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Falco v. Farmers Ins. Group

United States Court of Appeals, Eighth Circuit

August 3, 2015

Michael A. Falco, Plaintiff - Appellant
v.
Farmers Insurance Group; Farmers Insurance Group Federal Credit Union; Paul Crossetti; Farmers Insurance Exchange; Fire Insurance Exchange; Mid-Century Insurance Company; Truck Insurance Exchange; Farmers Insurance Company, Inc., Defendants - Appellees

Submitted April 13, 2015

Appeal from United States District Court for the Western District of Missouri - Kansas City.

For Michael A. Falco, Plaintiff - Appellant: Danieal Howard Miller, Columbia, MO.

For Farmers Insurance Group, Defendant - Appellee: James R. Holland II, Fisher & Phillips, Kansas City, MO; Daniel R. Luppino, Lewis & Rice, Kansas City, MO.

For Farmers Insurance Group Federal Credit Union, Defendant - Appellee: Joseph Edward Bant, Thomas Marvin Martin, Lewis & Rice, Kansas City, MO; James R. Holland II, Fisher & Phillips, Kansas City, MO.

For Paul Crossetti, Farmers Insurance Exchange, Fire Insurance Exchange, Mid-Century Insurance Company, Truck Insurance Exchange, Farmer's Insurance Company, Inc., Defendants - Appellees: James R. Holland II, Fisher & Phillips, Kansas City, MO.

Before MURPHY, COLLOTON, and KELLY, Circuit Judges.

OPINION

KELLY, Circuit Judge.

Michael Falco, formerly an independent agent selling for Farmers Insurance, filed suit against Farmers Insurance Group, Farmers Insurance Exchange, Fire Insurance Exchange, Mid-Century Insurance Company, Truck Insurance Exchange, and Farmers Insurance Company, Inc. (Farmers), Paul Crossetti,[1] and Farmers Insurance Group Federal Credit Union (Credit Union). On March 26, 2014, the district court[2] granted summary judgment in favor of Farmers and Crossetti. On June 19, 2014, the court granted summary judgment in favor of the Credit Union. Falco timely appeals both rulings. Having jurisdiction under 28 U.S.C. § 1291, we affirm.

I. Background

The underlying facts in this case are largely undisputed. Falco was an agent selling insurance products for Farmers between February 1990 and June 15, 2011. On June 16, 1990, Falco and Farmers entered into an Agent Appointment Agreement (Agent Agreement) which governed the agency relationship between Falco and Farmers. Assuming certain conditions were met, the Agent Agreement provided Falco would be paid a Contract Value upon termination of the Agent Agreement. The amount of the Contract Value was determined by a formula set out in the Agent Agreement.

As a Farmers agent, Falco was entitled to borrow money from the Credit Union. On October 5, 2006, Falco obtained a $28,578.00 open-ended business loan from the Credit Union. In exchange, Falco signed a Loan Agreement.[3] Under the terms of the Loan Agreement, Falco assigned his interest in his Agent Agreement receivables--including his Contract Value-- to the Credit Union as security for the business loan. The Loan Agreement also contained a provision appointing the Credit Union as Falco's " true lawful agent and irrevocable attorney-in-fact" with authority to demand payments that Farmers owed Falco. In the event of Falco's default on the loan, the Loan Agreement provided that the Credit Union could tender Falco's resignation under the Agent Agreement so the Credit Union could levy on Falco's Contract Value.

Beginning in February 2010, Falco failed to make payments to the Credit Union on his Loan Agreement; and in March 2010 he filed a Chapter 7 bankruptcy petition in the United States Bankruptcy Court for the Western District of Missouri. He listed the Credit Union loan on his bankruptcy schedules. Falco received a discharge in his bankruptcy on February 2, 2011, which included a discharge of Falco's personal liability under his loan with the Credit Union.

On April 13, 2011, the Credit Union notified Farmers that Falco had " defaulted on his Contract Value Secured Loan" and exercised " the power of attorney voluntarily granted by Mr. Falco in his written loan agreement to terminate his Agent Appointment Agreement." Farmers sent Falco a letter dated June 8, 2011, advising him that the resignation memo submitted by the Credit Union had been accepted and that as of June 15, 2011, the Agent Agreement was terminated. Using the formula set out in the Agent Agreement, Farmers determined Falco's Contract Value to be $104,323.30. After the Agent Agreement was terminated, ...


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