Owens v. Aetna Life & Cas. Co.
| Citation | 654 F.2d 218 |
| Decision Date | 07 July 1981 |
| Docket Number | No. 80-1049,80-1049 |
| Court | United States Courts of Appeals. United States Court of Appeals (3rd Circuit) |
| Parties | 1981-1 Trade Cases 64,154 William OWENS and Jean Owens, Appellants, v. AETNA LIFE & CASUALTY CO., a Connecticut Corporation, and its subsidiary, Aetna Casualty and Surety Co., a Corporation of Connecticut, Durward M. Stayton, Jr., and Donald Millure, The Medical Society of New Jersey, a New Jersey Corporation, Chubb & Son, Inc., a New York Corporation, Federal Insurance Company, a New Jersey Corporation, Joseph A. Britton, Joseph A. Matt, Joan B. Snyder, Kay B. Imtello, William A. Reilly and William P. Muhl, each individually and trading as Joseph A. Britton Agency. Aetna Life & Casualty Co., a Connecticut Corporation, and its subsidiary, Aetna Casualty and Surety Co., a Corporation of Connecticut, Duward M. Stayton, Jr. and Donald Millure, Appellees. |
Howard W. Kushner, Freehold, N.J., Robert Dwight Roadman (argued), Warrenton, Va., for appellants.
Sidney S. Rosdeitcher (argued), Jack Hassid, Andrew Kull, Paul, Weiss, Rifkind, Wharton & Garrison, New York City, for appellees.
Before GIBBONS, WEIS and SLOVITER, Circuit Judges.
William Owens and Jean Owens appeal from an order granting summary judgment in favor of Aetna Life & Casualty Co., Aetna Casualty & Surety Co., Durward M. Stayton and Donald Millure (collectively "the Aetna Defendants") on their eight count complaint against those defendants and others. Of the eight counts, two alleged violations of the federal antitrust laws, five alleged causes of action under New Jersey law, and one, on behalf of Jean Owens, is described as "derivative." 1 Although the notice of appeal is addressed to a judgment which dismissed all counts against the Aetna Defendants, the appellants seek review of it only insofar as it granted summary judgment on Counts 1 and 2 of the amended complaint. Appellant's Brief at 6. Addressing those counts, we affirm the grant of summary judgment. 2
I.
William Owens is an insurance broker licensed in the State of New Jersey. An insurance broker is "an individual who, for a commission or brokerage consideration, shall act or aid in any manner in negotiating contracts of insurance, or soliciting or effecting insurance as agent for an insured or prospective insured, other than himself; or an individual who, being a licensed agent (for an insurance company), places insurance in an insurance company which he does not represent as agent." N.J.S.A. 17:22-6.2. A broker acts for the insured for the purpose of making the application and procuring an insurance policy. Coro Brokerage, Inc. v. Rickard, 29 N.J. 295, 148 A.2d 817 (1959). Owens also alleges that he was, at the time relevant to this action, an agent of the Aetna Defendants. An insurance agent is "an individual ... authorized in writing by any insurance company lawfully authorized to transact business in (New Jersey), to act as its agent, with authority to solicit, negotiate and effect contracts of insurance in its behalf...." N.J.S.A. 17:22-6.1. Owens claims that he specialized in medical professional liability or malpractice insurance. Reading the allegations in his complaint, his affidavits, and the interrogatories, admissions and depositions on file in the light most favorable to him, it appears that his business was the placement, as a broker, of medical malpractice insurance on behalf of physicians, and the solicitation of such business on behalf of Aetna.
The Aetna Defendants include Aetna Casualty & Surety Co., an underwriter of liability insurance including medical malpractice coverage, and its parent, Aetna Life & Casualty Company. Stayton and Millure are, respectively, General Manager and Marketing Manager of Aetna's Haddonfield, New Jersey office. Other named defendants include the Medical Society of New Jersey, a professional organization of physicians, Federal Insurance Company and its parent, Chubb & Son, Inc. (Chubb), which also underwrite medical malpractice insurance, and six individuals engaged, like Owens, in the insurance brokerage business under the name Joseph A. Britton Agency (Britton Agency). The Medical Society of New Jersey is the owner of a group policy of medical malpractice insurance issued by Chubb. Britton Agency is the broker for the Medical Society of New Jersey. A fact finder could conclude that Britton Agency is in essentially the same business as Owens, acting as broker in placing medical malpractice insurance on behalf of the Medical Society of New Jersey and soliciting the Medical Society's business as agent on behalf of Chubb. 3
The events giving rise to this suit began in 1974 when Aetna announced that it would no longer market medical malpractice insurance in New Jersey. Owens alleges Aetna's withdrawal from the New Jersey market had a serious financial impact on his insurance business since he lost his current source of insurance. Moreover, another source was not readily available since Britton Agency was the exclusive agent for Chubb/Federal, the major remaining company offering malpractice insurance in New Jersey.
