This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2002).






Associated Medical Insurance Agents, L.L.C.,





The G.E. Medical Protective Company,

f/k/a The Medical Protective Company,

an Indiana corporation, et al.,



Filed ­­­March 30, 2004


Harten, Judge


Hennepin County District Court

File No. CT02-7133


Patricia J. Hartmann, Patricia J. Hartmann, P.A., 386 North Wabasha Street, Suite 1450, St. Paul, MN 55102; and


Donald G. Clapp, Clapp & Associates, 1450 Capital Centre, 386 North Wabasha Street, St. Paul, MN 55102 (for appellant Associated Medical Insurance Agents, L.L.C.)


Shawn M. Raiter, Larson & King, LLP, 30 East Seventh Street, Suite 2800, St. Paul, MN 55101 (for respondents John T. Wasche, Richard M. Williams, Richard M. Williams & Associates, Williams-Bartine Group and J & R Agency)


Thomas J. Vollbrecht, Kristin L. Poppenberg, Faegre & Benson, 2200 Wells Fargo Center, 90 South Seventh Street, Minneapolis, MN 55402 (for respondent G.E. Medical Protective Company)


            Considered and decided by Randall, Presiding Judge, Klaphake, Judge, and Harten, Judge.

U N P U B L I S H E D   O P I N I O N




            Respondents, an insurer and an independent agency, were awarded summary judgment in an action brought by appellant, another independent insurance agency, based upon a number of insureds transferring their business from appellant to respondent agency.  Appellant challenges the summary judgment.  Because we see no genuine issue of material fact and no erroneous application of the law, we affirm.


            In 1990, respondent John Wasche, a licensed insurance agent, was employed by respondent G.E. Medical Protective Company, f/k/a The Medical Protective Company, (GEMPC), a medical malpractice insurer, to serve as its local representative.  Wasche was the primary GEMPC contact for most insureds.

GEMPC also entered into insurance agency agreements with two independent insurance agents, respondent Richard M. Williams & Associates (Williams) and appellant Associated Medical Insurance Agents, L.L.C., (AMIA), allowing them to sell GEMPC policies in Minnesota in exchange for which GEMPC paid them commissions.

In 2001, GEMPC closed its Minnesota office and Wasche ceased to be a GEMPC employee.  He and Richard Williams decided to form the J&R Agency.

            Ten GEMPC insureds who had used AMIA as their agent opted to use Williams instead when they learned that Wasche would now be working as an independent agent with Williams.  The insureds informed GEMPC of their wish to change agents by filing an Agent of Record Assignment Form (AOR), in accord with standard practice in the industry.

When it received an AOR from an insured, GEMPC’s practice was to notify the original agent, who then had the option of contacting the insured and asking for a rescission of the change.  If GEMPC did not receive notice of a rescission within ten days, the change of agents became effective, and the new agent became entitled to the ongoing commissions on the insured’s account.

            Although GEMPC notified AMIA after receiving the AOR’s, AMIA chose not to contact its former insureds and pursue rescission of their AORs.  When GEMPC received no rescissions, it replaced AMIA with Williams as the agent for those insureds and, in January 2002, paid the commissions to Williams. 

When AMIA did not receive commissions on its former insureds’ accounts, it brought this action against GEMPC and Wasche and Williams, claiming breach of contract, tortious interference with business relationships, and violation of trade secrets law.  GEMPC and Wasche and Williams moved successfully for summary judgment on all claims.  AMIA challenges that judgment. 



            In reviewing a summary judgment, this court asks whether there are any genuine issues of material fact and whether the district court erred in its application of the law.  State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990).

1.         Breach of Contract Claim

            “It is a well-settled principle of contract law that a nonbreaching party is duty-bound to use reasonable diligence to mitigate damages.”  Deutz-Allis Credit Corp. v. Jensen, 458 N.W.2d 163, 166 (Minn. App. 1990) (citing Wavra v. Karr, 142 Minn. 248, 251, 172 N.W. 118, 120 (1919); Nelson v. Smith, 349 N.W.2d 849, 854 (Minn. App. 1984), review denied (Minn. 26 July 1984)).  The district court found that

AMIA failed, as a matter of law, to mitigate any damage it may have sustained.  [AMIA] had the opportunity to obtain rescissions of the AORs and had the opportunity to solicit the insureds’ business when they renewed their policies in 2002.  [AMIA] made no effort to do either.


