”) and Allstate Insurance Company. Plaintiffs-the agency itself, three of its owners (Roberto Clemente Jr., Kimberly Dschuhan, and Kailee Clemente), and one of its non-owner agents (Ryan Norton)-allege that the breakdown was the result of discrimination. Defendants include not only Allstate, but also the Tomaino Insurance Agency and its owner, John Tomaino (collectively, the “Tomaino Agency”), who were allegedly involved in the events giving rise to Plaintiffs' operative Second Amended Complaint. See ECF No. 36. Presently before the Court are Allstate's and the Tomaino Agency's Motions to Dismiss, ECF Nos. 43 & 49, in which they separately argue under Federal Rule of Civil Procedure 12(b)(6) that Plaintiffs have failed to state a claim for relief. For the reasons that follow, Allstate's Motion will be GRANTED IN PART and DENIED IN PART and the Tomaino Agency's Motion will be

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GRANTED in its entirety. The Court will grant Plaintiffs leave to amend their allegations to address the deficiencies identified by Allstate and the Tomaino Agency.

I. BACKGROUND

The following facts are taken from the Second Amended Complaint, which the Court takes as true for the purpose of ruling on the instant Motions to Dismiss. Although the Second Amended Complaint spans 346 numbered allegations, the Court will address only those allegations necessary to address the arguments raised in Allstate's and the Tomaino Agency's Motions.

Roberto Clemente played eighteen seasons for the Pittsburgh Pirates major league baseball team before dying tragically in a plane crash while on a humanitarian mission to Nicaragua. He was subsequently inducted into the National Baseball Hall of Fame. Roberto Clemente's son, Roberto Clemente Jr., is a licensed insurance agent. ECF No. 36 ¶ 7. Mr. Clemente Jr. is married to Kailee Clemente, who is also a licensed insurance agent, as is her mother, Kimberly Dschuhan (Mr. Clemente Jr.'s mother-in-law). Id. ¶¶ 8, 10. Ryan Norton, Mr. Clemente Jr.'s brother-inlaw, is also a licensed insurance agent. Id. ¶ 9. At all relevant times, Ms. Dschuhan, Mr. Clemente Jr., and Ms. Clemente each had an ownership interest in the Clemente Agency, where Mr. Norton was a non-owner agent. Id. ¶¶ 7-10.

The formation of the Clemente Agency begins with Ms. Dschuhan, who was formerly a successful insurance agent for Nationwide Insurance. Id. ¶ 14. While working as a Nationwide agent, she began exploring the purchase of a “book of business” from an existing agency, which would enable her to own her own agency. See id. ¶¶ 14-16. After a search, Ms. Dschuhan entered negotiations with Daniel Cone, an Allstate agent, resulting in a July 2017 Letter of Intent under which Mr. Cone would sell his book of business to the Clemente Agency. Id. ¶¶ 16, 19-20. The

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sale was contingent on Allstate's approval and the Clemente Agency's formal affiliation with Allstate. Id. ¶ 21.

The approval and affiliation process did not go smoothly. According to Plaintiffs, Justin Young, an Allstate representative, “consistently ‘moved the goal posts' with respect as to [sic] when [t]he [Clemente Agency] could complete its official affiliation with Allstate and open its doors.” Id. ¶ 24. Among the issues was a dispute over whether the Clemente Agency could do business as the “Roberto Clemente Jr. Family Agency, LLC,” because Mr. Clemente Jr. was a “financial backer[]” and not “the person holding the licenses” for the agency. Id. ¶ 25. Despite these issues, Allstate approved the sale and Mr. Cone sold his book of business to the Clemente Agency pursuant to an Asset Purchase Agreement dated May 1, 2018. Id. ¶¶ 16, 34; ECF No. 36-2.

The next month, the Clemente Agency and Allstate formalized their affiliation with an Exclusive Agency Agreement (“EAA”) dated June 1, 2018. ECF No. 36-3. Pursuant to the EAA, Allstate authorized the Clemente Agency to sell its insurance products to cover risks located in Pennsylvania, and the Clemente Agency agreed not to sell any other insurer's products. See generally id. Allstate also agreed to provide signage and materials as it deemed “advisable.” Id. § IV(A). The EAA further provided that the relationship between the Clemente Agency and Allstate was “that of an independent contractor for all purposes” and that employees of the Clemente Agency were not Allstate employees. Id. §§ I(D), III. The EAA could be terminated immediately for cause, or without cause upon ninety days written notice. Id. § XVII(B).

According to Plaintiffs, their experience with Allstate did not improve after the signing of the EAA. For one thing, the name issues continued, and Allstate refused to update its listings and provide signage that reflected the name “Roberto Clemente Jr. Family Agency, LLC.” ECF No.

