McGuire v. American Family Mutual Insurance, 448 F. App'x 801

McGuire held a written agent agreement with American Family in 1993, superseding a 1989 agreement, to operate in Kansas.
The 1993 agreement allowed termination by either party with notice; after two years, notice of undesirable performance could lead to termination, with a six-month buffer and exceptions for certain conduct.
Life Compliance Manual prohibited rebating and other inducements; later, an electronic version reiterated the rebating ban; McGuire had online access to these materials.
McGuire paid a portion of client Matthew Carney’s life insurance premiums for five years, despite Carney not qualifying for the lower Select rate; American Family billed Carney $472.50 while McGuire paid the $297.50 quoted by McGuire.
Carney discovered the discrepancy; American Family investigated; McGuire admitted paying part of Carney’s premiums and Kansas law prohibited rebating; American Family terminated McGuire’s agency.
District court granted summary judgment to American Family, applying Wisconsin contract law and Kansas rebating statutes, and awarded termination benefits to McGuire; on appeal, the issue was whether the rebating violated Kansas law and terminated the contract and implied covenant were proper.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether McGuire’s premium payments constituted rebating under Kansas law	McGuire argues subjective intent matters and that payments were to help Carney and rectify billing errors.	American Family proceeds under an objective standard, and the statute prohibits rebating regardless of intent.	Rebating analyzed under an objective standard; payments violated Kansas § 40-2404(8).
Whether rebating justified termination of the agent agreement	Termination was retaliatory and not properly grounded in law or contract terms.	Contract expressly allows termination for violation of insurance laws; rebating is such a violation.	Termination for rebating did not breach the contract.
Whether American Family breached the implied covenant of good faith and fair dealing	Termination was unfair given McGuire’s tenure and inconsistent treatment of others.	No breach because termination was authorized by the contract and Wisconsin law permits it when state law is violated.	No breach of the implied covenant as a matter of law.

Brew City Redev. Group v. Ferchill Group, 714 N.W.2d 582 (Wis. Ct. App. 2006) (contractual good-faith principles; breach requires more than mere compliance)
State v. JC Sports Bar, Inc., 861 P.2d 1334 (Kan. 1993) (statutory interpretation; forbids acts regardless of intent)
Goldsmith v. State, 255 P.3d 14 (Kan. 2011) (statutory construction; ordinary words; legislative intent)
Pieren-Abbott v. Kansas Dept. of Rev., 106 P.3d 492 (Kan. App. 2005) (in pari materia; interpretation of tax/fee statutes; legislative intent)
In re Lemons, 217 P.3d 41 (Kan. 2009) (agency interpretation of statutes; deference considerations)