Agent’s suit claiming Allstate stole his clients is dismissed

Where an insurance agent sued Allstate for giving his book of business to another agent, but the agency agreement provided that all insurance policies were owned by Allstate, the conversion claim failed as a matter of law.

Background

Keith Hallacher sued The Allstate Insurance Company after Allstate closed Hallacher’s insurance agency and gave his book of business to another Allstate agent. Hallacher alleges that his agency was meeting the business objectives that Allstate had established when he signed Allstate’s exclusive agency agreement, so Allstate had no right to close his agency. Allstate moves to dismiss these claims arguing that, under the contract‘s plain language, it was entitled to close Hallacher’s agency at any time with or without cause.

Conversion

Allstate argues that Hallacher fails to state a claim for conversion because he has not alleged ownership of any property Allstate allegedly took when it closed his agency. In his response, Hallacher clarifies that Allstate took the book of business that he purchased and gave it to another Allstate agent after closing his agency. In the light most favorable to Hallacher, the court assumes this is the “property” Allstate allegedly took.

But under the plain language of the contract, the parties agreed that Allstate “will own all business produced under the terms of this Agreement.” This includes Allstate insurance policies that Hallacher procured from his clients. Allstate thus cannot convert property it owns. The complaint and pleadings do not indicate any other property that Allstate allegedly took from Hallacher. This claim must be dismissed.

Breach of contract

Hallacher’s claim fails because, based on the plain language of the contract, he cannot demonstrate that Allstate breached any obligation to him.

The contract permitted either party to terminate the agreement “with or without cause.” That provision also states that the non-breaching party is entitled to 90 days’ prior written notice. While the timeline is not readily apparent from the complaint, Hallacher does not appear to allege that Allstate gave him less than the required 90 days’ notice before closing his agency.

That section also provides that Allstate will compensate the party “for a period up to and including the specified termination date.” Hallacher includes in his complaint that Allstate promised him compensation of $4,748.21 per month for a period of 24 months. He does not allege that Allstate reneged on this promise. There are no other allegations in the complaint that could lead the court to conclude that Allstate breached the contract.

Hallacher devotes some time to discussing Allstate imposing additional validation targets without his consent or consultation and using that as a basis for terminating the contract and closing his agency. But Allstate reserved in the contract “the right to amend the Supplement, EA Manual, and Agency Standards at any time without prior notice ….”Allstate then had every right, under the contract, to adopt new validation targets for its agencies and require its contractors to meet those standards.

Defendant’s motion to dismiss granted.

Hallacher v. The Allstate Insurance Company, Case No. 7:21-cv-00466, Jan. 19, 2022. WDVA at Roanoke (Cullen). VLW 022-3-023. 8 pp.