FILED: WESTCHESTER COUNTY CLERK 04/22/2015 01:15 PM
`NYSCEF DOC. NO. 28
`RECEIVED NYSCEF: 04/22/2015
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`INDEX NO. 62837/2014
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`SUPREME COURT OF THE STATE OF NEW YORK
`COUNTY OF WESTCHESTER
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`R. Brian Fechtel,
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`Plaintiff
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`- against -
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`Index No.___62837/2014____
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`Affidavit in Opposition
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`to Defendants' Motion to Dismiss
`submitted by pro se Plaintiff
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`Northwestern Mutual Life Insurance Company, et.al.,
`(specifically: Ed Zore, former CEO; Mark Bishop, Regional Vice President,
`Eric P. Christophersen, Vice President; William Beckley, former Executive Vice President
`Todd M. Schoon, Executive Vice President; Sandra L. Botcher, Vice President
`William Koenig, former Chief Actuary; David R. Remstad, Vice President and Chief Actuary
`Trustees Facundo Bacardi, John N. Balboni, David J. Drury,
`Connie K. Duckworth, David A. Erne, James P. Hackett,
`Paul R. Hardin, Hans C. Heimerich, Dale E. Jones,
`Margery Kraus, David J. Lubar, Ulice Payne Jr.,
`Gary A. Poliner, John E. Schlifske, Peter M. Sommerhauser,
`Mary E. Stanek, Timothy W. Sullivan, Steve S. Voynich,
`Ralph A. Weber, Barry L. Williams, Benjamin F. Wilson,
`and Eileen M. Seabolt, Director of Network Office Supervision at the Seery Financial Group of
`Northwestern Mutual and Northwestern Mutual Investment Services
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`_________________________________________________
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`TO THE SUPREME COURT OF THE STATE OF NEW YORK
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`Plaintiff's Affidavit in Opposition
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`Defendants
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`1. Northwestern Mutual and its Co-Defendants (hereinafter Northwestern or Defendants) state in
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`Exhibit G to their Notice of Pre-Answer Motion to Dismiss Plaintiff's Complaint, "We
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`acknowledge that Mr. Fechtel has had no customer complaints.....his [agent's] contract was
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`terminated because of his continued failure to follow Company policies--no other
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`reasons."(page 9, Defendant's Exhibit G) In fact, Defendants, after summarizing a purported
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`litany of rationales in its Attorney's Aff. at #24, assert further that Plaintiff's contract had to be
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`terminated because of "his repeated refusals to comply with rules necessary to protect
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`consumers from improper and unscrupulous insurance sales practices."(page 4, Memorandum)
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`2. Defendant's Memorandum [at VII] states or suggests, "While Fechtel's claim for breach of
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`contract based on his August 15, 2008 termination is not time-barred, [virtually everything else -
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`according to Defendants - based on pre-termination conduct is time-barred]."
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`3. Plaintiff Fechtel readily acknowledges that his pro-se filing of his suit on August 14, 2014 can
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`appear to have jeopardized some of his claims (i.e. Northwestern's total prohibition of
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`Northwestern agents' involvement in any viatical transactions promulgated in 1998). In many
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`ways, though, the Court should appreciate that this clearly focuses the dispute.
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`4. Plaintiff reiterates his Complaint's claim that the act of termination - which Northwestern plainly
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`acknowledges occurred August 15, 2008 - was, in and of itself, an action that was in violation of
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`Plaintiff's contract's Covenant of Good Faith. This is clearly a cause of action that survives
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`Defendants' Motion to Dismiss. This claim is exactly the type of question most appropriately
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`resolved by a jury trial. In essence, this one cause of action summarizes the heart of the dispute.
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`This litigation can be expeditiously resolved, as it depends on the straightforward answer to the
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`simple question: When Agent Fechtel's contract was terminated on August 15, 2008 was his
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`contract's implicit Covenant of Good Faith violated?
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`5. Admittedly, Northwestern and Plaintiff have very different views of the facts and circumstances.
