# Simmons v. USI Insurance Services LLC

> District Court, M.D. Florida · March 5, 2024

URL: https://www.frixlaw.com/law-library/cases/10115336

## Case

- **Court:** District Court, M.D. Florida
- **Decided:** March 5, 2024
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10115336

## How later opinions describe it (automated extraction)

- holding trial court erred in denying defendant’s motion for judgment as a matter of law where lost profits calculation presented to the jury did not deduct marginal costs, in the absence of evidence the marginal costs were zero

## Opinion text

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION

MATTHEW SIMMONS, SHEILA
MURRAY, JACK MITCHELL,
JACKIE RODRIGUEZ, MADISON
LIEFFORT, and EMILY CARTER,

Plaintiffs,

v. Case No.: 8:23-cv-201-TPB-AAS

USI INSURANCE SERVICES, LLC, a
foreign limited liability company and
USI ADVANTAGE CORP., a foreign
corporation,

Defendants.
___________________________________/

USI INSURANCE SERVICES LLC,

Counter-Plaintiff,
v.
MATTHEW SIMMONS, JACK MITCHELL
and SOUTHEAST SERIES OF LOCKTON
COMPANIES, LLC,

Counter-Defendants.
_________________________________________/
ORDER DENYING “USI INSURANCE SERVICES, LLC’S MOTION FOR
PARTIAL SUMMARY JUDGMENT AS TO MARKET VALUE DAMAGES;” and

ORDER GRANTING IN PART AND DENYING IN PART
“COUNTER-DEFENDANTS’ MOTION TO EXCLUDE DAMAGES-RELATED
OPINIONS OF DR. ANNE GRON AND ROBIN C. FROST”

This matter is before the Court on Defendant/Counter-Plaintiff “USI
Insurance Services, LLC’s Motion for Partial Summary Judgment as to Market
Value Damages” (Docs. 130; 167) and “Counter-Defendants’ Motion to Exclude
Damages-Related Opinions of Dr. Anne Gron and Robin C. Frost.” (Docs. 128;
162).1

Counter-Defendants filed a response in opposition to USI’s motion for
summary judgment on December 21, 2023, and USI filed a reply on January 11,
2024. (Docs. 139; 154; 165).
As to Counter-Defendants’ motion to exclude certain damages testimony by
USI experts Gron and Frost, USI filed a response in opposition on December 21,
2023. (Doc. 136).

The Court held a hearing on these and other motions on January 30, 2024.
(Doc. 172). Based on the motions, responses, the reply, argument of counsel, the
court file, and the record, the Court finds as follows:
Background
USI Insurance Services, LLC and Lockton Companies, Inc.2, are large
national insurance brokerage firms and are competitors in the industry. Until their
departure, Matthew Simmons and Jack Mitchell were “Producers” in USI’s Tampa,

Florida, office. Simmons led a team that included Mitchell, along with Plaintiffs
Emily Carter, Madison Lieffort, Sheila Murray, and Jackie Rodriguez. In the
industry, Producers have various responsibilities, but at its core, a “Producer” is a
salesperson who, acting on behalf of an insurance broker, convinces clients to

1 Some of the papers on the pending motions have been filed in both redacted and
unredacted versions, the latter filed under seal.
2 Lockton is represented in this suit by its affiliate Southeast Series of Lockton, LLC,
purchase insurance products and then provides ongoing services to those clients to
encourage the clients to continue purchasing insurance products through the
insurance broker. Successful Producers in this industry are highly compensated,

and this case reflects a battle in an ongoing “war for talent” between by various
insurance brokers.
Simmons and Mitchell entered into written employment agreements with
USI. In exchange, Simmons received over $3 million dollars in payments in the
year preceding his departure from USI. The agreements do not flatly prohibit
these employees from leaving USI to join competitors such as Lockton. They do,

however, contain several restrictive covenants.
First, the agreements provide that Simmons and Mitchell – for two years
post-employment – cannot, with respect to Client Accounts that they managed or
regularly serviced while at USI, directly or indirectly, (i) sell, provide, or accept any
request to provide services in competition with USI for any Client Account; (ii)
solicit or attempt to solicit services in competition with USI as to any Client
Account; (ii) divert or attempt to divert services away from USI with respect to any

