Sun Ins. Marketing Network v. Aig Life Ins. Co.

254 F.Supp.2d 1239

SUN INSURANCE MARKETING NETWORK, INC., Plaintiff, v. AIG LIFE INSURANCE COMPANY; American International Life Assurance Company of New York; and American General Corporation, Defendants.

No. 8:01-CV-2302-T-30MSS.

United States District Court, M.D. Florida, Tampa Division.

March 27, 2003.

COPYRIGHT MATERIAL OMITTED

Alan Frederick Wagner, Wagner, Vaughan & McLaughlin, Tampa, Roberto A. Rivera-Soto, Daniel G. Lyons, Fox, Rothschild, O'Brien & Frankel, Philadelphia, PA, for Sun Insurance Marketing Network, Inc., plaintiff.

Margaret Diane Mathews, Wesley D. Tibbals, Akerman, Senterfitt & Eidson, P.A., Tampa, Mark A. Aronchick, Daniel Segal, John S. Summers, Robert L. Ebby, Hangley Aronchick Segal & Pudlin, Philadelphia, PA, for AIG Life Insurance Company, American International Life Assurance Company of New York, American General Corporation, t/a American General Life Companies, a member of American General Financial Group, defendants.

ORDER GRANTING DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT AND STRIING OPINION OF PLAINTIFF'S EXPERT

MOODY, District Judge.

THIS CAUSE came before the Court upon Defendants' Motion for Partial Summary Judgment (Dkt.# 58) and Plaintiffs response thereto (Dkt.# 60). The Court entered an Order denying the Motion on November 12, 2002, but subsequently granted a Motion for Reconsideration and, by Order dated January 28, 2003, requested additional briefing on the opinion of lost profits expressed by Plaintiffs expert. Subsequently, the Court received the Defendants' Supplemental Brief in Support of their Motion for Partial Summary Judgment (Dkt.# 71) and the Plaintiffs Supplemental Brief in Opposition (Dkt.# 72). Having reviewed the record and memoranda of the parties, the Court determines that the opinion of Plaintiffs expert should be stricken because he is not qualified to give an opinion on the valuation of a business and his opinion of lost profits is too speculative.

FACTUAL BACKGROUND

Sun Insurance Marketing Network, Inc. ("Sun") is an insurance agency which sells only long term care insurance. It has a non-exclusive relationship with approximately 7,500 agents around the country. These agents also sell long term care and other types of policies through other managing general agents. Defendants AIG Life Insurance Company and American International Life Assurance Company of New York (collectively referred to as "AIG") are insurance companies doing business throughout the United States. American General Corporation ("American General") is a recently acquired subsidiary of AIG.

In 1997, AIG became interested in entering the long term care insurance field. Sun developed a long term care insurance policy to be offered by AIG and was given the exclusive right to market this and any other AIG long term care policy. Under this arrangement, Sun had nationwide authority and obligation to recruit sales agents and sell the policies. Sun sold no other product—only AIG's long term care insurance. AIG had the right to terminate the relationship upon written notice if it ceased selling long term care insurance.

AIG subsequently purchased SunAmerica, Inc. which was offering a long term care product sold by its agents. A dispute arose between AIG and Sun concerning whether Sun should be credited with the sales of the SunAmerica agents. To resolve this dispute, the parties entered into new agreements, two of which are at issue in this case: a Managing General Agent ("MGA") agreement and an Override Agreement. These new agreements provided that Sun was to remain the exclusive agent for all sales made by its producers at a commission rate of approximately seven percent. Sun would receive no commission on the sales of the former SunAmerica producers (referred to as "company producers"), but instead would receive a two percent override commission on their sales. It was further agreed that, if AIG purchased any other companies or existing blocks of long term care business, Sun's producers would be appointed as agents to sell the new long term care product and Sun would be offered "a separate and distinct Managing General Agent contract at the maximum compensation rates paid to any producers at the time by new business" for sales of the newly acquired long term care products. Again, AIG had the right to terminate the agreements in the event it ceased selling long term care insurance. The contracts were to be construed according to Delaware law.