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`But, again, ascertaining the truth (especially in situations where the litigating parties themselves
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`have such categorically opposing views), assessing the merit of a plaintiff's charges, and/or
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`evaluating defendants' intentions and other matters are routine and vital functions and parts of
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`almost every trial.
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`6. Northwestern's views expressed in its Memorandum are that Plaintiff claims "suffer from a
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`variety of incurable substantive pleading deficiencies[,]" "each of those claims is based on
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`events occurring long before the expiration of the applicable limitations periods" and moreover,
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`"does [/do] not require this Court to evaluate the merits of Fechtel's allegations of conspiracy
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`and retaliation" because "Fechtel previously peddled the same groundless allegations [italics by
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`Plaintiff] in this complaint in multiple insurance and FINRA regulatory complaints he filed against
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`Northwestern Mutual over six years ago" and "the regulators rejected Fechtel's complaints
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`against Northwestern Mutual, finding no basis for his contention that Northwestern Mutual had
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`violated any insurance laws--much less that Fechtel had been "wrongfully terminated" for
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`exposing Northwestern Mutual's purported violations of the insurance laws."
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`7. Defendants essentially are declaring that Plaintiff's Complaint is ridiculous, if not outright
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`frivolous. Admittedly, if what Defendants state were true, Plaintiff would have no case. But the
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`facts and law are very different from Defendants' assertions.
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`8.
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`It is not uncommon at the start of legal proceedings for defendants and plaintiffs to see the
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`case's facts and circumstances very differently. What is, however, perhaps quite striking in this
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`instant is Northwestern's representations, really misrepresentations, regarding fundamental
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`legal matters. Plaintiff brings this to the Court's attention because of its explicit and vital
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`relevance. Plaintiff thinks it may further help the Court highlight compelling reasons for
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`dismissing Defendant's Motion.
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`9. Northwestern asserts that Fechtel's complaints have already been heard and rejected by the
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`regulators. But Defendants' affirmation is plainly false.
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`10. On September 30, 2008, the New York State Department of Insurance informed Fechtel "Please
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`note that this Department does NOT have the authority to arbitrate the matter of your
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`termination from Northwestern Mutual and therefore we are unable to assist in this regard."
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`(Exhibit E, page 2, Capitalization Added by Plaintiff. Page numbers are to pdf with Page 1 as its
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`Cover Page.)
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`11. In a prior 2007 letter to Plaintiff the New York State Department of Insurance states, "With
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`certain exceptions - such as the matter of agent compensation, which is governed by Insurance
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`Law Section 4228 - the Insurance Department does not regulate relations between life insurance
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`companies and its agents." (Exhibit E, pages 3-11, as this is a 9 page letter. For the record,
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`Plaintiff notes that - as the Department itself states - the Department's proffered opinions are
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`hardly dispositive.)
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`12. To Plaintiff, admittedly, not an attorney, these two statements by the New York State
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`Department of Insurance certainly seem to directly contradict Defendants' assertion on a
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`gravely material question. If it is helpful to the Court, Plaintiff testifies that this type of
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`misrepresentation (stating something is true when it is not, or presenting a thing as something
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`which it is not) is so similar to the misrepresentations so many Northwestern agents make
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`where they endeavor (and quite often successfully) to confuse prospective consumers during
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`sales presentations. (Please be sure to see Exhibit E, page 12, as it is well worth reading. In
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`particular, please be sure to take special note of Professor Belth's statement that the industry
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`tried to have him fired from Indiana University because of his advocacy for disclosure. Plato's
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`admonition about "Everything that deceives can be said to enchant is spot on in its insight in the
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`industry's deceptive sales practices. Finally, the Smoking Gun quote if from Northwestern's
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`actuary John Keller; please also see his 1993 email to Plaintiff in Exhibit E, page 50.)