Client Account; (iv) consult for any Client Account with respect to services in
competition with USI; (v) sign a broker of record letter with any client account to
provide services in competition with USI; or (vi) induce the termination,
cancellation or non-renewal of any Client Account.3

3 The account restriction described above is specifically limited to: (a) USI Client Accounts
that Simmons or Mitchell managed or regularly serviced and/or about which they obtained
confidential information on behalf of USI within the last two years of their employment
with USI; or (b) active prospective clients that Simmons or Mitchell solicited and/or about
Second, the agreements contain a provision prohibiting Simmons and
Mitchell – for two years post-employment – from, directly or indirectly, soliciting
employees that they worked with at USI. Third, the agreements prohibit Simmons

and Mitchell from using or disclosing USI's confidential information. Finally, they
require departing employees to provide a 60-day notice of resignation.
On January 25, 2023, Simmons and Mitchell resigned from USI via email,
stating they would be joining USI’s competitor, Lockton, effective immediately.
Within a few hours, Carter, Lieffort, Murray, and Rodriguez, who supported
Simmons and Mitchell and worked on the accounts at issue, resigned effective

immediately to join Lockton.
Also on January 25, 2023, Simmons, Mitchell, and other Simmons team
members filed a complaint against USI and USI Advantage Corp. in the Thirteenth
Judicial Circuit in and for Hillsborough County, Florida, seeking a declaration that
their agreements are illegal and unenforceable. The action was removed to this
Court by Defendants USI and USI Advantage Corp., who then filed an answer. USI
also counterclaimed against Simmons, Mitchell, and against Lockton as an

additional counterclaim defendant, alleging claims for injunctive relief, breach of
contract, breach of fiduciary duties, tortious interference, conspiracy, and aiding
and abetting breach of fiduciary duty.

which they obtained confidential information on behalf of USI within the last six months of
their employment with USI.
The same day, several USI clients whose accounts were previously serviced
by Simmons or Mitchell submitted “broker of record” letters naming Lockton as
their new broker to handle their insurance needs. Since the morning of Simmons’

resignation, 26 USI clients previously serviced by the Simmons team have moved
all or a portion of their business to Lockton.
After leaving USI, Simmons, Mitchell, and the other Simmons team members
serviced the accounts of former USI clients to one degree or another in violation of
their agreements until the Court entered a temporary injunction prohibiting them
from doing so. After the original order was entered, Lockton discovered that two

additional former USI employees – Theresa Kemp and Chris Kakish – who were not
expressly covered by the injunction order and were not named Plaintiffs in this
litigation, were actively servicing one or more of these accounts. The Court then
entered an additional order prohibiting them from doing so as well. It appears the
prohibitions in the Court’s orders have been complied with.
Trial is currently set to begin in April 2024, and the parties have filed various
pretrial motions. This Order addresses USI’s motion for partial summary

judgment, which addresses the legal viability of the fair market value damages
model reflected in the proposed testimony of USI’s experts as an alternative to a
traditional lost profits damages analysis. Counter-Defendants oppose USI’s motion,
arguing that USI’s fair market value damages model is unavailable on the facts of
this case, and they have filed a motion of their own seeking to preclude testimony
by USI experts opining on that damages model. Counter-Defendants additionally
seek to preclude certain expert testimony relating to USI’s lost profits damages
model.
Legal Standard

Summary Judgment
Summary judgment is appropriate “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(a). A properly supported motion for summary
judgment is not defeated by the existence of a factual dispute. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 249 (1986). Only the existence of a genuine issue of

material fact will preclude summary judgment. Id.
The moving party bears the initial burden of showing that there are no
genuine issues of material fact. Hickson Corp. v. N. Crossarm Co., 357 F.3d 1256,
1260 (11th Cir. 2004). When the moving party has discharged its burden, the
nonmoving party must then designate specific facts showing the existence of
genuine issues of material fact. Jeffery v. Sarasota White Sox, Inc., 64 F.3d 590,
593-94 (11th Cir. 1995). If there is a conflict between the parties’ allegations or

