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Minnesota Life Insurance v. Brian Michael Philpot

January 7, 2013


The opinion of the court was delivered by: Barry Ted Moskowitz, Chief Judge United States District Court


Pending before the Court is Defendant Beverly Ann Fletcher's motion for summary judgment (ECF No. 84). For the reasons set forth herein, the Court DENIES Defendant Fletcher's motion for summary judgment.


Plaintiff Minnesota Life Insurance Company ("Minnesota Life" or "Plaintiff") is a life insurance company. The present action arises out of an alleged fraudulent scheme, coordinated among the various defendants (insurance sales agents, their employers, and their funding entities), to elicit large sales commissions from Plaintiff for policies that were deliberately allowed to lapse, resulting in Plaintiff paying more in sales commissions than it earned in policy payments. Defendant Fletcher was a sales agent with Marketing Partnerships, Inc., an insurance brokerage that sold life insurance policies, during the relevant time period.

Plaintiff commenced this action on April 18, 2011. Defendants filed various motions to dismiss, and the Court issued an order on those motions on September 27, 2012 ("September 27 order"). But while the motions to dismiss were under submission to the Court, Defendant Fletcher, who was among the defendants with a motion to dismiss pending, also filed a motion for summary judgment.

Plaintiff has alleged ten causes of action as follows: (1) unfair competition in violation of California Business & Professions Code § 17200, et seq.; (2) breach of fiduciary duty; (3) breach of contract; (4) breach of the covenant of good faith and fair dealing; (5) fraud; (6) negligence; (7) unjust enrichment; (8) violation of 18 U.S.C. § 1962(c) ("civil RICO") and 1962(d) ("RICO conspiracy"); (9) declaratory relief; and (10) accounting. In the Court's September 27, 2012 order, the Court dismissed Plaintiff's claims for declaratory relief and an accounting, but all other claims remain.


Summary judgment is appropriate under Rule 56 of the Federal Rules of Civil Procedure if the moving party demonstrates the absence of a genuine issue of material fact and entitlement to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A fact is material when, under the governing substantive law, it could affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Freeman v. Arpaio, 125 F.3d 732, 735 (9th Cir. 1997). A dispute is genuine if a reasonable jury could return a verdict for the nonmoving party. Anderson, 477 U.S. at 248.

A party seeking summary judgment always bears the initial burden of establishing the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. The moving party can satisfy this burden in two ways: (1) by presenting evidence that negates an essential element of the nonmoving party's case; or (2) by demonstrating that the nonmoving party failed to establish an essential element of the nonmoving party's case on which the nonmoving party bears the burden of proving at trial. Id. at 322-23. "Disputes over irrelevant or unnecessary facts will not preclude a grant of summary judgment." T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987).

Once the moving party establishes the absence of genuine issues of material fact, the burden shifts to the nonmoving party to set forth facts showing that a genuine issue of disputed fact remains. Celotex, 477 U.S. at 314. The nonmoving party cannot oppose a properly supported summary judgment motion by "rest[ing] on mere allegations or denials of his pleadings." Anderson, 477 U.S. at 256. When ruling on a summary judgment motion, the court must view all inferences drawn from the underlying facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).


At the outset, the Court notes that much of Defendant Fletcher's motion for summary judgment reiterates arguments made in her motion to dismiss, which the Court has since ruled on. While Defendant Fletcher has reframed the arguments as Plaintiff being unable to provide admissible evidence for its claims rather than failing to state them, that does not affect the merits of her arguments.

But one argument that Defendant Fletcher relied on extensively in both motions is that there was no enforceable contract between her and Plaintiff. In the Court's September 27 order, it declined to address this issue on the grounds that it was inappropriate in that procedural posture. But on a motion for summary judgment, the Court may consider facts outside the pleading, and therefore addresses the question of whether there was a valid contract.

Defendant Fletcher argues that there is no enforceable written contract between herself and Plaintiff because the signature pages in the Broker Sales Contract included language that "You and We must sign two copies of the contract before it goes into effect." (First Amended Complaint ("FAC"), Ex. B.) Plaintiff does not dispute that only one copy was signed. Instead, it argues that the requirement was not material to the contract, and ...

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