The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
THE WAGNER AGENCY, )
)
Plaintiff, )
)
v. ) Case No. 4:23 CV 1408 CDP
)
JOHNSON & JOHNSON, INC., et al., )
)
Defendants. )
MEMORANDUM AND ORDER
Plaintiff The Wagner Agency brings this diversity action against defendants
Johnson & Johnson, Inc. (J&J) and American Modern Property and Casualty
Company (American Modern) alleging that J&J wrongfully terminated an
agreement under which Wagner produced insurance policies for its clients with
American Modern as the insurer. Wagner claims that J&J’s termination of the
agreement resulted in American Modern effectively terminating 501 insurance
policies that Wagner had placed with American Modern, thereby depriving
Wagner of renewal commissions. Against J&J, Wagner brings claims of breach of
contract (Count III) and tortious interference with prospective economic interest
(Count IV). Against American Modern, Wagner brings claims of breach of
Missouri insurance statutes (Counts I, II, V) and tortious interference with
prospective economic interest (Count IV). 1
American Modern now moves to dismiss Wagner’s claims against it under
Federal Rule of Civil Procedure 12(b)(6), arguing that they fail to state a claim
upon which relief can be granted. In response, Wagner concedes that it cannot
bring a private cause of action under the insurance statutes invoked in its
complaint. I will therefore grant American Modern’s motion to dismiss those
claims. Because Wagner also fails to allege facts stating a plausible claim against
American Modern of tortious interference, I will grant American Modern’s motion
to dismiss that claim as well. As a result, all of Wagner’s claims against American
Modern will be dismissed, and the only remaining claims in this action are against
J&J for breach of contract and tortious interference with prospective economic
interest.
Legal Standard
The purpose of a motion to dismiss under Rule 12(b)(6) is to test the legal
sufficiency of the complaint. Fed. R. Civ. P. 12(b)(6). When reviewing a Rule
12(b)(6) motion, I assume that the allegations in the complaint are true, and I
construe the complaint in plaintiff’s favor. See Bell Atl. Corp. v. Twombly, 550
U.S. 544, 555-56 (2007). I am not bound to accept as true, however, a legal
1 Wagner also originally brought an insurance-statute claim against J&J, but it voluntarily
dismissed that claim in February 2024. (See ECF 22, 23.)
conclusion couched as a factual allegation. Id. at 555.
To 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.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The factual allegations must be
sufficient “to raise a right to relief above the speculative level.” Parkhurst v.
Tabor, 569 F.3d 861, 865 (8th Cir. 2009) (quoting Twombly, 550 U.S. at 555).
More than labels and conclusions are required. Twombly, 550 U.S. at 555. “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.” Iqbal, 556 U.S. at 678.
In addition to the complaint, I may consider exhibits that are attached to the
complaint, matters of public record, and materials necessarily embraced by the
complaint, without having to convert the motion to one for summary judgment.
Humphrey v. Eureka Gardens Pub. Facility Bd., 891 F.3d 1079, 1081 (8th Cir.
2018); Ryan v. Ryan, 889 F.3d 499, 505 (8th Cir. 2018). Accordingly, in
determining American Modern’s motion to dismiss here, I consider Wagner’s
complaint and its exhibits.
Background
Wagner is an insurance agency that offers a variety of different types of
insurance products; it places its clients with insurance carriers for coverage on
various insurable risks. Relevant to Wagner’s complaint is one insurance product
in particular – specialized marine insurance for expensive, high-performance boats
that have an insured value ranging from $500,000 to more than $2 million and can
travel more than 100 mph. Wagner avers that given the cost of the high-
performance boats and the greater risk associated with them, only a few insurance
companies are willing to undertake the risk and offer insurance coverage.
According to Wagner, American Modern is one of the few insurance companies to
offer such coverage.
Wagner asserts in its complaint that American Modern permits only a
handful of insurance agencies to apply directly to American Modern for high-risk
insurance coverage on behalf of their clients. Wagner is not one of those direct-
apply agencies and thus could not and cannot directly place its clients with
American Modern. Wagner avers, however, that it executed an agreement in 2014
with Midlands, a general agent that had direct access to American Modern,
whereby Wagner became Midlands’ sub-agent regarding high-performance marine
insurance. With that agreement, Wagner’s clients could obtain policies from
American Modern through Midlands, from which both Wagner and Midlands
would then obtain commissions. J&J purchased Midlands in 2022.2 Wagner
claims that it continued to operate under the agreement and produce American
2 Wagner avers the agreement was assigned to J&J as part of its purchase.
Modern policies for its clients until J&J terminated the agreement in August 2023.