evidence, the nonmoving party’s evidence is presumed to be true, and all reasonable
inferences must be drawn in the nonmoving party’s favor. Shotz v. City of
Plantation, 344 F.3d 1161, 1164 (11th Cir. 2003).
Expert Testimony
An expert witness may testify in the form of an opinion if “(a) the expert's
scientific, technical, or other specialized knowledge will help the trier of fact to
understand the evidence or to determine a fact in issue; (b) the testimony is based
on sufficient facts or data; (c) the testimony is the product of reliable principles and
methods; and (d) the expert has reliably applied the principles and methods to the

facts of the case.” Fed. R. Evid. 702; see also Daubert v. Merrell Dow Pharm., Inc.,
509 U.S. 579, 597 (1993). “The party offering the expert testimony bears the burden
of establishing, by a preponderance of the evidence, the expert's qualification,
reliability, and helpfulness.” Payne v. C.R. Bard, Inc., 606 F. App’x 940, 942 (11th
Cir. 2015) (citing United States v. Frazier, 387 F.3d 1244, 1258 (11th Cir. 2004) (en
banc)).

Functioning as a gatekeeper, the district court plays an important role by
ensuring that all expert testimony is reliable and relevant. Rink v. Cheminova,
Inc., 400 F.3d 1286, 1291 (11th Cir. 2005). Although Daubert references specific
factors for the district court to consider when evaluating relevancy and reliability,
the inquiry is a flexible one, focusing on the principles and methodology employed
by the expert, not on the conclusions reached. Chapman v. Procter & Gamble
Distrib., LLC, 766 F.3d 1296, 1305 (11th Cir. 2014); see also Hanna v. Ward Mfg.,

Inc., 723 F. App'x 647, 649-50 (11th Cir. 2018) (outlining the criteria for the
admissibility of expert witness testimony). Essentially, the Court is simply asked to
determine if the evidence “rests on a reliable foundation and is relevant.” Daubert,
509 U.S. at 597.
Measuring Damages
Whether a proposed measure of damages is proper in a particular case is a
question of law for the court. See, e.g., Asset Mgmt. Holdings, LLC v. Assets

Recovery Ctr. Investments, LLC, 238 So. 3d 908, 911 (Fla. 2d DCA 2018) (“Whether
the trial court applied the correct measure of damages on a breach-of-contract claim
is a question of law that this court reviews de novo.”); RKR Motors, Inc. v.
Associated Unif. Rental & Linen Supply, Inc., 995 So. 2d 588, 591 (Fla. 3d DCA
2008) (“The trial court's determination as to the proper methodology to be used in
Florida to calculate lost profits due to a breach of contract is strictly a legal issue.

Thus, our standard of review is de novo.”). When asking a jury to award damages, a
plaintiff is not permitted to argue for whatever amount of money it wants. Rather,
the amount of money a plaintiff requests from a jury must be rooted in the law – the
request must have a legal basis.
In that vein, the Court’s gatekeeper role under Daubert and Rule 702
requires the Court to ensure that a jury is not presented with expert testimony that
applies a legally incorrect measure of damages. See, e.g., Children’s Broad. Corp. v.

The Walt Disney Co., 245 F.3d 1008, 1017-18 (8th Cir. 2011) (affirming district
court’s conclusion that a new trial was required because the court should have
excluded expert damages testimony under Daubert to avoid “exposing the jury to an
exaggerated sum of damages”); Skypoint Advisors, LLC v. 3 Amigos Productions
LLC, 585 F. Supp. 3d 1326, 1332 (M.D. Fla. 2022) (excluding expert testimony as
unreliable because it applied the wrong damages measure); Fidelitad, Inc. v. Insitu,
Inc., No. 13-CV-3128-TOR, 2016 WL 7508843, at *5 (E.D. Wash. July 8, 2016)
(“Consequently, Ms. Barrick's expert testimony is not relevant, because it relies
upon the wrong measures to determine damages as to Fidelitad's unjust enrichment

claim, and thus, cannot be properly applied to the facts in issue.”).
Analysis
USI’s damages experts present two alternative damages models, both seeking
to quantify the financial damages allegedly caused by breaches of contract and
breaches of fiduciary duty by Simmons and Mitchell and tortious conduct on the
part of Lockton. One model attempts to quantify the “fair market value” of the book

