Vincent v. First Colony Life Insurance Co‪.‬

The plaintiffs, W.W. Vincent and Company (Vincent) and Northwest Insurance Service Center, Inc. (Northwest), by Weiss Insurance Agencies, Inc., as successor in interest, appeal from two orders of the circuit court which granted First Colony Life Insurance Company (First Colony) and Lincoln National Corporation's (Lincoln National) respective motions to dismiss various counts of the plaintiffs' amended and third amended complaints for failure to state causes of action. For the reasons which follow, we affirm in part, reverse in part, and remand for further proceedings. The following general allegations of fact were set forth in each of the plaintiffs' complaints. On July 31, 1992, Northwest and Lincoln National executed a Stock Purchase Agreement (the Agreement) pursuant to the terms of which Northwest purchased all of the issued and outstanding stock of Vincent. Prior to executing the Agreement, Northwest conducted a due diligence investigation and received documents from Lincoln National in order to determine the appropriate purchase price for Vincent's stock. One of the many documents received by Northwest during this due diligence investigation was a General Agents Contract between Vincent and First Colony dated November 25, 1987. Under the General Agents Contract, Vincent had agreed to sell life insurance policies for First Colony in exchange for certain service fees due at the end of the tenth policy year. In April 1998, when the fees became due, First Colony made the first of four monthly payments to Vincent. Following the fourth payment in July 1998, First Colony ceased paying Vincent and began to issue service fee checks to Rick Redman under a purported assignment of the General Agents Contract from Vincent to Redman dated October 31, 1990. The assignment was not provided to the plaintiffs during the due diligence investigation or at the time the Agreement was executed.