Bernard Litman v. Massachusetts Mutual Life Insurance Company

739 F.2d 1549, 1984 U.S. App. LEXIS 19177
CourtCourt of Appeals for the Eleventh Circuit
DecidedAugust 27, 1984
Docket83-5025
StatusPublished
Cited by39 cases

This text of 739 F.2d 1549 (Bernard Litman v. Massachusetts Mutual Life Insurance Company) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bernard Litman v. Massachusetts Mutual Life Insurance Company, 739 F.2d 1549, 1984 U.S. App. LEXIS 19177 (11th Cir. 1984).

Opinion

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 *1553 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. Lit-man 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 Í 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 Yol. 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 *1554 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 Lit-man 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, Lit-man’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 Lit-man 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.

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Cite This Page — Counsel Stack

Bluebook (online)
739 F.2d 1549, 1984 U.S. App. LEXIS 19177, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bernard-litman-v-massachusetts-mutual-life-insurance-company-ca11-1984.