of business represented by the clients who left USI for Lockton upon the departure
of Simmons and Mitchell. The second model, a more traditional approach in
litigation such as this, attempts to quantify future lost profits suffered by USI.
The proffered testimony of Anne Gron, an economist hired by USI, addresses
the nature of the losses suffered by USI in the context of the insurance business and
opines that they are similar to the “value transferred in the hypothetical sale of a
broker office with a book of business.” Another economist, Robin Frost, offers an

opinion on damages essentially based on such a “hypothetical sale” value. Using a
fair market value model, Frost calculates a damages amount ranging from
approximately $15.8 million to $18.9 million, with a mid-point of about $17.3
million. Frost alternatively offers opinions on lost profits suffered by USI, opining
on a range of lost profits (reduced to present value) from a low of approximately
$4.4 million to a high of $10.9 million. Obviously, if the fair market value model is
a legally acceptable method of calculating USI’s damages, this greatly increases the
amount of damages USI could ask a jury to award.

USI has moved for partial summary judgment in its favor, asking for a ruling
that the fair market value damages model is viable in this case, assuming liability
is established and the underlying facts supporting the damages claim are proven.
Counter-Defendants oppose USI’s motion and further seek to exclude testimony by
Gron and Frost on the market value measure of damages. As to Frost’s lost profits
valuation, Counter-Defendants do not seek to exclude it altogether but aim to

preclude one of the approaches used by Frost on the issue of lost profits. Because
these summary judgment and expert admissibility issues are related, the Court
addresses them here in a single order.
Rules Governing Damages under Florida Law
Under Florida law, damages for breach of contract are aimed at restoring the
injured party to the position the party would have occupied had the breach not
occurred. E.g., Lindon v. Dalton Hotel Corp., 49 So. 3d 299, 305 (Fla. 5th DCA

2010). Such damages may not be used to punish the breaching party nor be applied
to put the plaintiff in a better position than it would have been in had the contract
not been breached. Asset Mgmt. Holdings, LLC, 238 So. 3d at 912; see also
Proudfoot Consulting Co. v. Gordon, 576 F.3d 1223, 1243 (11th Cir. 2009)
(“Damages for breach of a non-compete are intended to make the prior employer
whole, not to punish employees.”). In addition, the injured party may recover only
those damages that naturally flow from the breach and could reasonably be said to
have been contemplated by the parties at the time the contract was made, that is,
those damages that could reasonably be expected to flow from the breach. Lindon,

49 So. 3d at 306.
Damages in tort are similarly aimed at “restor[ing] the injured party to the
position it would have been in had the wrong not been committed.” Totale, Inc. v.
Smith, 877 So. 2d 813, 815 (Fla. 4th DCA 2004) (quoting Nordyne, Inc. v. Fla.
Mobile Home Supply, Inc., 625 So. 2d 1283, 1286 (Fla. 1st DCA 1993)). Tort
damages are not limited to those within the reasonable contemplation of the

parties, but the damages must nevertheless represent the “natural, proximate,
probable or direct consequence of the [tortious] act” as opposed to consequences
deemed to be too speculative or remote. Taylor Imported Motors, Inc. v. Smiley, 143
So. 2d 66, 67-68 (Fla. 2d DCA 1962).
Whether in contract or tort, the plaintiff must prove that the breach of duty
proximately caused the alleged damage and provide “some standard by which the
amount of the damages may be adequately determined.” W.W. Gay Mech.

Contractor, Inc. v. Wharfside Two, Ltd., 545 So. 2d 1348, 1351 (Fla. 1989). The
amount need only be established with such “certainty as satisfies the mind of a
prudent and impartial person.” Id. In other words, “Florida law does not require
exactitude where it is certain that substantial damage has been caused; a
reasonable basis in the evidence for computation will suffice.” Marshall Auto
Painting & Collision, Inc. v. Westco Eng'g, Inc., No. 6:02-cv-109-Orl-22-KRS, 2003
WL 25668018, at *12 (M.D. Fla. May 8, 2003) (quoting Nat'l Indus., Inc. v. Sharon
Steel Corp., 781 F.2d 1545, 1548 (11th Cir.1986)).
In the context of noncompetition/nondisclosure litigation such as this, the

