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Klingshirn v. Fidelity & Guaranty Life Ins. Co.

United States District Court, Fourth Circuit

August 22, 2013

KENT KLINGSHIRN, Plaintiff,
v.
FIDELITY & GUARANTY LIFE INSURANCE COMPANY, Defendant.

MEMORANDUM OPINION

Richard D. Bennett United States District Judge

Plaintiff Kent Klingshirn (“Plaintiff” or “Klingshirn”), proceeding pro se, has brought this defamation and libel per se action against Defendant Fidelity & Guaranty Life Insurance Company (“Defendant” or “F&G”). Plaintiff’s claim is based on one form letter sent by Defendant to one of Plaintiff’s customers rejecting this customer’s annuity application on the ground that “certain regulatory or administrative requirements were not completed by your agent.” Following a period of discovery, Defendant F&G filed the pending Motion for Summary Judgment (ECF No. 28) pursuant to Rule 56 of the Federal Rules of Civil Procedure. This Court has jurisdiction over this matter as diversity jurisdiction[1] under 28 U.S.C. § 1332 exists and the amount in controversy exceeds the sum or value of $75, 000.00, exclusive of interest and costs. The parties’ submissions have been reviewed and no hearing is necessary. See Local Rule 105.6 (D. Md. 2011). For the reasons that follow, Defendant Fidelity & Guaranty Life Insurance Company’s Motion for Summary Judgment (ECF No. 28) is GRANTED.

BACKGROUND

This Court reviews the facts and all reasonable inferences in the light most favorable to the nonmoving party. Scott v. Harris, 550 U.S. 372, 378 (2007). Preliminarily, the parties have agreed that no genuine issues of material fact exist in this case. Def.’s Mem. in Supp. of Mot. for Summ. J. at 5, ECF No. 28-1 [hereinafter Def.’s MSJ]; Pl.’s Opp. to Def.’s Mot. for Summ. J. at 2, ECF No. 30-1 [hereinafter Pl.’s OSJ.

Plaintiff Kent Klingshirn (“Plaintiff” or “Klingshirn”) is a resident of Medina County, Ohio and has been an “active independent, insurance agent licensed in the State of Ohio.” Pl.’s Compl. ¶¶ 3, 6, ECF No. 1. Plaintiff sells various insurance products and operates under various business names including Klingshirn Investment Advisors, Klingshirn retirerx.com, Klingshirn & Associates and Klingshirn Companies. Def.’s MSJ, Ex. A., Klingshirn Dep. at 12, 17, 18-19, 62, ECF No. 28-2 [hereinafter Klingshirn Dep.]. Additionally, Plaintiff is an agent for twenty-five (25) to fifty (50) different insurance companies on behalf of which he sells numerous types of insurance products such as health insurance, long term care insurance, Medicare supplements, annuities and life insurance. Id. at 22-23. BHC Marketing, Ltd. (“BHC”), a field marketing organization that markets insurance and financial products, was at the times relevant to the Complaint Klingshirn’s “up line [a]gency.” Pl.’s Compl. ¶ 11.

Klingshirn became an agent of Defendant Fidelity & Guaranty Life Insurance Company (“Defendant” or “F&G”), an insurance company organized under Maryland law with its principal place of business in Baltimore, Maryland, on October 26, 2011. Pl.’s Compl. ¶¶ 4, 7; Def.’s Answer ¶¶ 4, 7, ECF No. 10. On October 28, 2011, Klingshirn completed F&G product specific training required under Ohio law pursuant to the state’s adoption of the revised National Association of Insurance Commissioners (“NAIC”) Model Regulation on Suitability in Annuity Transactions. Pl.’s Compl. ¶¶ 8-10; Def.’s Answer ¶¶ 8-10; Pl.’s OSJ, Ex. No. 2 at 12, ECF No. 30-3. “Defendant identified SalesLink as a web-based location where insurance agents could satisfy [F&G]’s product specific training requirements.” Def.’s Resp. to Pl.’s Second Admis. Req. at 2, no. 5, ECF No. 30-2. A couple of days later, on November 1, 2011, BHC advised Klingshirn that Defendant was unable to access SalesLink and could not verify that Klingshirn had satisfied the required product specific training. Pl.’s Compl. ¶ 11. To remedy the situation, Plaintiff immediately forwarded a screen printout of the SalesLink webpage to BHC indicating that he completed the required product training for FG Index Escalator 6, 8 & 10, FG Guarantee-Platinum 3, 5 &7, and FG Guarantee-Plus 3, 5 & 7. Id.; Pl.’s OSJ, Ex. No. 2 at 12.

On November 3, 2011, Klingshirn sold two annuities to his client, Jack C. Kovacs (“Kovacs”), in the total amount of $105, 000.00. Pl.’s Compl. ¶ 12. Klingshirn’s expected commission was $6, 300.00. Pl.’s Resp. to Interrog. No. 9, ECF No. 28-3. Subsequently, however, on November 16, 2011, Defendant sent a letter to Kovacs rejecting his annuity application on the ground that “certain regulatory or administrative requirements were not completed by [his] agent prior to the sale of [his] policy.” Nov. 16, 2011 Letter from F&G to Kovacs, ECF No. 1-3. In this letter, Defendant also offered to assist Kovacs in contacting his agent or “locating a properly authorized agent.” Id. The same day, Defendant notified BHC that Kovacs’ policy was canceled due to Klingshirn’s failure to complete the required product specific training. Pl.’s Compl., Ex. C, ECF No. 1-4.

