2003 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit 6-11-2003 

# V uk ich v . N at ion wide M utl I ns P r e c e de n t i al or N on-P r e c e de n t i al : N on-P r e c e de n t i al D ocke t N o . 02-3359

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Thi s de c i sion i s br ou gh t t o you for f r e e a nd ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i l l a no va U nive r sit y S choo l of L a

w Di g it al Re posit or y

. It h as be e n a c c e pt e d for inclusion in 2003 D e c i sion s b y a n author i z e d a dmini s tr at or of V i l l a no va U nive r sit y S choo l of L a

w Di g it al Re posit or y

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. Re c omme nde d C it at ion
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w . v i l l a no va . e du/thir dc ir c uit_2003/463NOT PRE CEDENT IAL THE UNITED STATES COURT OF APPEALS

FO R T HE TH IRD CIR CU IT

___________ Nos. 02-3359, 02-3360, 02- 3361

___________ CRAI G VUKIC H, Appellant at No. 02-3359
v. NATI ONWIDE MUTUAL I NSURANCE COMPANY; NATI ONWIDE MUTUAL FI RE I NSURANCE COMPANY; NATI ONWIDE LI FE INSURANCE COMPANY; NATI ONWIDE GENERAL INS URANCE COMP ANY; NATI ONWIDE PROPE RTY AND CAS UALTY INSURANCE COMPANY; CO LO NIA L IN SU RA NC E C OM PA NY OF WI SC ON SIN , f/k/a CO LO NIA L IN SU RA NC E C OM PA NY OF CA LIFO RN IA

____________ WILLI S JAMES BRANTHOOVER, Appellant at No. 02-3360
v. NATI ONWIDE MUTUAL I NSURANCE COMPANY; NATI ONWIDE MUTUAL FI RE I NSURANCE COMPANY; NATI ONWIDE LI FE INSURANCE COMPANY; NATI ONWIDE GENERAL INS URANCE COMP ANY; NATI ONWIDE PROPE RTY AND CAS UALTY INSURANCE COMPANY; CO LO NIA L IN SU RA NC E C OM PA NY OF WI SC ON SIN , f/k/a CO LO NIA L IN SU RA NC E C OM PA NY OF CA LIFO RN IA

____________2 TO DD A BR AHA M, Appellant at No. 02-3361

v. NATIONWIDE MUTU AL INSURANCE; NATI ONWIDE MUTUAL FI RE I NSURANCE COMPANY; NATI ONWIDE LI FE INSURANCE COMPANY; NATI ONWIDE GENERAL INS URANCE COMP ANY; NATI ONWIDE PROPE RTY AND CAS UALTY INSURANCE COMPANY; CO LO NIA L IN SU RA NC E C OM PA NY OF WI SC ON SIN , f/k/a CO LO NIA L IN SU RA NC E C OM PA NY OF CA LIFO RN IA

___________ ON APPEAL FROM THE UNI TED STATES DIST RICT COURT FO R T HE WE STE RN DIST RIC T O F PE NN SY LV AN IA (D.C. Civi l Nos. 01- 1510, 01-1511, 01-1509) Distri ct Judge: The Honorable Gustave Diamond

___________ Submitte d Under Third Circ uit LAR 34.1(a)

May 23, 2003
BE FO RE : SC IRI CA , Chief Judge , SL OV ITE R, a nd N YG AA RD , Circu it Judges
. (Fil ed: June 11, 2003)

___________ OPINI ON OF THE COURT

___________1. T he re a re tw o c om pa nio n la w su its, Branthoover v. Nationwide , et al. , No. 02-

3360, and Abraham v. Nationwide , et al. , No. 02- 3361, al so on appeal . These cas es rai se ide nti cal l egal i ssues t o Vukich and our di scussi on appli es equal ly t o them. 2. T he D istrict C ou rt also fou nd tha t V uk ich ’s co m pla int fa iled to state a c laim and alt ernat ivel y dismis sed the complaint forthat reason. Because we agree with t he Distr ict Court’ s counte rcl aim analys is, we need not rea ch it s second j usti fi cati on for dism issa l. 3 NY GA AR D, Circu it Judge
.

Appellant

Craig Vukich appeal s the di smissalof his compla int fol lowing th e Di stri ctCour

t’ s de te rmi natio n that

hi s pr es ent

cl ai ms we re comp ul sor ycount er cl ai ms to a p rev iou s law suit, Na tionw ide M utua l Insura nce C o., et al. v. Jo hn F lemin g, et al. , Civil No . 99-1417 (W.D . PA 2 001)(‘ Fleming ’). 1 On appe al, Vu kich a rgue s that his alle gations of breach of cont ract and fraudule nt misr epresent ation by Nationwide ar e not logica lly relat ed to the prior

acti on. We exercis e plenar y r eview over the grant of a motion to d ism iss. Lorenz v. CSX Corp. , 1 F. 3d 1 406 , 1 411 (3 d Ci r. 199 3) . A cc or di ngly , w e
re vi ew de novo the Dist rict Court' s deter

minati on that Vukic h's s uit s hould have been pursued as a

compulsory

counterc laim i n the Flemingactio n. SeeXer ox Co rp. v. SCM Corp. , 576 F .2d 10 57, 10 58 (3 d C ir.1978 ). We will affirm th e D istrict Co urt. 2 I. Appellant ’s complaint ari ses out of the te rminati on of an agency agreement that gove rned his servi ces to Nati onwide as an exclusive i nsurance age nt. Pur suant t o the terms of t

hat agre ement, Vukich a ccumulated c ertain deferred e arnings as a form of benefit s and was enti tled to recei ved those earnings in the event of a disabi lit