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`13. Moreover, an actual reading of Defendants' Exhibit J shows that the Wisconsin Department of
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`Insurance came to no conclusions regarding Plaintiff's complaints of Northwestern's breaches of
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`his agent contract. Defendants Exhibit J, which is essentially a 3 sentence letter, where sentence
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`one reads as an apology, and its concluding sentence cites Wisconsin's limited authority, reads
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`as follows: "Although I understand the frustration that caused you to contact us, I am unable to
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`resolve your complaint to your satisfaction. Based on the information provided [apparently the
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`department did not obtain any independent actuarial expertise to assess Northwestern's
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`submission and did not conduct a market conduct survey or even contact any of the quoted
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`uthorities in "The Right Blend," an article Plaintiff's letter to Wisconsin cited and (contained
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`herein as Exhibit E pages 13-14)], it appears the insurance company did not violate an insurance
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`law or regulation with respect to the issues raised in your complaint. Our office has limited
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`authority to resolve complaints when there has been no apparent violation of the Wisconsin
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`insurance laws." [Plaintiff added bolding and underlining for emphasis] Plaintiff inquires of the
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`Court, is it customary for an adversary to so selectively excerpt a quotation in writing its Memo
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`for one of its sentences to be totally misleading? Moreover, given Defendant Northwestern's
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`history of more than 150+ years in business in New York State, how can its assertion be
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`reconciled with its experience? (Please again see Defendants' Memo page 4 and contrast with
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`Bogan v. Hodgkins - a case about which Northwestern was very much involved, if not a named
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`defendant; complete citation forthcoming.)
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`14. Furthermore, with respect to state insurance departments' investigating vigor (or lack thereof)
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`and contrary to Northwestern's implications of having been exonerated by its home state
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`regulator, Plaintiff needs to inform the Court that state departments of insurance have a history
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`of seldom enforcing life insurance laws and regulations pertaining to market misconduct (see
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`1995 industry journal article "A Personal Perspective on Disclosure as an Ethical Imperative"
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`Exhibit C, bottom of article's page 64 and top of 65. Cited author says that regulations "have
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`never been enforced." The Court is encouraged to google this cited author to evaluate the
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`significance of his statement). The Court is invited to also further research Plaintiff's online
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`article about when he informed the New York State Department of Insurance about a blatantly
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`fraudulent New York Life advertisement that recently (circa 2007-11) ran in leading national
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`publications. (See footnote1 and Exhibit E page 15 for more about this fraud by New York Life.)
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`15. Given Exhibit E's unimpeachable statements which unambiguously express the law and the long
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`standing operating practices of the New York Department of Insurance (of which Defendants
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`had to have been fully aware), Plaintiff is compelled to inquire: How does the Court feel with
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`regard to Defendants' misrepresentation of these material matters?
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`16. Plaintiff would like to next direct the Court's attention to Defendants' Affirmation 24 (which is
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`virtually repeated in Defendants' Memorandum). Northwestern states, "Specifically,
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`Northwestern Mutual apprised the regulators of [1] Fechtel's processing of insurance
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`applications for applicants he never even met in person; [2] his presenting clients with forms to
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`be signed in blank; [3]his failure to document the suitability and justification for consumer
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`recommendations and sales in his client files; [4] his advising clients of his purported right to
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`change their mix of permanent and term insurance protection unilaterally, without the client's
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`1 The New York examiner who initially reviewed the fraudulent advertisement upon Fechtel's request could
`not even recognize the fraud. It was only when the state regulators' Chief Actuary became involved that New
`York Life agreed to never run the ad again and to make changes in its advertising approval process. The New
`York Department of Insurance took no action against New York Life, nor did it even endeavor to attempt to
`inform possibly deceived policyholders. Again, the full history of this can be found at the Breadwinners'
`Insurance website A.W.O.L enforcement is the standard mode of operation of the state insurance regulators;
`much like what our nation learned regarding regulation of mortgage origination and mortgage securitization
`following the Great Recession about the banking regulators. Two important and relevant final points: First, as
`the Court well knows, but seemingly Defendants have forgotten or try to ignore or misrepresent: a regulator's
`failure to pursue any action is never an exoneration. Every regulator, like every prosecutor, always has
`discretion about whether any charges are actually filed. Moreover, as evidenced by the above New York Life
`incident, regulators - aside from the widely known ailment of regulatory capture - are often clueless. Second,
`Plaintiff would like to be on the record, that while it is undeniably clear he has been and is critical of
`Northwestern's market conduct, he has been equally, if not more, critical of several other life insurers and
`independent life insurance agents' marketing conduct. (i.e., his online articles regarding Mutual Trust Life).
