Vazirani v. Heitz

876 F. Supp. 2d 1249, 2012 WL 2449854
CourtDistrict Court, D. Kansas
DecidedJune 27, 2012
DocketCivil Action Nos. 09-1311-MLB, 11-1032-MLB
StatusPublished
Cited by1 cases

This text of 876 F. Supp. 2d 1249 (Vazirani v. Heitz) is published on Counsel Stack Legal Research, covering District Court, D. Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Vazirani v. Heitz, 876 F. Supp. 2d 1249, 2012 WL 2449854 (D. Kan. 2012).

Opinion

MEMORANDUM AND ORDER

MONTI L. BELOT, District Judge.

Before the court are the following:

[1250]*12501. Defendants’ motion for summary-judgment (Doc. 121);
2. Plaintiffs’ response (Doc. 132); and
3. Defendant’s reply (Doc. 137).

Undisputed Facts

The following undisputed facts were in existence during the relevant time period:

Individuals

Anil Vazirani was an insurance agent. Vazirani contracted as an independent agent, also known as a producer, with life insurers to sell life insurance and annuity products of such insurers.

Mark Heitz served as President of Aviva Sales and Distribution.

Jordan Canfield served in various executive positions for sales and distribution at Aviva, including Executive Vice-President of Sales and Distribution. Canfield had direct responsibility for the management of Aviva’s independent distribution and sales relationships. Canfield left Aviva in August 2009 to become CEO of Innovation Design.

Heitz and Canfield each had the authority to terminate Aviva’s producer contracts, including its contracts with Vazirani and his downline agents.

Justin Jacquinot was an Aviva regional vice president of sales and marketing who reported to Canfield. One of Jacquinot’s responsibilities was “interfacing” with Vazirani.

Ron Shurts was a principal of Annexus Distributions.

Business Entities

Secured Financial Solutions, LLC (“SFS”) and Vazirani & Associates Financial, LLC (“Vazirani & Associates”) were owned and operated solely by Vazirani. SFS was a marketing name only. It did not sell insurance products and had no downline producers or agents. SFS had no contractual relationship with Aviva.

Vazirani & Associates was an independent marketing organization, also known as an IMO, that worked with multiple insurance companies to perform distribution and marketing functions for one or more of such insurers’ products or product lines.

Aviva Life and Annuity Company (Aviva) provided life insurance, annuity products and other services to individuals, families and businesses. Aviva used many marketing organizations to recruit agents to sell its products and to provide marketing and sales support. Aviva considers some of those organizations its “key distribution partners,” but Vazirani’s organization was not one of them.

Advisors Excel, LLC (“Advisors Excel”) was an IMO located in Topeka, Kansas. Advisors Excel competed with other marketing organizations, including Vazirani & Associates, for downline agents. Advisors Excel was one of Aviva’s key distribution partners since at least 2007.

Annexus Distributors AZ, LLC, formerly known as Shurwest Product Connection, LLC, developed with Aviva a line of annuity products (“Aviva’s Annexus products”) that were issued by Aviva under one of Aviva’s three distribution channels. Aviva’s Annexus products were marketed and distributed differently than the annuities offered under Aviva’s other two distribution channels. Aviva granted Annexus Distributors the exclusive rights to market and sell Aviva’s Annexus products. An-nexus Distributors had the right to determine (i) what marketing organizations could market Aviva’s Annexus annuities to agents and (ii) which Aviva agents could sell such annuities to consumers. The only IMOs that were authorized to market Aviva’s Annexus products to agents were a small group of IMOs which had been handpicked by Annexus Distributors. Annexus [1251]*1251Distributors were granted this exclusive marketing and distribution authority by contracting directly with those IMOs.

Financial Independence Group (“FIG”) was one of Aviva’s “key core marketing groups” since approximately 2008. FIG and Advisors Excel were two of the select group of approximately 12 IMOs that were authorized by contract with Annexus Distributors in 2008 to: (i) market Aviva’s Annexus line of products to other agents, and (ii) recruit agents to such IMO’s down-line to sell Aviva’s Annexus products. Neither Vazirani, Vazirani & Associates nor SFS were members of the select group of IMOs contracted with Annexus Distributors.

Creative Marketing International Corporation (CMIC) was a marketing organization that performed marketing and distribution functions for several different life insurers. CMIC was a wholly-owned subsidiary of Aviva which competed with Vazirani for downline agents.

Innovation Design was a product development company that developed annuity and life insurance products. Innovation Design was not (and never has been) a marketing organization, did not have (and has never had) a downline of insurance agents, and did not sell (and never has sold) insurance products.

Aviva’s Business Practices Regarding IMOs

Aviva had in place certain rules that govern the conduct and practices of IMOs concerning the recruiting of agents to such organizations’ downlines to sell Aviva products.

One of Aviva’s rules governing the conduct of IMOs in recruiting agents prohibited an IMO such as Vazirani & Associates from recruiting a producer away from another IMO to sell the same Aviva distribution-channel products by offering such producer a higher commission level within the first six months of transfer.

Aviva, never had a policy placing any restrictions on an IMO’s ability to bind downline agents to non-compete covenants.

Vazirani’s Pre-termination Dealings with Aviva

Aviva’s contract with Vazirani authorized him, subject to certain terms and conditions, to sell Aviva life insurance and annuity products as an independent producer, and to recommend that Aviva contract with additional agents to sell certain Aviva products as part of the Vazirani downline.

From approximately 2005 until April 1, 2009, Vazirani contracted with Aviva and/or its predecessor entities, American Investors and AmerUs, as an independent agent to sell Aviva life insurance and annuity products. Vazirani’s producer contract with Aviva did authorize him to sell Aviva’s Annexus products to consumers.

Vazirani and/or Vazirani & Associates received compensation from Aviva in the form of (i) commissions for his personal sales production and (ii) override commissions for the sales production of agents who were contracted with Aviva as part of the Vazirani downline.

By the close of 2008, approximately one hundred (100) of Vazirani’s downline producers were contracted with Aviva USA and approximately forty percent (40%) of his commission income was generated from the sale of Aviva annuities.

Aviva’s contract with Vazirani provided that it could be terminated with or without cause by either party , immediately upon written notice to the last known address of the other party. Similarly, Aviva’s contracts with Vazirani downline agents provided that such contracts could be terminated with or without cause by either party immediately upon written no[1252]*1252tice to the last known address of the other party.

Vazirani Was a Top Producer for Aviva

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Related

Anil Vazirani v. Mark Heitz
741 F.3d 1104 (Tenth Circuit, 2013)

Cite This Page — Counsel Stack

Bluebook (online)
876 F. Supp. 2d 1249, 2012 WL 2449854, Counsel Stack Legal Research, https://law.counselstack.com/opinion/vazirani-v-heitz-ksd-2012.