Kee v. National Reserve Life Ins. Co.

• Citation: 918 F.2d 1538
• Decision Date: 14 December 1990
• Docket Number: No. 89-6139,89-6139
• Parties: Thomas B. KEE, CTL Insurance Corporation, a Florida corporation, Plaintiffs-Appellants, Cross-Appellees, v. NATIONAL RESERVE LIFE INSURANCE COMPANY, a Missouri corporation, Defendant-Appellee, Cross-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1538

918 F.2d 1538

Thomas B. KEE, CTL Insurance Corporation, a Florida

corporation, Plaintiffs-Appellants, Cross-Appellees, v. NATIONAL RESERVE LIFE INSURANCE COMPANY, a Missouri

corporation, Defendant-Appellee, Cross-Appellant.

No. 89-6139.

United States Court of Appeals,

Eleventh Circuit.

Dec. 14, 1990.

Henry J. Hunnefeld, Carusello & Hunnefeld, Coral Gables, Fla., for plaintiffs-appellants, cross-appellees.

William J. Gallwey, III, Shutts & Bowen, Miami, Fla., for defendant-appellee, cross-appellant.

Appeals from the United States District Court for the Southern District of Florida.

Before JOHNSON and HATCHETT, Circuit Judges, and DYER, Senior Circuit Judge.

JOHNSON, Circuit Judge:

This case arises on appeal from the district court's grant of summary judgment in favor of defendant National Reserve Life Insurance Company ("National") on claims brought by plaintiffs Thomas B. Kee and CTL Insurance Corporation ("CTL"). National also cross-appeals the district court's grant of summary judgment in favor of Kee and CTL on National's counterclaims. We now affirm the district court's decision on both motions.

I. BACKGROUND

Kee was in the business of selling life insurance to the public. He acquired general agent's contracts with several insurance companies which allowed him to sell individual life insurance policies in the state of Florida. In 1981, Kee entered a general agent's contract with National and assigned his rights to payment of commissions under that contract to CTL.

Kee allegedly was in the practice of inducing the sale of policies to individuals by paying the first year's premiums out of his own pocket or with borrowed funds. For the individuals who were not inclined to renew their policies the following year, the deal afforded them a free year of coverage. For Kee, whose commission on the sale was some figure greater than one hundred percent of the first year's premium, the sale afforded him a profit in the amount of the spread between the premium he paid and the commission he received in return. Upon learning of the scheme by which Kee obtained his commissions in 1984, National terminated Kee's contract and allegedly informed other insurance companies with which he dealt about the scheme.

Kee and CTL filed suit against National in 1986, requesting an accounting of commissions allegedly owed, and alleging breach of contract, breach of implied covenant, conversion, and conspiracy. The district court granted summary judgment in favor of National on all counts. Kee and CTL now appeal the summary judgment decision only on the claims for accounting, conversion, and conspiracy.

National counterclaimed for breach of contract, breach of fiduciary duty, negligence, fraud/intentional misrepresentation, and negligence per se. Kee and CTL moved for summary judgment on the breach of fiduciary duty, negligence, and fraud counts on the ground that these claims were not separate from the breach of contract claim. ¹ Kee and CTL also moved for summary judgment on the negligence per se count on the ground that the state statutes forming the basis of that count had been held unconstitutional. The court found that National had failed to present sufficient evidence to establish a prima facie case as to any of the tort counts and granted Kee's and CTL's motion for summary judgment. National now cross-appeals the district court's ruling.

II. DISCUSSION

The district court's grant of summary judgment is subject to de novo review at the appellate level. Carriers Container Council, Inc. v. Mobile S.S. Assoc., Inc., 896 F.2d 1330, 1337 (11th Cir.), cert. denied, --- U.S. ----, 111 S.Ct. 308, 112 L.Ed.2d 261 (1990). This Court must determine whether after discovery there remained a genuine triable issue of fact or whether the movant was entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986).

A. Kee's Appeal

(1) Accounting

Under Florida law, a party seeking an equitable accounting must show the existence of a fiduciary relationship or a complex transaction and must demonstrate that the remedy at law is inadequate. Parliament Ins. Co. v. Hanson, 676 F.2d 1069, 1072 (5th Cir. Unit B 1982) (applying Florida law); F.A. Chastain Constr., Inc. v. Pratt, 146 So.2d 910, 913 (Fla.Dist.Ct.App.1962). ² The district court found that Kee and CTL had raised an issue of fact as to the complexity of the commission/fee structure between the parties, but had made no showing that National owed a fiduciary duty to Kee or that the remedy at law was inadequate.