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36 ¶¶ 28, 45-50. Plaintiffs also allege that other Allstate agencies in the area were jealous of the Clemente Agency's association with “one of the most beloved Black athletes of all time,” which gave the Clemente Agency a competitive advantage with minority customers and thus caused friction with the other agencies. Id. ¶¶ 164-67. In one instance of alleged friction, Plaintiffs claim that the Tomaino Agency “stole[] one of their customers,” by “g[iving] the client a lower quote than the Plaintiffs had first provided.” Id. ¶¶ 82-83. Upon bringing the issue to Allstate's attention, an Allstate representative, Valerie Staudt, reached out to Mr. Tomaino, who “criticiz[ed] the way that Plaintiffs quoted insurance” and told her that Plaintiffs, quote, “should have changed this to this, and changed this to this,” with respect to certain unspecified discounts. Id. ¶ 87. Ms. Staudt then trained Plaintiffs on those unspecified discount practices, which Plaintiffs began to employ. Id. ¶ 101.

The issues between the Clemente Agency and Allstate came to a head on August 21, 2020, when Allstate informed Ms. Dschuhan that it had decided to terminate the EAA. Id. ¶ 114. Allstate told Ms. Dschuhan that the termination was “for fraud,” without “providing any analysis for its decision.” See id. ¶¶ 116-17; see also 36-3 § XVII(B)(3) (Allstate may terminate EAA immediately upon proving written notice for cause including fraud). Earlier that summer, an Allstate fraud investigator had contacted Ms. Dschuhan and Mr. Norton “regarding the practice of applying a widow discount to certain policies” (a practice that the Second Amended Complaint does not further describe). ECF No. 36 ¶ 112. For its part, the Clemente Agency denies committing any fraud, and claims that “[i]f there were any mistakes” it was because they relied on certain representations by Mr. Tomaino and Ms. Staudt, apparently pertaining to widow discounts. Id. ¶ 117. Although the Second Amended Complaint is not entirely clear on this point, it appears that Plaintiffs are referring to what Ms. Staudt communicated to Plaintiffs in response to the

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Tomaino Agency's alleged theft of a Clemente Agency customer-i.e., that Plaintiffs “should have changed this to this, and changed this to this,” with respect to certain unspecified discounts. Id. ¶ 87.

The Clemente Agency had a qualified right to sell its book of business upon termination of the EAA, which it invoked. ECF No. 36-4. Under its arrangement with Allstate, the Clemente Agency had until December 1, 2020 to find a buyer, which had to “meet Allstate's eligibility requirements.” Id. Allstate retained an “absolute right of approval of the buyer.” Id. According to Plaintiffs, they failed to sell the Clemente Agency's book of business by December 1, 2020, because “Allstate . . . interfered with and made this process impossible,” including by providing a pretextual reason for blocking at least one potential sale. ECF No. 36 ¶¶ 127, 129. Plaintiffs further contend that in October 2020, the Tomaino Agency agreed to receive “certain seeded policies owned by [the Clemente Agency],” despite the fact that Plaintiffs still had until December 1, 2020 to sell the Clemente Agency's book of business. Id. ¶ 138.

From there, the Second Amended Complaint moves ahead to August 26, 2021, when Plaintiffs filed a Charge of Discrimination with the Equal Employment Opportunity Commission, asserting that Allstate terminated the EAA and took various other actions against Plaintiffs for discriminatory reasons. See generally ECF No. 36-1. The specifics of Plaintiffs' allegations of discrimination are discussed in detail below, but they rest largely upon Allstate's alleged disparate treatment of Plaintiffs because the Clemente Agency is minority owned (Mr. Clemente Jr. is Afro-Hispanic) and the Clemente Agency's use of the name associated with a famous Afro-Hispanic baseball player, Roberto Clemente. See generally ECF No. 36. The EEOC ultimately did not reach the merits of Plaintiffs' Charge of Discrimination and dismissed it as untimely filed. ECF No. 36-1 at 11.

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Plaintiffs then turned to this Court for redress, filing their original Complaint on January 10, 2022. ECF No. 1. Plaintiffs filed a First Amended Complaint on April 20, 2022, see ECF Nos. 19-20, 29, which Allstate and the Tomaino Agency moved to dismiss, ECF Nos. 32, 34. Instead of opposing the motions, Plaintiffs filed their Second Amended Complaint. ECF No. 36. In the Second Amended Complaint, Plaintiffs assert claims for: (1) a violation of 42 U.S.C. § 1981 (Count I, against all defendants); (2) a violation of Title VII of the Civil Rights Act of 1964 (Count II, against Allstate); (3)...