A North Carolina court has largely sided with an insurance marketing organization on counterclaims brought by former agents who left to start a rival brokerage.
The case by the North Carolina Business Court, centers on the fallout when insurance agents leave for a rival - and what the old firm does to win back the clients they once served.
The Assurance Group, LLC, known as TAG, is a Delaware-based insurance marketing organization headquartered in Randolph County, North Carolina. In June 2024, Kristie Alice Shackelford and Abby Beaver Lynch formed a competing insurance brokerage called EPIC Broker Solutions. According to court filings, several TAG agents had grown dissatisfied with changes at the organization and began looking elsewhere. A number of them ended up at EPIC, including Darrin Shackelford and Brandon Passe, who resigned from TAG on February 17, 2025.
TAG sued Shackelford and Passe shortly after, on February 24, 2025, alleging breach of contract, trade secret violations, tortious interference, unfair trade practices, civil conspiracy, and money owed. The defendants fired back with counterclaims against TAG and its president, Edward Lee Shackelford, accusing the company of engaging in improper tactics to recapture clients.
At the heart of the dispute is a practice the defendants say TAG adopted after their departure. They allege TAG instructed its agents to make unsolicited house calls - known in the industry as "door-knocks" - on clients whose policies had been sold by agents now working for EPIC. In insurance parlance, these are "orphan accounts," meaning the original agent of record no longer works for TAG, even though the policies remain active.
The agent of record, for context, is the person who originally sold the policy and serves as the client's main point of contact. The defendants argued that these clients still had a relationship with the EPIC agents who had sold them their coverage, and that TAG was trying to replace those agents and capture the associated business.
The defendants also pointed to federal regulations. The Center for Medicare and Medicaid Services generally prohibits insurance agents from making unsolicited calls to clients, a rule codified in 42 C.F.R. sections 422.2263 through 422.2264. The defendants alleged TAG's door-knocking ran afoul of those rules, and that TAG agents told clients their former agents were no longer working in insurance, had left the industry or the area under clouded circumstances, or were in legal trouble.
They also alleged TAG agents told clients they were required to sign documents to switch their agent of record.
These allegations formed the backbone of the defendants' counterclaims, which included, among other claims, tortious interference with contract and prospective economic advantage, defamation, unfair or deceptive trade practices, and violations of the North Carolina Wage and Hour Act.
The court, however, was largely unpersuaded.
On the tortious interference claim, the defendants argued they were third-party beneficiaries of the insurance contracts between policyholders and insurance carriers, and that TAG's actions cost them commissions. The court disagreed, finding that receiving a commission from a policy sale is an incidental benefit, not a direct one. Because the defendants could not show they were intended beneficiaries of those contracts, the claim was dismissed. The defendants had also initially asserted a claim for tortious interference with prospective economic advantage, but conceded that claim at the hearing, and it too was dismissed.
The defamation claim met a similar fate. North Carolina requires a high level of specificity in defamation pleadings - the claimant needs to identify the exact statements, who made them, when, and to whom. The court found the defendants' allegations too vague on all of these points and dismissed the claim.
The unfair or deceptive trade practices counterclaim also failed. The court found it was largely built on the same allegations underlying the tortious interference and defamation claims, both of which had already been found deficient. The defendants pointed to one additional allegation: that TAG had received Medicare marketing funds and diverted them to purchase Final Expense insurance leads, in violation of CMS regulations. The court found this allegation too vague and the claimed injury too remote to sustain a standalone unfair trade practices claim.
The one counterclaim that did survive was the North Carolina Wage and Hour Act claim against Edward Lee Shackelford personally. The defendants alleged that he, as TAG's president, made the decision not to pay them their earned compensation after they resigned. While the court acknowledged the allegations were thin, it was required to accept them as true at this stage of the proceedings and found them sufficient to keep the claim alive.
The ruling is not a final decision on the merits. TAG's original claims against the defendants remain pending, as do the defendants' claims for declaratory relief and wage and hour violations against TAG itself. But the dismissal of four of the five counterclaims addressed by the motion - all with prejudice, meaning they cannot be refiled - represents a significant procedural win for TAG.
For insurance professionals watching from the sidelines, the case raises familiar questions about agent mobility, client ownership, and the competitive tactics firms use when agents leave for a rival. The allegations around door-knocking orphan accounts and CMS compliance are particularly worth following, even though the court did not reach the merits of those claims in this ruling.
