Litman v. Massachusetts Mut. Life Ins. Co.

Decision Date27 August 1984
Docket NumberNo. 83-5025,83-5025
Citation739 F.2d 1549
PartiesBernard LITMAN, Plaintiff-Appellee, v. MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, Defendant-Appellant.
CourtU.S. Court of Appeals — Eleventh Circuit

Kimbrell, Hamann, Jennings, Womack, Carlson & Kniskern, P.A., Carl K. Hoffman, Daniels & Hicks, Mark Hicks, Miami, Fla., for defendant-appellant.

Podhurst, Orseck, Parks, Josefsberg, Eaton, Meadow & Olin, P.A., Joel D. Eaton, Miami, Fla., for plaintiff-appellee.

Appeal from the United States District Court for the Southern District of Florida.

Before FAY and ANDERSON, Circuit Judges, and MARKEY *, Chief Judge of the Federal Circuit.

FAY, Circuit Judge:

Appellant, Massachusetts Mutual Life Insurance Company (herein Mass Mutual), appeals from a final judgment in favor of one of its former general agents, appellee Bernard Litman, in the amount of $2,500,234. A jury, sitting in the United States District Court for the Southern District of Florida, awarded $2,000,234 for the breach by Mass Mutual of an orally modified general agent's contract in the company's 1977 termination of Litman. The jury awarded $100,000 in damages for a slanderous statement made by a Mass Mutual spokesman to a prospective employer who had solicited information regarding Litman at Litman's request. An additional $150,000 was awarded for slander resulting from statements made by two Mass Mutual employees to Litman's former insurance salesmen as to the reason he was terminated. The jury also awarded $250,000 in punitive damages for slander.

Mass Mutual presents five major issues for review:

(1) Whether there is substantial evidence to support the jury's findings of a valid oral modification to the written general agent's contract and of promissory estoppel; (2) whether a new trial is required on the issues of modification and promissory estoppel; (3) whether the slander award based upon the statement made by a Mass Mutual executive to Litman's prospective employer should be reversed; (4) whether the slander award for the statements made by Mass Mutual employees to Litman's former insurance salesmen should be reversed; and (5) whether the record is sufficient to sustain an award of punitive damages. Finding that the statement made by Mass Mutual to Litman's prospective employer was invited and as such not actionable as slander, we reverse the district court's award of $100,000 based upon this statement. Accordingly, we hold that the issue of punitive damages, damages which were in part based upon such slander, must be returned to the district court for a new trial. We find appellant's remaining claims to be without merit and therefore affirm the district court's decision as to the remainder of the judgment.

I. FACTS AND PROCEDURAL HISTORY

Bernard Litman, a former life insurance agent for Penn Mutual Insurance Company in New York, joined Mass Mutual as a salesman in 1957. He moved to Miami in 1959 and became a staff supervisor and later an assistant general agent in the south Florida area. Litman was recruited by James Martin, then Mass Mutual's vice president in charge of sales, to become a "general agent" of the company. 1 He was given the option by Martin to become a "formula" or a "non-formula" general agent. Under the "formula" arrangement, as explained to Litman, the company pays all of the general agent's expenses and has complete control over the agency; under the "non-formula" arrangement, Mass Mutual contributes to the payment of some expenses for a limited period of time, but the general agent remains autonomous, personally responsible for most of the expenses of developing and operating his agency. Litman elected to proceed as a non-formula general agent. 2

Following Litman's initial recruitment in Miami, he was invited to the home office and presented with a standard form "General Agent's Contract." Litman signed the contract on January 15, 1962, in Springfield, Massachusetts, for an agency located in Miami, Florida. The contract was signed on behalf of Mass Mutual by the company's vice-president in charge of production. Litman was told during his subsequent "indoctrination" that a general agency required a tremendous initial investment of time, energy and money; as a result, he became extremely concerned about the termination provision in the contract, which appeared to him to provide that Mass Mutual could terminate him simply by providing him with a written notice of termination. Reluctant to proceed on this basis, Litman asked Robert Albro, the agency secretary of Mass Mutual and the officer who had originally presented Litman with the contract for execution, for a "guarantee" that he would not be terminated but for a legitimate reason. Litman testified that he recalled Albro's response to be as follows:

As best I recall, Mr. Albro said to me that this would be a much more difficult question to answer if he were dealing with a general agent, a prospective general agent coming from another company. But the relationship that he and I had, the respect that we had and assumed that I had for the respect of Mass Mutual made it very easy. That there was no way in the world my contract would be terminated on the whim of anybody. That he was fully aware of the time, effort, and money that I had to put into it. And that I was going to run my own shop. He was careful to point out, although you have no reason to assume it would occur, that because I was responsible for handling large amounts of money, responsible for submitting and transmitting information to the home office on which they made decisions to underwrite insureds, that any act of fraud of that type or lack of fiduciary capacity would be a cause and the only cause for terminating my contract.

Record Vol. 7 at 175-76. Litman further testified that he "agreed to that," that he "relied upon that," and that he "agreed to go forward" because of the statement. Record Vol. 7 at 174-75. Albro testified that he had no recollection of a meeting with Litman in 1962; that he would never have told any general agent that he would only be terminated for fraud; and that he may later have told the plaintiff that a general agent would only be terminated for "good cause." Record Vol. 9 at 617-24.

