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James T. Falls v. State Farm Insurance Mutual Automobile

March 1, 2011

JAMES T. FALLS,
PLAINTIFF,
v.
STATE FARM INSURANCE MUTUAL AUTOMOBILE
INSURANCE COMPANY, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Judge Jones

MEMORANDUM

BACKGROUND:

Plaintiff, James T. Falls, ("Plaintiff" or "Falls") initiated the instant action by filing a complaint in the Centre County Court of Common Pleas, which defendants removed to federal court on April 9, 2010. (Rec. Doc. No. 1). Named as Defendants are State Farm Insurance Mutual Automobile Insurance Company, State Farm Life and Accident Assurance Company, State Farm Fire and Casualty Company, and State Farm General Insurance Company (collectively "State Farm"). The complaint alleges breach of contract, and Defendants removed the complaint on the basis of diversity jurisdiction.

Cross motions for summary judgment have been filed. Both motions have been briefed and are ripe for disposition. For the reasons that follow, we will deny Plaintiff's motion and grant Defendants' motion.

FACTS:

The facts are substantially not in dispute. The following are not disputed. State Farm is an insurance and financial services company that markets its products through agents. Agents are employed through State Farm's Agency Career Track process. In May 2009, Falls joined State Farm's Agency Career Track. On May 11, 2009, Falls signed a Declaration of Understanding/Statement of Intention where he agreed to abide by the terms of the Agency Career Track. The Declaration of Understanding provided that "Candidates will automatically be withdrawn for ethical or integrity violations occurring or uncovered while pursuing a career as a State Farm agent." The Declaration of Understanding further provides that "[t]here is no guarantee of an appointment as a State Farm agent pursuant to the State Farm Agent's Agreement (Form TICA04) or any successive State Farm Agent's Agreement."

On June 19, 2009*fn1 , James Falls was hired by State Farm as an agent trainee. After an initial approval process, candidates become part of a pool of individuals who are to be considered for agency openings before all other interested individuals. After completing an internship phase and meeting certain eligibility requirements, candidates are appointed as a Term Independent Contract Agent ("TICA") on the date set forth by Form TICA04. The term of form TICA04 is 12 months, but may be terminated at any time, for any reason, by either party.

On November 12, 2009, Falls was provided with an "agent start up kit." Plaintiff spent several thousands of dollars preparing his office. On November 2, 2009, Falls signed State Farm's Agent Agreement Form TICA04, which indicated that his agency with State Farm was to be effective December 1, 2009. The parties dispute whether the form was countersigned by a representative of State Farm. Falls did not keep a copy of Form TICA04. State Farm shredded and discarded Form TICA04 when Falls' employment was terminated.

Falls hired Michelle Quinlan to work for him. Quinlan had to pass several online computer tests to become licensed to work for a State Farm agent. She was working on the tests on November 23, 2009, when a problem with the internet prevented the tests from being marked as completed on her transcript. She told Falls about the problem, and he called another State Farm employee, Yolanda Wilson, for help. The problem was not resolved that day and Quinlan was going to be out of the office the next day. Because she was going to be out of the office,she gave Falls her online coursework user name and password in case he needed to get into the online transcripts to show that her coursework had been completed. On November 24, 2009, Wilson told Falls that Quinlan's transcripts were still not showing up as completed. Falls logged into Quinlan's online account and completed coursework that Quinlan had not finished. State Farm later discovered that Falls completed coursework that Quinlan had not done, and thereafter suspended him pending an investigation. As a result of the investigation, State Farm terminated Falls' employment.

State Farm maintains a code of conduct with which its employees must comply. State Farm's Human Relations Policy Manual indicates that the company's objective is to counsel employees, rather than provide immediate discharge, however it also indicates that there are some misconduct activities, such as dishonesty, which can lead to discharge without prior warning.

There are disputed facts, which will be considered in the light most favorable to Falls, in defending State Farm's motion for summary judgment. They are as follows. Falls observed Ralph Grover signing Form TICA04 and believed that Grover had authority to sign the form on behalf of State Farm.

Additional disputed facts considered, in the light most favorable to State Farm, in defending Falls' motion for summary judgment are as follows. State Farm asserts that Form TICA04 was not countersigned by anyone at State Farm. STANDARD OF REVIEW:

Summary judgment is appropriate if the record establishes "that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). Initially, the moving party bears the burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). The movant meets this burden by pointing to an absence of evidence supporting an essential element as to which the non-moving party will bear the burden of proof at trial. Id. at 325. Once the moving party meets its burden, the burden then shifts to the non-moving party to show that there is a genuine issue for trial. Fed. R. Civ. P. 56(e). An issue is "genuine" only if there is a sufficient evidentiary basis for a reasonable jury to find for the non-moving party, and a factual dispute is "material" only if it might affect the outcome of the action under the governing law. Anderson, 477 U.S. at 248-49.

In opposing summary judgment, the non-moving party "may not rely merely on allegations or denials in its own pleading; rather its response must . set out specific facts showing a genuine issue for trial." Fed. R. Civ. P. 56(e)(2). The non-moving party "cannot rely on unsupported allegations, but must go beyond pleadings and provide some evidence that would show that there exists a genuine issue for trial." Jones, 214 F.3d at 407. Arguments made in briefs "are not evidence and cannot by themselves create a factual dispute sufficient to defeat a summary judgment motion." Jersey Cent. Power & Light Co. v. Twp. of Lacey, 772 ...


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