United States District Court, D. Nebraska
JOHN FASTRICH, and UNIVERSAL INVESTMENT SERVICES, INC., Plaintiffs,
CONTINENTAL GENERAL INSURANCE COMPANY, and GREAT AMERICAN FINANCIAL RESOURCE, INC., Defendants.
MEMORANDUM AND ORDER
Smith Camp Chief United States District Judge
matter is before the Court on the Motion to Dismiss for Lack
of Personal Jurisdiction, ECF No. 35, filed by Defendant
Great American Financial Resource, Inc.
(“GAFRI”), and on the Motion to Dismiss for
Failure to State a Claim, ECF No. 32, filed by Defendants
GAFRI and Continental General Insurance Company
(“CGI”). For the reasons stated below GAFRI's
Motion to Dismiss for Lack of Personal Jurisdiction will be
granted and the Motion to Dismiss for Failure to State a
Claim will be granted, in part, and denied, in part.
following facts are those alleged in the Complaint, ECF No.
1, which are assumed true for purposes of the Motion to
Dismiss, as well as those contained in the evidence submitted
to support personal jurisdiction over GAFRI.
a class action brought by John Fastrich and his insurance
agency, Universal Investment Services, Inc., on behalf of
themselves and on behalf of “[a]ll current and former
regional managers, general agents, associate general agents,
and agents of CGI . . . who have lost commissions, renewals,
and/or overrides as a result of Defendants' wrongful
conduct . . .” (John Fastrich, Universal Investment
Services, Inc., and the purported class will be collectively
referred to as “Plaintiffs”). Complaint, ECF No.
1, Page ID 7 ¶ 42. According to the Complaint,
Plaintiffs entered into contracts with CGI to sell CGI's
insurance products to individual customers. These products
included Medicare supplements, long-term care and senior life
policies, and annuities. Pursuant to their contracts with
CGI, Plaintiffs were to receive compensation in the form of
commissions, renewals, and overrides on the various insurance
products they sold.
worked in a four-level hierarchy of regional managers,
general agents, associate general agents, and agents.
Plaintiffs would become the “agent of record” any
time they sold an insurance product to a customer and
“took the original information” from the
customer. Complaint, ECF No. 1, Page ID 2 ¶ 6. If an
agent of record received less than $600 in renewals and
overrides in a one-year period, however, their commissions,
renewals, and overrides would revert to the next-highest
agent in the hierarchy. This is referred to as non-vesting.
a domestic insurer organized under Nebraska law and the
wholly-owned subsidiary of Ceres Group, Inc.
(“Ceres”). In 2006, GAFRI applied to the Nebraska
Department of Insurance to acquire all the shares of Ceres
and the Department approved the acquisition. Sometime after
GAFRI finalized the acquisition of Ceres, and thereby CGI,
GAFRI and CGI began contacting existing insurance
policyholders and offering them new, less expensive insurance
products without giving Plaintiffs the opportunity to sell
the new products. As a result, the original insurance
policies that Plaintiffs sold on CGI's behalf were
cancelled and new insurance products were marketed and issued
by other agents.
allege that “[regardless whether a policy was replaced
by a new policy by in-house marketing organizations and/or
selected outside agents, Plaintiffs remain the agents of
record for the purpose of receiving commissions, renewals,
and/or overrides.” Complaint, ECF No. 1, Page ID 5
¶ 31. Yet Plaintiffs were not paid the promised
commissions, renewals, and overrides they claim they were
entitled to receive. Plaintiffs also assert that they were
contractually entitled to “commissions on premium
increases on long term care policies written before January
2000, ” but have been denied those commissions as well.
Furthermore, when CGI and GAFRI issued the new policies, it
caused several Plaintiffs to become non-vested, but CGI and
GAFRI retained the amounts that should have reverted to the
next-highest agent in the hierarchy.
have brought claims against CGI and GAFRI for breach of
contract, tortious interference with a business relationship
or expectancy, and unjust enrichment. GAFRI argues the Court
should dismiss it from this action because it is not subject
to the Court's personal jurisdiction. CGI and GAFRI both
argue Plaintiffs' claims should be dismissed for failure
to state a claim upon which relief can be granted.
Lack of Personal Jurisdiction Under Fed.R.Civ.P.
survive a Federal Rule of Civil Procedure 12(b)(2) motion to
dismiss for lack of personal jurisdiction, a plaintiff must
plead “sufficient facts ‘to support a reasonable
inference that the defendant[ ] can be subjected to
jurisdiction within the state.'” K-V
Pharm. Co. v. J. Uriach & CIA, S.A., 648 F.3d
588, 591-92 (8th Cir. 2011). When jurisdiction is challenged,
the “‘nonmoving party need only make a prima
facie showing of jurisdiction.'” Pangaea, Inc.
v. Flying Burrito LLC, 647 F.3d 741, 745 (8th Cir. 2011)
(quoting Dakota Indus., Inc. v. Dakota Sportswear,
Inc., 946 F.2d 1384, 1387 (8th Cir. 1991)). The
nonmoving party's prima facie showing is analyzed
“not by the pleadings alone, but by the affidavits and
exhibits presented with the motions and in opposition
thereto.” Dever v. Hentzen Coatings, Inc., 380
F.3d 1070, 1072 (8th Cir. 2004). “‘[T]he court
must look at the facts in the light most favorable to the
nonmoving party, and resolve all factual conflicts in favor
of that party.'” Id. (quoting Dakota
Indus., Inc., 946 F.2d at 1387).
Failure to State a Claim Under Fed.R.Civ.P. 12(b)(6)
complaint must contain “a short and plain statement of
the claim showing that the pleader is entitled to
relief.” Fed.R.Civ.P. 8(a)(2). To satisfy this
requirement, a plaintiff must plead “enough facts to
state a claim to relief that is plausible on its face.”