As to the specific conduct giving rise to the complaint, Wagner alleges as
follows:
32. On August 10, 2023, J&J abruptly terminated the contract with
Plaintiff and J&J by an email sent by Lynn Mannchen, J&J’s marine
Manager.
33. J&J provided no other notice of termination except for the
email dated August 10, 2023.
34. In addition, J&J notified AMP [American Modern] that J&J
immediately terminated Plaintiff and that AMP must therefore
immediately “non-renew” all of Plaintiff’s 501 policies it produced
and placed with AMP through J&J. Essentially, without prior notice,
nor even a simple conversation, with Plaintiff, all 501 policies
place[d] by Plaintiff with AMP were effectively terminated.
35. As a result of the foregoing, AMP commenced issuing notices
to Plaintiff’s clients, in total, on information and belief, 501 notices of
non-renewals will be sent to Plaintiff’s clients in the next few weeks.
Some of which have already been mailed and received by Plaintiff’s
clients.
(ECF 1 at ¶¶ 32-35) (citations to record omitted). Wagner contends that its profits
from commissions on the high-performance marine policies exceed $300,000
annually, and that its inability to place its clients with American Modern for such
coverage has caused it to suffer more than $300,000 in damages.
With Wagner’s concession that it cannot bring a private cause of action
under the Missouri insurance statutes invoked in its complaint, I will grant
American Modern’s motion to dismiss Counts I, II, and V of the complaint, which
were brought under those statutes. For the reasons that follow, I will also grant
American Modern’s motion to dismiss the claim raised in Count IV of the
complaint to the extent it asserts that American Modern tortiously interfered with
Wagner’s prospective economic interest.3
Discussion
To state a claim under Missouri law4 for tortious interference with a business
expectancy, Wagner must allege sufficient facts showing: (1) a valid business
expectancy; (2) American Modern’s knowledge of the relationship; (3) American
Modern’s intentional interference causing a breach of the relationship; (4) absence
of justification for American Modern’s interference; and (5) damages resulting
from American Modern’s conduct. Bishop & Assocs., LLC v. Ameren Corp., 520
S.W.3d 463, 472 (Mo. banc 2017); Creative Compounds, LLC v. ThermoLife Int’l,
LLC, 669 S.W.3d 330, 341 (Mo. Ct. App. 2023) (distinguishing between tortious
interference with contract and tortious interference with business expectancy).
3 To the extent Wagner’s complaint can be read to have embedded claims of breach of good faith
and fair dealing within its statutory claims against American Modern (see ECF 1 at ¶¶ 44, 51),
Wagner did not respond to American Modern’s argument that such claims should be dismissed.
I consider those claims abandoned and will not address them in this Memorandum and Order.
See Little v. U.S. Dep’t of Defense, No. 4:21-CV-1309-JAR, 2022 WL 1302759, at *3 (E.D. Mo.
May 2, 2022).
4 As American Modern is an Ohio-based company, it suggests that Ohio law may apply to
Wagner’s claim of tortious interference even though it relies on Missouri law to argue that the
claim should be dismissed. Applying Missouri’s conflict-of-law rules, I find that Missouri has
the most significant relationship to Wagner’s tort claim. See Nestlé Purina PetCare Co. v. Blue
Buffalo Co., 129 F. Supp. 3d 787, 791 (E.D. Mo. 2015); Restatement (Second) of Conflict of
Laws § 145(2) (1971). I will therefore apply Missouri law here.
Wagner must plausibly plead all elements of the claim to survive American
Modern’s motion to dismiss. See Twombly, 550 U.S. at 562. American Modern
argues that Wagner has not plausibly pled any element of its claim. Because
Wagner’s complaint fails to allege facts against American Modern that plausibly
support the third and fourth elements, I will dismiss the claim as to American
Modern.
Intentional Interference Causing Breach
To satisfy this element, Wagner must allege facts showing that American
Modern actively and affirmatively took steps to induce the breach, and that
Wagner’s relationship with its insureds would have continued absent American
Modern’s interference. Veazie-Gallant v. Brown, 620 S.W.3d 641, 655-56 (Mo.
Ct. App. 2021). Wagner alleges in its complaint, however, that it was J&J that
induced the breach, not American Modern:
62. Just prior to August 10, 2023, J&J made a series of false
statements to AMP [concerning] Plaintiff and its business. On
information and belief, J&J told AMP that the insureds that Plaintiff
had placed with AMP were uniquely high risk and that AMP should
immediately terminate all 501 insurance policies that Plaintiff had
caused to be placed with AMP.
