United States District Court, S.D. Ohio, Western Division
LANCE BROWNING, Individually and on Behalf of All Others Similarly Situated, Plaintiff,
THE OHIO NATIONAL LIVE INSURANCE COMPANY et al., Defendants.
REPORT AND RECOMMENDATION
Stephanie K. Bowman, United States Magistrate Judge
civil action is now before the Court on Defendants Ohio
National Life Insurance Company (“ONLIC”), Ohio
National Life Assurance Company (“ONLAC”), Ohio
National Equities, Inc. (“ONEQ”) (collectively,
Ohio National”), and Ohio National Financial Services,
Inc. (“ONFS”) motion for judgment on the pleadings
(Doc. 15) and the parties' responsive memoranda. (Docs.
Background and Facts
is one of the many licensed securities representatives of the
broker-dealer LPL Financial LLC (“LPL”) who have
sold variable annuities to customers nationwide that feature
a guaranteed minimum income benefit (GMIB) rider, offered by
The Ohio National Life Insurance Company and its subsidiaries
Ohio National Life Assurance Corporation and Ohio National
Equities, Inc. (these three collectively referred to herein
as, “Ohio National” or “ON”). (Doc.
11, ¶ 1.) All of these entities operate under the
umbrella of Ohio National Financial Services, Inc.
(“ONFS”). Id. at 2.
to the Selling Agreement entered into by Ohio National and
LPL (“Selling Agreement”), LPL and its affiliated
securities representatives, including Plaintiff, marketed and
sold the Ohio National GMIB variable annuities (the
“Annuities”) to customers, with all customer
premiums from those sales being paid directly to Ohio
National. In return for promoting, selling, and servicing
these complex Annuities, LPL and its affiliated securities
representatives received commissions, including
“trailing commissions, ” that were paid to LPL
and affiliated securities representatives on a regular basis
until and unless the Annuities were surrendered or
annuitized. Id. at ¶ 2.
September 28, 2018, Ohio National announced that it was
terminating the Selling Agreement with LPL, and numerous
other broker-dealers, with regard to the Annuities. As part
of that termination, it also announced that it would no
longer pay trailing commissions stemming from Annuities that
were already in existence. Effective December 12, 2018, Ohio
National stopped paying LPL and its affiliated securities
representatives any trailing commissions on the Annuities.
Id. at ¶ 3.
Plaintiff filed the instant action for breach of contract,
unjust enrichment, tortious interference and promissory
estoppel, Plaintiff also seeks an injunction to require Ohio
National to live up to its obligations under the Selling
Agreement and cease causing damage and irreparable harm,
including the loss of goodwill and the negative impact to the
business relationships and reputation of Plaintiff and the
proposed class. Plaintiff additionally seeks declaratory
relief resolving Ohio National's future obligations
pursuant to the Selling Agreement with LPL. Plaintiff also
brings this suit as a class action pursuant to Rule 23 of the
Federal Rules of Civil Procedure on behalf of himself and all
members of the following Class:
All persons who: (1) act as securities representatives of
LPL; and (2) have solicited the sale of an Ohio National
guaranteed minimum income benefit Variable Annuity that that
has not been surrendered or annuitized.
National moves for Judgment on the Pleadings asserting that
Plaintiff lacks standing and/or fails to state a claim upon
which relief can be granted.
Standard of Review
district court reviews a Rule 12(c) motion for judgment on
the pleadings under the same standard applicable to a Rule
12(b)(6) motion to dismiss. EEOC v. J.H. Routh Packing
Co., 246 F.3d 850, 851 (6th Cir. 2001). Accordingly,
“we construe the complaint in the light most favorable
to the nonmoving party, accept the well-pled factual
allegations as true, and determine whether the moving party
is entitled to judgment as a matter of law.”
Commercial Money Ctr., Inc. v. Illinois Union Ins.
Co., 508 F.3d 327, 336 (6th Cir. 2007). While such
determination rests primarily upon the allegations of the
complaint, “matters of public record, orders, items
appearing in the record of the case, and exhibits attached to
the complaint, also may be taken into account.”
Amini v. Oberlin Coll., 259 F.3d 493, 502 (6th Cir.
2001) (quoting Nieman v. NLO, Inc., 108 F.3d 1546,
1554 (6th Cir. 1997)) (emphasis omitted). The court
“need not accept the plaintiff's legal conclusions
or unwarranted factual inferences as true.”
Commercial Money Ctr., 508 F.3d at 336. To withstand
a Rule 12(c) motion for judgment on the pleadings, “a
complaint must contain direct or inferential allegations
respecting all the material elements under some viable legal
Sixth Circuit has explained the pleading requirements that
are necessary to survive a Rule 12(c) motion as follows:
In Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127
S.Ct. 1955, 167 L.Ed.2d 929 (2007), the Supreme Court
explained that “a plaintiff's obligation to provide
the ‘grounds' of his ‘entitle[ment] to
relief' requires more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action
will not do.... Factual allegations must be enough to raise a
right to relief above the speculative level....”
Id. at 1964-65 (internal citations omitted). In
Erickson v. Pardus, ... 127 S.Ct. 2197, 167 L.Ed.2d
1081 (2007), decided two weeks after Twombly, however, the
Supreme Court affirmed that “Federal Rule of Civil
Procedure 8(a)(2) requires only ‘a short and plain
statement of the claim showing that the pleader is entitled
to relief.' Specific facts are not necessary; the
statement need only ‘give the defendant fair notice of
what the ... claim is and the grounds upon which it
rests.'” Id. at 2200 (quoting Twombly, 127
S.Ct. at 1964). ... We read the Twombly and
Erickson decisions in conjunction with one another
when reviewing a district court's decision to grant a
motion to dismiss for failure to state a claim or a motion
for judgment on the pleadings pursuant to Federal Rule of
Civil Procedure 12.
Tucker v. Middleburg-Legacy Place, 539 F.3d 545, 549
- 550 (6th Cir. 2008) (quoting Sensations, Inc. v. City
of Grand Rapids, 526 F.3d at 295-96 (6th Cir. 2008))
(footnote omitted); see also generally, Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009).
Ohio National argues that Plaintiff is not a party to the
Selling Agreement at issue and therefore lacks contractual
privity to enforce the agreement.
Selling Agreement states that the only parties thereto are
the Ohio National Contracting Defendants and LPL. (Doc. 11,
Ex. A). The Selling Agreement also specifically states that
all commissions owed by Ohio ...