In 2001, AIG entered into an agreement to acquire American General which, at the time, was developing its own long term care product, GPC. AIG performed its due diligence during the summer of 2001 and the purchase was consummated at the end of August, 2001. Because AIG was experiencing rate problems with its own long term care product, LTC1 and LTC2, and considered the American General long term care product, GPC, to be superior, AIG decided to terminate sales of LTC1 and LTC2 and to continue developing GPC.

On September 28, 2001, AIG notified Sun that it was terminating sales of LTC1 effective October 1, 2001, in the State of California and October 30, 2001, in the remainder of the United States. On October 5, 2001, AIG notified Sun that it was terminating the sales of LTC2 effective November 30, 2001, and was terminating its existing agency agreements (the MGA agreement and the Override Agreement). On that same day, October 5, 2001, AIG offered Sun a separate and distinct Managing General Agent contract to sell GPC at the maximum commission rates offered by American General. Sun refused to accept the new agreement because 1) it was not on the same terms and conditions as its present MGA, 2) it did not designate Sun as the exclusive agent for its producers, and 3) it did not provide for the two percent override on the sales of the company producers.

Realizing that it needed product to sell, Sun began contacting other long term care insurance companies to explore selling their products and began preparations to file this lawsuit to force AIG to offer an agency agreement on the terms to which it thought it was entitled. On December 4, 2001, Sun filed this lawsuit seeking a Temporary Restraining Order, Preliminary Injunction, and damages. On December 13 2001, this Court conducted a preliminary injunction hearing on Sun's Motion and, on December 21, 2001, issued an Order partially granting and partially denying Sun's Motion.

This Court determined that the existing MGA was terminated and that Sun was entitled to a new MGA for the sale of GPC, not on the same terms and conditions as its prior MGA, but on the best terms and conditions offered any existing agency for the sales of GPC, and that Sun's producers were to remain exclusive to Sun. The Override Agreement was terminated and Sun was no longer entitled to the two percent on the sales of GPC by the company producers. Pursuant to those parameters, AIG was ordered to add Sun's producers as selling agents for GPC.

During the month of January, 2002, AIG decided that it would withdraw entirely from the long term care insurance market. That included a decision to cease selling GPC. On February 14, 2002, AIG advised this Court and Sun of its decision and, after a ninety-day run-off period, terminated sales of GPC effective May 15, 2002.

STANDARD OF REVIEW

Motions for summary judgment should only be granted when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, show there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P.56(c); Celotex Corp. v. Catrett, All U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The existence of some factual disputes between the litigants will not defeat an otherwise properly supported summary judgment motion; "the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 411 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)(emphasis in original). The substantive law applicable to the claimed causes of action will identify which facts are material. Id. Throughout this analysis, the judge must examine the evidence in the light most favorable to the non-movant and draw all justifiable inferences in its favor. Id. at 255,106 S.Ct. 2505.

Once a party properly supports a summary judgment motion by demonstrating the absence of a genuine issue of material fact, whether or not accompanied by affidavits, the nonmoving party must go beyond the pleadings through the use of affidavits, depositions, answers to interrogatories and admissions on file, and designate specific facts showing that there is a genuine issue for trial. Celotex, All U.S. at 324, 106 S.Ct. 2548. The evidence must be significantly probative to support the claims. Anderson, All U.S. at 248-49, 106 S.Ct. 2505 (1986).

This Court may not decide a genuine factual dispute at the summary judgment stage. Fernandez v. Bankers Nat'l Life his. Co., 906 F.2d 559, 564 (11th Cir.1990). "[I]f factual issues are present, the Court must deny the motion and proceed to trial." Warrior Tombigbee Transp. Co. v. M/VNan Fung, 695 F.2d 1294, 1296 (11th Cir.1983). A dispute about a material fact is genuine and summary judgment is inappropriate if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson, All U.S. at 248, 106 S.Ct. 2505; Hoffman v. Allied Corp., 912 F.2d 1379 (11th Cir.1990). However, there must exist a conflict in substantial evidence to pose a jury question. Verbraeken v. Westinghouse Elec. Corp., 881 F.2d 1041, 1045 (11th Cir.1989).

When there has been an objection to the opinion of an expert witness, the Court is obligated to "make a preliminary assessment of whether the reasoning or methodology underlying the testimony is scientifically valid and of whether that reasoning or methodology properly can be applied to the facts in issue." Daubert v. Merrell Dow Pharmaceuticals,...