`Exhibit E, page 16 has the cover page reference to Professor Joseph Belth's also presents the fundamental
`nature sales misrepresentations that occur because of the industry's inadequate product disclosures.
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`prior consent; [5] his improper and unauthorized disclosure of confidential policyowner
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`information2; and [6] his other licensing issues.
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`2 With respect to this scurrilous allegation, Fechtel's specifically mentioned these five clients (i.e.,
`an SEC Commissioner, Wharton Insurance Professor) to demonstrate the caliber of clients who
`chose to work with Fechtel, and this very fact, which Fechtel's letter explicitly stated, was
`appropriate and necessary information to have conveyed to Northwestern's CEO to demonstrate
`Fechtel's credibility. There can be no disagreement about this. Again, these clients include a former
`top Federal Reserve executive, a former SEC Commissioner, a Wharton Insurance Professor, and
`heads of a worldwide consulting firm and a leading American media company. Northwestern's
`issuance of its Supervisory Memo was entirely without cause and an example of its harassment.
`Northwestern's purported but entirely unsubstantiated rationales, in fact, does nothing but
`substantiate Fechtel's charge of harassment. No one can say with a straight face that there was any
`possible harm in Fechtel's "disclosure" to Northwestern's CEO in his May 21, 2008 letter (See Exhibit
`A). Please stop, review Exhibit E pages 53-63, and really just think about this incident for a at least
`one full minute. Plaintiff asks can this Northwestern conduct be viewed in public without the
`company being universally condemned. Please let a trial decide this matter.
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`Again, Northwestern's fifth charge is absolutely preposterous. Northwestern's Supervisory Memo is
`unquestionably harassment. Moreover, on the basis of its ridiculous Supervisory Memo,
`Northwestern further harassed Fechtel by requiring that he spend time watching its training video
`"The Right Way to Write" and having to pass a test to purportedly document his comprehension of
`the video. (Keep in mind, Northwestern does not pay Fechtel a salary, as he is an commission
`compensated independent contractor, which to be clear means that unwarranted disruptions in his
`efforts to obtain business are harmful.)
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`When Fechtel completed the test without first watching the video (an action (or inaction) justified
`by two reasons: to avoid having his time wasted by the 30 or 40 minute video, and to be able to
`demonstrate his knowledge of how to write without being "trained by Northwestern" ) and
`answered all (or all but one) of the test's questions correctly, he informed Northwestern of an error
`in the test's answer key (the problematic question). Northwestern ordered Fechtel to watch the
`video, claiming he was being insubordinate and threatened that if he did not Northwestern would
`immediately terminate him. While this entire incident can seem trivial, it is undeniably evidence of
`Northwestern's harassment and its breach of Fechtel's agent contract with its unreasonable and
`harmful actions. To be unmistakably clear: there was no justification and therefore no legitimacy in
`Northwestern's demands regarding "The Right Way Write" video.
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`In fact, the full story about this incident show actually show that it was Northwestern who violated
`these clients' confidentiality. When Northwestern released a copy of Fechtel's letter to New York
`regulators it failed to redact the policyowners' names and identifying titles and firms.
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`17. Given the undeniable severity of Fechtel's alleged misconduct, genuine criminality,
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`Northwestern would seem to have an easy task at trial. In the courtroom, Northwestern can
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`essentially endeavor to sing its own praises for protecting the public from such a purportedly
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`despicable reprobate who, at least according to Northwestern fourth charge, unilaterally does
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`harmful things and does so without clients' prior consent.
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`18. Northwestern could try to do that, except for the fact that all of Northwestern's allegations
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`are either completely false or outrageously deceptive distortions. On these matters,
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`Defendants' representations are patently deceptive, and their deceptiveness is readily provable
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`beyond a shadow of a doubt.
