Life Plans Inc. v. Sec. Life of Denver Ins. Co., No. 14-1437 (7th Cir. 2015)
Annotate this CaseIn 2011, the two companies signed an agreement under which Life Plans would broker and Security Life would insure life insurance policies financed through arbitrage. Four months later, Security Life terminated the agreement. Life Plans then sued for breach of contract and of the implied covenant of good faith and fair dealing for refusing to offer the policies. The district court granted summary judgment, reading the contract to grant Security Life the right to terminate at any time. The Seventh Circuit reversed, finding that the evidence presented genuine disputes of material facts. The language of the agreement was ambiguous as to whether Security Life could terminate at will during the first three years. The extrinsic evidence of meaning was in conflict, so summary judgment was not appropriate on the breach of contract claim. The facts are also disputed concerning whether Security Life’s review and approval of the product was required and whether approval was received. The implied covenant claim under Delaware law also should not have been resolved on summary judgment. A reasonable jury could find that Security Life’s conduct was arbitrary and unreasonable and had the effect of denying Life Plans the fruits of its bargain.
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