In December 2004, a Connecticut jury awarded $2.3 million to an insurance agency terminated by Nationwide, despite a provision in the agency agreement allowing termination "without cause," according to press reports. The decision was based in part on a finding that the action was governed by the Connecticut Franchise Act ("CFA"), C.G.S. §§42-133e, et seq. Atty. Ray Garcia of Garcia & Milas, P.C. represents the plaintiff in this case and told Insurance Journal: "This jury decision is groundbreaking in that it is the first in the United States to apply Franchise rules to the Insurance business, in effect invalidating the 'without cause' provision."
According to Atty. Garcia, "The jury's decision ... opens up the possibility of future class action suits against major insurance companies from independent agents terminated in the last few years without cause, or those who were not given reasons for their termination even when accused of illegal conduct." Jury Backs $2.3 Million Award to Terminated Independent Agent; Nationwide to Challenge Verdict
In September 2003, the U.S. District Court denied summary judgment sought by Nationwide. Charts v. Nationwide, D.Conn., Civil Action No. 3:97CV1621(CFD) (1993)). Nationwide has indicated it may appeal if the court allows the jury verdict to stand, according to Insurance Journal.
Posted by dougsimpson at December 19, 2004 01:56 PM | TrackBack