Lincoln National Life Insurance Company v. Dov Sussman

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 17-10436
Non-Argument Calendar
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D.C. Docket No. 8:16-cv-00052-RAL-AAS
LINCOLN NATIONAL LIFE INSURANCE COMPANY,
an Indiana corporation,
Plaintiff - Appellee,
versus
DOV SUSSMAN,
an individual,
Defendant - Appellant.
________________________
Appeal from the United States District Court
for the Middle District of Florida
________________________
(May 30, 2019)
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Before MARCUS, ROSENBAUM and JILL PRYOR, Circuit Judges.
PER CURIAM:
Appellant Dov Sussman, an attorney proceeding pro se, appeals from the
district court’s judgment ordering him to pay Lincoln National Life Insurance
Company $234,405.12 plus pre-judgment and post-judgment interest. Sussman
argues that the district court erred in granting summary judgment to Lincoln
because under the terms of the parties’ contract, Lincoln was required to arbitrate
its breach of contract claim. He also argues that the district court erred in
concluding that he breached the parties’ agreement when he refused to pay
Lincoln. After careful consideration, we affirm.
I. BACKGROUND
A. The Parties’ Dispute
Lincoln is in the business of selling life insurance products. Sussman
entered into a series of written agreements with Lincoln, including a Producer
Agreement and a Marketing Agreement, which permitted him to sell Lincoln
policies. This appeal is a dispute about whether the terms of these agreements
required Sussman to repay a commission he earned for selling a Lincoln insurance
policy.
Sussman sold a Lincoln life insurance policy to a third party, the William A.
Brown Irrevocable Trust. The policy Lincoln issued to the trust included an
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alternate cash surrender value rider, which is also known as an “exec rider.” For
selling the policy, Lincoln paid Sussman a commission of $234,405.12.
About a year after the policy was issued, the trust surrendered the policy.
When the policy was surrendered, Lincoln returned to the trust all premiums that
the trust had paid to Lincoln, except for a $25 processing fee. Lincoln then sent a
demand letter to Sussman, requesting that he return the commission. Sussman
refused to do so.
B. The Relevant Contract Language
Because the parties disagree about Sussman’s obligations, we briefly review
the terms of their agreements. The Marketing Agreement that Sussman signed set
forth terms governing the commissions that Sussman earned and when Lincoln
could recoup commissions, called “chargebacks.” Doc. 25-2 at 4. 1 The Marketing
Agreement specified that Sussman would be compensated for his services based
upon the “terms and conditions set forth in . . . Schedule[] A1/B1,” which was
attached to the Marketing Agreement. Id. The agreement further explained that
Sussman’s commissions would “be calculated on the basis and using the
methodology shown on Compensation Schedule[] A1/B1 attached to the
Agreement.” Id. at 12. Schedule A1/B1 identified the commissions that Sussman
could earn for selling various Lincoln insurance products. It also identified when
1
Citations in the form “Doc. #” refer to numbered entries on the district court’s docket.
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Lincoln was permitted to charge back earned commissions for policies that were
surrendered or lapsed. Importantly, Schedule A1/B1 expressly stated that
commission chargebacks for policies with “[e]xec [r]ider[s]” were handled
differently and directed Sussman to consult the “Lincoln LifeReserve® UL and/or
Indexed UL Product Guide(s) for full details.” Id. at 19.
The Product Guide, in turn, stated that when a policy was issued with an
exec rider that “an entire new . . . compensation structure [was] used.” Doc. 25-6
at 25. After setting forth how commissions were earned on these policies, the
Product Guide provided that if a policy with an exec rider lapsed or was
surrendered, Lincoln was permitted to charge back the “most recent two years of
[c]ommissions.” Id.
At the time Sussman signed the Marketing and Producer Agreements, he
was not provided a copy of and had not reviewed the Product Guide. But Sussman
never contacted Lincoln to request a copy of the Product Guide or asked Lincoln
any questions about its terms.
The Marketing and Producer Agreements also contained dispute resolution
provisions. Sussman and Lincoln agreed to submit to arbitration all claims or
controversies arising from the agreements. In addition, the arbitration provisions
identified specific cities where the arbitration would be held. Each agreement also
stated that it was governed by the laws of Indiana.
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C. Procedural History
When Sussman refused to repay the charged-back commission, Lincoln sued
him in federal court. After discovery, Lincoln moved for summary judgment,
claiming that Sussman was liable because he had failed to repay the commission in
violation of the terms of the Marketing Agreement. In his opposition brief,
Sussman argued that the court lacked subject matter jurisdiction because Lincoln
was required to arbitrate the dispute. He further argued that under the terms of the
Marketing Agreement, he was not required to repay the commission because the
Product Guide was neither provided to him nor signed by him. In his brief,
Sussman also moved to strike Lincoln’s complaint and summary judgment filings,
asserting that Lincoln had attached to its complaint exhibits that included social
security numbers, tax identification numbers, dates of birth, and other confidential
information about Sussman and the policyholder.2
The district court granted summary judgment to Lincoln, concluding that the
Marketing Agreement unambiguously required Sussman to repay the commission.
