Opinion
Case No. 1:00CV00544
March 19, 2002
MEMORANDUM OPINION
This case is before the Court on Plaintiff's Motion for Judgment on the Pleadings on its first claim for relief pursuant to Rule 12(c) [Doc. #17]. For the reasons below, this motion is DENIED.
On December 3, 2001, the Court accepted Zinzow's amended complaint which included two additional claims for relief. The amended complaint was accepted after Zinzow's motion for judgment on the pleadings. Zinzow, however, has not moved for judgment on the pleadings for these subsequent claims. World's motion for summary judgment does address the additional claims.
I.
The facts, in the light most favorable to Defendant World Insurance Co. ("World"), the non-moving party, as found in the Complaint and Answer, are as follows. In February 1993. Plaintiff Zinzow and World entered into a fee agreement which stated:
In consideration for each insurance company, business entity, block of insurance business, source of new business or other property that Zinzow submits, directs or introduces to [World] in which [World] purchases an interest within thirty-six (36) months of the date of submission or introduction, [World] agrees to pay Zinzow a fee as determined in paragraph 2 of this Agreement.
The 1993 agreement continued to provide specific calculations to determine the appropriate fee owed Zinzow in certain situations.
In February 1998, Zinzow sought to introduce World to Trigon which was contemplating selling its subsidiary Mid-South Insurance. Zinzow informed World that Trigon was interested in selling part of Mid-South's business and may later sell Mid-South's charter. On September 4, 1998, Zinzow sent World a fax detailing the terms of World's intent to purchase particular blocks of Mid-South's insurance business. The September 4 fax stated that World would "assume the risk and all administration associated with . . . [p]ieces designated 'MedSupp,' 'Health,' and 'MightSellAH' as so characterized in the summary lines of the Trigon/Mid-South database." In the September 4 fax, Zinzow also alluded to earlier conversations about those blocks of insurance. The September 4 fax also contains a specific fee provision for Zinzow. The fax states that:
Both parties indicate in their briefs that the September 4, 1998 agreement was not attached to the original Complaint. The record, however, includes the September 4 agreement as the last attachment to the Complaint as provided in the Notice for Removal. Doc. 1, Ex. A. If the September 4 agreement had not been attached to the Complaint, however, it would only bolster the denial of Zinzow's motion for judgment on the pleadings because there would be a question of contract interpretation that could not be resolved by the pleadings.
World Insurance would be responsible for payment of the finder's fee to ZinZow Associates. This would consist of a percentage of Premium on products described in item 2) above, payable as such premium is earned and World is due its fee for administration, but only to the extent such Percentage of premium may exceed the $50,000 finder's fee at closing.
The fax then set out a specific fee scale.
On September 25, 1998, Zinzow sent another letter via fax to World in which Zinzow offered to accept:
in lieu of the scale agreed upon as described in my fax of September 4, a flat one-time fee of $350,000, to be paid at closing (i.e. execution of a contract with Mid-South or Trigon to reinsure and/or administer any or all of the business which we have described to you).
In the letter, Zinzow stated that this flat fee was a compromise intended to promote negotiations between World and Trigon while protecting Zinzow's interest in the finder's fee.
On March 1, 2000. World and Monticello (a subsidiary of Trigon) entered into a stock purchase agreement in which World would purchase all of the outstanding shares of Mid-South. World informed Zinzow that it did not intend to pay Zinzow a finder's fee in relation to this purchase. Zinzow filed a Complaint in Forsyth County Superior Court on April 24, 2000, claiming anticipatory breach of contract and requesting the $350,000 fee provided in the September 25, 1998 agreement as well as attorneys' fees of $52,500 and costs. Zinzow filed a notice for removal in this Court on June 5, 2000 and its Answer on July 3, 2000.
II.
A motion for judgment on the pleadings should not be granted unless there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law. Edwards v. Liberty Life Assurance Co. of Boston, 2001 WL 1672256 (W.D.N.C. Dec. 19, 2001);Bell-Atlantic-Maryland. Inc. v. Prince George's County, 155 F. Supp.2d 465 (D. Md. 2001); Davenport v. Robert H. Davenport, 146 F. Supp.2d 770 (M.D.N.C. 2001); Wilkerson v. Thrift, 124 F. Supp.2d 322 (W.D.N.C. 2000); 5A Charles Alan Wright Arthur R. Miller § 1368 (2d ed. 1990) (stating that motions under 12(c) are not granted "unless the movant clearly establishes that no material issue of fact remains to be resolved and that he is entitled to judgment as a matter of law"). The facts must be viewed in the light most favorable to the non-moving party. Hamm v. Canal Ins. Co., 10 F. Supp.2d 539 (M.D.N.C. 1998).