 AMIA concedes that it did not try to obtain rescissions but claims that its correspondence with GEMPC showed that it “attempted to prevent the entire series of events which gave rise to this claim.”  AMIA’s correspondence, however, was not an effort to mitigate damages.  It included a threat to take legal action if Wasche and Williams obtained AORs and a directive to GEMPC to deny the AORs and inform the insureds that they could not choose Wasche and Williams as their agent, notwithstanding the undisputed right of insureds to choose their own agents. 

            Even assuming that AMIA did not fail to mitigate, its breach of contract claim fails.  AMIA references no particular portion of the contract, i.e., the agency agreement between AMIA and GEMPC,  in its allegation of breach. It relies instead on V.L. Phillips & Co. v. Penn. Threshermen & Farmers Mut. Cas. Ins. Co., 199 F.2d 244 (4th Cir. 1952), cert. denied, 345 U.S. 906, 73 S. Ct. 645 (1953).  That case is clearly distinguishable.  It concluded that an insurer could not avoid paying commissions to former agents by appointing sub-agents and contacting the insureds through them because such an activity would “unjustly enrich [the insurer] to the impoverishment of the [agents].”  Id. at 248.  Here, GEMPC has not been enriched—it has paid commissions either to AMIA or to Wasche and Williams throughout. 

            AMIA neither denies that it failed to mitigate damages nor asserts that any particular provision of its agreement with GEMPC was breached.  The district court did not err in granting summary judgment on this claim.

2.         Tortious Interference with Business Relations

            AMIA contends that GEMPC is directly liable for its wrongful interference in the relationships between AMIA and the insureds who filed AORs and “vicariously liable for the torts of its agents” Wasche and Williams.  The district court found that

[t]he conduct of the Wasche/Williams defendants was simple business competition and is therefore privileged and not subject to a claim for tortious interference.  There was nothing unethical or illegal about [their] contacts with the insureds and therefore a tortious interference claim cannot stand.


AMIA claims Wasche and Williams “actively solicited” insureds to execute the AORs.  But active solicitation is not coercion, and AMIA does not claim that the insureds were coerced to execute the AORs. 

The record compels the finding that the insureds were solicited rather than coerced.  Because the insureds were accustomed to dealing with Wasche and were pleased with his service, they wanted to continue dealing with him.  Testimony indicated that Wasche’s change in status from a GEMPC employee to an independent agent with Williams was irrelevant to the insureds.  The assistant to the CEO of the umbrella organization for six of the ten insureds testified:

            [GEMPC] closed the Minnesota office . . . leaving us with no agent, at least in our eyes, to service it close by and be available.  John Wasche was always our contact with [GEMPC], and it concerned us not having somebody close by in a personal relationship like that for our malpractice insurance.  John Wasche had always given us that service in the past, so it was natural in our eyes, that we would continue to have him service it.


The CEO of that organization testified:

            I made it very clear at that meeting [with Wasche and Williams] that John Wasche was going to be the agent.  I wanted to continue the service through John Wasche, and for no other reason would I signed [sic] this form [the AOR].  If John Wasche wasn’t the agent, then I would go direct to [GEMPC] . . . .


. . . .


I assumed that John Wasche, by his mere presence, was still an agent of [GEMPC] and that I was going to continue to do business with John Wasche no matter where he was or what agency he was associated with.


The CEO clearly understood that Wasche was no longer a GEMPC employee but an agent, and the agent whom the CEO wanted to handle his accounts, regardless of which agency he worked for.

            AMIA argues that GEMPC should have rejected the AORs selecting Williams and his agency because Williams’ appointment to sell for GEMPC had expired and he was in violation of Minn. Stat. § 60K.49, subd. 2 (2002) (requiring agents to be appointed by insurers for whom they do business).[1]  Neither Williams nor GEMPC was aware that his appointment had lapsed.  Williams continued to sell policies for GEMPC, and GEMPC continued to pay commissions to Williams.  The information about the lapse was obtained by AMIA from a state government employee; the occurrence of the lapse is unexplained.  In any event, the lapse of Williams’s formal appointment was inadvertent and had no practical effect on Williams, GEMPC, or any insured.

