216 F.2d 479 (7th Cir. 1954), 11084, Repsold v. New York Life Ins. Co.

Docket Nº:11084.
Citation:216 F.2d 479
Party Name:Louis W. REPSOLD, Jr., Plaintiff-Appellant, v. NEW YORK LIFE INSURANCE COMPANY, Defendant-Appellee.
Case Date:November 01, 1954
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit
 
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Page 479

216 F.2d 479 (7th Cir. 1954)

Louis W. REPSOLD, Jr., Plaintiff-Appellant,

v.

NEW YORK LIFE INSURANCE COMPANY, Defendant-Appellee.

No. 11084.

United States Court of Appeals, Seventh Circuit.

Nov. 1, 1954

Page 480

George C. Bunge, George Hamilton Bunge, Chicago, Ill., for appellant.

Wendell J. Brown, Joseph A. Dubbs, Chicago, Ill., Lee M. Gammill, Harry J. McCallion, New York City, of counsel, for defendant-appellee.

Before FINNEGAN, LINDLEY and SCHNACKENBERG, Circuit Judges.

SCHNACKENBERG, Circuit Judge.

This is an appeal from a summary judgment entered in favor of defendant in a suit at law brought by an insurance agent against the defendant for additional monies arising out of services that were rendered by him during the period he sold policies for defendant, allegedly from 1936 to 1950. During that period he operated from 1936 to 1946 under one set of contracts which in 1946 was exchanged for another set of contracts, under which he operated until 1950, when his agency contract was terminated. The action was for damages, plaintiff claiming that his discharge by defendant was without cause and in bad faith, for the purpose of depriving him of deferred compensation and pension rights.

The complaint alleges that in or about the year 1936, defendant employed plaintiff as a soliciting agent for life insurance and annuity policies and agreed to pay him certain commissions therefor; that at the same time they entered into a written agreement providing for a system of agents' benefits known as 'Nylic;' that said Nylic agreement, inter alia, provided that after he had been in defendant's employ for 20 consecutive years, plaintiff would receive an additional income in a gradually increasing amount, based on insurance previously written, as long as he remained in defendant's employ, and also a pension in the event he should become disabled or should leave defendant's employ; and said Nylic agreement also provided that all of the benefits should be available to plaintiff provided only that he wrote insurance of at least $50, 000 per year. The complaint also charged that to procure execution of said contracts and agreements by plaintiff, defendant represented that plaintiff would be entitled to the benefits of the Nylic agreement if he remained in the employ of the defendant in the various periods specified therein, and that to quality for the benefits thereof it was necessary to produce only a minimum of $50, 000 of insurance per year, and he would thereby obtain valuable pension rights, as well as the other benefits therein specified, and plaintiff, relying upon said promises and representations, was induced to enter into the employment contract and Nylic agreement.

Page 481

The complaint alleges that plaintiff did produce in excess of $50, 000 of insurance per year; and that in or about the year 1946, defendant requested plaintiff to surrender the existing contracts and in lieu thereof to enter into a new contract and Nylic agreement, called 'Modified Nylic No. 4, ' defendant representing to plaintiff that these instruments gave him more liberal rights, privileges and benefits, and preserved to him all of the rights under the prior agreement; that, relying upon these representations, on or about October 14, 1946, plaintiff surrendered the 1936 documents and executed those tendered to him as aforesaid; and he continued to perform all duties required under the new contracts and to write in excess of $50, 000 of insurance per year; that during the year 1948 defendant notified plaintiff that his rights under the contract and Nylic agreement were terminated, which action defendant rescinded; that under date of June 14, 1950, defendant again notified plaintiff that his contract and Nylic rights were terminated, effective 30 days from the day thereof, and later refused to supply plaintiff with any information as to the amount of insurance written by him and the amount of compensation or commission earned during his 14 years of service for the defendant, on the ground that defendant had the right to terminate plaintiff's contract and Nylic rights at any time, both with or without cause.

The complaint also charges that during and prior to 1946 defendant formed the purpose and intent of terminating plaintiff's contract and depriving him of his Nylic rights, particularly the pension rights which would accrue to plaintiff, not because of any failure of plaintiff to perform his duties, but in order to avoid paying him the income and pension provided in the Nylic agreement; that, in furtherance of such purpose and intent, defendant induced plaintiff to surrender his original contract and Nylic agreement and to accept in lieu thereof the 1946 contract and Modified Nylic No. 4 agreement, containing a clause purporting to give defendant the right to cancel same 'with or without cause;' that the subsequent termination, without cause, was in furtherance of such intent and purpose; that defendant did not enter into the 1946 contract and Nylic agreement in good faith, but with the intent and purpose of depriving plaintiff of any substantial benefits thereunder by cancelling same before such benefits should accrue.

In the alternative, complaint charged that in the event the 1936 contract contains a provision authorizing defendant to cancel same without cause, defendant formed the purpose and intent of cancelling both contract and Nylic agreement, before he should become entitled to any substantial income or pension right thereunder.

The complaint alleges that plaintiff has been greatly damaged by the aforesaid 'malicious and unconscionable acts' of the defendant, wherefore he seeks punitive as well as compensatory damages.

Defendant's answer attaches copies of the documents mentioned in the complaint and quotes paragraph 19 of the 1936 agent's contract:

'19th. Either party hereto may without cause terminate this agreement upon written notice, said termination to become effective thirty days from the day on which such notice is dated.'

The answer states that the Nylic agreement, known as 'Nylic No. 3, ' provided in part:

'XVII. The termination of the employment agreement of any member of Nylic, whether for cause or otherwise, prior to becoming a Senior Nylic, or the removal of an agent, prior to becoming a Senior Nylic, to any country where...

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