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`19. In fact, Northwestern's fourth charge is quite possibly libelous. Nothing could be further from
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`the truth than Northwestern's charge that Fechtel "advis[es] clients of his purported right to
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`change their mix of permanent and term insurance protection unilaterally, without the client's
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`prior consent."
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`20. Northwestern knows that there is no evidence to support its charge. To completely prove a libel
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`charge is an involved undertaking, and only the outlines of such need to be presented at this
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`time for the Court to recognize Defendants' blatant misrepresentation. (Complete and total
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`refutation of Northwestern's charge requires an education about life insurance policies in
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`general, Northwestern's products, its compensation practices, and the application process,
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`which is beyond the present need. It will be presented upon request or at an appropriate time.)
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`21. To begin to explain Defendants' misrepresentation it is useful to remind the Court (as
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`mentioned in Plaintiff's Complaint) that Defendants' have for years prior to August 15, 2008
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`wanted to terminate Plaintiff. In August 2007, Defendants wanted Fechtel terminated (see
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`Exhibit E page 16) and sought in September 2007 his mutual consent to a parting of the ways.
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`Defendants' motivations or reasons - at least as stated on paper - are shown on an internal
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`memo prepared (coincidentally) August 14, 2007 .The internal memo reads: "Mr. Fechtel states
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`he tells clients that he reserves the right to change the mix of a policy to earn a higher
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`commission, if the amount of work he does calls for it." What the Court needs to notice and
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`understand is that in 2007 when Northwestern earnestly undertook its truly delusional efforts to
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`terminate Fechtel, its 2007 internal memo mentions nothing about Fechtel doing anything
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`"unilaterally" or "without the client's prior consent."
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`22. As anyone over the age of a teenager knows, when someone exaggerates or embellishes or
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`worse, the truth is being distorted. For some reason, at this early stage in this litigation,
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`Defendants have made a shocking misrepresentation to the Court, trying to deceive the Court
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`about both Plaintiff's character and conduct. (Exhibit E pages 18-25 contain documentation of
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`Plaintiff's character and expertise from well-respected individuals.)
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`23. To continue this explanation of Defendants' misrepresentation regarding Fechtel's alleged acting
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`without client approval, it is necessary to briefly describe a life insurance agent's activities.
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`Nothing is ever finalized without the life insurer having written documentation, explicitly signed
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`by the policyholder, showing his/her objective at the start of processing any transaction
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`paperwork and at the end the transaction confirming that what was sought has in fact been
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`delivered.
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`24. Not only is this Northwestern libelous allegation preposterous, Northwestern's own records of
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`Fechtel's clients' policies show that Fechtel was one of but a very, very few (perhaps just one of
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`a handful of) Northwestern agents that invariably showed all prospective clients the absolute
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`best value cash value policy from among Northwestern's product line and recommended and
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`sold Northwestern best value products. Northwestern's affirmation regarding Fechtel's conduct
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`and character is absolutely false, and Northwestern knows that it is absolutely false. (See Exhibit
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`E page 26 to see typical Northwestern agent's practice.)
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`25. Plaintiff respectfully asks the Court to recall that discussions of life insurance policies can involve
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`some complexities, because unless both parties accurately understand the subject, there are
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`many ways for misunderstanding to occur. Questions and answers regarding "mixing" or
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`blending can be so readily understood, but only when a non-industry person's participates in an
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`actual conversation with an individual knowledgeable about blending. This issue of blending or
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`mixing - and misrepresentations and/or omissions about such is at the very core of the long-
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`running dispute between Fechtel and Northwestern; the crux of the matter concerns the
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`compensation an agent receiving selling Mix 1 vs Mix 2 and whether the consumer
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`understanding this and other related policy aspects. Northwestern's explanation to Wisconsin's
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`regulator spans three pages of their letter (see Defendants' Exhibits). They state "We simply
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`reject that line of thought......He has been making this argument for many years; we have been
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`disagreeing with his argument for many years. For him to claim that his career as a
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`Northwestern Mutual financial representative suddenly ended because he articulated it yet one
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`more time in a letter to our CEO is simply not supported by the facts of the history of his career
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`with Northwestern Mutual. We do not insist that our representatives agree with our position on
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`issues. We do insist that they comply with our policies and with our supervisory requirements,
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`and that they do right by the public and their customers." Northwestern provides not a shred of
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`evidence in support of its statements, and American jurisprudence requires such.
