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MDM Group Associates, Inc. v. JLT Specialty Ltd.

United States District Court, D. Colorado

February 21, 2019

JLT SPECIALTY LIMITED d/b/a Lloyd & Partners Limited, a United Kingdom limited company; AMTRUST SYNDICATES LIMITED d/b/a Amtrust at Lloyd's, a United Kingdom limited company; JOHN SMITH, an individual resident of the United Kingdom; and PETER YOUNG, an individual resident of the United Kingdom, Defendants.


          R. Brooke Jackson, United States District Judge.

         This 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.

         I. BACKGROUND

         MDM 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.

         A. MDM's Business Relationships with LPL and ANV.

         In 2012 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, ANV. Id.

         In 2012 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.

         B. MDM's Business Relationship with PAC7.

         MDM 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 ¶¶19-20.

         C. Alleged Wrongful Conduct.

         The 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.

         According 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.

         D. Procedural History.

         MDM 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.[1] On August 22, 2018 defendants moved to dismiss the ...

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