            A claim for tortious interference with prospective business relations requires proof that the defendant intentionally committed a wrongful act that improperly interfered with the prospective relationship.  Hunt v. Univ. of Minn., 465 N.W.2d 88, 95 (Minn. App. 1991).  AMIA offers no proof of any wrongful act; it asserts only that Wasche and Williams “actively solicited” business.  Active solicitation is competition, and “[c]ompetition is favored in the law.”  United Wild Rice, Inc., v. Nelson, 313 N.W.2d 628, 633 (Minn. 1982).  The district court did not err in granting summary judgment on the claim of tortious interference with business relationships.

3.         Trade Secrets

AMIA argues that its book of business (the list of insureds to whom it sold policies and information about those insureds) was a trade secret in which it had a property right and that respondents violated that right.  AMIA’s argument has two flaws: first, an insurance agent’s books of business is not a trade secret as a matter of law, and second, AMIA made no effort to keep secret the material in its book of business.

 “[Appellant’s] customer list which respondents allegedly misappropriated was not a trade secret or otherwise deserving of protection.  It could be easily duplicated from public sources.  Customers . . . are independent insurance agents, a limited group easily identified, and whose identity is not protected.”  Blackburn, Nickels & Smith, Inc., v. Erickson, 366 N.W.2d 640, 645 (Minn. App. 1985), review denied (Minn. 24 June 1985).  Appellant attempts to distinguish Blackburn on the ground that, in that case, the customer list was not a list of insureds but a list of insurance agents.  This distinction is irrelevant: those needing medical malpractice insurance are also a readily identifiable group.  In fact, AMIA testified that information on areas of medical practice and potential insurance coverage needs was available in the public library.  See also Lasermaster Corp. v. Sentinel Imaging, 931 F. Supp 628, 637 (D. Minn. 1996) (“[T]he factor which weighs against plaintiff’s motion is the accessibility of the information sought to be protected. . . . [I]nformation as to customers, including knowledge of contact persons, prior purchasing history, and product and service requirements do[es] not constitute [a] trade secret[] under the Uniform Trade Secrets Act.”).

AMIA, like the plaintiff in Lasermaster, relies on Surgidev Corp. v. Eye Tech., Inc., 648 F. Supp. 661 (D. Minn. 1986), aff’d, 828 F.2d 452 (8th Cir. 1987).  Lasermaster explains why that reliance is misplaced.

Fundamental to the Court’s holding in Surgidev, however, was the fact that plaintiff proffered numerous testimony demonstrating that the identity of high volume implanters is considered to be confidential in the opthamalogical industry.  Id. at 682.  In the present action, plaintiff proffers no persuasive evidence whatsoever to bolster its proposition that the information of this type is highly proprietary or confidential.


Lasermaster, 931 F. Supp. at 637.  Here, AMIA testified that it gave prospective customers a referral list, or names of insured who were already its customers.  Moreover, testimony of the assistant to the CEO of the organization who signed AOR’s provided evidence that the information is not confidential.  She testified about meetings where she spoke to other insurance agents, occasionally sought better rates or coverage, told prospective insurers and agents who her current insurer was and the renewal date of the current policy, how many doctors were insured, what kind of coverage they currently had, and what their loss history was.  Thus, the information in which AMIA claims a proprietary or trade secret interest was not kept secret, either by AMIA agents or by insureds.  AMIA cannot successfully argue that it deserves trade secret protection. See Gordon Employment, Inc. v. Jewell, 356 N.W.2d 738, 741 (Minn. App. 1984) (finding no trade secret where there was no confidentiality policy about the allegedly secret information).

            The district court did not err in granting summary judgment on the trade secret claim.



[1] We note that AMIA may lack standing to raise this issue.  Violation of a statute does not create a private right of action absent some indication by the legislature.  Bruegger v. Faribault County Sheriff’s Dept., 497 N.W.2d 260, 262 (Minn. 1993).