Filed: Jun. 11, 2003
Latest Update: Mar. 02, 2020
Summary: Opinions of the United 2003 Decisions States Court of Appeals for the Third Circuit 6-11-2003 Vukich v. Nationwide Mutl Ins Precedential or Non-Precedential: Non-Precedential Docket No. 02-3359 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2003 Recommended Citation "Vukich v. Nationwide Mutl Ins" (2003). 2003 Decisions. Paper 463. http://digitalcommons.law.villanova.edu/thirdcircuit_2003/463 This decision is brought to you for free and open access by t
Summary: Opinions of the United 2003 Decisions States Court of Appeals for the Third Circuit 6-11-2003 Vukich v. Nationwide Mutl Ins Precedential or Non-Precedential: Non-Precedential Docket No. 02-3359 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2003 Recommended Citation "Vukich v. Nationwide Mutl Ins" (2003). 2003 Decisions. Paper 463. http://digitalcommons.law.villanova.edu/thirdcircuit_2003/463 This decision is brought to you for free and open access by th..
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Opinions of the United
2003 Decisions States Court of Appeals
for the Third Circuit
6-11-2003
Vukich v. Nationwide Mutl Ins
Precedential or Non-Precedential: Non-Precedential
Docket No. 02-3359
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2003
Recommended Citation
"Vukich v. Nationwide Mutl Ins" (2003). 2003 Decisions. Paper 463.
http://digitalcommons.law.villanova.edu/thirdcircuit_2003/463
This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
University School of Law Digital Repository. It has been accepted for inclusion in 2003 Decisions by an authorized administrator of Villanova
University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.
NOT PRECEDENTIAL
THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
Nos. 02-3359, 02-3360, 02-3361
___________
CRAIG VUKICH,
Appellant at No. 02-3359
v.
NATIONWIDE MUTUAL INSURANCE COMPANY;
NATIONWIDE MUTUAL FIRE INSURANCE COMPANY;
NATIONWIDE LIFE INSURANCE COMPANY;
NATIONWIDE GENERAL INSURANCE COMPANY;
NATIONWIDE PROPERTY AND CASUALTY INSURANCE COMPANY;
COLONIAL INSURANCE COM PANY OF WISCONSIN, f/k/a
COLONIAL INSURANCE COMPANY OF CALIFORNIA
____________
WILLIS JAMES BRANTHOOVER,
Appellant at No. 02-3360
v.
NATIONWIDE MUTUAL INSURANCE COMPANY;
NATIONWIDE MUTUAL FIRE INSURANCE COMPANY;
NATIONWIDE LIFE INSURANCE COMPANY;
NATIONWIDE GENERAL INSURANCE COMPANY;
NATIONWIDE PROPERTY AND CASUALTY INSURANCE COMPANY;
COLONIAL INSURANCE COM PANY OF WISCONSIN, f/k/a
COLONIAL INSURANCE COMPANY OF CALIFORNIA
____________
TODD ABRAHAM,
Appellant at No. 02-3361
v.
NATIONWIDE MUTUAL INSURANCE;
NATIONWIDE MUTUAL FIRE INSURANCE COMPANY;
NATIONWIDE LIFE INSURANCE COMPANY;
NATIONWIDE GENERAL INSURANCE COMPANY;
NATIONWIDE PROPERTY AND CASUALTY INSURANCE COMPANY;
COLONIAL INSURANCE COM PANY OF WISCONSIN, f/k/a
COLONIAL INSURANCE COMPANY OF CALIFORNIA
___________
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
(D.C. Civil Nos. 01-1510, 01-1511, 01-1509)
District Judge: The Honorable Gustave Diamond
___________
Submitted Under Third Circuit LAR 34.1(a)
May 23, 2003
BEFORE: SCIRICA, Chief Judge, SLOVITER, and NYGAARD, Circuit Judges.
(Filed: June 11, 2003)
___________
OPINION OF THE COURT
___________
2
NYGAARD, Circuit Judge.
Appellant Craig Vukich appeals the dismissal of his complaint following
the District Court’s determination that his present claims were compulsory counterclaims
to a previous lawsuit, Nationwide Mutual Insurance Co., et al. v. John Fleming, et al.,
Civil No. 99-1417 (W.D. PA 2001)(‘Fleming’).1 On appeal, Vukich argues that his
allegations of breach of contract and fraudulent misrepresentation by Nationwide are not
logically related to the prior action. We exercise plenary review over the grant of a motion
to dismiss. Lorenz v. CSX Corp., 1 F.3d 1406, 1411 (3d Cir.1993). Accordingly, we
review de novo the District Court's determination that Vukich's suit should have been
pursued as a compulsory counterclaim in the Fleming action. See Xerox Corp. v. SCM
Corp.,
576 F.2d 1057, 1058 (3d Cir.1978). We will affirm the District Court. 2
I.