63. J&J knew that these statements were not true and were
misleading.
. . .
66. J&J was intimately familiar with Plaintiff’s contract and
business relationship with AMP.
67. Without justification, J&J intentionally induced AMP to
terminate the contract and business relationship Plaintiff enjoyed with
AMP by disseminating to AMP, upon information and belief, false
and/or misleading information to AMP concerning Plaintiff’s insureds
that it placed with AMP.
(ECF 1 at ¶¶ 62, 63, 66, 67.) There are no allegations that American Modern
actively and affirmatively took steps to induce a breach in Wagner’s business
relationships.
Moreover, there are no allegations that Wagner’s business expectancy would
have been realized in the absence of American Modern’s purported interference.
According to Wagner, it had no direct relationship with American Modern and
could only obtain and maintain American Modern high-performance policies for
its clients through the 2014 agreement with the general agent, Midlands. Without
that agreement, Wagner had no access to American Modern. It was that agreement
that Wagner alleges J&J terminated. Accordingly, with that agreement having
been terminated, Wagner’s business expectancy to maintain its clients’ policies
with American Modern could not be realized, regardless of American Modern’s
conduct after J&J terminated the agreement.
Absence of Justification for Interference
Even if Wagner’s complaint alleges sufficient facts showing that American
Modern actively and affirmatively induced a breach, it nevertheless fails to allege
facts showing that American Modern lacked justification in issuing non-renewal
notices to Wagner’s clients. Indeed, Wagner’s factual allegations show that
American Modern was justified in its action.
“A defendant’s conduct is without justification when the defendant uses
‘improper means’ to further [its] interests and to the plaintiff’s detriment.” SEMO
Servs., Inc. v. BNSF Ry. Co., 660 S.W.3d 430, 439 (Mo. Ct. App. 2022) (quoting
Nazeri v. Mo. Valley Coll., 860 S.W.2d 303, 317 (Mo. banc 1993)). “[O]nly a
showing of improper means satisfies the burden of establishing a lack of
justification in a tortious interference with expectancies case.” Id. (quoting Clinch
v. Heartland Health, 187 S.W.3d 10, 17 (Mo. Ct. App. 2006)). “Improper means
are those that are independently wrongful, such as threats, violence, trespass,
defamation, misrepresentation of fact, restraint of trade, or any other wrongful act
recognized by statute or the common law.” Bishop & Assocs., 520 S.W.3d at 472
(quoting W. Blue Print Co. v. Roberts, 367 S.W.3d 7, 20 (Mo. banc 2012)). See
also Creative Compounds, 669 S.W.3d at 341-42.
According to the complaint here, J&J told American Modern that Wagner’s
insureds were “uniquely high risk,” that it had terminated its relationship with
Wagner, and that the policies placed by Wagner with American Modern should
therefore be terminated. Nothing in the complaint demonstrates that American
Modern’s issuing non-renewal notices based on those representations from its
direct insurance agent was improper or that it used improper means in doing so.
Moreover, as discussed above, Wagner’s only access to American Modern
was through the 2014 agreement with Midlands which, Wagner claims, J&J
assumed in 2022. Consequently, if J&J was the only conduit by which Wagner’s
clients could access American Modern’s high-performance policies, and J&J no
longer had an agreement for Wagner to place such policies with American Modern,
American Modern was justified in complying with J&J’s instruction to not renew
those policies given that American Modern did not have an independent
relationship with Wagner and thus no means by which to maintain the policies with
Wagner’s clients.
Accordingly,
IT IS HEREBY ORDERED that defendant American Modern Property
and Casualty Company’s Motion to Dismiss [28] is GRANTED.
IT IS FURTHER ORDERED that Counts I, II, and V of the complaint,
which allege violations of Missouri insurance statutes, are dismissed in their
entirety with prejudice.
IT IS FURTHER ORDERED that Count IV of the complaint, which
alleges tortious interference with business expectancy, is dismissed as to defendant
American Modern Property and Casualty Company only. The claim remains as to
defendant Johnson & Johnson, Inc.
IT IS FURTHER ORDERED that American Modern Property and
Casualty Company is dismissed from this action.
As Johnson & Johnson, Inc., has already answered the claims that remain
against it (ECF 19), this case will be set for a Rule 16 Scheduling Conference by
separate Order.
CATHERINE D.PERRY //
UNITED STATES DISTRICT JUDGE
Dated this 8th day of May, 2024.
-ll-