Robert Sherman v. Mutual Benefit Life Ins. Co.

Robert E. Sherman sued Mutual Benefit Life Insurance Company for breach of his general agency contract, breach of fiduciary duty, and fraud. The United States District Court for the Northern District of California dismissed Sherman’s complaint for failure to state a claim upon which relief can be granted. Sherman appeals. We affirm in part and reverse and remand in part.

FACTS:

After working for Mutual for several years in Houston, Texas as an insurance sales agent, Sherman became Mutual’s general agent for Oakland, California and eventually the entire San Francisco-Oakland area. Sherman and Mutual entered an “Agreement for General Agents” which contained a termination clause with the following provision: “Basis of Termination. This Agreement may be terminated at any time by either party, by giving the other sixty days’ notice to that effect; or it may be terminated immediately by the Company if in its judgment its interests so require.” Sherman alleged that before he signed the agreement, a Mutual official, who was to become his immediate supervisor, assured him that the provision meant that .Mutual could terminate him only if it had good cause to do so. Sherman further alleges…