Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_08-cv-00496/USCOURTS-azd-2_08-cv-00496-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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NOT FOR PUBLICATION

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Chiropractic Benefit Services, Inc., et al.,

Plaintiffs, 

vs.

Compass Insurance Agency, Inc., et al., 

Defendants. 

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No. CV-08-496-PHX-FJM

ORDER

The court has had under advisement CBS’s request for a temporary restraining order

against Compass. We have considered the amended application for temporary restraining

order (doc. 9), the declaration of Terry Rondberg (doc. 3), Compass’s oversized response

(doc. 10), and CBS’s reply (doc. 15). These are our Findings and Conclusions under Rule

52(a), Fed. R. Civ. P.

The standard for granting a motion for temporary restraining order or preliminary

injunctive relief in the Ninth Circuit is well-known. Plaintiff must show a likelihood of

success on the merits and the possibility of irreparable injury, or show that serious questions

going to the merits are raised, and the balance of hardships tips in favor of the moving party.

Save Our Sonoran Inc. v. Flowers, 408 F.3d 1113 (9th Cir. 2005).

CBS is an organization that permits chiropractors to buy group insurance. It entered

into an insurance brokerage agreement with the defendant Schaefer-Smith-Ankeney

Case 2:08-cv-00496-FJM Document 18 Filed 03/25/08 Page 1 of 3
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Insurance Agency. CBS acquiesced in Compass’s assumption of the contractual obligations

of Schaefer-Smith. 

CBS terminated the agreement and intends to substitute another broker, Scali, for

Compass. The other broker claims to need Compass’s underwriting information in order to

continue placing business with CNA Insurance.

CBS claims that Compass refuses to turn over its “Book of Business” so that Scali can

do its work. CBS claims that the Book of Business belongs to it under paragraph three of the

insurance brokerage agreement and includes “the dates of the insurance policies, the names

of the insured, the policy expiration dates, the amount of insurance, information on

premiums, and other terms and details of insurance.” Amended Application at 6 n.3 (doc. 9).

Compass acknowledges that CBS owns the Book of Business. Compass concedes

that CBS is entitled to “a copy of the policy issued to the insured, the date of expiration, the

amount of insurance, premiums, property covered, and terms of insurance.” Compass’s

Response at 7 (doc. 10). It claims that it has consistently provided this information by

sending CBS the “Bordereau Report.” However, Compass asserts that the Book of Business

does not include the broker’s underwriting information, rating information, computerized

records of transactions, and raw computer data. By its reply, CBS contends that the client

files and patient charts come within the scope of “Book of Business,” because how “else can

a new broker process renewals.” Reply at 4 (doc. 15).

We note that CBS’s claim to underwriting information is based solely on its

contention that such information is within the scope of “Book of Business” and yet “Book

of Business” is nowhere defined in the parties’ extensive written contract. It is vaguely

referred to as “professional liability insurance” and “shall only include policies sold during

the term of this Agreement.” Declaration of Terry Rondberg, Ex. A at 3 ¶ 3 (doc. 3). Now,

it may well be that CBS is entitled to the underwriting information or that Compass is

obligated to share that information with a substitute broker, but any such obligations do not

appear to arise out of the contract which is the basis of CBS’s claim. Instead, they may arise

out of insurance statutes, other contracts, or by operation of law. In any event, we cannot say

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that CBS has shown a likelihood of success on the merits of its claim that underwriting

information is within the scope of the definition of “Book of Business” under the terms of

the agreement. And, while a serious question going to the merits has been raised, we cannot

say that the balance of hardships tips sharply in favor of CBS. CBS should have given

thought to the transition of underwriting information from one broker to another before it

terminated its agreement with Compass. Moreover, although the substitute broker claims he

needs the information, there is nothing in this record directly coming from CNA to suggest

that it will not continue to write this business for the members of CBS. It seems quite likely

that CNA already has this information.

To be sure, Compass appears to be taking a hard-line position in this case. It

characterizes the underwriting information as its work product, processes, and modes of

doing business. We suspect that underwriting information necessary to transition to a new

broker can be made available to CBS without compromising the integrity of Compass’s

proprietary processes. Indeed, although the parties make no such contention here, it seems

likely that Compass probably has a duty elsewhere in the law to provide this information to

at least the insurer, CNA, and the insureds who buy their insurance through the CBS group.

At all events, the complexities here do not lend themselves well to interim injunctive relief.

For all of these reasons, IT IS ORDERED DENYING CBS’s “Amended Motion for

Temporary Restraining Order” (doc. 9). IT IS FURTHER ORDERED DENYING the

“Application for Provisional Remedy” (doc. 9). This is without prejudice to the right of CBS

to seek preliminary injunctive relief in the event Compass fails to deliver to it all of the data

which even Compass concedes is within the scope of “Book of Business.” 

DATED this 25th day of March, 2008.

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