A motion for judgment on the pleadings should be converted to a motion for summary judgment if matters outside of the pleadings are considered. Fed.R.Civ.P. 12(c); Eagle Nation. Inc. v. Market Force, Inc., 180 F. Supp.2d 752, 754 (E.D.N.C. 2001); Pledger v. North Carolina Dent. of Health Human Servs., 7 F. Supp.2d 705, 707-08 (E.D.N.C. 1998). In the instant case, Zinzow did not offer any additional material and relied solely on the pleadings and the attached exhibits. See Eagle Nation, 180 F. Supp. 2d at 754 (stating that exhibits attached to the complaint or answer should be considered part of the pleadings). Although World did provide supplemental material in response to Zinzow's motion for judgment on the pleadings, those materials will be excluded pursuant to Rule 12(c) to avoid conversion of the motion into a motion for summary judgment. Zinzow's motion will therefore remain one for judgment on the pleadings.
World did not attach any exhibits to its Answer.
Both Zinzow and World currently have separate cross-motions for summary judgment pending before the Court which more fully address the issues Defendant attempted to inject into Plaintiff's motion on the pleadings.
III.
Zinzow's motion for judgment on the pleadings is premised on the argument that all material facts are undisputed and that all necessary documents were attached to the Complaint. Zinzow alleges that World's first four affirmative defenses are without a factual or legal basis and that the affirmative defense of failure of consideration is without merit.
Zinzow is incorrect, however, in stating that all of the material facts are undisputed. Although World admits that the 1993 and September 25, 1998 agreements "speak for themselves," it denies liability under either of the agreements. World contends that it did not believe that the 1993 agreement applied to the stock purchase transaction, as noted in paragraph 8 of its Answer. Thus, even if the September 25, 1998 agreement modified the 1993 agreement, World denies that it owed Zinzow a fee for the stock purchase transaction. This denial is sufficient under the requirements for answers in Rule 8(b) which only require a defendant to make a short and plain statement affirming or denying the claims or asserting that the defendant has insufficient knowledge to make form a belief as to the claim. Fed.R.Civ.P. 8(b). Furthermore, the Federal Rules of Civil Procedure provide for a system of notice pleading. Liner v. DiCresce, 905 F. Supp. 280, 283 (M.D.N.C. 1994). The denial thus sufficiently raises the question of whether the September 25 agreement for a $350,000 finder's fee applies to the stock purchase transaction. Looking at the face of the September 25, 1998 agreement does not resolve the dispute because the language is unclear as to the scope of the agreement. The September 25 agreement refers back to the September 4 agreement which only dealt with a particular type of sale. Conversely, the September 25 agreement states that the $350,000 flat fee should be paid at closing, which includes "execution of a contract with Mid-South or Trigon to reinsure and/or administer any or all of the business which we have described to you." Although World's denial of liability is brief, it is enough to create a material issue of fact as to whether the September 25, 1998 agreement covers the stock purchase transaction, especially in light of the language of the agreement.
Zinzow, relying on Reed v. Turner, 2 F.R.D. 12 (E.D. Pa. 1941), contends that World's denial is insufficient because it is a disfavored pro forma denial. The Reed court, however, stated that it disfavored denials of a matter which was "one of common knowledge or one as to which the party can inform himself with the slightest effort." Id. at 12. In this case, however, World is not denying a matter of which it could easily inform itself. Instead, World's denial goes to Zinzow's substantive claim that the $350,000 fee should apply to the stock purchase agreement.
Finally, World alleged five affirmative defenses in its answer which are presumed denied by Zinzow. Fed.R.Civ.Pro. 7(d). World's affirmative defenses include payment, waiver, election of remedies, accord and satisfaction, and failure of consideration. The first four affirmative defenses allege that Zinzow received payment from Trigon and Mid-South in lieu of payment by World. In the Complaint, Zinzow does not include any contracts between itself and Trigon and Mid-South regarding payment of a finder's fee. The Stock Purchase Agreement attached to the Complaint reflects that Trigon had an agreement to pay Zinzow $50,000.00 for the transaction. Doc. 1, Ex. A, Stock Purchase Agreement at 15. The Stock Purchase Agreement, however, does not explain whether this payment was made in satisfaction of any agreement between World and Zinzow. The Complaint does not include any other reference to Trigon's contract with Zinzow for a $50,000.00 finder's fee. There is therefore insufficient information on the face of the pleadings to determine if World's first four affirmative defenses are meritorious. If World can later demonstrate that there was an agreement between Trigon and Zinzow that covered World's fee obligation, Zinzow would not prevail. A genuine issue of material fact thus remains as to World's affirmative defenses.
IV.
In conclusion, because the pleadings do not resolve all material issues of genuine fact as to whether the September 25, 1998 agreement applies to the stock purchase transaction, Zinzow's motion for judgment on the pleadings is DENIED.