Fietz v. Southland Nat. Ins. Co.
| Citation | 484 F.Supp.2d 535 |
| Decision Date | 10 April 2007 |
| Docket Number | Civil Action No. 05-0064. |
| Parties | James Truett FIETZ, Kyle W. Halter, American Prearranged Services, Inc. v. SOUTHLAND NATIONAL INS. CO. |
| Court | U.S. District Court — Western District of Louisiana |
Roger D Phipps, Phipps & Phipps, New Orleans, LA, for James Truett Fietz, Kyle W. Halter, American Prearranged Services, Inc.
Michael H. Pinkerton, Eugene Terk, Francis H. Brown, III, Frilot Partridge et al, New Orleans, LA, for Southland National Ins. Co.
RULING ON MOTIONS IN LIMINE (Rec. Docs. 56 and 60)
Before the court are two motions in limine seeking a determination of the applicable law in this case. In determining the applicable law in this diversity case, the court must apply the conflict of laws analysis of the forum state, i.e., Louisiana. Louisiana uses an issue-by-issue analysis in deciding what state law is applicable to claims.1 Defendant Southland National Insurance Corporation ("Southland") filed a motion arguing that Alabama law should be applied to plaintiffs' claims of detrimental reliance, unjust enrichment, and contract claims, while Texas law should be applied to the defamation claims.2 Plaintiffs filed a memorandum requesting that the court apply Louisiana law to all claims. On January 23, 2007, the district judge referred the motions to the undersigned for disposition.3
Except where indicated, the facts are not substantially in dispute. On January 15, 2003, plaintiff Kyle W. Halter telephoned Southland's President, Dennis Painter.4 Halter was in Lafayette, Louisiana and Painter was in Tuscaloosa, Alabama. Halter advised Painter that he and plaintiff James Truett Fietz were leaving their employment with Mission Life Insurance Company and asked whether Southland was interested in working with them in selling insurance policies to funeral homes. Painter invited Halter to come to Southland's office in Tuscaloosa to discuss the matter further.5
On January 29, 2003, Halter traveled from his home in Louisiana to Tuscaloosa and met with Painter for several hours to discuss a possible partnership between Southland, Halter, and Fietz.6 Plaintiffs contend that during the meeting, Painter offered to provide Halter and Fietz with override commissions on all agents they brought to Southland for as long as the agents wrote Southland policies, regardless of whether Halter and Fietz were still with Southland.7 Painter told Halter that he would call him at a later date because he needed to discuss the "numbers" with the board.8
According to Halter, Painter telephoned him to say that the board was excited about partnering with Halter and Fietz as they had discussed.9 Painter allegedly stated that the percentage of override commissions would be less than what they had originally discussed. Halter, who claims to have been Fietz's agent with authority to accept the deal for Fietz, allegedly replied "We'll accept that."10
On February 10, 2003, Halter, Fietz and two other employees of Mission who wanted to become Southland employees, flew to Tuscaloosa to meet with Painter and the Southland employees.11 During the meeting, the details of the partnership allegedly were discussed.12 In his deposition, Fietz testified that the meeting lasted all day and that 13
On March 20, 2003, Painter sent commission contracts to Halter and Fietz. The three men later had a conference call during which they allegedly discussed the fact that the draft contracts failed to include any reference to Southland's agreement to pay commissions to Halter and Fietz for Southland policies written by agents brought onboard by Halter and Fietz.14 Plaintiffs contend that Painter explained that the commission contracts were simply the standard contracts executed by Southland personnel, and it was agreed that the contracts would not cover their separate agreement concerning the override commissions. Halter and Fietz completed the paperwork and returned it to Southland.
Halter and Fietz began working with Southland in March, 2003. Halter worked out of an office in Lafayette, Louisiana, which he leased on December 17, 2003.15 Southland paid a portion of the salary of Halter's secretary.16 Fietz worked out of his home in Texas. Their goal was to bring in agents for Southland in the western division. Halter brought in agents from Louisiana, Mississippi, Texas, Oklahoma, Florida, and Tennessee.17 Fietz brought in agents from Texas and New Mexico.18
Painter left Southland in May, 2004. Thereafter, Southland sent termination letters to Halter and Fietz advising that their commission contracts would terminate on July 1, 2004. Subsequently, Halter and Fietz formed plaintiff company American Prearranged Services, Inc. ("APSI"), which directly competes with Southland.
