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Mid-America Risk Managers, Inc. v. Chubb & Son

United States District Court, D. Nebraska

October 20, 2017

MID-AMERICA RISK MANAGERS, INC., Plaintiff,
v.
CHUBB & SON, a Division of Federal Insurance Company; and CHUBB INSURANCE SOLUTIONS AGENCY, INC., Defendants.

          MEMORANDUM AND ORDER

          Robert F. Rossiter, Jr., United States District Judge

         This matter is before the Court on plaintiff Mid-America Risk Managers, Inc.'s (“MARM”) Motion for Temporary Restraining Order and Preliminary Injunction (Filing No. 4). MARM seeks a Temporary Restraining Order (“TRO”) prohibiting Chubb & Son, a Division of Federal Insurance Company (“Chubb”) from contacting MARM's sub-producers. MARM also requests a preliminary injunction hearing seeking the same relief. For the reasons stated below, the Motion is granted in part and denied in part.

         I. BACKGROUND[1]

         MARM is a 22-year-old general insurance agency that operates as a managing general underwriter. It has an established network of independent agents, general agents, and sub-producers. MARM specializes in inland marine polices which cover farm irrigation systems.

         On October 29, 2013, MARM entered into a Producer Agreement (“agreement”) with Chubb & Son, a Division of Federal Insurance Company (“Chubb”). The agreement gave MARM the authority to act as Chubb's producer to solicit applications, submit the applications to Chubb for approval, and to service approved policies. MARM and Chubb also entered into a Policy Administration Agreement (“PAA”) which set up an arrangement through which MARM undertook the duties in the agreement through its established network of sub-producers. MARM informed Chubb prior to entering the agreement and PAA of its longstanding relationship with its sub-producers, general agents, and independent agents.

         On January 14, 2016, ACE Limited acquired Chubb and adopted the Chubb name. MARM felt the business relationship changed and informed Chubb on July 12, 2017, that MARM would no longer place new business or renewals effective August 1, 2017.

         Chubb Insurance Solutions Agency, Inc. (“CISA”), presumed to be affiliated with Chubb, began contacting MARM's sub-producers stating that MARM “unilaterally terminated its relationship with Chubb in favor of a different market, ”[2] and soliciting the sub-producers to work directly with CISA. CISA offered various incentives to the sub-producers, including promising to increase commissions to 20% if the sub-producer would renew the policy directly with CISA.

         II. DISCUSSION

         A. Requirements for Injunctive Relief

         “A district court considering injunctive relief evaluates the movant's likelihood of success on the merits, the threat of irreparable harm to the movant, the balance of the equities between the parties, and whether an injunction is in the public interest.” Conquest Commc'ns. Grp., LLC, v. Swanson (In re Gresham), 866 F.3d 853, 854 (8th Cir. 2017) (quoting Dataphase Sys., Inc. v. C L Sys., Inc., 640 F.2d 109, 114 (8th Cir. 1981) (en banc)).

         In addition to qualifying for injunctive relief, a TRO granted without written or oral notice to a party requires that (1) specific facts in an affidavit or a verified complaint clearly show that immediate and irreparable injury, loss, or damage will result to the movant before the adverse party can be heard in opposition, and (2) the movant's attorney certifies in writing any efforts made to give notice and the reasons why it should not be required. Fed.R.Civ.P. 65(b).

         B. Likelihood of Success

         “Success on the merits has been referred to as the most important of the four factors.” Roudachevski v. All-American Care Ctrs., Inc., 648 F.3d 701, 706 (8th Cir. 2011). MARM states three claims for relief: (1) a breach of the implied covenant of good faith and fair dealing, (2) tortious interference with business relationships, and (3) conversion.

         1. Implied Covenant of Good ...


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