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November 5, 1982


The opinion of the court was delivered by: Shadur, District Judge.


International Administrators, Inc. ("IAI") and its President Sheldon Harrison ("Harrison") initially sued Life Insurance Company of North America ("LINA"), claiming interference with IAI's contractual relationships, interference with prospective advantage, breach of contract and defamation. LINA in turn filed a two-count counterclaim. IAI has moved to dismiss the Counterclaim, apparently (though not specifically designated) under Fed.R.Civ.P. ("Rule") 12(b)(6) for failure to state a cause of action. For the reasons stated in this memorandum opinion and order, IAI's motion is denied.

Counterclaim Count I*fn1

Count I depicts the following version of events*fn2:

Insurance broker IAI, acting for the Iowa Department of the American Legion ("Iowa Legion"), solicited LINA to underwrite various group insurance policies for members of the Iowa Legion (Ans. ¶ 11). As administrator of those insurance programs IAI assertedly maintained records*fn3 "for the benefit of and in trust for the policyholder, the insureds, and . . . LINA" (Count I ¶ 4). For several months after its termination as administrator, IAI refused to turn over its records to the Iowa Legion, LINA or a successor administrator (Count I ¶ 7). Without the information in those records, LINA (or the successor administrator) could not have billed the individual subscribers, jeopardizing their continued coverage. To avoid that prospect, LINA expended more than $26,000 to generate its own substitute list.

In LINA's view those allegations disclose actionable fiduciary and contractual improprieties by IAI. IAI's infractions assertedly stem from its role as LINA's agent or alternatively as trustee of an express trust whose beneficiaries included the Iowa Legion, the individual subscribers and LINA.

Without offering any legal support for its own motion,*fn4 IAI contends LINA's cited authorities do not transmute its legal theories into a cognizable claim. IAI also assails Count I on factual grounds*fn5 — arguments wholly inappropriate at the pleading stage.

Standards governing complaints (or counterclaims) are lenient indeed:

  On a motion to dismiss, a complaint must be
  construed in the light most favorable to the
  plaintiff, the allegations thereof being taken as
  true; and, if it appears reasonably conceivable
  at trial the plaintiff can establish a set of
  facts entitling him to some relief, the complaint
  should not be dismissed.

Mathers Fund, Inc. v. Colwell Co., 564 F.2d 780, 783 (7th Cir. 1977). Nor is this Court limited by the theories advanced by the pleading's author. See Craft v. Board of Trustees, 516 F. Supp. 1317, 1323 (N.D.Ill. 1981).

Under those liberal criteria Count I withstands scrutiny — at least under Illinois principles of agency law.*fn6 Both parties agree IAI acted as an insurance broker in obtaining LINA-underwritten insurance coverage for the Iowa Legion. See Complaint ¶ 3 and Answer ¶ 11. Galiher v. Spates, 129 Ill. App.2d 204, 206, 262 N.E.2d 626, 628 (4th Dist. 1970) defined such a broker:

  An insurance broker is one who procures insurance
  and acts as middleman between the insured and the
  insurer, and solicits insurance business from the
  public under no employment from any special
  company, but, having secured an order, places the
  insurance with the company selected by the
  insured, or, in the absence of any selection by
  him, with the company selected

  by such broker. 22 ILP Insurance § 71, at 102.

And as the Illinois Supreme Court characterized the difference between the insurance broker and agent relationships over 30 years ago, City of Chicago v. Barnett, 404 Ill. 136, 142, 88 N.E.2d 477, 481 (1949) (emphasis added, citation omitted):

  A broker is distinguished from an agent in that a
  broker sustains no fixed and permanent employment
  by, or in relation to, any principal, but holds
  himself out for employment by the public
  generally, his employment in each instance being
  that of a special agent for a single
  object . . ., whereas an agent sustains a fixed
  and permanent relation to the principal he
  represents and owes a permanent and continued
  allegiance. A broker does not cease ...

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