It appears that under Florida law the mere existence of an agency relationship such as that between Kee and National is insufficient to establish a fiduciary duty which would entitle Kee to a bill of accounting. McLeod v. Gaither, 94 Fla. 55, 113 So. 687, 688 (1927) ("[T]here is no duty on the part of the principal as there is on the part of the agent to keep an account of the dealings between them and there is no confidence reposed by the agent in the principal as there is by the principal in the agent.").

Moreover, Kee's and CTL's claim is for commissions and bonuses earned under Kee's general agent's contract. When a judgment for breach of contract is obtainable, the remedy at law is considered adequate, precluding the need for the imposition of an equitable remedy. Mary Dee's, Inc. v. Tartamella, 492 So.2d 815, 816 (Fla.Dist.Ct.App.1986). The district court was therefore correct in granting summary judgment in favor of National in the absence of a showing of these elements. Chiron v. Isram Wholesale Tours and Travel, Ltd., 519 So.2d 1102, 1103 (Fla.Dist.Ct.App.1988) (dismissing complaint requesting accounting where evidentiary facts did not show inadequacy of legal remedy).

(2) Conversion

Under Florida law, conversion is " 'an act of dominion wrongfully asserted over another's property inconsistent with his ownership of it.' " Advanced Surgical Technologies, Inc. v. Automated Instruments, Inc., 777 F.2d 1504, 1507 (11th Cir.1985) (per curiam) (quoting Belford Trucking Co. v. Zagar, 243 So.2d 646, 648 (Fla.Dist.Ct.App.1970)). Neither an obligation to pay money nor a breach of contract generally gives rise to a claim of conversion in tort. Id. Money may be the subject of a conversion only where "it consists of specific money capable of identification." Belford, 243 So.2d at 648 (giving as examples money kept in a sealed envelope or deposit bag and money held in constructive trust until the occurrence of a specified event). The district court found that under the test set out in Advanced Surgical and Belford Kee and CTL had not established a conversion claim by merely asserting that National held commissions to which Kee was entitled under the contract.

Kee and CTL contend on appeal that under the general agent's contract National was to hold in trust a portion of premiums Kee turned over to National for Kee's commissions and that these were specific, identifiable monies which may be the subject of conversion under Advanced Surgical and Belford. Kee and CTL, however, have misstated the provisions of the contract. The contract makes no provision for National to hold the commission as a "trust" and in fact states the inverse, i.e., that Kee holds the premium in trust for National until the policy is approved and accepted. ³ A plain reading of the contract thus refutes Kee's and CTL's assertion; we find nothing in the contract justifying their position. This argument is therefore without merit.

(3) Conspiracy

Civil conspiracy under Florida law requires a showing that two or more persons have taken concerted action to accomplish some unlawful purpose, or to accomplish some lawful purpose by unlawful means. Renpak, Inc. v. Oppenheimer, 104 So.2d 642, 646 (Fla.Dist.Ct.App.1958). The basis for the conspiracy must be "an independent wrong or tort which would constitute a cause of action if the wrong were done by one person." American Diversified Ins. Servs. v. Union Fidelity Life Ins. Co., 439 So.2d 904, 906 (Fla.Dist.Ct.App.1983). "[A]n act which does not constitute a [cause] of action against one person cannot be made the basis of a civil action for conspiracy." Churruca v. Miami Jai-Alai, Inc., 338 So.2d 228, 229 (Fla.Dist.Ct.App.1976), rev'd on other grounds, 353 So.2d 547 (Fla.1977).

The basis of Kee's and CTL's conspiracy claim was that National informed other insurance companies of Kee's alleged fraud and that these companies then acted in concert to destroy Kee's business by informing the state commissioner of Kee's alleged wrongdoings thus causing him to be investigated, by cancelling Kee's general agent's contracts, and by withholding commissions allegedly earned. The district court held that because none of these acts constituted an independent wrong or tort Kee had not established a prima facie case of conspiracy.

On appeal, Kee and CTL argue that the conspiracy claim should fall within the "force of numbers exception." Under this exception, the "conduct complained of would not be actionable if done by one person, but by reason of force of numbers or other exceptional circumstances, the defendants possess some peculiar power of coercion, which gives rise to an independent tort of conspiracy, sometimes referred to as an 'economic boycott.' " American Diversified, 439 So.2d at 906. A showing of mere malice is not enough. Id. The result of the defendants' concerted action "must be different from anything that could have been accomplished separately." Churruca, 338 So.2d at 230.

Applying this exception, Kee and CTL still have not made out a prima facie case of conspiracy. Each company could independently inform the insurance commissioner of its suspicions, cancel the at-will agency contracts, and withhold commissions pending resolution of the claims in court. These independent acts taken together did not amount to something larger than the sum. The "force of members" exception...