case law analyzing the types of damages a plaintiff may recover is not well
developed. Similarly, there appear to be very few reported opinions analyzing the
types of damages recoverable for tortious interference in this factual context. Aside
from the general rules relating to the purpose of damage awards and the prohibition
on speculative awards, there are few bright lines applicable across the board, and
decisions allowing or precluding damages tend to be very case-specific and fact-

specific. Nonetheless, the parties seem to agree that, in a case like this, as long as
damages can be proven without resort to speculation, there is no bright line rule
precluding a plaintiff from recovering damages suffered outside the period during
which a contractual restrictive covenant operates.
Fair Market Value Damages
The primary issue presented is whether USI can recover the fair market
value of the accounts USI lost to Lockton allegedly as a result of contractual

breaches and tortious conduct. Counter-Defendants argue there is a bright line rule
reflected in Florida law to the effect that an award of the market value of a business
is only the proper measure of damages when a business is completely destroyed by
the defendant’s wrongdoing. On the other hand, if the business remains viable, the
plaintiff’s proper measure of recovery is lost profits. See, e.g., Montage Group, Ltd.
v. Athle-Tech Computer Sys., Inc., 889 So. 2d 180, 193 (Fla. 2d DCA 2004); Sostchin
v. Doll Enters., Inc., 847 So.2d 1123, 1128 n.6 (Fla. 3d DCA 2003). Because USI’s
business was not completely destroyed, Counter-Defendants argue this rule
precludes USI from recovering fair market value damages and limits USI to lost

profits. This line of cases, however, holds only that a plaintiff cannot recover the
market value of the entire business where the business is not destroyed. As USI
correctly points out, USI is not seeking to recover for the entire value of its
business, but only for the value of the lost accounts or the “book” of business lost to
Lockton. The line of cases cited by Counter-Defendants therefore does not apply to
the specific factual scenario presented here.

On the other hand, the Court rejects USI’s argument that its proposed fair
market value damage model is viable because it is simply another method of
calculating USI’s lost profits arising from the loss of the specific accounts that
moved to Lockton. The fallacy of this argument is shown by the calculations of
USI’s own expert, Frost. One of Frost’s lost profits calculations projects USI’s
revenue had it maintained the lost accounts, subtracting Producer commissions
attributable to those accounts. The other lost profits calculation subtracts from

revenue a broader range of expenses. These lost profits calculations produce a
range of lost profits from around $5 million to $10 million. Frost’s fair market value
model, in contrast, multiplies EBITDA (earnings before interest, taxes,
depreciation, and amortization) attributable to the lost accounts by a multiple of 11,
producing a value purportedly reflecting USI’s damages that ranges from almost
$16 million to almost $19 million.4
It is manifest, then, that the fair market value damages model is measuring

something more than the stream of profits arising from the specific accounts that
left USI, and the Court concludes this “something more” prevents the application of
this damages model in this case. In his deposition, Frost acknowledged that
additional contributors to value in the sale of a book of business measured by the
EBITDA multiple would typically include assets such as intellectual property,
physical assets, leases, and the protections of a typical non-competition agreement

precluding the seller from competing with the buyer. Frost also repeatedly
acknowledged that the value acquired by a seller in such a typical sale – and
therefore incorporated into his valuation – included not only the projected revenue
stream from the specific accounts being transferred but also the value of the
personnel involved in producing and servicing those accounts. This means that in
this case, Frost’s calculation of the lost “value” USI proposes to request as its
damages includes the skills, services, and client relationships of Producers

Simmons and Mitchell. Consistent with Frost’s testimony, Gron opines that the
“value” USI lost, which she testified could be analogized to a hypothetical sale of a

4 USI cites Twyman v. Roell, 166 So. 215 (Fla. 1936), for the proposition that USI’s “market
valuation damages model is a recognized method for calculating lost profits.” USI’s sole
basis for this assertion appears to be that Twyman refers to “market values” as a
component of calculating lost profits from an anticipated crop of peas. In context, “market
values” plainly referred to the price at which a business could sell peas, not to the fair
market value of the business. While earning high marks for creativity, USI’s reliance on
this 1936 case to support its sweeping damage model is unpersuasive.
book of business, included the value of the Producers and other employees who had
“valuable experience and client relationships,” who had “successfully serviced a
growing book of business,” and who could be expected to attract new business and

