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Kollar v. Allstate Insurance Co.

United States District Court, D. Connecticut

July 28, 2017

RAYMOND KOLLAR Plaintiff,
v.
ALLSTATE INSURANCE CO. and ALLSTATE FINANCIAL SERVICES, LLC, Defendants

          RULING ON DEFENDANTS' MOTION TO DISMISS THE COMPLAINT

          VICTOR A. BOLDEN, UNITED STATES DISTRICT JUDGE

         Mr. Raymond Kollar (“Mr. Kollar” or “Plaintiff”) brings this suit against Defendants Allstate Insurance Company and Allstate Financial Services, LLC (collectively “Defendants”), with whom he was affiliated as a licensed insurance agent. He raises five claims in his Complaint. Specifically, he asserts that both Defendants are liable for breach of contract, breach of the implied covenant of good faith and fair dealing, violation of the Connecticut Unfair Trade Practices Act (“CUTPA”), Conn. Gen. Stat. § 42-110a, et seq., tortious interference with his business expectancy, and negligent misrepresentation. Defendants move to dismiss all counts.

         For the reasons that follow, Defendants' Motion is GRANTED. The Court dismisses all of Mr. Kollar's claims, but does so without prejudice to his filing an amended complaint within thirty (30) days of this decision.

         I. FACTUAL ALLEGATIONS

         Defendants Allstate Insurance Company and Allstate Financial Services, LLC (“Defendants”) are foreign corporations with their principal offices located at 3075 Sanders Rd., Ste. H2D, Northbrook, Illinois, 60062. Compl., ¶ 2. Defendants are engaged in the sale of insurance products in the State of Connecticut, in collaboration with insurance agents authorized to act on their behalf. Id.

         For many years, Raymond Kollar served as a licensed insurance agent in the State of Connecticut with an office in Trumbull, Connecticut. Compl., ¶ 1. Between 1991 and 2003, Mr. Kollar worked as a “sales producer” for Robert D. Richter, an Allstate agent. Id. at ¶ 5. When Mr. Richter retired in 2003, Mr. Kollar purchased his book of business and established his own agency called Allstate-Raymond Kollar Agency. Id. Mr. Kollar signed an exclusive agency agreement with Defendant Allstate Insurance Company, see AllstateR3001S Exclusive Agency Agreement, Ex. B. to Mot. to Dismiss, ECF No. 20-2 (“Contract”), under which he was authorized to act as an insurance agent on Allstate's behalf. Id. at ¶ 3. The Agency was allegedly Mr. Kollar's “lifework and business, ” and supported Mr. Kollar and his family for more than a decade. Id. at ¶ 6.

         Under the Contract, Allstate would “determine in its sole discretion all matters relating to the business and the operation of the Company including, but not limited to, the following:

2. The acceptance or rejection of any application;
3. The termination or modification of any contract or the refusal to renew any contract;
4. The limitation, restriction, or discontinuance of the writing or selling of any policies, coverages, lines, or kinds of insurance or other Company Business; . . . .

         Contract at I.F., pp. 1-2. The Contract provided that, as an agent, Mr. Kollar could “select [his] sales location, within a geographical area specified by the Company, subject to Company approval.” Id. at V.A., pp. 4. It added, however, that Mr. Kollar had “no exclusive territorial rights” to his sales location. Id. (“You understand that you have no exclusive territorial rights in connection with your sales location.”). Finally, the Contract explained that the relationship between Mr. Kollar and Allstate could be terminated in several ways, specifically:

2. By either party, with or without cause, upon providing ninety (90) days written notice to the other, or such greater number of days as is required by law. Once written notice of termination has been given by either party, you will, immediately upon request of the Company cease to act or to represent yourself in any way as an agent or representative of the Company, but you will receive compensation pursuant to Section XV. from the Company for the period up to and including the specified termination date;
3. Alternatively, by the Company, with cause, immediately upon providing written notice to you. Cause may include, but is not limited to, breach of this Agreement, fraud, forgery, misrepresentation or conviction of a crime. The list of examples of cause just stated shall not be construed to exclude any other possible ground as cause for termination.

Agreement, XVII.B., pp. 7.

         Mr. Kollar alleges that, in 2014, Defendants “improperly caused [his] lifework, business and agency to abruptly end.” Compl. at ¶ 7. Mr. Kollar alleges that Defendants caused this harm in several ways, leading to the five claims for relief in his Complaint.

