United States District Court, D. Kansas
SNYDER INSURANCE SERVICES, INC. and RAYMOND F. SNYDER, Plaintiffs,
MARK R. SOHN and KULIN-SOHN INSURANCE AGENCY, INC., Defendants.
MEMORANDUM AND ORDER
D. Crabtree United States District Judge
matter comes before the court on defendant Mark R. Sohn and
Kulin-Sohn Insurance Agency's Motion to Dismiss (Doc. 12)
plaintiffs' Snyder Insurance Services, Inc.
(“SIS”) and Raymond F. Snyder's First Amended
Complaint. This motion represents defendants' third
motion to dismiss. Plaintiffs responded to the current motion
(Doc. 16), and defendants now have replied (Doc. 17). For
reasons explained below, the court grants defendants'
motion, but only in part. The court explains its reasoning,
below, and also explains what is granted and what is denied.
Facts Governing Defendants' Motion to Dismiss
following facts are taken from plaintiffs' First Amended
Complaint (Doc. 5). Because the current dismissal motion
relies on Fed.R.Civ.P. 12(b)(6), the courts accepts the
pleaded facts as true and views them in the light most
favorable to them.
Mark R. Sohn, an Illinois resident, owns Kulin-Sohn Insurance
Agency, Inc., an insurance company incorporated under
Illinois law and having its principal place of business in
Illinois. Plaintiff SIS is an insurance brokerage company
that specializes in insuring amateur sports and
children's fitness centers across the country. Plaintiff
Raymond F. Snyder is SIS's president. The First Amended
Complaint alleges that Mr. Snyder is a Kansas resident and
that SIS is a Kansas corporation with its principal place of
business in Kansas.
February 2016, defendants filed a complaint with the State of
Washington Office of Insurance Commissioner
(“Washington OIC”). Defendants' complaint to
Washington OIC alleged that plaintiffs: (1) falsified and/or
altered insurance documents; (2) misrepresented the number of
students on their insurance applications to reduce the
premiums charged on the policies; (3) defrauded insurance
carriers; (4) repeatedly solicited clients with the intent of
indirectly placing them with unauthorized insurers; (5)
engaged in a pattern of fraud to gain a business advantage;
and (6) violated Washington laws, regulations, and rules.
Doc. 5 at 4. According to plaintiffs' allegations
here-ones the court must accept as true for present
purposes-defendants did not conduct reasonable due diligence
to determine whether their allegations were true or false
before filing their complaint. And, as a result of
defendants' complaint, the Washington OIC launched an
investigation into defendants' allegations, eventually
concluding that they were false and unsubstantiated.
April 2016, Mr. Sohn contacted Precision Gymnastics
(“Precision”), one of plaintiffs' clients in
California. Mr. Sohn communicated to Precision that
plaintiffs had lied to them, had misled them to make them
believe they had insurance coverage when, in fact, they did
not, and similarly had misled and defrauded other gyms. Like
the assertions made in defendants' Washington OIC
complaint, Mr. Sohn's statements to Precision are untrue
move to dismiss the case under Fed.R.Civ.P. 12(b)(6) for
“failure to state a claim upon which relief can be
granted.” Fed.R.Civ.P. 12(b)(6). Federal Rule of Civil
Procedure 8(a)(2) requires a complaint to contain “a
short and plain statement of the claim showing that the
pleader is entitled to relief.” Although this Rule
“does not require ‘detailed factual allegations,
'” it demands more than “[a] pleading that
offers ‘labels and conclusions' or ‘a
formulaic recitation of the elements of a cause of
action.'” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 555 (2007)).
survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to ‘state
a claim to relief that is plausible on its face.'”
Id. (quoting Twombly, 550 U.S. at 570).
“A claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Id. (citing
Twombly, 550 U.S. at 556). “Under this
standard, ‘the complaint must give the court reason to
believe that this plaintiff has a reasonable
likelihood of mustering factual support for these
claims.'” Carter v. United States, 667
F.Supp.2d 1259, 1262 (D. Kan. 2009) (quoting Ridge at Red
Hawk, LLC v. Schneider, 493 F.3d 1174, 1177 (10th Cir.
motion to dismiss under Rule 12(b)(6) the court must assumes
that a complaint's factual allegations are true. But
legal conclusions are different. The court need not accept
mere legal conclusions as true. Id. at 1263.
“Threadbare recitals of the elements of a cause of
action, supported by mere conclusory statements” are
not enough to state a claim for relief. Iqbal, 556
U.S. at 678. In addition to the complaint's factual
allegations, the court also may consider “attached
exhibits and documents incorporated into the complaint by
reference.” Smith v. United States, 561 F.3d
1090, 1098 (10th Cir. 2009) (citations omitted).
addressing defendants' arguments, the court must
determine which state's substantive law governs
plaintiffs' claims. Rigby v. Clinical Reference Lab.,
Inc., 995 F.Supp. 1217, 1221 (D. Kan. 1998) (citing
Erie R. Co. v. Tompkins, 304 U.S. 64, 78 (1938)).
Because the parties are citizens of different states and the
amount in controversy exceeds $75, 000, the court has
diversity subject matter jurisdiction over this case.
See 28 U.S.C. § 1332. Federal courts sitting in
diversity apply the choice of law rules of the forum state.
See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S.
487, 496 (1941). For tort claims, Kansas applies the law of
the state where the tort occurred. Brown v. Kleen Kut.
Mfg. Co., 714 P.2d 942, 944 (Kan. 1986); see also
Atchison Casting Corp. v. Dofasco, Inc., 889 F.Supp.
1445, 1456 (D. Kan. 1995). Under this rule, the law of the
“place of the wrong controls.” 889 F.Supp. at
1455. “The ‘place of the wrong' is that place
where the last event necessary to impose liability took
place.'” Dofasco, Inc., 889 F.Supp. at
1456 (quoting Ling v. Jan's Liquors, 703 P.2d
731, 735 (Kan. 1985)). “Under this rule, the
tort is deemed to have occurred where the wrong was
felt.” Altrutech, Inc. v. Hooper Holmes, Inc.,
6 F.Supp.2d 1269, 1276 (D. Kan. 1998).
party disputes that Kansas law applies in this case. Indeed,
both parties cite Kansas case law in their briefs. Also,
plaintiffs are Kansas residents asserting defamation and
tortious interference claims. Thus, the wrongs they
experienced were felt in Kansas, ...