The initial complaint was the subject of a motion for a more definite statement, which was granted in October 1975. An amended complaint alleges a number of state law claims including fraudulent inducement of the sale of Owens' business, libel, unlawful interference with his business relationships, and violation of unspecified portions of the New Jersey antitrust laws. The factual allegations in support of these state law claims are in many respects duplicative of those supporting Counts I and II, which this appeal addresses. Those counts charge a conspiracy among the defendants in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1, and a conspiracy to monopolize the business of medical malpractice insurance in violation of Section 2 of that Act, 15 U.S.C. § 2. The issue to be decided is whether, considering "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits if any" there is any "genuine issue as to any material fact," and whether "the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). Reading the allegations of the complaint generously, it charges (1) that the Aetna Defendants and Chubb conspired to divide the liability insurance market in New Jersey so that only Chubb would write medical malpractice insurance in New Jersey, and do so only on a group basis for the Medical Society of New Jersey, while Aetna would do so in other states, and would, without competition from Chubb, sponsor all group automobile and homeowners' insurance arranged by the Medical Society for its members; (2) that the Aetna Defendants and Chubb boycotted him; and (3) that the defendants conspired in other ways to drive Owens out of business. Those allegations must, however, be tested not in the abstract, but in light of an extensive record of depositions, interrogatories, admissions, and affidavits. Examining those, we must, after first determining all issues of disputed fact in Owens' favor, decide whether as a matter of law either section of the Sherman Act would provide grounds for relief. The district court concluded that neither would, because any activity Owens could hope to prove was exempt from antitrust scrutiny by virtue of the McCarran-Ferguson Act, 15 U.S.C. §§ 1011-1015 (1976), and because there was no evidence that the Aetna Defendants boycotted him or conspired to drive Owens out of business.
II.
Before turning to the specific facts in the extensive record, a brief description of the regulatory scheme for liability insurers licensed to do business in New Jersey will help to place those facts in context. A key provision of that scheme is N.J.S.A. 17:29A-15, which prohibits any insurer, broker or agent from charging, demanding or receiving a premium for any policy of insurance except in accordance with a rating system on file with and approved by the New Jersey Insurance Commissioner. The statutory standard for the Commissioner's approval is a rate "not unreasonably high or inadequate for the safety and soundness of the insurer, and which (does) not unfairly discriminate between risks in this State involving the same hazards and expense elements...." N.J.S.A. 17:29A-4. While individual insurers may make their own rate filings with the Commissioner the statute also contemplates that filings will be made on behalf of insurers by licensed rating organizations, which are organizations "engaged in the business of rate-making for two or more insurers." N.J.S.A. 17:29A-1(f). Each rating organization must admit, without discrimination, any insurer engaged in issuing the kind of insurance for which that organization has been approved by the Commissioner for rate-making. N.J.S.A. 17:29A-3. Thus the New Jersey statutory scheme affirmatively encourages joint action in rate-making. Rate-making, moreover, includes the classification of risks, such that rates may vary somewhat according to the degree of risk. N.J.S.A. 17:29A-4(a). Thus both the rates and the classifications of risks may be the result of joint action among firms that would otherwise be competitors, subject to approval by the Commissioner.
Among the rates and classifications are those applicable to mass marketing of property and liability insurance through employer or association groups. Pursuant to general rule-making authority, N.J.S.A. 17:1-8.1 & 17:1C-6(e), the Commissioner has adopted comprehensive regulations for such mass marketing plans. N.J.A.C. 11:2-12.1 to 12.15. A mass marketing plan is one in which insurance "is offered to employees of particular employers or to members of particular associations or organizations" and for which "(s)ome rate, coverage, underwriting or substantial service advantage is provided which is not available from the same insurer on a nonplan basis."...
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