Judge Allows Roberto Clemente Jr. Agency Fraud Claim Against Allstate

The son of the late Major League Baseball Hall of Famer Roberto Clemente alleges that Allstate Insurance Co. committed fraud when it cancelled his family agency’s agreement after accusing them of fraud for using auto insurance discounts that the insurer instructed them to use.

A federal judge last week rejected Allstate’s bid to dismiss the fraud claim and allowed the claim to proceed.

Roberto Clemente Jr. Family Agency owners and employees allege that the insurer caused their agency to be investigated so that the insurer could then terminate its exclusive agency agreement and give the book of business to another agency.

Specifically, they claim that Allstate, acting through Valerie Staudt, an Allstate employee who served as the agency process specialist, taught them discounting practices that would trigger an investigation into their agency and give Allstate a “pretextual reason to terminate their business relationship and give away the Clemente Agency’s book of business to other agencies that Allstate preferred.”

The Clementes said they had been having some issues with Allstate since signing an agency agreement in 2018. One such issue occurred in August 2019, when another Allstate agency allegedly stole one of their customers. They said that after looking into the stolen customer issue, Staudt relayed the other agency’s criticism of how Clemente’s staff quoted insurance and then agreed to teach the Clementes the other agency’s discounting techniques.

“True to her word,” the Clementes say, Staudt taught them how to apply “widow discounts,” “retirement vs. employed discounts,” and “business use vs. pleasure discounts.”

They further maintain that Staudt represented “that all of these discounts were strictly in accordance with the way that Allstate quotes insurance and complied with all insurance department regulations.”

Despite that reassurance, the Clementes received a call on July 28, 2020 from an Allstate fraud investigator who questioned them about their “practice of applying a widow discount to certain policies.”

The next month, Allstate representatives phoned the Clementes to tell them that Allstate was terminating the agency agreement effective immediately because they had committed fraud. Allstate did not provide further detail about the alleged fraud, but the Clementes say they presumed that it concerned the widow discounting practices that Staudt taught them.

Based on these allegations, the Clementes now claim that Allstate committed fraud in terminating their agreement based on their use of the widow discount that Staudt assured them complied with Allstate’s practices.

Allstate moved to dismiss the fraud claim arguing that it was both unproven and untimely and that the dispute had to do with the agency contract.

But a federal judge in western Pennsylvania last week rejected Allstate’s arguments. U.S. District Judge Christy Criswell Wiegand found that the Clementes had been able to plead a plausible and timely fraud claim based on Staudt’s alleged misrepresentation. The judge said that because the claim involves the violation of a broader social duty owed to all individuals that exists regardless of the contract, it could be regarded as a tort.

Topics Fraud Legislation