MDM is an insurance broker that developed a program for insuring ski resorts against the risk that

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MDM is an insurance broker that developed a program for insuring ski resorts against the risk that the number of paying ski days during a ski season would fall below a certain minimum. CX and others agreed to write policies starting in the 1997-1998 ski season. The policies generated premiums of $550,000. MDM received a commission of 12.5 percent. In the 1999-2000 year, premiums were up to $3 million, but due to poor snow that year, many ski days were lost, and the resorts filed many claims. CX resisted, resulting in negotiations, mediation, and litigation that resulted in $23 million in claims payouts. As it had the right to do, CX stopped issuing policies.

1. The appeals court held that MDM could not prevail over CX in a claim for tortious interference with prospective advantage because CX had the right to stop issuing insurance policies. Since there were buyers who wanted to get the policies from MDM, and it could no longer provide them, why was that not interference by CX?
2. CX apparently behaved in bad faith in paying insurance claims, as the ski resorts had to sue to collect on the policies. Why would that not affect the decision in this case?

Broker
A broker is someone or something that acts as an intermediary third party, managing transactions between two other entities. A broker is a person or company authorized to buy and sell stocks or other investments. They are the ones responsible for...
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The Legal Environment of Business

ISBN: 978-0538473996

11th Edition

Authors: Roger E Meiners, Al H. Ringleb, Frances L. Edwards

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