Upon being notified that his client received the above mentioned letter, Klingshirn alleges that he became physically ill and vomited. Pl.’s Compl. ¶ 16. He then immediately went to Kovacs home to attempt to explain the situation but, despite his efforts, Kovacs allegedly refused to proceed with the annuity and forbade any further contact. Klingshirn Dep. at 52. Klingshirn further claims that he contacted Defendant on several occasions to request the issuance of a letter of apology and of a correction letter. Pl.’s Compl. ¶¶ 18-21; see also Nov. 23, 2011 Letter from Klingshirn to Defendant, Pl.’s OSJ, Ex. 2 at 11. Klingshirn alleges that when Defendant refused to issue a correction and apology letter, he sent a “certified letter to Defendant requesting compensation for willingly and maliciously damaging [his] reputation while causing mental pain, emotional distress and humiliation.” Id. at ¶ 22. Subsequently, on January 11, 2012, Defendant sent a letter to Kovacs, with a carbon copy to Klingshirn, indicating that Kovacs’ application was “inadvertently cancelled due to an administrative error.” Pl.’s Compl., Ex. D, ECF No. 1-5. The letter also stated that Klingshirn had “in fact satisf[ied] the noted requirement prior to the signing of the applications.” Id. The letter further informed Kovacs that he should contact his agent if he would like to continue with the issuance of the policies. Id.

On February 21, 2012, Klingshirn brought this action alleging defamation and libel per se against Defendant. See generally Pl.’s Compl. Specifically, Klingshirn claims that the letter to Kovacs and the notice to BHC contained a defamatory statement which constitutes libel per se. Pl.’s Compl. ¶¶ 24-25. Klingshirn further claims that this statement caused injury to his reputation, caused him to lose a client and sales, as well as caused him mental pain, emotional distress as well as humiliation. Pl.’s Compl. ¶ 26. With respect to the mental pain and emotional distress, Klingshirn claims that he vomited upon learning that the letter included the statement in question and that contacting Defendant to correct the situation caused him to experience anxiety and sleeplessness. Klingshirn Dep. at 64. Klingshirn seeks $6, 300.00 in special damages for lost commission and $343, 700.00 in compensatory damages. Pl.’s Resp. to Interrog. No. 9. Klingshirn admitted during his deposition that his calculations for “compensatory damages for loss of reputation, humiliation, emotional distress and loss of client” were based on other cases he found on the internet site VerdictSearch.com. Klingshirn Dep. at 70. Klingshirn further acknowledged that none of the cases relied upon involved insurance agents. Id.

The record reflects that at his deposition Kovacs testified that the November 16, 2011 letter did not lead him to conclude that he did not want to do business with Klingshirn. Excerpt from Kovacs Dep. at 14, ECF No. 28-7. Kovacs explained that he at first believed that the application had been rejected because he had “procrastinated and then the time lapsed.” Excerpt from Kovacs Dep. at 13, ECF No. 28-6. Then he testified that while not referring to the agent by name, the letter indicated that Klingshirn “didn’t do something that was necessary, whatever that was.” Excerpt from Kovacs Dep. at 17, ECF No. 30-12. While Kovacs stated that the better agent would be the one who “completed the requirements, ” Excerpt from Kovacs Dep. at 18, ECF No. 30-12, he also testified that he was still doing business with Klingshirn and that he had recommended Klingshirn to at least one other person. Kovacs Dep. at 14-15, ECF No. 28-7. With respect to his reasons for not going forward with the policies upon learning that Klingshirn had in fact completed the required product specific training, Kovacs stated that he “just got cold feet at the time.” Excerpt from Kovacs Dep. at 13, ECF No. 28-6.

The parties also took the deposition of a Nancy Jennett (“Jennett”) who apparently is a Fidelity & Guaranty Life Insurance Processing Manager.[2] Pl.’s OSJ, Ex. No. 8, ECF No. 30-9. Jennett testified that she had use or access to SalesLink and was familiar with the NAIC Model Regulation for Suitability in Annuity Transactions. Excerpt from Jennett Dep. at 12, ECF No. 28-10. She also testified that upon receiving any application, the Data Entry Team would refer to the SalesLink website to verify an agent’s compliance with the product specific training requirements. Id.; Excerpt from Jennett Dep. at 13, ECF No. 30-13. The New Business Department which reports to her would also perform this verification. Id. With respect to Klingshirn, she testified that a note on F&G’s administrative system made on November 16, 2011 indicated that Klingshirn had not completed the required product specific training and that F&G had notified BHC to request that Klingshirn complete the relevant training. Excerpt from Jennett Dep. at 23, ECF No. 28-4. Although Jennett was able to agree that Klingshirn had completed the required product specific training on October 28, 2011 when Klingshirn presented her with the SalesLink printout he had emailed to BHC and introduced as an exhibit in these proceeding, Jennett testified that when the November 16, 2011 letter was sent to Kovacs, Defendant F&G did in fact believe that the statement “certain regulatory or administrative requirements were not completed by your agent prior to the sale of your policy” was true. Excerpt from Jennett Dep. at 14, ECF No. 30-13; Jennett Dep. at 26, ECF No. 28-9.

STANDARD OF REVIEW

Rule 56 of the Federal Rules of Civil Procedure provides that a court “shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). A material fact is one that “might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine issue over a material fact exists “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. In considering a motion for summary judgment, a judge’s function is limited to determining whether sufficient evidence exists on a claimed factual dispute to warrant submission of the matter to a jury for resolution at trial. Id. at 249.

In undertaking this inquiry, this Court must consider the facts and all reasonable inferences in the light most favorable to the nonmoving party. Scott v. Harris, 550 U.S. 372, 378 (2007). However, this Court must also abide by its affirmative obligation to prevent factually unsupported claims and defenses from going to trial. Drewitt v. Pratt, 999 F.2d 774, 778-79 (4th Cir. 1993). If the evidence presented by the nonmoving party is ...


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