new employees in the future.
In short, the fair market value model USI proposes to present to the jury
would award, as part of USI’s damages, the value USI lost by virtue of Simmons
and Mitchell leaving USI to join Lockton. But the agreements did not preclude
Simmons or Mitchell from leaving USI and moving to Lockton, and thereafter
competing with USI in generating new business. It was not a breach of contract or

a tort for them to do so. The agreements with Simmons and Mitchell did not give
USI the right to keep Simmons and Mitchell working for USI for any period of time.
Rather, the agreements only required these Producers to give 60 days’ notice before
leaving, to refrain from soliciting employees and clients, and to refrain from
servicing their former clients for a period of time.
Accordingly, the significant value lost to USI purely due to Simmons and
Mitchell leaving does not flow from the alleged breaches of duty and therefore

cannot legally constitute a component of the damages awardable to USI if it proves
its case. Contrary to USI’s argument, awarding damages to USI that includes the
loss of the value of Simmons and Mitchell as Producers does not “put USI in the
same position it would have been in but for the contractual breaches because it
restores the market value that USI lost as a result of the breach.” To the contrary,
it would impermissibly put USI in a better position by awarding USI the value of
Simmons and Mitchell as Producers as a component of damages, when these
individuals were free to leave USI at any time without breaching any duty. Thus,
the “position [USI] would have been in but for the contractual breaches” is not one

where USI is entitled to keep Simmons and Mitchell as Producers in perpetuity or
for any particular time.
Neither in its summary judgment papers nor in its opposition to the Daubert
motion as to Gron and Frost does USI dispute that the fair market value damages it
seeks to recover include the lost value of the client relationships, knowledge, skills,
and services of Simmons and Mitchell. And USI offers no explanation why USI is

legally entitled to be compensated for the loss of Simmons and Mitchell themselves
when those individuals were free to leave USI and join Lockton, as they did,
without breaching any duty to USI.5
Nor does USI cite Florida case law supporting the application of its fair
market value model of damages to a situation like this one. USI argues that this

5 At the January 30, 2024, hearing, counsel for USI stated that USI would present evidence
that Simmons would not have left USI had Lockton not offered to indemnify him and allow
him to service his former clients. But counsel admitted that Simmons could leave and that
he would not have stayed with USI “forever” (an understatement, given Simmons’ manifest
dissatisfaction with USI), and counsel did not argue USI could have retained Simmons for
any particular period of time. Instead, he argued that Simmons would not have left USI
when he did and in the manner he did but for Lockton’s actions. While this may be true, it
was not a breach for Simmons to leave USI no matter when he did it. And the damages
flowing from Simmons’ failure to give 60 days’ notice and the other breaches of his
agreement are those attributable to the loss of specific accounts and reflected in Frost’s lost
profits calculation, assuming USI can prove that the breaches caused the loss. Those
damages would not include the loss of Simmons and Mitchell as Producers. And to the
extent USI believes its fair market value model somehow captures damages resulting from
Lockton’s tortious interference, that argument is rejected as wholly and completely
speculative. The undisputed evidence in this case shows that Simmons and Mitchell were
leaving USI regardless of anything Lockton may have done.
approach is justified as a disgorgement remedy for USI’s tort claims such as tortious
interference and aiding and abetting breach of fiduciary duty. USI cites Bailey v.
St. Louis, 268 So. 3d 197 (Fla. 2d DCA 2018), where the court endorsed the concept

of a disgorgement award on claims for breach of fiduciary duty and other theories.
Assuming arguendo that disgorgement could constitute a proper remedy for tort
claims in a case like this, that would not help USI here, for two reasons. First, the
expert opinions offered on fair market value damages do not purport to measure
profits obtained by Lockton but instead measure the loss suffered by USI. Those
are very different concepts. Second, just as fair market value fails to properly

measure USI’s losses as a result of the breaches of duty, it also fails to measure
Lockton’s gain as a result of those breaches, and for the same reason: it includes as
part of the value, among other things, the skills and services of Simmons and
Mitchell, who were not prevented by their agreements or any fiduciary duty from
moving to Lockton or from competing with USI after the move.
USI points to decisions from other jurisdictions addressing a fair market
value damages model. However, the Court does not find these cases persuasive in

