Court of Appeals of Illinois, First District, Sixth Division
GUARANTEE TRUST LIFE INSURANCE COMPANY, an Illinois Mutual Reserve Company, Plaintiff-Appellant,
PLATINUM SUPPLEMENTAL INSURANCE, INC., f/k/a Platinum Services, Inc., an Iowa Corporation, and WAYNE A. BRIGGS, an Individual, Defendants-Appellees.
from the Circuit Court of Cook County, No. 15-CH-17997; the
Hon. Thomas R. Allen, Judge, presiding.
Smith LLP, of Chicago (John S. Vishneski III, Paul
Walker-Bright, Michael D. Richman, and Emily E. Garrison, of
counsel), for appellant.
Kirkland & Ellis LLP, of Chicago (Andrew R. Running,
Frank G. Dylewski, and Jeffrey L. Lula, of counsel), for
JUSTICE ROCHFORD delivered the judgment of the court, with
opinion. Justice Cunningham concurred in the judgment and
opinion. Presiding Justice Hoffman specially concurred, with
1 Plaintiff, Guarantee Trust Life Insurance Company (GTL),
appeals an order (1) granting defendant Platinum Supplemental
Insurance, Inc.'s (Platinum) motion to compel arbitration
of plaintiff's complaint against Platinum for breach of
contract, rescission, fraud, and breach of fiduciary duty;
and (2) staying plaintiff's litigation against defendant
Wayne A. Briggs (Platinum's president) for fraud, breach
of fiduciary duty, and tortious interference with contract,
pending the arbitration between GTL and Platinum. Mr. Briggs
appeals the order denying his motion to compel arbitration of
plaintiff's claims against him for fraud, breach of
fiduciary duty, and tortious interference with contract. We
2 GTL provides a portfolio of health, accident, life, and
special risk insurance products. Platinum markets and sells
insurance products on behalf of insurance companies.
Defendant Wayne Briggs is the founder of Platinum, served as
its chief executive officer, and currently serves as its
president and chairman of the board of directors.
3 On December 11, 2015, GTL filed this suit against Platinum
and Mr. Briggs raising claims that stem from an April 4,
2002, marketing agreement between GTL and Platinum. Mr.
Briggs signed the marketing agreement on behalf of Platinum
as its president and CEO. The complaint sets forth the
following factual background.
4 Pursuant to the marketing agreement, Platinum and GTL
agreed to jointly develop a long-term care insurance product
that would be marketed and sold exclusively by Platinum and
underwritten by GTL. Platinum, on behalf of GTL, had the
exclusive authority, personally or through
"[i]ndependent [s]olicitors, " to solicit and
procure applications for the product, deliver issued
policies, collect initial premiums, and service the business.
Additionally, Platinum had the responsibility for supervising
and managing its employees and independent solicitors as to
the marketing of the product on GTL's behalf and for
"compliance with all applicable local, state and federal
laws and regulations" and with GTL's rules
concerning advertising and marketing conduct. GTL's
advertising policy required that, prior to use, all sales
materials be approved, in writing, by its compliance
department. As president and CEO of Platinum, Mr. Briggs was
responsible for all aspects of Platinum's performance
under the marketing agreement and had authority over
Platinum's supervision, management, and training of its
employees and independent solicitors in connection with
soliciting and procuring insurance applications on GTL's
5 Platinum marketed and sold the product from April 4, 2002,
through July 17, 2015. During that time period, through
applications solicited and procured by Platinum, GTL issued
186, 129 insurance policies and paid Platinum in excess of
$226 million in commissions and other compensation.
6 The marketing agreement included a dispute resolution
provision. Section 17 provided, in relevant part:
"17. Mandatory Binding Arbitration. Except as otherwise
provided in this Agreement, all claims, disputes and other
controversies arising out of or in any manner relating to
this Agreement, or any other agreement executed in connection
with this Agreement, or to the performance, interpretation,
application or enforcement hereof, including, but not limited
to, breach hereof (in each case, 'Dispute'), shall be
submitted to binding, non-appealable arbitration, and such
arbitration shall be governed by the Rules of the American
Arbitration Association ('AAA').
Either party may within one year from the date of the alleged
breach or occurrence resulting in the Dispute, make a demand
for arbitration by filing a demand in writing with the other
party and serving the same by depositing it in the U.S. Mail,
certified mail return receipt requested. GTL and Platinum
shall each choose, within sixty (60) days after demand
arbitration is made, a person from the panel of the AAA as
its arbitrator and the two appointed arbitrators shall choose
a third arbitrator."
Section 12(f) of the marketing agreement, which covered the
effects of the termination of the marketing agreement,
provided that, "[n]otwithstanding section 17, " a
nonbreaching party was entitled to seek injunctive relief
against the party who breached a covenant in section 12.
Additionally, section 13, which protected confidential and
proprietary information, allowed injunctive relief and money
damages for violations of section 13.
7 The marketing agreement also contained a choice of law
provision. Section 16(f) stated that the marketing agreement
was to be "construed and enforced in accordance with the
law of the state of Illinois."
8 In December 2012, Michael Casper brought an action in
Colorado state court (Casper v. Guarantee Trust Life
Insurance Co., No 12 CV 740 (Pueblo Co. Dist. Ct. Colo.)
(the Casper lawsuit) against GTL, Platinum, and an
independent solicitor. GTL had issued an insurance policy to
Mr. Casper in 2010 pursuant to an application solicited and
procured by the independent solicitor (the Casper policy).
The Casper lawsuit included claims against GTL for breach of
contract and bad faith for GTL's denial of coverage under
the Casper policy, claims against Platinum and the
independent solicitor for negligently misrepresenting the
scope of coverage during the sale of the Casper policy, and a
claim against Platinum for failure to properly train its
9 During the proceedings in the Casper lawsuit, GTL learned
that Platinum, in violation of the marketing agreement, had
failed to supervise, manage, or train its employees and
independent solicitors to comply with all applicable local,
state, and federal laws when soliciting and procuring
applications on behalf of GTL and, during training, had used
materials that had not been approved by GTL's compliance
department. Platinum's breaches occurred over a period of
years-from April 4, 2002, to at least December 5, 2012-and
involved "thousands of applications."
10 Mr. Casper settled his claims against Platinum and the
independent solicitor. However, the claims against GTL
proceeded to trial. On July 15, 2014, the jury found in favor
of Mr. Casper and against GTL. The judgment on the verdict
included an award of ...