Cases

An insurance agent trade association sued seeking a declaration that GMSR’s insurance company client can only discipline or terminate its agents for cause (which did not include how the agency was operated) and asserted that the governing Agency Appointment Agreements were unconscionable in allowing either party to terminate them without cause.  They further claimed that the carrier acted improperly in establishing performance guidelines for exercising its no-cause termination rights.

The Court of Appeal affirmed the trial court’s rulings, after a bench trial, across the board in favor of the insurance carrier.  It held the agents’ trade association had no standing to pursue its unconscionability claim because that claim required individualized proof and participation by each agent.  On the merits, it agreed that the agency agreements properly permit the insurance company to terminate agents under the no-cause termination provision for any reason, or for no reason at all, and that such lawful no-cause grounds could include office location, lack of performance, or other business practices deemed below standard.

Case Briefs

• California Court of Appeal Opinion - View Document