United States District Court, D. Colorado
Brooke Jackson, United States District Judge.
matter is before the Court on defendants John Smith and Peter
Young's motion to dismiss [ECF No. 38]. For the reasons
stated below, the Court GRANTS the motion, but the claims
against defendants are dismissed without prejudice. Plaintiff
MDM Group Associates, Inc.'s request for leave to amend
its complaint is GRANTED.
Group Associates, Inc. (“MDM”) is a Delaware
corporation with its principal place of business in Steamboat
Springs, Colorado. Complaint, ECF No. 2 at ¶1. The
company provides insurance and other financial products and
services to individuals and businesses. Id. at
¶7. This dispute centers on two financial services that
MDM offers-its Trip Cancellation Program (“TCP”)
and Security Deposit Waiver (“SDW”)-and three
business relationships born out of MDM's attempts to
launch these services.
MDM's Business Relationships with LPL and
MDM developed an underwriting market and a proprietary
description of coverage for the TCP, a specialty insurance
product that protects travelers against loss on prepaid
travel expenses when they are unable to take their trip or
when their trip is interrupted. Id. at ¶8. To
underwrite this insurance offering, in August 2012 MDM
entered into an agreement with defendant AmTrust Syndicates
Limited (“ANV”), a London-based insurance
company. Id. at ¶¶10-11. MDM and ANV
signed a licensing and marketing agreement wherein the
companies agreed that MDM would be the sole marketing and
sales representative of TCP, and that ANV would refrain from
creating or offering competing trip-cancellation products
during a period of exclusivity. Id. at ¶11. To
comply with London insurance-market regulations, MDM hired
defendants Lloyd & Partners Limited (“LPL”)
to be its London-based broker for MDM's TCP and SDW
programs. Id. at ¶14. LPL served as an
intermediary between MDM and its London-based underwriter,
defendants Smith and Young were LPL insurance brokers
residing in London. Id. at ¶16. Messrs. Smith
and Young worked for LPL until late November 2014 and
December 2014, respectively. Id. They took a short
break in employment until March 2015, when they started
working for Ambris LLP (“Ambris”), the company
that eventually replaced ANV as MDM's underwriter.
Id. at ¶¶14, 16.
MDM's Business Relationship with PAC7.
also contracted with PAC7, LLC (“PAC7”), a travel
and property-rental insurance agency based in South Carolina.
Id. at ¶17. The contract, which went into
effect on September 1, 2012, appointed PAC7 as the sole
representative for marketing and selling the TCP and SDW in
North America and the Caribbean. Id. at
Alleged Wrongful Conduct.
complaint alleges that LPL and ANV enabled MDM's client,
PAC7, to eliminate MDM from the equation so that PAC7 could
contract directly with LPL and ANV. Id. at ¶27.
The alleged plan started in October 2013, when LPL flew a
PAC7 employee to London to meet with ANV and MAPFRE Insurance
(another prospective underwriter for MDM's programs).
Id. at ¶28. Once MDM got word of this meeting,
it informed LPL to not contact any MDM clients in the future
without including MDM in the communication. Id. at
¶29. According to MDM, LPL continued to use its brokers,
Messrs. Smith and Young, to directly communicate with PAC7,
ultimately resulting in LPL allegedly marketing MDM's TCP
in London through other U.S.-brokers without MDM's
consent. Id. at ¶¶30-31.
to the complaint, Messrs. Smith and Young maintained their
improper relationship with PAC7 during their five-month break
between jobs. Id. at ¶33. MDM also alleges that
they “communicated with representatives of MAPFRE in
December of 2014.” Id. Then, in March 2015,
the same month Messrs. Smith and Young began working for
Ambris, PAC7 changed its broker of record from LPL to Ambris
without consulting MDM. Id. at ¶35.
filed its complaint in Colorado state court on April 16,
2018. ECF No. 2. Defendants removed the case to federal court
on May 10, 2018. ECF No. 1. MDM originally asserted seven
common law claims: (1) breach of contract against ANV; (2)
breach of fiduciary duties against LPL; (3) fraudulent
concealment against LPL and ANV; (4) fraudulent
misrepresentation against LPL and ANV; (5) tortious
interference with contracts against all defendants; (6)
tortious interference with prospective business relations
against all defendants; and (7) conspiracy against all
defendants. Following the initial scheduling conference
before this Court, MDM, ANV, and LPL jointly moved to dismiss
all claims asserted against ANV and LPL. ECF Nos. 48, 50.
Upon granting those motions, only the last three claims
against defendants Smith and Young remained. On August 22,
2018 defendants moved to dismiss the ...