American General Life Insurance v. Rasche

273 F.R.D. 391, 2011 U.S. Dist. LEXIS 29902
CourtDistrict Court, S.D. Texas
DecidedMarch 22, 2011
DocketCivil Action No. H-10-4087
StatusPublished
Cited by17 cases

This text of 273 F.R.D. 391 (American General Life Insurance v. Rasche) is published on Counsel Stack Legal Research, covering District Court, S.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American General Life Insurance v. Rasche, 273 F.R.D. 391, 2011 U.S. Dist. LEXIS 29902 (S.D. Tex. 2011).

Opinion

Memorandum and Order

GRAY H. MILLER, District Judge.

Pending before the court are defendant’s motions to dismiss for lack of personal jurisdiction under Fed. R. Civ. P. 12(b)(2), improper venue under Fed. R. Civ. P. 12(b)(3), and for failure to state a claim under Fed. R. Civ. P. 12(b)(6). Dkt. 5. In the alternative, defendant seeks a transfer of venue to the United States District Court for the Southern District of Indiana, Evansville Division. After a review of the complaint, defendant’s motion, plaintiffs response, and the applicable law, the court is of the opinion that each of these motions should be DENIED.

I. Background

1. The complaint

Plaintiff American General Life Insurance Company (“American General”) alleges that defendant Lawrence Rasche was its agent, and that, pursuant to a “General Agent Contract” signed by the parties, Rasche agreed that any disputes arising out of the contract would be governed by the laws of Texas. Dkt. 1 at ¶7. Defendant marketed American General life insurance policies to his customers, and sold two policies, policy numbers A70016461 L (“Horn Policy”) and A70018107L (“Alt Policy”), that are the source of this dispute. Id. at ¶ 8. Defendant earned commissions on the sale of these policies pursuant to the General Agent Contract, but since those commissions were paid by American General, the Horn Policy has been classified as “not taken out” and the Alt Policy has lapsed due to nonpayment. Id. at ¶ 9 The General Agent Contract requires defendant to return any unearned commissions paid to him in the event that American General returns premiums to the policy owner. Id. at ¶ 10. American General alleges that it returned premiums with respect to both the Horn and Alt policies, but that defendant has refused to repay the commissions he received for those policies, totaling $224,741.20. Id. Plaintiff filed suit alleging breach of contract and breach of fiduciary duty seeking repayment of the commissions plaintiff paid defendant on the sale of the Horn Policy and Alt Policy. Id. at ¶ ¶ 12, 15. American General seeks to recover both for breach of contract, and for a breach of fiduciary duty. Id.

2. The motion to dismiss or to transfer venue

Defendant Rasche has filed a motion to dismiss plaintiffs claims under Federal Rule of Civil Procedure 12(b)(2) for lack of person[394]*394al jurisdiction, and Rule 12(b)(3) for improper venue. Defendant also moves to dismiss the breach of fiduciary duty claim under Rule 12(b)(6) for failure to state a claim upon which relief can be granted. Alternatively, defendant seeks to transfer venue to the United States District Court for the Southern District of Indiana, Evansville Division.

II. Analysis

1. Lack of Personal Jurisdiction

A Standard of Review

A court must dismiss an action when it lacks personal jurisdiction over the defendant. Fed. R.Civ. P. 12(b)(2). When a district court rules on personal jurisdiction without an evidentiary hearing, as is the case here, the plaintiff must make a prima facie showing of jurisdiction. Johnston v. Multidata Sys. Int’l Corp., 523 F.3d 602, 609 (5th Cir.2008). In deciding whether to exercise personal jurisdiction, the court can consider the entire contents of the record, including affidavits. Paz v. Brush Engineered Materials, Inc., 445 F.3d 809, 812 (5th Cir.2006). The court must resolve all conflicts in the evidence in favor of the plaintiff and accepts as true all of the plaintiffs uncontroverted allegations. Luv n’ care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 469 (5th Cir.2006).

In a diversity action, a federal court may exercise personal jurisdiction over a nonresident defendant if: (1) the long-arm statute of the forum state allows the exercise of personal jurisdiction over that defendant; and (2) the exercise of personal jurisdiction over that defendant is consistent with due process under the U.S. Constitution. Mullins v. TestAmerica, Inc., 564 F.3d 386, 398 (5th Cir.2009). The two-step personal jurisdiction inquiry collapses into one federal due process analysis because the Texas long-arm statute extends to the limits of federal due process. Johnston, 523 F.3d at 609. “To satisfy the requirements of due process, the plaintiff must demonstrate: (1) that the nonresident purposely availed himself of the benefits and protections of the forum state by establishing ‘minimum contacts’ with the state; and (2) that the exercise of jurisdiction does not offend ‘traditional notions of fair play and substantial justice.’ ” Mullins, 564 F.3d at 398 (internal quotations omitted).

A forum state may exercise specific jurisdiction over a nonresident defendant “when the nonresident defendant’s contacts with the forum state arise from, or are directly related to, the cause of action.” Allred v. Moore & Peterson, 117 F.3d 278, 286 (5th Cir.1997). The court considers whether the defendant has purposefully availed himself of the laws of the forum state and could reasonably anticipate being sued there. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 481-82, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985).

B. Relevant Facts

Defendant Rasche is a resident of Indiana, and he entered into the General Agent Contract with plaintiff, a Texas corporation. Dkt. 1. The General Agent Contract provides, inter alia, that any “unearned” compensation Rasche may receive arising from “premiums or payments returned to policy or contract owners” is to be repaid immediately to American General. Id. at 9. American General is a Texas corporation with its principal place of business in Texas. Id. The General Agent Contract contains the following arbitration provision:

a. Any and all disputes arising under this Contract shall be settled in Houston, Texas, or such other place as may be mutually agreed upon by the parties, under the rules of the American Arbitration Association, and judgment may be entered upon the award in any court of competent jurisdiction.

b. The arbitrator will decide the dispute in accordance with the substantive law of Texas.

Dkt. 15-2 at 15.

Rasche sold insurance policies pursuant to the General Agent Contract with American General, and received commissions on those sales, for fifteen years. Dkt. 15, Ex. A, ¶ 4. The claims in this case arise under the “unpaid commissions” provision of the General Agent Contract. Dkt. 1.

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Bluebook (online)
273 F.R.D. 391, 2011 U.S. Dist. LEXIS 29902, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-general-life-insurance-v-rasche-txsd-2011.