Slay v. Allstate Corp.
2018 IL App (1st) 180133 (Ill. App., 2018)Words & Phrases
Agent/Broker: In GeneralTrial Judge
Brigid Mary McGrathAppellate Judge
CunninghamHolding
Agent pleaded facts that sufficiently alleged an improper motive, and abuse of insurer's contractual discretion, in violation of its implied duty of good faith and fair dealing.Fact Summary
This action arises out of the termination of Allstate’s contract with Mary, under which Mary was an exclusive agent selling Allstate insurance, and Allstate’s subsequent denial of Mary’s proposed sale of her economic interest in her agency to her husband.
According to the second amended complaint, beginning in 1999, Mary’s husband, Buddy Slay (Buddy), operated an independent Allstate agency in Lake City, Florida.2 Mary was employed as a school guidance counselor, but she often assisted Buddy with his insurance agency.
We conclude, drawing reasonable inferences from her pleading in Mary’s favor, that dismissal was not warranted under section 2-615. That is, the second amended complaint alleged facts sufficient to plead that Allstate abused its contractual discretion when it denied the proposed transfer to Mary’s husband, in breach of its implied duty to exercise its discretion in good faith. The pleading alleged a contract, the EA Agreement, that afforded Allstate discretion in whether to approve a sale to Mary’s proposed transferee. As Allstate acknowledged in its briefing and on oral argument, Allstate was bound by the implied duty to exercise its discretion in good faith. In turn, Mary had a reasonable expectation that Allstate would not deny the sale to her proposed transferee, her husband Buddy, for a bad-faith, arbitrary, or capricious reason. Further, Mary alleges specific facts supporting a reasonable inference that Buddy was qualified to be the transferee, as he allegedly served as a successful independent Allstate insurance agent for several years. Mary alleges that the transfer to Buddy, an otherwise qualified candidate, was disapproved for an arbitrary or capricious reason—that is, Allstate refused to approve the transfer to Buddy “solely for the benefit of Faye McKnight,” the spouse of Mary’s manager, whose agency was in competition with Buddy’s agency.