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Richards v. Burnco Texas, LLC

Court of Appeals of Texas, Fifth District, Dallas

August 30, 2019

DAWN RICHARDS, Appellant
v.
BURNCO TEXAS, LLC AND CLIFFORD HAHNE, Appellee

          On Appeal from the 162nd Judicial District Court Dallas County, Texas Trial Court Cause No. DC-16-11668

          Before Justices Myers, Molberg, and Carlyle

          MEMORANDUM OPINION

          LANA MYERS, JUSTICE

         This is an appeal from a summary judgment granted in favor of appellees Burnco Texas, LLC, and Clifford Hahne. In one issue, appellant Dawn Richards argues the trial court erred in granting summary judgment because the termination of her independent contractor status with Aflac released her from her contractual obligations. We reverse and remand.

         Background and Procedural History

         Appellant Dawn Richards started working for the American Family Life Assurance Company (Aflac) in April of 2006. Richards sold individual and group policies for Aflac as an independent contractor. On March 16, 2007, she signed an "Associate's Agreement" (AA) with Aflac that authorized her to solicit applications for insurance policies sold by Aflac. The AA specifically provided that "[a]ssociate [Richards] represents, warrants, and agrees that the performance of Associate under this Agreement shall be as an independent contractor of Aflac."

         Paragraph ten of the AA, entitled "Arbitration and Other Legal Proceedings," included the following provision, a covenant not to sue:

10.6. Covenant Not to Sue: Associate [Richards] covenants and agrees that he/she shall not, directly or indirectly, assert or threaten to assert any claim, charge, action or cause of action (hereinafter "Claim") against (a) an Account or Prospective Account (which is defined as any individual or entity that Associate ever solicited for purposes of selling an Aflac policy or product), including all of the Account's or Prospective Account's past and present officers, trustees, directors, stockholders, employees, agents, partners and attorneys, or (b) a policyholder, which relates in any way to Associate's communications, dealings or relationship with the Account, Prospective Account or policyholder. Nothing contained in this Paragraph 10.6 shall prohibit Associate from asserting a claim against an Account or Prospective Account (including any of the entities or individuals described herein) or policyholder for a matter that is completely unrelated to Aflac or Associate's representation of Aflac. Moreover, in the event that an Account or Prospective Account (including any of the entities or individuals described herein) or policyholder should assert a claim against Associate, Associate shall be free to assert any counterclaim against the Account or Prospective Account (including all of the entities or individuals described herein) or policyholder. Associate acknowledges that this covenant not to sue is for the benefit of Accounts or Prospective Accounts (including any of the entities or individuals described herein) and policyholders and, in addition, for Aflac in connection with its relationship with its Accounts, Prospective Accounts and policyholders. Associate further acknowledges that this covenant not to sue is an integral part of this Agreement and is supported by valuable consideration.

         In 2007, Richards opened a group policy for Gateway, a company that was subsequently purchased by appellee Burnco Texas, LLC, a privately held construction materials company. Gateway had offered a "cafeteria plan" to its employees that continued after Burnco purchased Gateway. Appellee Hahne is the vice president of Burnco's United States operations.

         On January 11, 2015, Richards signed an Aflac "Benefits Advisors Producer's Agreement" (BAPA) to sell insurance policies for Aflac Benefits Advisors, Inc. (ABA) through its ABA Exchange. The agreement provided in part:

WHEREAS, Producer [Richards] is in the business of soliciting insurance coverage as a representative of Broker and is currently appointed and authorized by American Family Life Assurance Company ("Aflac") to solicit applications for insurance policies offered for sale by Aflac pursuant to an Associates Agreement (the "AA") or a General Agent's Agreement (the "GA Agreement"), whereby such AA or GA Agreement is hereby being incorporated herein by reference thereto[.]

         With thirty-day written notice, either ABA or Richards could terminate the BAPA, and upon such termination, Richards's access to and permission to sell policies through the ABA exchange would be revoked.

         Section five of the BAPA, also entitled, "Arbitration and Other Legal Proceedings," included the following covenant-not-to-sue provision:

5.6. Covenant Not to Sue. Producer [Richards] covenants and agrees that it will not, directly or indirectly, assert or threaten to assert any claim, charge, action, class action, or cause of action (hereinafter "Claim") against: (a) Broker, its parent, subsidiaries or affiliates, including aforementioned past and present officers, trustees, directors, stockholders, members, employees, agents, partners, and attorneys, (b) the Companies, or a policyholder or certificate holder that relates in any way to Producer's communications, dealings or relationship with such Company, policyholder, or certificateholder pursuant to Producer's authority under the terms of this Agreement, (c) the solicitation, submission or sale of an insurance product on the ABA Exchange or (d) related in any way to this Agreement. Nothing contained in this Paragraph 5.6 shall prohibit Producer from asserting any claims against a Company, policyholder, or certificateholder for a matter that is completely unrelated to Broker or to Producer's representation of Broker under the terms of this Agreement. Moreover, in the event that a Company, policyholder, or certificateholder should assert a claim against Producer, Producer is free to assert any counterclaim against such Company, policyholder, or certificateholder. Producer acknowledges that this covenant not to sue is for the benefit of the policyholders and certificateholders of the companies to ...

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