The court explained that the Marketing Agreement incorporated by reference the
Product Guide’s provision regarding chargebacks for life insurance products with
exec riders. Because the Product Guide clearly and unambiguously stated that
there was a two-year chargeback period for policies with exec riders, Sussman was
2
When Sussman first pointed out that the exhibits to the complaint included confidential
information, Lincoln filed corrected exhibits with proper redactions.
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required to repay the commission. The court rejected Sussman’s argument that he
was not bound by the Product Guide because he never reviewed or was given a
copy of it. The court explained that because the Marketing Agreement clearly
referenced the Product Guide, Sussman was presumed to have read and understood
its terms.
In the summary judgment order, the court also considered Sussman’s
argument that the case should be dismissed because the parties had agreed in the
Marketing and Producer Agreements to arbitrate any claims. The court concluded
that Sussman waived his right to arbitration through his participation in litigation
and his failure to move to compel arbitration. After concluding that Lincoln was
entitled to summary judgment, the court denied Sussman’s motion to strike
Lincoln’s pleadings as moot.
The court entered judgment in Lincoln’s favor and ordered Sussman to pay
Lincoln $235,405.12, plus pre-judgment interest and post-judgment interest.
Lincoln then filed a motion to alter or amend the judgment to reflect the amount of
pre-judgment interest that had accrued and that post-judgment interest would
accrue at a rate of 0.88%. The court granted the motion and amended the judgment
accordingly.
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This is Sussman’s appeal. 3
II. DISCUSSION
On appeal, Sussman challenges the district court’s entry of summary
judgment in Lincoln’s favor. He argues that the district court erred when it refused
to compel arbitration and concluded that the terms of the contract unambiguously
required Sussman to repay the commission. He also challenges the district court’s
decision to deny as moot his motion to strike. We consider Sussman’s arguments
in turn.
A. Sussman Abandoned Any Challenge to the District Court’s Conclusion
that He Waived His Right to Arbitrate.
Sussman argues that the district court erred when it refused to compel
arbitration because the parties agreed in the Marketing and Producer Agreements
to arbitrate their disputes. When Sussman raised this argument at the summary
judgment stage, the district court refused to compel arbitration or dismiss the
action because it concluded that Sussman waived his right to arbitration. On
appeal, Sussman has failed to address the district court’s conclusion that he waived
his right to arbitration and thus has abandoned the issue. See Timson v. Sampson,
518 F.3d 870, 874 (11th Cir. 2008) (“While we read briefs filed by pro se litigants
3
After the court entered the judgment, Lincoln filed a motion seeking its attorney’s fees
and costs. The court denied the motion without prejudice, directing Lincoln to refile the motion
after this appeal was resolved.
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liberally, issues not briefed on appeal by a pro se litigant are deemed abandoned.”
(internal citations omitted)). 4
B. The District Court Did Not Err in Concluding that Sussman Breached
the Marketing Agreement.
Sussman also argues that the district court erred in granting summary
judgment to Lincoln on its breach of contract claim. Sussman contends that he was
not required to repay Lincoln the commission earned on the policy because the
Product Guide was never made a part of their agreement. We disagree.
“We review de novo the district court’s grant of summary judgment,
construing the facts and drawing all reasonable inferences in favor of the
nonmoving party.” Smelter v. S. Home Care Servs. Inc., 904 F.3d 1276, 1284
(11th Cir. 2018). Summary judgment is appropriate if the record gives rise to “no
genuine dispute as to any material fact,” such that “the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a). A genuine dispute of material
4
Sussman argues that because the parties agreed to arbitrate their dispute, the district
court lacked subject matter jurisdiction to hear Lincoln’s claim. But he cites no authority
establishing that an agreement to arbitrate a dispute deprives a district court of subject matter
jurisdiction to hear litigation related to the dispute. And the fact that a party can waive its right
to arbitration, see S&H Contractors, Inc. v. A.J. Taft Coal Co., 906 F.2d 1507, 1514 (11th Cir.
1990), tells us that an agreement to arbitrate does not deprive a court of subject matter
jurisdiction. See Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006) (“[S]ubject-matter
jurisdiction, because it involves a court’s power to hear a case, can never be forfeited or waived.”
(internal quotation marks omitted)).
