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Snyder Insurance Services, Inc. v. Kulin-Sohn Insurance Agency, Inc.

United States District Court, D. Kansas

June 6, 2018



          Daniel D. Crabtree United States District Judge

         Amateur sports and fitness activities play a substantial role in the development of American youth. Often, the gyms and fitness centers who host these activities elect to buy insurance coverage to protect themselves from liability. The parties in this case-plaintiff Snyder Insurance Services, Inc. and defendant Kulin-Sohn Insurance Agency, Inc.-both provide insurance brokerage services to amateur sports venues and children's fitness centers. But there's some bad blood between these two. Snyder Insurance and plaintiff Raymond Snyder-an agent and Snyder Insurance's owner and President-allege that Kulin-Sohn Insurance and defendant Mark Sohn-Kulin-Sohn Insurance's owner and also an agent-have made defamatory remarks about plaintiffs and caused plaintiffs to lose some of their clients.

         Currently before the court is defendants' Motion to Dismiss (Doc. 33). In it, defendants argue that the Complaint[1] fails to allege a tortious interference with prospective business relations claim sufficiently. For reasons explained below, the court denies the motion.

         I. Facts

         Because defendants' motion relies on Federal Rule of Civil Procedure 12(b)(6), the court must accept the well-pleaded facts in the Complaint as true. Brokers' Choice of Am., Inc. v. NBC Universal, Inc., 757 F.3d 1125, 1136 (10th Cir. 2014). It also must construe the alleged facts in the light most favorable to plaintiff. Id.

         As explained above, Snyder Insurance and Kulin-Sohn Insurance are insurance brokers who insure amateur sports and children's fitness centers. Mr. Snyder is the owner, President, and an agent for Snyder Insurance. Mr. Sohn owns Kulin-Sohn Insurance and acts as an agent for that company. The market for insuring amateur sports and children's fitness centers is a relatively small, niche segment of the larger insurance market.

         In 2016, defendants told several of plaintiffs' clients-including Emerald City Gymnastics, All-Star Gymnastics, and Ninja Zone-that plaintiffs had lied to them, misled them about their insurance coverage, and misled other gyms about their insurance coverage. Defendants also said that plaintiffs had lied to plaintiffs' insured and insurance carriers. Snyder Insurance expected Emerald City, All-Star, and Ninja Zone to continue to renew their policies through Snyder Insurance and possibly refer new clients there. Particularly, Snyder Insurance expected Ninja Zone to refer new clients because it franchises its program curriculum to other gyms who might need the same type of insurance. Mr. Snyder expected to receive commissions and broker's fees for anticipated renewals by Emerald City, All-Star, and Ninja Zone. But he allegedly lost these earnings when they secured insurance through someone else.

         Defendants made these statements despite knowing they were false. Indeed, defendants had made similar statements in 2004 and 2008. When defendants made the false statements in 2004 and 2008, plaintiffs sent defendants cease and desist letters, cautioning defendants to stop making false statements to plaintiffs' clients.

         Plaintiffs now have filed this lawsuit against defendants. In the newly amended Complaint, plaintiffs bring two claims: defamation (Count I) and tortious interference with prospective business relations and advantage (Count II). Previously, the court ruled that the Complaint sufficiently alleged a defamation claim. Doc. 18 at 5. But, in the same Order, the court held that the prior Complaint required more specific factual allegations to plead a sufficient claim for tortious interference with prospective business relations (“TIBR”). Id. at 9. On March I, 2018, plaintiffs filed an amended Complaint. Two weeks later, defendants filed this motion challenging the sufficiency of the allegations supporting the TIBR claim.

         II. Legal Standard

         On a motion to dismiss for failure to state a claim, the court accepts all facts pleaded by the non-moving party as true and draws any reasonable inferences in favor of the non-moving party. Brokers' Choice of Am., 757 F.3d at 1136. “To survive a motion to dismiss [under Rule 12(b)(6)], a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “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, L.L.C. v. Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007) (emphasis in original)).

         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'” which, as the Supreme Court has explained, simply “will not do.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555). This is so because the court need not “ʻaccept as true a legal conclusion couched as a factual allegation.'” Twombly, 550 U.S. at 557 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)).

         III. Discussion

         As explained above, defendants' current motion solely challenges the sufficiency of the allegations supporting the Complaint's TIBR claim. In Kansas, [2] TIBR requires pleading and proof of: “(1) the existence of a business relationship or expectancy with the probability of future economic benefit to the plaintiff; (2) knowledge of the relationship or expectancy by the defendant; (3) that, except for the conduct of the defendant, plaintiff was reasonably certain to have continued the relationship or realized the expectancy; (4) intentional misconduct by defendant; and (5) damages suffered by plaintiff as a direct or proximate cause ...

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