Court Watch

On Dec. 13, 2004, a federal jury in the U.S. District Court of Connecticut awarded $2.3 million in damages to a terminated independent insurance agent, in the case of Charts v. Nationwide Mutual Insurance Company, Civil Action No. 3:97 01621 (CFD). Among the findings of the jury were that agent Charts operated pursuant to a franchise agreement, that the franchise was terminated without good cause as required by the Connecticut Franchise Act, that Nationwide violated the implied covenant of good faith and fair dealing, and that Nationwide's conduct violated the Connecticut Unfair Trade Practices Act.

Note that at press time, the court had not yet ruled on Nationwide's post-verdict motion for judgment as a matter of law and/or for new trial. Among the several grounds for its post-trial motion, Nationwide has asserted that it had good cause to terminate; that the evidence did not prove that Charts was a franchisee because there was no proof that he was engaged in the sale, offering, or distribution of Nationwide's products; that the sale, offering, and distribution of Nationwide's insurance policies were vested solely in Nationwide; and that Charts was merely an agent/conduit with no authority to vary the terms for Nationwide's insurance products. The post-trial motion further contends that no marketing plan was imposed by Nationwide, that Charts was an independent contractor who had the sole discretion and responsibility for operating the agency, and that Nationwide's control was limited to its obligations under Connecticut's insurance statutes and to preserving its trademark.