In a related argument, Sussman argues that venue was improper in the Middle District of
Florida because it was not one of the locations identified in the agreements’ arbitration
provisions. But Sussman did not raise improper venue as an affirmative defense in a motion to
dismiss or a responsive pleading and thus waived this defense. See Fed. R. Civ. P 12(h)(1).
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fact exists when “the evidence is such that a reasonable jury could return a verdict
for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986).
Under Indiana law, 5 a person “is presumed to understand the documents
which he signs and cannot be released from the terms of the contract due to his
failure to read it.” Yellow Book Sales & Distrib. Co. v. JM McCoy Masonry Inc.,
47 N.E.3d 388, 394 (Ind. Ct. App. 2015) (internal quotation marks omitted).
“Other writings . . . which are referred to in a written contract may be regarded as
incorporated by the reference as part of the contract and, therefore, may properly
be considered in the construction of the contract.” I.C.C. Protective Coatings v.
A.E. Staley Mfg. Co., 695 N.E.2d 1030, 1036 (Ind. Ct. App. 1998). If a reference
in a written contract is made to another writing for a particularly designated
purpose, the other writing becomes part of the contract only for the purpose
specified. Id.
The Product Guide’s chargeback provision governs this dispute because the
provision was incorporated by reference into the Marketing Agreement. It is
undisputed that Sussman signed the Marketing Agreement. Schedule A1/B1,
5
Each agreement provides that Indiana law governs the agreement. Because the parties
agree that Indiana law applies here, we assume that it does. See Bahamas Sales Assoc., LLC v.
Byers, 701 F.3d 1335, 1342 (11th Cir. 2012) (“If the parties litigate the case under the
assumption that a certain law applies, we will assume that law applies.”).
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which was attached to and made a part of the Marketing Agreement, stated that the
Product Guide governed commission chargebacks for policies that included exec
riders. The fact that Sussman did not receive read the Product Guide does not
change our analysis. Under Indiana law, Sussman cannot be released from the
terms of a contract simply because he failed to read them. See Yellow Book Sales
& Distrib., 47 N.E.3d at 394. And there is no evidence that he requested the
Product Guide but was denied it. We thus conclude that when Sussman signed the
Marketing Agreement, he agreed that the terms in the Product Guide would govern
when Lincoln could chargeback commissions for policies with exec riders.
Under the terms of the Product Guide, when the trust surrendered the policy,
Sussman was required to return to Lincoln the entire commission. The Product
Guide unambiguously provided that when a policy with an exec rider lapsed or was
surrendered, Lincoln was entitled to charge back the two most recent years of
commissions. Because the trust surrendered the policy within two years of when it
was issued, Lincoln was entitled to charge back the entire commission that
Sussman had earned on the policy. The district court thus did not err in granting
summary judgment to Lincoln on its breach of contract claim. 6
6
Sussman also argues that the district court erred in granting summary judgment because
there were disputed issues of fact about whether one of Lincoln’s exhibits, described as an
illustration, was signed and whether it was provided to or rejected by the trust. Even if there are
disputed issues of fact, the disputes are not material because they have no bearing on whether the
Product Guide was made a part of the agreement between Lincoln and Sussman. See Fed. R.
Civ. P. 56(a).
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C. Sussman Abandoned Any Challenge to the District Court’s Denial of
His Motion to Strike.
Sussman also argues that the district court erred in denying his motion to
strike Lincoln’s complaint as a sanction for the company having filed confidential
information in exhibits attached to its complaint. After granting summary
judgment to Lincoln, the court denied the motion to strike as moot. On appeal,
Sussman argues that the district court erred in deciding the case was moot because
there still was a live case or controversy. But the district court did not conclude
that the entire case was moot; rather, it denied the motion as moot because the
court had determined that Lincoln was entitled to summary judgment. Because
Sussman presents no argument on appeal challenging this aspect of the district
court’s determination, we conclude that he abandoned any challenge to it. See
Timson, 518 F.3d at 874.7
III. CONCLUSION
For the reasons set forth above, we affirm the district court’s judgment.
AFFIRMED.
7
Sussman also argues that the district court erred in granting Lincoln’s motion to alter or
amend the judgment to award pre-judgment and post-judgment interest and that the district court
judge should have recused because the judge had a conflict of interest. But Sussman failed to
develop adequately either argument. First, Sussman has abandoned any challenge to the district
court’s order granting the motion to amend the judgment. He failed to raise any argument in his
brief that the district court was not permitted to award such interest. See Timson, 518 F.3d at
874. Second, regarding recusal, Sussman’s brief simply states that the district court judge may
have had a financial interest in the case and should have recused. Because Sussman raises the
recusal issue in only a perfunctory manner without supporting arguments or authority, he has
abandoned the issue. Sapuppo v. Allstate Floridian Ins. Co., 739 F.3d 678, 681 (11th Cir. 2014).
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