the context of this factual scenario and the Florida law principles governing
damages discussed above. For example, USI cites an order from a case in the
Northern District of Georgia also involving USI and Lockton, but the order is
merely an endorsed order with no explanation or analysis. See USI Ins. Serv., LLC
v. Southeast Series of Lockton Co., LLC, No. 1:20-cv-2490 (N.D. Ga. Apr. 26, 2023).
Another case cited, USI Ins. Serv., LLC v. Aitkin, No. 3:21-cv-267 (D. Ore. Sept. 21,
2022), addresses only the reliability of the methodology used by an expert to
calculate market value. It does not address the fundamental underlying issue of
whether a fair market value model is legally or factually appropriate in the first

place.
Accordingly, the Court denies USI’s motion for partial summary judgment
and concludes that a fair market value damages model is unavailable in this case as
a matter of law. For the same reason, the Court grants in part Counter-Defendants’
motion to preclude expert testimony by Gron and Frost on this measure of damages.
To be admissible, expert testimony must be reliable, but it also must be relevant –

that is, the testimony must “fit” the facts and legal theories applicable in the case.
See Daubert, 509 U.S. at 591. In other words, the court must ensure that the
proposed testimony “logically advances a material aspect of the proposing party’s
case.” Allison v. McGhan Medical Corp., 184 F.3d 1300, 1312 (11th Cir. 1999)
(quotation omitted). Where testimony fails to do that, it fails to pass muster under
Daubert and Rule 702 because it is not relevant nor is it helpful to the jury.
Daubert, 509 U.S. at 591.

The Court concludes that is the case with USI’s proposed market value
damage model here. As this measure of damages is legally unavailable, expert
testimony on this issue, however reliable in theory, is not legally relevant.
Accordingly, USI’s experts Gron and Frost will not be permitted to offer testimony
or opinions regarding fair market value damages.
Lost Profits
Counter-Defendants do not argue that Frost’s opinions on lost profits should
be excluded altogether, but they make two arguments to limit Frost’s lost profits

testimony. First, Counter-Defendants challenge the expenses deducted in one of
Frost’s lost profits calculations, titled “Gross Profit Less Producer Commissions
Valuation,” where he deducts from anticipated revenue attributable to the lost
accounts only the commissions that would be owed to Producers for those accounts.
The other calculation, titled “Net Lost Profit Valuation,” deducts from revenue not
only Producer commissions but also service and support staff expenses and other

operating expenses. Frost also includes an average of the results of the two
methods. Counter-Defendants seek to exclude the first calculation and the average
of the two, arguing that a lost profits analysis must subtract all expenses.
USI argues that a lost profits calculation that subtracts only the Producer
commissions is “akin to” a “contribution margin” for the lost accounts and is a
reliable valuation method because it “accounts for the possibility that USI could
have pooled resources and continued servicing the Lost Accounts without incurring

additional expense beyond the 25% producer commission.”6 USI also argues that
reliance on a “contribution margin” is not “foreclosed by Florida law.”

6 “Contribution margin” can be defined as “[t]he difference between a product’s selling price
and its variable production costs.” Contribution Margin, BLACK’S LAW DICTIONARY (10th
ed. 2014). “The contribution margin measures the amount of funds available for profit and
payment of fixed costs.” Id.
The Court concludes that Frost’s “Gross Profit Less Producer Commissions”
model is not legally appropriate, nor does it represent a reliable methodology for
calculating USI’s claimed damages in this case. Florida law generally requires that

an analysis of profits lost due to a breach of contract deduct from revenue all
expenses necessary to perform the contract, including both variable costs and a
proportion of the fixed expenses. See, e.g., RKR Motors, 995 So. 2d at 592-93. USI
offers no argument as to why this standard should not also apply to the tort claims
at issue in this case.
It is true that, outside the breach-of contract setting, courts have in some

circumstances permitted calculations of lost profits without necessarily deducting
all fixed expenses. See, e.g., Fin. Info. Techs., LLC v. iControl Sys., USA, LLC, 21
F.4th 1267, 1278 (11th Cir. 2021) (lost profits calculation under trade secret statute
providing for damages for the “actual loss caused by [the] misappropriation”). For
example, in Murray v. Dep’t of Transp., 687 So. 2d 825 (Fla. 1997), the Florida
Supreme Court allowed an expert’s analysis of the business damages caused by a
governmental taking of property that deducted from revenue the costs of food, other

