An insurance agent last month received a $2.4 million verdict in his favor against Farmers Insurance Group in a trial held in Mobile, Ala. The company was accused of lying about its policy regarding independent agents. Kyle Morris, who had been working for his family’s independent insurance agency for a number of years, sought to become a Farmers agent in 2006. Morris told Farmers that he did not want to de-affiliate from the Morris Insurance Agency. Testimony at trial indicated that Farmers told Morris that would not be a problem and that his association with the agency would not violate any Farmers’ policies or procedures. But, that representation was false.
Farmers had an internal policy, in place at least since 2003, that prohibited any Farmers agent from associating with an independent insurance agency. Morris worked diligently for Farmers over the course of two years, building a book of business, establishing relationships with clients, and quadrupling the premiums he earned for Farmers. In December 2009, Farmers fired Morris without warning. Farmers’ internal documents revealed that Farmers fired the agent because of his relationship with the Morris Insurance Agency – the very thing they assured him would be no problem when he started to work for the company.
Morris said at trial he never would have accepted the offer from Farmers had he known about the company’s policy. In December 2009, after a management change at Farmers, the company sent him a termination letter without explanation. The company told Morris, after he pressed for an answer, that the termination was due to the policy.
The lawyers representing Farmers argued at trial that it did not matter what the company’s managers had told Morris because he signed a contract giving them the right to terminate him with 90 days’ notice. Morris’ lawyer argued that the company committed fraud, which negated that provision of the contract. Farmers not only took all of the clients that Morris had built up over 2½ years, but also the clients he brought with him when he came with Farmers. That was a total of 250 customers, with 310 policies worth some $630,000 a year in premiums, according to testimony during the trial.
The contract had a non-compete clause prohibiting Morris from contacting his former clients for a year. He went back to the family insurance agency, where he now works, but essentially lost three years of his career. The Mobile County Circuit Court jury awarded Morris $600,000 in compensatory damages to compensate him for lost commissions and $1.8 million in punitive damages. Brian Duncan and Lucy Tufts, lawyers with the Mobile firm Cunningham Bounds, represented Morris. They did a very good job for him in the case.
Source: AL.com