y, death, or4

“qua lified ca ncella tion.” T he ag reem ent pro vides that V ukich ’s com petition with Nationwide fol lowing employ ment would preclude consideration a s a quali fied
ca nc ell ati on . B as ed on V uk ich ’s a cti on s in es tab lis hi ng a c om pe tin g i ns ur an ce ag en cy, Nationwide withheld his deferred c ompensation be nefit s and brought the afor ementioned Fleminglawsuit . In t

his sui t, Vukic h alle ges that Nationwide was contractua lly permitted to eithe r with hold his de ferred com pens ation a nd allo w c om petition , or pay the bene fits and bring a l awsuit—not both. He claims that Nati onwide breached hi s employment contrac t by

withholding his benefi ts and t hen fil ing the Fleminglawsuit . Additi onally , he clai ms that Nati onwide fraudul ently misrepr esented t

he true nature of t

he deferre d compensation program and that Nationwide never intended to pay the deferred funds, irrespective of his actions. 1. The FlemingLaw suit

On August 27, 1999, Nati onwide brought a diversi ty acti on against

several former ins urance agent s for l ost pre mium income, cor porate oppor

tunities, and customer goodwill al legedl y arisi ng from the agent s’ impl ementati on of a plan t o trans fer Nationwide’s policy

holders to dir ect competitors. The agents, including Vukich, cre ated a sep arate in suran ce co mp any w hile still un der co ntract to Na tionw ide an d utilized certain policy holder informati on gleaned fr om their Nat ionwide employ ment to establis h a customer base with the new agen cy. Nationwide brought suit for breach of the agents’ respective employ

ment agreement s, br each of fiduci ary duty , and brea ch of a covenant5

not to com pete w ith respect to a particular ag ent. On c ross-motion s for sum mary judgment, the Dist

rict Court grant ed summary j udgment to t he defendants on several counts, but all owed the case t o proceed t o tri al on sever al othe r counts , inc luding t he breach of contract claims against t he defendants.

II. It i s clear that bot h the Fleminglawsui t and t hi s c as e aris e fr om the s ame fac tual p red icate and relat e to th e pr ope r inte rpre tatio n of the e mp loym ent a gre em ent. Fed eral R ule of

Civil P roced ure 1 3(a) p rovid es that: A p leadin g sha ll state as a coun terclaim any claim which at the time of s erving t he pleadi ng the ple ader has agains t any

opposing party , if it ari ses out of the trans acti on or occurr ence that is the subject

matter of the op posin g par ty’s claim a nd d oes n ot requ ire for its adjudic ation t

he presence of third parti es of whom the court cannot acqui re jurisdi ction. We have said that

“[f]or a c laim t o qualif y as a compulsory

counterc laim, there ne ed not be preci se identity

of issue s and fact s between the clai m and the counterclai m; rathe r, t he relevant inquiryis whether the count ercla im ‘bears a logic al rel ations hip to an oppos ing party 's c laim. ’” Transamerica Occide ntal Li fe Ins . Co. v. Aviati on Officeof America, Inc. , 292 F.3d 384, 389 ( 3d Cir. 2002) (quoti ng Xerox Corp. , 5 76 F .2 d a t 1 059 ). Inturn , w e have fo und that “a counterclaim is logically related to the opposing party's claim where separat e tri als on eac h of thei r respe ctive clai ms would involve a s ubstant ial dupl icat ion6

of effort and time by

the parties and t

he courts .” Great Lakes Ru bber Corp. v. Herbert Co ope r C o., 286 F .2d 631, 63 4 (3d C ir. 1961).

A comparison of the two lawsuit s quickl y yields the conclusion that the claim s ma de in th is suit are logica lly related to th e claim s ma de by N ationw ide in Fleming . “ Wher e multipl e cl ai ms i nvo lv e manyof t he s ame f

act ualis sue s, orth e s ame factual and legal iss ues, or where they are offshoots of the same basic controversy betw een the p artie s,” a com pul sory c oun tercl aim exis ts. Great Lakes Rubber Corp. , 286 F.2d at 631. Both lawsuits are primarily concerned with the scope of the parties’ permissible act ions under the same employ

ment agreement

during t he same ti me period and are i nterconne cted. In Fleming , Nati onwide sued Vukich for br each of the employment

agreement for

acti ons taken during his tenure and post-e mployment competit ion. Here, the pri mary argument put forth by Vukich is t

hat Nati onwide had a choice under

the employ

ment agreement

to eit her withhol d deferred c ompensation or bring a l awsuit t o prevent c ompetit ion. Once Nati onwide fil ed its clai m in Fleming , it purport edly

tri ggered Vukich’s clai m. In each l awsuit, the res pecti ve clai ms focus on the acti ons of the ot

her part y wit hin the s ame factualparadigm and share the c ommon legal ques tion of

the pro per inte rpretatio n of the em ployme nt agre eme nt w ith resp ect to competit ion. We have construed compul sory counterc laims l iberal ly in supporting the notions of judic ial e conomy, and we see no reason t o circumscribe that int erpret ationhere. Vukic h’s cl aims of brea ch of contr act and fr audulent misrepr esentation ari se from his interpretation of N ationwide ’s duties unde r the emp loyment agreem ent and are logica lly relat ed to the Fleminglawsuit . Thus, t he Distr ict Court

properl y di smissed Vuki ch’ s c ompl ai ntas a co mpul sor ycount er cl ai m. III. For th e fore goin g reas ons, w e w ill affirm the ord ers of the D istrict Co urt.

/s/ Richard L. Nygaard Circuit Judge