         A. Defendants Allegedly Interfere with the Life Insurance Application Mr. Kollar Submitted on his Wife's Behalf

         In early 2014, Mr. Kollar submitted an application in his wife's name for life insurance coverage from Lincoln Benefit Life. Compl., ¶ 9(e). On July 2, 2014, Mr. Kollar's wife received a letter from Lincoln Benefit Life stated that it had “been informed that [she wished] to withdraw [her] application for insurance coverage.” Id. at ¶ 9(f). Neither Mr. Kollar nor his wife remembered withdrawing the application, he alleges, and they began to investigate. Id. at ¶ 9(g). They allegedly “learned that Allstate Regional Financial Services Leader Dan Mattingly, an individual who oversaw the sale of financial service products, improperly interfered with the underwriting decision and caused the application to be denied.” Id. at ¶ 9(h). They also allegedly learned that there was no other reason why Lincoln Benefit could not have issued the policy. Id. at ¶ 9(i).

         B. Defendants Allegedly Improperly Terminate Mr. Kollar's Employment and File a Form U-5 that Allegedly Falsely States that he Failed to Meet Minimum Production Requirements

         Mr. Kollar alleges that he was subject to “minimum production requirements” under the Agreement with Defendants. See Compl., ¶ 9. Before 2014, Mr. Kollar had satisfied his production requirements. Id. at ¶ 9(b). In 2014, he alleges, he would have satisfied the production requirements as well, because of the Life Insurance application he had submitted on his wife's behalf. Id. In July 2014, Allstate Senior Vice President Bill Kavanaugh had informed Mr. Kollar by e-mail that any policy made by an agent on behalf of the agent or his or her “spouse, children, household members, father, or mother [would] no longer be eligible for advanced compensation.” Id. at ¶ 9(c). According to the e-mail, Mr. Kollar alleges, this policy would be “effective Oct. 1 through Dec. 31, 2014, ” meaning that his wife's application should have counted towards his production requirements for 2014, which allegedly had a June 30, 2014 deadline. Id. at ¶¶ 9(a); 9(c).

         On August 20, 2014, Mr. Kollar received a termination letter from Terri Winger, Territorial Sales Manager for Allstate. Compl., ¶ 7; see also Letter, Ex. B to Motion to Dismiss, ECF No. 20-3. Mr. Kollar also received copy of a “Form U-5” that Allstate had filed with the Financial Industry Regulatory Authority, Inc. (“FINRA”) regarding the termination. Compl. at ¶ 7; see also Rev. Form U5, Ex. D to Motion to Dismiss, ECF No. 20-5. The Form notified FINRA of Mr. Kollar's “full termination” and cited, as a “termination explanation, ” his “failure to meet minimum production requirements as required by the firm.” Two weeks earlier, Mr. Kollar alleges, he had received a call from an Allstate employee named Robert Dunn. Compl., ¶ 8. Mr. Dunn allegedly told Mr. Kollar “that he was being terminated because a variable life insurance policy that was submitted on behalf of Kollar's wife with Lincoln Benefit Life ‘was rejected and not issued.'” Id. at ¶ 9.

         C. Defendants Improperly Interfere in the Sale of Mr. Kollar's Agency

         After Mr. Kollar was terminated, he sold his agency. Under the Contract, Allstate reserved the right to approve the buyer before such a sale. Specifically, Allstate told Mr. Kollar, in the Agreement, that:

You have an economic interest, as defined in this Agreement and the Incorporated Supplement and EA Manual, in your Allstate customer accounts developed under this Agreement. Subject to the terms and conditions set forth in this Agreement and the incorporated Supplement and EA Manual, you may transfer your entire economic interest in the business written under this Agreement upon termination of this Agreement by selling the economic interest in the business to an approved buyer. The Company retains the right in its exclusive judgment to approve or disapprove such a transfer

         Contract, XVI.B., pp. 7. In its termination letter to Mr. Kollar, Allstate reiterated this requirement, stating that “if you elect to sell your economic interest in the book of business, Allstate has the absolute right of approval of the buyer.” Letter, 1.

         Mr. Kollar alleges that Allstate “interfered with the sale of the agency by refusing to allow qualified, previously-approved agents to purchase the agency, forcing [him] to sell to member of Defendant's ...


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