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`26. Plaintiff does not ask the Court to accept his uncorroborated statements on this matter, just as
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`he knows the Court would not simply or automatically accept Northwestern's statements.
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`Corroboration of Plaintiff's position can be obtained though from the former Northwestern
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`actuary, Scott Witt, who is now a fee-only adviser (see Exhibit E page 29 which can be
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`supported by a deposition). It can also be obtained from reviewing fee-only adviser David
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`Barkhausen's cogent email regarding Northwestern's submission to the Wisconsin regulators.
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`(See Exhibit E, page 34)
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`27. Moreover, even if Fechtel were to have ever sought to change a client's mix to receive a higher
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`commission, Northwestern knows that the client has the option or the right to discontinue
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`working with Fechtel and obtain the policy from another Northwestern agent with the "mix" just
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`as the client desires. Further Northwestern knows that a policyholder's chosen mix is actually
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`specified by the client on the application, and that before any policyholder accepts delivery of
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`any policy he receives, reviews, and signs forms illustrating the actual mix that Northwestern
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`has issued.
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`28. Northwestern's libelous charge is actually the Mount Everest of chutzpah. Again, Northwestern
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`knows that Fechtel was one of its only agents that would even show and sell prospective
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`policyholders the "mixed" or blended policy providing best value. That Northwestern would libel
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`Fechtel about this particular issue in particular - because this issue is at the heart of our dispute
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`about its sales force's pervasive misconduct and misrepresentation is nothing short of
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`outrageous. Northwestern might not like consumers to understand its sales compensation
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`practices - and the actual role that its agents play in determining their own compensation by
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`recommending one of the company's policies rather than another one - but proper disclosure of
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`its policies requires such. That Northwestern six years after having terminating Fechtel would so
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`distort the facts about Fechtel and his Northwestern sales is shocking and indicative of the
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`extent to which it carried and still carries its harassment with vitriol. It will be interesting to
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`learn this Court's opinion regarding Northwestern's fraudulent statements; Plaintiff respectfully
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`invites the Court to specifically address this contentious subject.
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`29. Plaintiff asserts that Northwestern disregard for the truth, documented in its very own filings in
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`this case, and which is a long standing practice manifested in its ultimate act of terminating
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`Fechtel on August 15, 2008 is precisely the reprehensible conduct from which Fechtel's
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`contract's implicit Covenant of Good Faith was intended to protect him. And now, Plaintiff
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`prays, it can finally do so with the Court's assistance.
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`30. Had Defendant Northwestern wrongfully terminated Plaintiff any day before August 15, 2008
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`for any fanciful allegation it created out of thin air, and where the act of termination and of itself
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`constituted a clear breach of Plaintiff's contract's Covenant of Good Faith, Plaintiff would have
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`filed a lawsuit at least within six years of that date of ultimate and independently actionable
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`breach of contract.
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`31. It may be difficult for the Court to presently fathom, having merely read a few pages into this
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`Affidavit, how Defendants' affirmations could be so incorrect. For the Court to fully understand
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`this dispute, it needs to understand Northwestern's (and other life insurers, as well) adamant
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`age-old opposition to appropriate disclosure of its whole life insurance policies. Northwestern
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`(and to be fair all of its fellow industry peers) have objected to appropriate disclosure of their
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`cash value life insurance policies because disclosure reveals many things that consumers need
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`and ought to know (in order to make informed purchases) but which life insurers have never
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`wanted them to know.
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`32. The Court is encouraged to closely read and study Exhibit E's pages 36-48 (documenting the
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`historical disclosure problem) and recall that when Senator Philip Hart (D-MI) in 1968 spoke
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`about achieving reform through improved product disclosure; he said: “Obviously, if it makes
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`sense to tell consumers how much of what is in a package on a supermarket shelf, or how much
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`interest they will pay for using someone else’s money [or vice versa], it makes sense to tell them
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`how much they are paying for death protection and how much they are saving when they plunk
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`down a life insurance premium. Hopefully your industry will think so too – and start supplying
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`the information. If not- watch for Truth in Life Insurance to follow Truth in Packaging and Truth
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`in Lending through the legislative mill. Because that’s the way people are thinking in
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`consumerland.”