On December 7, 2004, plaintiffs filed suit in the 15th Judicial District Court, Lafayette Parish, Louisiana.19 Plaintiffs claim they are entitled to damages for detrimental reliance, unjust enrichment, breach of contract, and defamation. The defamation claim is based upon allegations that employees of Southland made disparaging remarks about them to agents and businesses in an attempt to limit their ability to compete with Southland.
On January 13, 2005, Southland removed the case to this court based on diversity jurisdiction.
The sole issue presented is what state law applies to the various issues in the case — Alabama, Louisiana, and/or Texas.
"If the laws of the states do not conflict, then no choice-of-law analysis is necessary." Schneider National Transport v. Ford Motor Company, 280 F.3d 532, 536 (5th Cir.2002) (quoting W.R. Grace & Company v. Continental Casualty Company, 896 F.2d 865, 874 (5th Cir.1990); National Union Fire Insurance v. CNA Insurance Companies, 28 F.3d 29, 32 n. 3 (5th Cir.1994)). When the laws of the states do not conflict, the law of the forum state applies. Id.
When the laws do conflict, a federal court sitting in diversity applies a conflict of laws analysis in accordance with the law of the forum state. Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); Roberts v. Energy Development Corp., 104 F.3d 782, 786 (5th Cir.1997). Louisiana uses an issue-by-issue analysis in deciding what state law is applicable. The general conflict of laws provision is found in La. Civ. Code Art. 3515:
Art. 3515. Determination of the applicable law; general and residual rule
Except as otherwise provided in this Book, an issue in a case having contacts with other states is governed by the law of the state whose policies would be most seriously impaired if its law were not applied to that issue.
That state is determined by evaluating the strength and pertinence of the relevant policies of all involved states in the light of: (1) the relationship of each state to the parties and the dispute; and (2) the policies and needs of the interstate and international systems, including the policies of upholding the justified expectations of parties and of minimizing the adverse consequences that might follow from subjecting a party to the law of more than one state.
Comment (a) points out that Article 3515 provides the general rule when another more specific rule is inapplicable:
(a) The residual and general nature of this Article. This Article applies only to cases that fall within the scope of this Book and that are not "otherwise provided [for] in this Book". Thus, this is the residual article. If any other article in this Book is found to be applicable to a particular case or issue, that article prevails. However, Article 3515 also serves as the general article, in the sense that it contains the general principles from which the other articles of this Book have been derived and in light of which they should be applied.
Comment (d) to Article 3515 explains that because of the issue-by-issue analysis, "laws of different states may be applied to different issues in the same dispute."
Issues regarding contractual and quasi-contractual20 disputes are governed by La. Civ.Code Art. 3537, which restates the general rule, but adds specific criteria for determining which state's policies would be most seriously impaired if its law were not applied to the issue:
Art. 3537. General rule
Except as otherwise provided in this Title, an issue of conventional obligations is governed by the law of the state whose policies would be most seriously impaired if its law were not applied to that issue.
That state is determined by evaluating the strength and pertinence of the relevant policies of the involved states in the light of: (1) the pertinent contacts of each state to the parties and the transaction, including the place of negotiation, formation, and performance of the contract, the location of the object of the contract, and the place of domicile, habitual residence, or business of the parties; (2) the nature, type, and purpose of the contract; and (3) the policies referred to in Article 3515, as well as the policies of facilitating the orderly planning of transactions, of promoting multistate commercial intercourse, and of protecting one party from undue imposition by the other.
The specific article on tort issues likewise provides specific standards for analysis:
Art. 3542. General rule
Except as otherwise provided in this Title, an issue of delictual or quasi-delictual obligations is governed by the law of the state whose policies would be most seriously impaired if its law were not applied to that issue.
That state is determined by evaluating the strength and...
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