Protectors Insurance Service, Inc. v. United States Fidelity & Guaranty Company

132 F.3d 612 (10th Cir. 1998)

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Nature of the Case

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Facts

Protector (P) was a corporation formed with only one stockholder. P was an agent of United States Fidelity (D) and had a written contract. If applications P made were accepted, P would get a sales commission. P was an independent agent but had only two insurance carriers and wrote 80% of its business with D from 1979 - 1992. In 1992, D notified P that because of profitability concerns it was establishing a formal rehabilitation program for P. The agreement called for such efforts to be in good faith. D gave P a 180-day plan for his personal lines business that if not met would result in termination; terminating his personal lines would put him out of business for the commercial accounts even though the personal lines were only 20% of his business. P then decided to sell his assets to Centennial Agency, Inc. on January 1, 1993. P was to receive $148,000. P then sued D for breach of contract in not making a good faith effort. P got the verdict for $844,650 all but $35,000 was for lost future profits. D appealed.