The attorneys for the plaintiff summarize on its website the case in the following manner, “The Complaint alleges that American Family improperly classifies its agents as independent contractors when they are actually employees, reserving the right to exercise complete control over every important aspect of the agent-employees’ businesses. Examples of American Family’s control include, but…
Category: Other Suits
Allstate v Mota
James Mota was an exceptionally successful exclusive financial specialist (“EFS”), who primarily marketed and sold financial products including life insurance. From his Answer and Counterclaims, filed on 3-25-21, he acted quite appropriately in his exit from Allstate in the sense that he notified Allstate in advance of his exit, he found a successor and trained him to take care of his clients or accounts, and kept in touch with agents who had referred him business in the past by making known to them and the successor his continuous assistance to old clients. Allstate did not cite one case where he directed old customers to cancel Allstate policies. And yet Allstate sent him cease and desist letters on 7-9-20 and 10-19-20 and sued him for trade secret theft on 2-2-21. Judge Liman seemed to believe that Mota had acted honorably and decently.
During the period between 1-20-20 when Mota quitted his job with Allstate and 10-19-20 when Allstate filed the suit against him, Allstate “had continued to use Mota’s name and, as part of Allstate’s wrongful efforts to solicit business in Mota’s name, continued to falsely represent that Mota was affiliated with Allstate after he had left the company,” alleged Mota’s attorney, Mr. Ward. (Answer and Counterclaims, §53, p.17.) Judge Liman summarized the case in his 11-5-21 Opinion and Order and concluded, “Allstate’s motion to dismiss the first (unfair competition, Answer and Amended Counterclaims, §66-73) and second counterclaims (misappropriation of Mota’s name and image, Id., §74-85) is denied; the third counterclaim (bad faith claim under the defend trade secrets act, Id., §86-89) is dismissed.” In his 5-20-22 final Opinion and Order, he concluded, “Mota’s motion for partial summary judgment as to liability on his second (amended) counterclaim is GRANTED, and Allstate’s motion for summary judgment is DENIED.” A big victory to the defendant! Or to agents, who were constantly and routinely bullied by Allstate in this fashion? Judge Liman had handed agents a deadly weapon against the misuse of the no-compete covenant by Allstate.
It may be noted that the no-compete covenant signed by the EA of P&C is different from the restrictive no-compete covenant, signed by the EFS of financial products. The latter means that an EFS would not influence an policy holder of Allstate to cancel an existing policy, whereas the former forbids an ES to solicit business from his/her former customers for a period, usually, of one year.
Slay, et. al. v Allstate
We did not provide the complaint of Mary Slay, first filed in 9/2016, because Justice Cunningham summed her case ably and clearly in the delivery of the judgment of the three-justice panel of the Appellate Court.
The three justices reviewed whether the allegations of the second amended complaint stated a claim for breach of the EA Agreement, arising from a breach of the implied covenant of good faith and fair dealing. They came to the conclusion that Allstate had breached in this case the implied covenant of good faith and fair dealing and thus reversed and remanded the case back to the lower court. It indicates that the EA Agreement is not air-tight, as many agents made to believe, and it can be challenged. However, it must be pointed out that this judgment is made narrowly in view of the facts presented by Slay and cannot be applied broadly to refute the EA Agreement by referring to a breach of the implied covenant of good faith and fair dealing. Below we outline the Slay case:
Prestige Inc., et al. v. Allstate
Agent Cicciarelli of Prestige Insurance signed up as an ECP (Enhanced Compensation Plan) scratch agent, which means he would receive higher than usual commission paid to agents by Allstate. He signed up on 8/1/20 and became instantaneously a superman agent – because he claimed, “Cicciarelli and Prestige, by all objective calculations, was the most…
Jourdan v. Allstate, et al.
The main text of the complaint is only 26 pages; however, the many exhibits consist of 548 of 580 pages – the Allstate R3001S contract together with several attachments (mainly, rules and regulations of the company) alone claims 422 pages. Plaintiff alleged that Allstate would not let him sell his economic interests (say, 10%) of his book of business (with a premium sum of $1,907,497 and a retention rate of 93%+), which he had built from the scratch in three years (2013-16), to an existing Allstate agent – which can easily fetch a sales price of $476,874.25 (= $190,749.7 x 2.5 multiplier) in 2015/16. Allstate demanded that his book could only be sold to an outside qualified buyer. He had several qualified buyers but could not receive approval from Allstate within the timeframe of 90 days to close a deal. He asked for an extension and was rejected by Allstate. In his view, Allstate had violated the Florida Statute §626.754 in forbidding him from serving his customers and receiving commission payments after termination. Allstate went ahead forfeiting his book without paying him a dime.
Two other issues are of concern. Was the plaintiff guilty of a major misconduct or a minor infraction? The offense is not clearly stated in the termination letter. Was the plaintiff given a chance of defensing himself? Was he provided evidence of his wrongdoings? Granting the fact that a company of the private sector does not need to provide due process for termination, it does raise the suspicion that Allstate acted arbitrarily, and its goal was to pocket the value of the economic interest of the book. The second concern is that, during the 90 days after termination, Allstate would tolerate another Allstate agents to raid the customers of the plaintiff’s book.
The case was remanded back to the circuit court, filings of which were not available to us now. We shall update the content, once available.
Ochoa, et al. v. Allstate, et al.
At issue is whether Allstate can single out Ochoa and his staff for special underwriting requirements; in this case, to go beyond the six-month requirement of proof of prior insurance before binding the policy – as Allstate requires all its agents to do. Allstate allegedly imposed a go-beyond requirement on Ochoa, who was Spanish, and…
Nocella v. Allstate
Star agent Nocella received his termination letter on 3/1/18 and his attorney, Mr. DellUniversila, filed a complaint at the N.Y. Suffolk County Supreme Court on 3/10/18 and received an injunction/Temp Restraining Order from Judge Gaguilo on 3/15/18. The judge’s injunction order ceased the sale of his book and restored the use of telephones and…
Tabor, et al. v. Allstate, et al.
The 10 plaintiffs of the Tabor case filed on 5/11/15 are all residents of Tennessee, but they filed the suit in the state of Pennsylvania. This is because the famous suits Romero I[1] & II[2] were filed there. The Romero suit grew from 30 to approx. 430 plaintiffs and was first filed in 2001…
Wasgatt v. Allstate, et al.
This is an ingenious lawsuit of taking the novel legal approach of accusing Allstate of misclassifying its agents as independent contractors and, in fact, they have been treated as employees and thus deserved multiple compensations as an employee. Credit goes both to attorney Mr. Cutler for this unusual approach and Agent Wasgatt, who had both the Mass. Insurance Bureau and attorney’s office involved in his case. Wasgatt would receive attorney fee if he won, since his suit had been approved by the latter office. Wasgatt thus could have a contingent agreement with his attorney without the financial burden of engaging a lawsuit. Also, Mr. Cutler made the brilliant move of successfully dragging the president of Allstate, Mr. Shapiro, into the suit as defendant, which led to a speedy settlement with generous concessions from Allstate. Quite a success story!