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Hudson v. Allstate Insurance Co.

August 14, 1996

GARY HUDSON, PLAINTIFF-APPELLANT,

v.

ALLSTATE INSURANCE COMPANY, ET AL., DEFENDANTS-APPELLEES.



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 93 C 7488 Milton I. Shadur, Judge.

Before POSNER, Chief Judge, and DIANE P. WOOD, Circuit Judge. *fn*

DIANE P. WOOD, Circuit Judge.

ARGUED APRIL 10, 1996

DECIDED AUGUST 14, 1996

After ten years of working as an Allstate Insurance agent, Gary Hudson took a wrong turn. When his office was burgled on Christmas Day, 1991, he submitted claims for recovery both to Allstate, which had issued his homeowner's policy, and to State Farm Insurance, which had issued the policy protecting his business premises. Although Hudson initially informed each company that he had submitted the other claim, he collected for the same items from both companies, and he retained the extra money for approximately nine months before he remedied the situation. Allstate eventually fired him, which prompted Hudson to bring this suit claiming that his termination was in breach of his agency contract. The district court granted summary judgment for Allstate, and we affirm.

As the district court correctly observed, the essential facts of this case are undisputed. Hudson's relationship with Allstate was governed by the R-830 Agent Compensation Agreement. Because they are critical to the resolution of Hudson's appeal, we set forth the relevant termination provisions of that agreement from Section XI of Part Four:

XI. This agreement will automatically terminate upon your death. Either you or Allstate have the right to terminate this agreement upon mailing to the other, at his or its last known address, written notice of termination . . . The Company will not terminate your employment because of unsatisfactory work unless you have been notified that your work is unsatisfactory and that your job is in jeopardy and unless you have been given a reasonable opportunity to bring your performance up to satisfactory standards.

In no event shall an employee be released for any reason without the following review and approval procedure having been adhered to:

(1) For employees with less than four years of service, review and approval by the Regional Manager.

(2) For employees with more than four years, but less than ten years service, additional review and approval by the Zone Personnel Manager and the Zone Vice President are required.

(3) For employees with more than ten years service, review and approval in the Home Office by the Personnel Vice President are required in addition to the above. (Emphasis added).

Section XI of Part Four also contained a simultaneously-executed rider, which amended it as follows:

The term "unsatisfactory work" relates to the quality of performance. Notification that your job is in jeopardy is not required in the event of termination of employment for a criminal act or an act of dishonesty, such as, by way of example but not limited to, the following: embezzlement, falsification of any Company or industry plan documents completed or approved by you in the performance of your duties, fraud or misrepresentation of material fact, or forgery . . . .

If this agreement is terminated by the Company, you have the right to a review by the Agent Review Board as set forth in the Agents Procedure Manual, unless such termination is in accordance with the provisions ...


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