United States Court of Appeals,

Eleventh Circuit.

No. 95-3553.

MADIO GROUP, INC., Plaintiff-Appellant,

v.

J. Patrick SHORES; Life Insurance Company of North America,

Defendants-Appellees,

Shores Group, Inc., Defendant,

Tim Ryles, Commissioner of Insurance of the State of Georgia as

Receiver of The Shores Group, Inc., Movant.

Feb. 10, 1997.

Appeal from the United States District Court for the Middle

District of Florida. (No. 91-796-CIV-T-17C), Elizabeth A. Jenkins,

Magistrate Judge.

Before HATCHETT, Chief Judge, TJOFLAT, Circuit Judge, and GODBOLD,

Senior Circuit Judge.

PER CURIAM:

This is an appeal from a summary judgment for defendant Life

Insurance Company of North America (LINA). We affirm though on

grounds different from those of the district court. Parks v. City

of Warner Robins, Ga., 43 F.3d 609, 613 (1995).

Two Florida associations of medical doctors maintained

employee health benefit plans that were self-insured. They were

ordered by the State, on short notice, to discontinue the plans and

replace them with insured plans. The two groups designated the

plaintiff, Madio Group, Inc., as their "insurance agent of record"

to represent them in obtaining the required insurance coverage for

their plans. Madio did not represent an insurance company that

could offer the desired coverage. Instead it intended, it

contends, to broker the desired coverage through some other
insurance agency. It was referred to Shores Group, a corporation,

said to be an agency for insurance coverage for health benefits

plans issued by CIGNA. CIGNA is a trade name for a group of

insurance companies of which LINA is a participant for insuring

health/medical benefit plans.

A representative of Shores Group then entered into

negotiations with a representative of LINA. The precise content of

these negotiations is disputed. Madio asserts that Shores was

negotiating for the insurance coverage desired for the two medical

association groups. LINA contends that the subject matter was

reinsurance of the business of an insurance company, otherwise

unrelated to this case, that Shores was attempting to acquire. The

LINA representative sent a letter to Shores that said in one

paragraph that CIGNA was willing to fully reinsure business of

Shores, and in another paragraph said CIGNA "recognizes and has

appointed J. Patrick Shores [the principal of the Shores agency] as

a licensed Agent to write business to CIGNA," and also stated that

it would supply Shores with appropriate licensing forms to do

business for it. Madio relies upon this letter as evidence that

Shores was an agent with actual authority, or apparent authority,

to represent LINA in dealing with Madio concerning the insurance

coverage sought for the two Florida groups. Madio contends that

Shores, as agent for LINA, agreed that the coverage sought would be

issued by LINA, and that, on behalf of the associations, Madio

accepted. Shores wrote Madio agreeing that a "fee" would be paid

to Madio of $25 per month for each employee participating in the

two associations (plus 10% of monthly premiums from each such
employee participating in a life insurance program).

The insurance coverage was never issued. Madio and Shores

fell out, and Madio claims that Shores set about on its own behalf

to obtain coverage for the two associations. Madio sued Shores and

LINA. It charged Shores with fraud, negligent misrepresentation,

breach of contract, conversion, tortious interference with business

relationships, and state RICO. With respect to LINA Madio claimed

that Shores was LINA's agent with actual or apparent authority and

that LINA as principal was responsible for Shores' failure to

provide insurance coverage as agreed and for Shores' conduct and

alleged misrepresentation. Madio claimed as damages what it

describes as the "commission fees" allegedly owing to it pursuant

to the commitment by Shores to pay such fees.

The district court granted summary judgment for LINA on the

ground that the subject matter of negotiation between Shores and

the LINA representative, and of the letter of from LINA to Shores,

was reinsurance and not insurance coverage for the two medical

associations. Therefore Shores was not proved to be agent for LINA

or possessed of apparent authority with respect to insurance

coverage for the associations. Claims against Shores were

dismissed for want of subject matter jurisdiction because Shores

had gone into receivership proceedings in the State of Georgia.

We do not need to address the agency issues relied on by the

district court, because Madio has no cause of action for the

"commission fees" it claims. The representation by Shores to Madio

was that "the following fee will be paid to your company." Any

ambiguity of who might be the obligor to pay these fees was removed
by the deposition of Ralph Madio, who described his understanding

that his agency, as "subagent" for Shores, would be paid by Shores

from commissions it received from CIGNA. He acknowledged that

there was no representation that Madio would be paid commissions by

LINA [or CIGNA]. Madio describes in its brief to us that

commissions would "flow" to Shores and Shores would then distribute

to Madio the "commission fees" agreed to be paid by Shores. This

is a commission-splitting arrangement that is forbidden by Florida

law. Fla. Stat. Ann. § 626.838 provides in pertinent part:

(1) No health insurer or licensed health agent shall pay

directly or indirectly any commission or other valuable

consideration to any person for services as a health insurance

agent within this state, unless such person holds a currently

valid license and appointment to act as a health insurance

agent as required by the laws of this state; except that a

health insurer may pay such commission or other valuable

consideration to, and a licensed and appointed health

insurance agent may share any commission or other valuable

consideration with, an incorporated insurance agency in which

all employees, stockholders, directors, or officers who

solicit, negotiate, or effectuate health insurance contracts

are qualified health insurance agents holding currently valid

licenses and appointments.

(2) No person other than a licensed and appointed health

agent shall accept any such commission or other valuable

consideration, except as provided in subsection (1).

It is not clear to us whether Shores held a "currently valid

license and appointment [by CIGNA or LINA or any other company] to

act as a health insurance agent" in Florida. Assuming that Shores

had the required status, it might share a commission with a

corporation in which "all employees, stockholders, directors or

officers" who negotiate health insurance contracts are themselves

"qualified health insurance agents holding currently valid licenses

and appointments." But Ralph Madio, the principal in and

negotiator for Madio Group, was not such a person. Under § 626.838
Shores could not share with Madio, and Madio could not accept from

Shores, the commission or other valuable consideration that it

claims.

The summary judgment for LINA is AFFIRMED.