supplies, laundry and cleaning, payroll taxes, group insurance, and workers’
compensation insurance. The defendant argued that these deductions were
insufficient, but the expert testified that these were the business costs “which, in
his opinion, would have been attributed to production of those sales had the sales
not been lost.” Id. at 826.
Here, in contrast, Frost offered no economic justification for his failure to
deduct not only fixed costs but even variable costs other than Producer
commissions, even though he admitted that such other variable costs would have

existed. Frost further admitted that his “Gross Profit Less Producer Commissions
Valuation” was “purely presentational.” He did not explain what “purely
presentational” meant, but it appears that the only basis for doing the calculation is
to “present” a larger number to the jury.7 The situation is not saved by USI’s
speculation that it is “possible” that USI could have generated the revenue projected
by Frost without incurring any associated expenses beyond the producer

commissions. Frost testified that such other expenses would have existed, and
speculation about what might be “possible” is not a substitute for evidence. See Fin.
Info. Techs., 21 F.4th at 1280 (holding trial court erred in denying defendant’s
motion for judgment as a matter of law where lost profits calculation presented to
the jury did not deduct marginal costs, in the absence of evidence the marginal costs
were zero). Accordingly, the Court will not allow USI to present to the jury Frost’s

7 USI’s reliance on Highland Consulting Grp., Inc., v. Minjares Soule, No. 9:19-cv-81636-
ROSENBERG/REINHART, 2021 WL 3793028 (S.D. Fla. Aug. 26, 2021) is not helpful. That
case did not involve an expert’s calculation of lost profits resulting from breach of an
employment agreement where the expert deducted only producer commissions. Rather, the
employment agreement in that case contained a liquidated damages provision of 50% of any
fees received. Id. at *11. The district court rejected the defendant’s argument that the
provision constituted an unenforceable penalty as a matter of law because an expert
testified that the 50% figure “approximates Plaintiff’s contribution margin after certain
costs and commissions are deducted from gross revenue.” Id. (emphasis added). No
explanation is given in the opinion as to what the deducted “certain costs” represented.
“Gross Profit Less Producer Commissions Valuation” or the average of that
calculation and the net lost profits calculation.
Counter-Defendants next argue that Frost should not be allowed to calculate

lost profits for the 10-year period presented in his report on the ground that there is
no justification for this period and other evidence suggests USI would not have
maintained the lost accounts for a 10-year period. USI points out, however, that
Frost’s damages calculation does not assume that USI would maintain all the lost
accounts for the entire 10-year period. The calculation factors in an annual 10%
attrition rate (or conversely a 90% retention rate) per year, which USI contends is

consistent with industry standards, data derived from USI’s and Lockton’s own
experience in retaining clients, and with case law approving similar periods for lost
profits projections, although in different contexts. Florida law requires only that a
claimant provide “some standard” by which to measure the amount of damages.
W.W. Gay, 545 So. 2d at 1351. The Court concludes that the 10-year period as
calculated by Frost satisfies the “some standard” requirement and is not
impermissibly speculative or otherwise improper. To the extent Counter-

Defendants argue that a different attrition rate should be applied due to the
departure of Producers Simmons and Mitchell, that point goes to the weight of
Frost’s testimony rather than its admissibility and can be made in cross
examination and closing argument at trial.
Accordingly, it is hereby
ORDERED, ADJUDGED, and DECREED:
1. “USI Insurance Services, LLC’s Motion for Partial Summary Judgment
as to Market Value Damages” (Doc. 130; 167) is DENIED. The Market Value
Damages model is unavailable in this case as a matter of law.
2. “Counter-Defendants’ Motion to Exclude Damages-Related Opinions of
Dr. Anne Gron and Robin C. Frost” (Doc. 128; 162) is GRANTED IN PART and
DENIED IN PART to the extent set forth above.
DONE and ORDERED in Chambers in Tampa, Florida, this 5th day of
March, 2024.

PA
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-TOMBARBER i (sssi—‘“—Ci‘(C
UNITED STATES DISTRICT JUDGE

Page 238 of 23

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10115336. Public record. Not legal advice.