Appellant’s complaint arises out of the termination of an agency agreement
that governed his services to Nationwide as an exclusive insurance agent. Pursuant to the
terms of that agreement, Vukich accumulated certain deferred earnings as a form of
benefits and was entitled to received those earnings in the event of a disability, death, or
1. There are tw o com panion lawsuits, Branthoover v. Nationwide, et al., No. 02-
3360, and Abraham v. Nationwide, et al., No. 02-3361, also on appeal. These cases
raise identical legal issues to Vukich and our discussion applies equally to them.
2. The District C ourt also found that Vukich’s complaint failed to state a claim
and alternatively dismissed the complaint for that reason. Because we agree with the
District Court’s counterclaim analysis, we need not reach its second justification for
dism issal.
3
“qualified cancellation.” The agreement provides that Vukich’s competition with
Nationwide following employment would preclude consideration as a qualified
cancellation. Based on Vukich’s actions in establishing a competing insurance agency,
Nationwide withheld his deferred compensation benefits and brought the aforementioned
Fleming lawsuit. In this suit, Vukich alleges that Nationwide was contractually permitted
to either withhold his deferred compensation and allow competition, or pay the benefits
and bring a lawsuit—not both. He claims that Nationwide breached his employment
contract by withholding his benefits and then filing the Fleming lawsuit. Additionally, he
claims that Nationwide fraudulently misrepresented the true nature of the deferred
compensation program and that Nationwide never intended to pay the deferred funds,
irrespective of his actions.
1. The Fleming Lawsuit
On August 27, 1999, Nationwide brought a diversity action against several
former insurance agents for lost premium income, corporate opportunities, and customer
goodwill allegedly arising from the agents’ implementation of a plan to transfer
Nationwide’s policyholders to direct competitors. The agents, including Vukich, created
a separate insurance company while still under contract to Nationwide and utilized certain
policyholder information gleaned from their Nationwide employment to establish a
customer base with the new agency. Nationwide brought suit for breach of the agents’
respective employment agreements, breach of fiduciary duty, and breach of a covenant
4
not to compete with respect to a particular agent. On cross-motions for summary
judgment, the District Court granted summary judgment to the defendants on several
counts, but allowed the case to proceed to trial on several other counts, including the
breach of contract claims against the defendants.
II.
It is clear that both the Fleming lawsuit and this case arise from the same
factual predicate and relate to the proper interpretation of the employment agreement.
Federal Rule of Civil Procedure 13(a) provides that:
A pleading shall state as a counterclaim any claim
which at the time of serving the pleading the pleader
has against any opposing party, if it arises out of the
transaction or occurrence that is the subject matter of
the opposing party’s claim and does not require for its
adjudication the presence of third parties of whom the
court cannot acquire jurisdiction.
We have said that “[f]or a claim to qualify as a compulsory counterclaim, there need not
be precise identity of issues and facts between the claim and the counterclaim; rather, the
relevant inquiry is whether the counterclaim ‘bears a logical relationship to an opposing
party's claim.’” Transamerica Occidental Life Ins. Co. v. Aviation Office of America, Inc.,
292 F.3d 384, 389 (3d Cir. 2002) (quoting Xerox
Corp., 576 F.2d at 1059). In turn, we
have found that “a counterclaim is logically related to the opposing party's claim where
separate trials on each of their respective claims would involve a substantial duplication
5
of effort and time by the parties and the courts.” Great Lakes Rubber Corp. v. Herbert
Cooper Co., 286 F.2d 631, 634 (3d Cir. 1961).
A comparison of the two lawsuits quickly yields the conclusion that the
claims made in this suit are logically related to the claims made by Nationwide in
Fleming. “Where multiple claims involve many of the same factual issues, or the same
factual and legal issues, or where they are offshoots of the same basic controversy
between the parties,” a compulsory counterclaim exists. Great Lakes Rubber Corp., 286
F.2d at 631. Both lawsuits are primarily concerned with the scope of the parties’
permissible actions under the same employment agreement during the same time period
and are interconnected. In Fleming, Nationwide sued Vukich for breach of the
employment agreement for actions taken during his tenure and post-employment
competition. Here, the primary argument put forth by Vukich is that Nationwide had a
choice under the employment agreement to either withhold deferred compensation or
bring a lawsuit to prevent competition. Once Nationwide filed its claim in Fleming, it
purportedly triggered Vukich’s claim. In each lawsuit, the respective claims focus on the
actions of the other party within the same factual paradigm and share the common legal
question of the proper interpretation of the employment agreement with respect to
competition.
We have construed compulsory counterclaims liberally in supporting the
notions of judicial economy, and we see no reason to circumscribe that interpretation
6
here. Vukich’s claims of breach of contract and fraudulent misrepresentation arise from
his interpretation of Nationwide’s duties under the employment agreement and are
logically related to the Fleming lawsuit. Thus, the District Court properly dismissed
Vukich’s complaint as a compulsory counterclaim.
III.
For the foregoing reasons, we will affirm the orders of the District Court.
/s/ Richard L. Nygaard
Circuit Judge