The bulk of the evidence in the record relates to the ongoing relationship of Litman and Mass Mutual from 1962 through his ultimate termination by the company fifteen years later. Litman borrowed extensively in order to capitalize his business both through local banks and from Mass Mutual (in the latter instances, using his vested commissions as security for the loan). Furthermore, Litman's agency in its early years was characterized by rapid growth and therefore rising expenses, generating a cash-flow shortage. Not wishing to discourage growth in production by its general agencies, Litman was frequently asked to control this inherent problem by reducing his expenses. From the beginning of the relationship through 1975, Litman's primary contact with Mass Mutual was with Frank Meeske, the company's "Director of Agencies." It is uncontroverted that Litman's agency was quite successful during its first decade in terms of generating policies and premiums; the production number showed a steady increase throughout each year of operation. Meeske, however, was concerned that Litman was spending too much of his income on his employees, and Meeske maintained the pressure on Litman to control his expenses.

In 1974, the bottom fell out of the real estate market in south Florida, and drastically altered the insurance business in general. Three of Litman's agents departed and his agency's total production for the years 1974-1976 resultingly dropped from its production level in 1973. This downturn generated concern at the home office, and in 1975 Litman was called to Mass Mutual's Springfield headquarters to attend a meeting at which he was told that he was "bankrupt." During the meeting, Litman conferred with the company's chief financial planner, Emmett Jergensen, who was intimately familiar with Litman's past. Jergensen worked up a conservative, detailed projection of Litman's anticipated income and expenses through Litman's retirement in 1986, and provided a "recovery plan" (which included an additional loan from the company) intended to solve Litman's perceived financial problem. Litman agreed to abide by the plan.

Meeske retired in 1976 and Walter (Derby) Wilson was placed in charge of the agency division. Berk Ingram was also promoted to the position of executive vice-president at this time. Both Wilson and Ingram questioned Litman's capabilities and considered his autonomy harmful to Mass Mutual. The loan request contemplated by Jergensen's projection came under scrutiny, and the company officers contemplated a strategy whereby Mass Mutual would have much greater control over Litman's agency. 3

Soon thereafter, Wilson called Litman to a meeting at the home office. Upon arrival, Litman was handed a letter (dated March 28) in which Wilson had demanded that Litman comport his activities in numerous areas to the dictates of "the company." Litman was quite upset by the letter and refused to sign it. Wilson also produced a check in the amount of the pending loan request and took Litman into the office of James Martin, the Chairman of the Board. Martin stated that authorization for the loan had not been obtained, refused to permit delivery of the check, and instructed Litman to meet with Jergensen to work out a new "recovery plan." Litman did meet with Jergensen, but returned to Miami without the check and later learned that the revised plan had been disapproved.

Litman then received another letter (dated May 6) from Wilson, which reiterated several of the demands made in the March 28 letter and which also insisted that Litman's employees "identify ... Mass Mutual on the telephone" when answering it. Litman refused to sign this letter as well. On May 25, proceeds of a new $20,000 loan...

To continue reading

Request your trial
31 cases
  • Jones v. Clinton, LR-C-94-290.
    • United States
    • United States District Courts. 8th Circuit. United States State District Court of Eastern District of Arkansas
    • August 22, 1997
    ...defamatory statement wherein the injured party precipitated the statement's release, is not actionable." Litman v. Massachusetts Mut. Life Ins. Co., 739 F.2d 1549, 1560 (11th Cir. 1984). See also Williams v. School Dist. of Springfield, 447 S.W.2d 256, 269 (Mo.1969) ("One who has invited or......
  • Twin City Fire Ins. Co. v. Philadelphia Life Ins. Co., s. 85-3906
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • July 29, 1986
    ...and negligence claims. Both parties presented substantial evidence on these issues. 5 See generally Litman v. Massachusetts Mutual Life Insurance Co., 739 F.2d 1549, 1559 (11th Cir.), reh'g denied, 746 F.2d 815 (1984) (en banc); R.S. Bennett & Co. v. Economy Mechanical Industries, Inc., 606......
  • In re Ward
    • United States
    • United States Bankruptcy Courts. First Circuit. U.S. Bankruptcy Court — District of Massachusetts
    • April 16, 1996
    ...Cir.1991); State Office Sys., Inc. v. Olivetti Corp. of America, 762 F.2d 843, 846-47 (10th Cir.1985); Litman v. Massachusetts Mut. Life Ins. Co., 739 F.2d 1549, 1559 (11th Cir.1984) cert. denied, 484 U.S. 1006, 108 S.Ct. 700, 98 L.Ed.2d 652 (1988); Boothby v. Texon, Inc., 414 Mass. 468, 60......
  • Litman v. Massachusetts Mut. Life Ins. Co.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • August 31, 1987
    ...IN BANC FAY, Circuit Judge: The case was taken in banc to consider whether the mandate in Litman v. Massachusetts Mutual Life Insurance Co., 739 F.2d 1549 (11th Cir.1984) ("Litman I ") was properly executed. The mandate included an order for a new trial on punitive damages. The district cou......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT