1 S.W.3d 555 (Mo.App. W.D. 1999), 55679, Sloan v. Bankers Life & Cas. Co.

Docket NºWD 55679.
Citation1 S.W.3d 555
Party NameFrank A. SLOAN, Appellant, v. BANKERS LIFE & CASUALTY COMPANY, and Norman Fischer, Respondents.
Case DateJuly 20, 1999
CourtCourt of Appeals of Missouri

Page 555

1 S.W.3d 555 (Mo.App. W.D. 1999)

Frank A. SLOAN, Appellant,


BANKERS LIFE & CASUALTY COMPANY, and Norman Fischer, Respondents.

No. WD 55679.

Court of Appeals of Missouri, Western District.

July 20, 1999

Submitted April 20, 1999.

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[Copyrighted Material Omitted]

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William A. Lynch, Kansas City, for Appellant.

Richard D. Schreiber, St. Louis, for Respondent.


SMART, Judge.

Frank Sloan, an insurance agent for Bankers Life & Casualty Company ("Bankers Life"), filed suit against Bankers Life and Norman Fischer, the branch manager of Bankers Life's Jefferson City, Missouri office, alleging age discrimination

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and retaliation in violation of the Missouri Human Rights Act ("MHRA"); tortious interference with a business expectancy; and breach of the duty of good faith and fair dealing owed to Mr. Sloan under his agent contract with Bankers Life. The trial court dismissed Mr. Sloan's claims under the MHRA for lack of subject matter jurisdiction. Mr. Sloan's claims of tortious interference with a business expectancy and breach of good faith and fair dealing resulted in a jury verdict in favor of Mr. Sloan. The jury awarded Mr. Sloan $400,000.00 in compensatory damages for tortious interference with a business expectancy and breach of good faith and fair dealing against Bankers Life and Mr. Fischer, and $500,000.00 in punitive damages for tortious interference with a business expectancy against Bankers Life only. The trial court granted Bankers Life's and Mr. Fischer's motions for JNOV on the claim related to tortious interference with a business expectancy. The trial court granted a new trial on the breach of good faith and fair dealing claim. Mr. Sloan appeals the dismissal of his claims under the MHRA, the grant of JNOV on his tortious interference with a business expectancy claim, and the grant of a new trial on his breach of good faith and fair dealing claim.

We affirm the trial court in each respect, except that we reverse the grant of new trial as to the liability issues on the breach of good faith claim and remand only for a trial on the issue of damages.

Factual Background

Frank Sloan began selling health and life insurance for Bankers Life in 1953. Mr. Sloan worked strictly on a commission basis. He set his own hours and paid his own licensing and other expenses. Mr. Sloan maintained his own office outside of Bankers Life's Jefferson City, Missouri office at his own expense.

After the passage of the Medicare Act in 1966, Bankers Life began selling Medicare supplement insurance. Since the 1970s, Medicare supplement insurance has been Bankers Life's highest-selling policy. The purpose of the Medicare supplement insurance policy is to provide payment for the expenses not covered by Medicare. Mr. Sloan learned that the best time to sell Medicare supplement insurance to an individual is just before that individual turns sixty-five.

In 1984, Mr. Sloan learned about "turning 65 lists." These lists, which identified individuals who were close to turning sixty-five, were available for purchase from independent sources. Mr. Sloan began purchasing these lists at his own expense in 1984. The lists provided him "with a mechanism to precisely identity individuals turning 65 within his region." These lists provided Mr. Sloan with the names of between 150 and 200 prospects for Medicare supplement insurance every month.

In 1991, Norman Fischer became the branch sales manager of Bankers Life's Jefferson City office. Mr. Fischer knew that Mr. Sloan was purchasing the "turning 65 lists" and that a significant portion of Mr. Sloan's income resulted from the use of these lists. Mr. Fischer did not object to Mr. Sloan's purchase and use of the "turning 65 lists." Bankers Life, however, began purchasing its own lists of individuals turning sixty-five. Mr. Fischer sometimes distributed these lists to sales agents within the branch, but did not distribute lists to Mr. Sloan.

In 1994, Mr. Sloan was the top agent in the Jefferson City branch, receiving several sales awards. In February 1995, Mr. Fischer met with Mr. Sloan to discuss goals for 1995. Mr. Fischer requested that Mr. Sloan attempt to sell other policies in addition to Medicare supplement insurance. Although Bankers Life had a policy of "protecting" households from other agents, Mr. Fischer also warned Mr. Sloan that he might have other agents contact Mr. Sloan's existing policyholders concerning other Bankers Life products. Shortly after the February meeting, Mr.

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Sloan went through his 1994 records and provided Mr. Fischer with information showing that Mr. Sloan had good policyholder relation skills. Mr. Sloan also showed Mr. Fischer that of the $114,000.00 in premiums that Mr. Sloan had sold in 1994, $44,000.00 was from existing policyholders. Mr. Fischer responded that this information was "very encouraging."

Bankers Life held a management meeting in Kansas City, Missouri, in March 1995. Present at that meeting were: Mr. Fischer; his supervisor Michael Lees, the Regional Sales Vice-President; and Randy Eppenauer, an agent development associate. At the management meeting, Bankers Life changed its "turning 65 list" policy. Bankers Life decided that it would no longer allow agents to use their own lists, and decided that it would divide the company's "turning 65 list" among all of its agents in the Jefferson City area. The agents would be able to sell Medicare supplement insurance only to people in an assigned territory. Mr. Fischer testified that the motivation for the change in Bankers Life's policy came from dissatisfaction with the fact that people turning 65 were being contacted by multiple agents. During the meeting, it was decided that Mr. Sloan and Bill Jenkins, another veteran agent, would be the first agents notified of the rule change because they sold more Medicare supplement insurance policies than any other agents. At the conclusion of the meeting, Mr. Lees drafted a memorandum for Mr. Fischer to distribute to the Jefferson City agents regarding the new restrictions imposed on the use of the "turning 65 lists."

After returning from the management meeting, Mr. Fischer notified Mr. Sloan that Mr. Fischer and Mr. Lees wished to meet with him. Mr. Fischer would not explain the purpose of the meeting. Fearing the worst, Mr. Sloan prepared a letter of resignation. During their meeting, Mr. Fischer informed Mr. Sloan that the newer agents found that when they called on prospective Medicare supplement insurance customers, Mr. Sloan had already been there. Mr. Lees and Mr. Fischer informed Mr. Sloan that he would no longer be allowed to use his personal "turning 65 list," but instead, he would be limited to selling Medicare supplement insurance in a certain territory in the Jefferson City area, designated by zip code.

Mr. Sloan, upset by this development, tendered his letter of resignation. Mr. Fischer and Mr. Lees asked him to reconsider. On the Monday morning following their meeting, Mr. Sloan told Mr. Fischer that he had decided to remain at Bankers Life and would abide by the new rules. Mr. Sloan informed Mr. Fischer that, in spite of his decision to stay, he believed he had been discriminated against because of his age (sixty-seven) and was going to pursue a legal remedy. Mr. Sloan gave Mr. Fischer a letter asking him to reconsider implementing the policy changes, which Fischer refused to do. At a meeting on March 31, 1995, Mr. Lees told Mr. Sloan, "We have read your letter; and ... our decision, Bankers Life's decision, is to back Norm Fischer on this." Mr. Sloan told Mr. Fischer that he hoped they would continue to have a cordial working relationship. Mr. Fischer replied that it would be difficult to have a cordial relationship if Mr. Sloan sued Bankers Life.

As a result of the policy changes, Mr. Sloan's Medicare supplement insurance prospects amounted to approximately ten or eleven prospects per month. Mr. Sloan asserted he had formerly been able to pursue approximately 200 prospects per month. In an attempt to demonstrate the negative impact on his livelihood, Mr. Sloan showed Mr. Fischer one of his paychecks, showing that Mr. Sloan had earned $12.88 in a two-week period.

Mr. Fischer retired from Bankers Life in early 1997. Shortly after Mr. Fischer's retirement, twenty-six year old Glenn Wilde became branch manager of the Jefferson City office. Mr. Wilde met with Mr. Sloan, Mr. Jenkins, and another veteran agent and told them that it appeared

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that Bankers Life sold more policies using the original method of prospecting Medicare supplement insurance. After asking the men their thoughts on returning to the old way of prospecting Medicare supplement insurance, Mr. Wilde contacted Mr. Lees and asked whether the Jefferson City office could return to the old system of prospecting. After speaking with Mr. Lees, Mr. Wilde understood that he could make his own decision regarding the Medicare supplement insurance prospecting rules. However, Mr. Wilde lied to Mr. Sloan, telling him that, according to Mr. Lees, they could not return to the old system of prospecting.

Procedural History

Mr. Sloan's original petition against Bankers Life was filed on March 21, 1996. In Count I, Mr. Sloan alleged that Bankers Life and Mr. Fischer had subjected him to age discrimination in violation of the Missouri Human Rights Act ("MHRA"). Count II alleged that Mr. Sloan was subjected to retaliation for exercising his rights, pursuant to the MHRA. Count III alleged tortious interference with Mr. Sloan's business relations, and Count IV alleged that the defendants breached the duty of good faith and fair dealing, which they owed to Mr. Sloan by virtue of their agency...

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