Corrado v. Life Inv'rs Ins. Co. of Am., 804 F.3d
915, 917 (8th Cir. 2015) (quoting Bell Atlantic Corp. v.
T wombly, 550 U.S. 544, 570 (2007)). “A claim has
facial plausibility when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.”
Barton v. Taber, 820 F.3d 958, 964 (8th Cir. 2016)
(quoting Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009)). “Threadbare recitals of the elements of a
cause of action, supported by mere conclusory statements, do
not suffice.” Zink v. Lombardi, 783 F.3d 1089,
1098 (8th Cir. 2015) (quoting Iqbal, 556 U.S. at
678), cert. denied, 135 S.Ct. 2941 (2015). The
complaint's factual allegations must be “sufficient
to ‘raise a right to relief above the speculative
level.'” McDonough v. Anoka Cty., 799 F.3d
931, 946 (8th Cir. 2015) (quoting T wombly, 550 U.S.
at 555). The Court must accept factual allegations as true,
but it is not required to accept any “legal conclusion
couched as a factual allegation.” Brown v. Green
Tree Servicing LLC, 820 F.3d 371, 373 (8th Cir. 2016)
(quoting Iqbal, 556 U.S. at 678). Thus, “[a]
pleading that offers ‘labels and conclusions' or
‘a formulaic recitation of the elements of a cause of
action will not do.'” Ash v. Anderson
Merchandisers, LLC, 799 F.3d 957, 960 (8th Cir. 2015)
(quoting Iqbal, 556 U.S. at 678), cert.
denied, 136 S.Ct. 804 (2016).
motion to dismiss, courts must rule “on the assumption
that all the allegations in the complaint are true, ”
and “a well-pleaded complaint may proceed even if it
strikes a savvy judge that actual proof of those facts is
improbable, and ‘that a recovery is very remote and
unlikely.'” T wombly, 550 U.S. at 555
& 556 (quoting Scheuer v. Rhodes, 416 U.S. 232,
236 (1974)). “Determining whether a complaint states a
plausible claim for relief . . . [is] a context-specific task
that requires the reviewing court to draw on its judicial
experience and common sense.” Mickelson v. Cty. of
Ramsey, 823 F.3d 918, 923 (8th Cir. 2016) (alternation
in original) (quoting Iqbal, 556 U.S. at 679).
argues it is not subject to the Court's personal
jurisdiction. In determining whether personal jurisdiction
over a nonresident defendant exists, the Court must determine
whether: (1) the requirements of the Nebraska long-arm
statute are satisfied; and (2) the exercise of jurisdiction
is permitted by the Due Process Clause of the Fourteenth
Amendment. See Coen v. Coen, 509 F.3d 900, 905 (8th
Cir. 2007). Nebraska's long-arm statute, Neb. Rev. Stat.
§ 25-536, has been interpreted to extend jurisdiction
over nonresident defendants to the fullest degree allowed by
the Due Process Clause of the United States Constitution.
Pecoraro v. Sky Ranch for Boys, Inc., 340 F.3d 558,
561 (8th Cir. 2003). Thus, the Court need only determine
whether the assertion of jurisdiction offends constitutional
touchstone of the due-process analysis remains whether the
defendant has sufficient “minimum contacts with [the
forum state] such that the maintenance of the suit does not
offend ‘traditional notions of fair play and
substantial justice.'” Viasystems, Inc. v.
EBM-Papst St. GEorgen GmbH & Co., KG, 646 F.3d 589,
594 (8th Cir. 2011) International Shoe Co. v.
Washington, 326 U.S. 310, 316 (1945). “The Supreme
Court has recognized two theories for evaluating personal
jurisdiction: general and specific jurisdiction.”
Steinbuch v. Cutler, 518 F.3d 580, 586 (8th Cir.
2008) (citing Helicopteros Nacionales de Colombia, S.A.
v. Hall, 466 U.S. 408, 414-15 (1984)). “Under the
theory of general jurisdiction, a court may hear a lawsuit
against a defendant who has 'continuous and
systematic' contacts with the forum state, even if the
injuries at issue in the lawsuit did not arise out of the
defendant's activities directed at the forum.”
Dever, 380 F.3d at 1073 (quoting
Helicopteros, 466 U.S. at 415-416). On the other
hand, under the theory of specific jurisdiction, “the
injury giving rise to the lawsuit [must have] occurred within
or had some connection to the forum state.”
Dever, 380 F.3d at 1073 (citing
Helicopteros, 466 U.S. at 414). In other words, a
court will have specific jurisdiction over a cause of action
“arising from or related to a defendant's actions
within the forum state.” Bell Paper Box, 22
F.3d 816, 819 (8th Cir. 1994).
either theory, the defendant must have committed
“‘some act by which the defendant purposely
avail[ed] itself of the privilege of conducting activities
within the forum State, thus invoking the benefits and
protections of its laws.'” Dever, 380 F.3d
at 1073 (quoting Denckla, 357 U.S. at 253). A
defendant's “purposeful availment must be
sufficient to provide the defendant with fair warning that
his activities might result in his being haled into court in
that jurisdiction.” Johnson v. Woodcock, 444
F.3d 953, 955 (8th Cir. 2006) (citing Porter v.
Berall, 293 F.3d 1073, 1075 (8th Cir. 2002)). In other
words, the defendant's contacts with the forum state must
not be “random, ” “fortuitous, ”
“attenuated, ” or the result of the
“unilateral activity of another party or a third
person.” Burger King, 471 U.S. at 475
(quotations and citations omitted). A ...