Savage v. Lincoln Ben. Life Co.
| Decision Date | 22 March 1999 |
| Docket Number | No. 97-CV-10331-BC.,97-CV-10331-BC. |
| Citation | 49 F.Supp.2d 536 |
| Parties | Richard SAVAGE and Richard Savage d/b/a Richard Savage Agency, Plaintiffs, v. LINCOLN BENEFIT LIFE COMPANY, Allstate Insurance Company, and Cindy Hoffman, Jointly and Severally, Defendants. and Allstate Insurance Company, Counter-Plaintiff, v. Richard Savage, Counter-Defendant. |
| Court | U.S. District Court — Eastern District of Michigan |
Philip R. Sturtz, Saginaw, MI, for plaintiffs.
Mark K. Riashi, Detroit, MI, for defendants.
ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT AS TO PLAINTIFFS' CLAIM AGAINST DEFENDANTS AND GRANTING DEFENDANT ALLSTATE'S MOTION FOR SUMMARY JUDGMENT AS TO ITS COUNTERCLAIM AGAINST PLAINTIFFS
Plaintiff1 originally sued three defendants —Allstate Insurance Company, Lincoln Benefit Life Company (a subsidiary of Allstate Insurance Company), and Cindy2 Hoffman (an employee of Lincoln Benefit Life Company)—in the Tenth Circuit Court in Saginaw County, Michigan alleging defamation. Defendants removed the case to this court on September 17, 1997. On October 10, 1997, defendant, Allstate Insurance Company, filed a counterclaim averring breach of contract, conversion, misappropriation of trade secrets, and unfair competition. Pending before the court is defendants' motion for summary judgment on both the original claim and the counterclaim, filed on October 14, 1998. Plaintiff responded on November 19, 1998, to which defendants replied on December 2, 1998. A hearing was held on December 9, 1998. The court then called for supplemental briefing on the issue of privilege; defendants filed a brief on December 21, 1998 and plaintiff replied with a letter on December 28, 1998.
On September 12, 1994, plaintiff Richard Savage became an employee of Allstate Insurance Company ("Allstate") by signing an Allstate R3000 Exclusive Agent Employment Agreement. Plaintiff's defamation claim is based on incidents which allegedly occurred in October and November 1996. Specifically, plaintiff collected $50.13 in cash from a client, Linda Burns, and in turn sent a check for $50.13 and an insurance policy application to defendant Lincoln Benefit Life Company ("Lincoln Benefit"). On November 5, 1996 Linda Burns contacted Cindy Hoffman, an employee of Lincoln Benefit, to inquire about the status of the insurance policy. At that time Cindy Hoffman communicated with Linda Burns in a manner that plaintiff characterizes as an accusation that he had kept or mishandled the money and was not eligible to sell the type of policy Linda Burns attempted to purchase. Plaintiff also postulates, without support, that such information could have been circulated to others.
The R3000 agreement expired, by its own terms, on April 1, 1996. On March 21, 1996, plaintiff signed an Allstate R3001 Exclusive Agency Agreement which, according to defendant Allstate, provides greater monetary rewards and changes the status of the signer from an employee to an independent contractor. The R3001 agreement contains a confidentiality and non-competition clause effective upon termination. Plaintiff also signed a separate Confidentiality and Non-Competition Agreement upon which defendant does not rely.
Approximately four months later, on February 27, 1997, defendant Allstate notified plaintiff that he would be terminated, effective June 1, 1997. According to defendants, the termination was not based on the incident involving Cindy Hoffman and Mrs. Burns; instead, defendants aver that plaintiff was terminated because he falsified documents and sold competitor's insurance products. Nonetheless, plaintiff was entitled to termination payments on condition that he adhere to the confidentiality/non-competition agreement found within the R3001 contract. Defendants further proffer that, after his termination, plaintiff sold competitor's products to people who were Allstate customers at the time of plaintiff's termination and/or to people plaintiff learned about through confidential Allstate information. Defendants additionally allege that plaintiff used Allstate's prepaid postage to sell competitor's products and for his own use. Defendants further aver that plaintiff violated his obligations by conducting business within one mile of the location in which he sold Allstate's products. Conversely, plaintiff argues that the R3001 agreement is invalid and, therefore, could not be violated.