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`33. Plaintiff will show at trial that Northwestern's very own financial statements document that
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`many of the policies its agents sell violate its Agent's Code of Conduct's requirements: 1) to
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`serve the client's best interest, and 2) to avoid any conflict of interests with clients.
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`34. Northwestern's efforts to hide the factual and real basis for the parties' contentious relationship
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`by attempting to substitute a seemingly legitimate basis for its termination has been shown in
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`this Opposition to be a sham. Moreover, Northwestern presents no information to substantiate
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`its position on this matter, and therefore this case deserves to go to trial.
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`35. Plaintiff now presents information in support of the preservation of his other causes of action
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`(unreasonable restraint of trade, unreasonable post-contractual prohibitions in breach of
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`contract, theft, Northwestern coercive efforts upon Plaintiff to silence his efforts to reform the
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`life insurance industry's fraudulent sales practices which constitute RICO violations, and
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`harassing activities constituting many separate and individually actionable contractual breaches)
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`36. As stated in Plaintiff's Complaint, Defendants' problematic conduct on a number of matters -
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`very separate from the above breach of the his agent's contract's Covenant of Good Faith -
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`caused him significant and provable financial harms. Whether Plaintiff's or Defendants' views
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`will be ultimately declared correct, is a matter that can only be determined at trial.
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`Northwestern's Motion, it must be acknowledged, contained no valid information in support of
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`its positions for its autocratic rule making.
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`37. While Plaintiff is well aware of courts' somewhat traditional or limited restraint when
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`interpreting contracts of adhesion, Plaintiff respectfully asks the court to allow him to present
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`expert testimony at trial demonstrating the profound legal problems created by Northwestern
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`antiquated Agent's Contract. Very unique and problematic implications are created by: 1) the
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`interaction of three provisions of Northwestern's contract's - #13 (Agents pay all expenses they
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`incur3), #19 (Termination with or without cause) and #20 (Commissions after Termination) and
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`2) Northwestern's autocratic exercise of its rule making authority (in Plaintiff's view with actions
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`that conflict with Claus #4's granted freedoms) and 3) the contract absence of any fair dispute
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`resolution mechanism. These problems are further compounded by some unique New York
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`State compensation related regulations based upon a misguided 1907 legislature's belief in
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`paternalistic regulation that has been a complete failure).
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`38. Northwestern purports in this instant lawsuit to claim that it has an enforceable right to
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`terminate an agent for no cause at all. Common sense, however, makes it difficult if not
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`impossible to understanding how its executives in trying to answer questions by any prospective
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`recruit could honestly answer a concern about Northwestern exercising its authority to
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`terminate without cause in light of contract's clauses #13 (expenses), #20 (problematic renewal
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`commissions vesting rules), and Northwestern's history of implementing extra-contractual rules
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`(adversely impacting the recruits' expected rights under clause #4, which permits agents to sell
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`other insurers products via Clause 6 and to engage in other business activities via Clause 8) all
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`without the potential new recruited independent contract having access to any fair dispute
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`resolution provisions. The Court should know that approximately 80% (Plaintiff's estimate) of
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`3 Clause 13 states, "Agent shall pay all expenses incurred by him in the performance of this
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`agreement." In real life this involves, agents paying for office rent, hiring administrative staff, buying
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`computers, phones and everything in a modern office, and in fact, even having to pay monthly
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`access fees for accessing Northwestern's computer system which is necessary to presentation policy
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`illustrations to prospective clients. The Northwestern Contract is not an employment contract, and
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`individuals are recruited to be agents by being told they are starting their own businesses.
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`14
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`Northwestern's agents' contracts terminate before their 5th year. Plaintiff contends this very
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`abridged contract summary shows Northwestern's assertion that the contract can be
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`terminated for no cause cannot be main