Under Rule 56, summary judgment is proper when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.Pro. 56(c). "Where the moving party has carried its burden of showing that the pleadings, depositions, answers to interrogatories, admissions and affidavits in the record construed favorably to the non-moving party, do not raise a genuine issue of material fact for trial, entry of summary judgment is appropriate." Gutierrez v. Lynch, 826 F.2d 1534, 1536 (6th Cir.1987) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)). Summary judgment is not appropriate when "the evidence presents a sufficient disagreement to require submission to a jury." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The existence of some factual dispute does not defeat a properly supported motion for summary judgment; the disputed factual issue must be material.
The burden placed upon the movant for summary judgment is to show that the non-moving party has failed to establish an essential element of its case upon which the non-moving party would bear the ultimate burden of proof at trial. Celotex Corp., 477 U.S. at 322, 106 S.Ct. 2548. But the moving party need not support its motion with affidavits or other similar materials "negating" the opponent's claim. Id. at 323, 106 S.Ct. 2548. Once the moving party meets this burden, the burden passes to the non-moving party to establish, after an adequate opportunity for discovery, the existence of a disputed factual element necessary to its case with respect to which it bears the burden of proof. Id. The non-moving party must show that there is sufficient evidence for a jury to return a verdict in its favor, Street v. J.C. Bradford & Co., 886 F.2d 1472, 1477 (6th Cir.1989) (citation omitted), that is, that there is doubt as to the material facts and that the record, taken as a whole, does not lead to a judgment for the movant. Id. at 1478 (citation omitted). The non-moving party must present affirmative evidence on critical issues. Id. at 1477.
A. Plaintiff's Defamation Claim Against Defendant Allstate
Plaintiff possesses no first hand knowledge of the conversation(s) between Cindy Hoffman and Linda Burns. Hence, in trying to survive defendants' motion for summary judgment plaintiff relies almost exclusively on the deposition of Linda Burns regarding her telephone conversations with Cindy Hoffman. The relevant portions of Linda Burns's testimony are as follows.
Q. Was there any other conversation [on November 5th, 1996]?
...
A. ... Then [Cindy Hoffman] said she would get the money from Mr. Savage because according to her there was no money that she had received from Mr. Savage.
Q. Did [Cindy Hoffman] say anything about Mr. Savage keeping the money?
A. I don't know if she said that, I don't remember her, recall her saying that, but I just recall that she did say there was no money received from Mr. Savage. And I told her that we did give him a check. And she said there was nothing there in her office that she found that there was any money. So there was no policy written.
(Id.)
Q. And on November 5th did you have further conversation with [Cindy Hoffman] .... [Cindy Hoffman] told you apparently that Savage did not send her the money.
A. Right
Q. And you were to send [Cindy Hoffman] a copy of whatever you have given to Savage?
A. And then her company would send us the money and she would turn around and get the money from Mr. Savage.
(Id. at 18.)
Q. Did [Cindy Hoffman] say anything else on that phone conversation on November 5?
A. Just enough to make me think that I didn't know who I was working with then, because I was very upset over the fact that Mr. Savage had told me that we had a policy and I'm talking to this lady, this Cindy Hoffman, and she's telling me we have no policy. And she didn't receive a check. And there was no moneys in her hand, so she said there is no policy.
(Id. at 18-19.)
Q. What were you thinking of Savage at this time?
A. I was really distrustful of him. I didn't really want him for an agent anymore because he was very—because the way [Cindy Hoffman] talked he wasn't eligible to write up this policy.
(Id. at 20-21.)
Cindy Hoffman called Linda Burns on November 7th:
Q. Do you remember anything else that was said in that conversation....
A. Just that [Cindy Hoffman] said that they had found a check. And I was thinking that if she would have told me that in the first place, there wouldn't have been no problem. But she also told me that they were still checking into his eligibility to sell up this policy. And, according to Cindy Hoffman, we had no policy with Lincoln Benefit because Mr. Savage sold us a policy he wasn't supposed to.... I feel that Cindy Hoffman should have been 100 percent sure of what she told me that was exactly the way that should have — I mean, she should have known what she was saying before she told me anything. That's what I felt. Because they were very distrustful of Mr. Savage, we were ready to take all of our policies somewhere else.
(Id. at 24-45.)
Q. On this November 7th date conversation she still indicated to you that Savage still did not have the ability to write this policy, nor was he authorized to do that?
A. Yes, she did.
(Id. at 25.)
Q. Did she say anything else to you?
A. She was still checking into whether or not he had the...
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