2010 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

1-20-2010

Amgro Inc v. Lincoln General Ins

Precedential or Non-Precedential: Non-Precedential

Docket No. 08-3154

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1

NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

No. 08-3154

_____________

AMGRO, INC.

v.

LINCOLN GENERAL INSURANCE COMPANY,

Defendant/Third-Party Plaintiff

v.

BANCAR ASSOCIATES, INC., D/B/A DAVID MACGREGOR COMPANY;

MARK GROSSBARD; NORTHERN FINANCIAL GROUP, INC.;

RICHARD PISCANE,

Third-Party Defendants

Lilncoln General Insurance Company,

Appellant

_____________

No. 08-3303

_____________

AMGRO, INC.

v.

LINCOLN GENERAL INSURANCE COMPANY,

Defendant/Third-Party Plaintiff
2

v.

BANCAR ASSOCIATES, INC., D/B/A DAVID MACGREGOR COMPANY; 

MARK GROSSBARD; NORTHERN FINANCIAL GROUP, INC.;

RICHARD PISCANE,

Third-Party Defendants

Bancar Associates, Inc., d/b/a David MacGregor Company;

Mark Grossbard,

Appellants

 

On Appeal from the United States District Court

for the District of New Jersey

District Court No. 3-06-cv-00472

District Judge: The Honorable Mary L. Cooper

 

Submitted Pursuant to Third Circuit L.A.R. 34.1(a)

January 14, 2010

Before: SCIRICA, Chief Judge, BARRY, and SMITH, Circuit Judges

(Filed: January 20, 2010)

 

OPINION

 

SMITH, Circuit Judge.

This case is about missing insurance premium payments. Lincoln General

Insurance Co. (“Lincoln General”), an insurance company, never received insurance

premium payments from certain policyholders (the “Policyholders”). AMGRO, Inc.

(“AMGRO”), an insurance premium financing company, paid the Policyholders’
 Wholesale insurance agents do not sell directly to the public. Instead, they use retail 1

insurance brokers to communicate with insurance customers.

3

premiums to David MacGregor Co. (“MacGregor”), the Policyholders’ retail insurance

broker, which retained its agreed upon commission and then sent the remaining funds to

Northern Financial Group, Inc. (“Northern Financial”), Lincoln General’s wholesale

insurance agent for the transactions. Under normal circumstances, Northern Financial 1

would then have sent payment to Lincoln General. But the insurance premium payments

never arrived at Lincoln General and this litigation ensued. Lincoln General, MacGregor,

and MacGregor’s risk management consultant, Mark Grossbard, now seek review of the

District Court’s determinations of several motions for summary judgment. After

reviewing the record, we conclude that the District Court correctly decided the summary

judgment motions and will affirm its judgment.

The District Court had jurisdiction over this case under 28 U.S.C. § 1332(a) and

we review its grant of summary judgment under 28 U.S.C. § 1291. We exercise “plenary

review over the District Court’s grant of summary judgment.” Shuman ex rel. Shertzer v.

Penn Manor Sch. Dist., 422 F.3d 141, 146 (3d Cir. 2005) (internal quotation omitted). A

court should grant summary judgment “if the pleadings, the discovery and disclosure

materials on file, and any affidavits show that there is no genuine issue as to any material

fact and that the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c). 

In applying that standard, “a court must view the facts in the light most favorable to the
 Because we write only for the parties, we will concisely recount the facts. 2

 An insurance binder is a “temporary contract of insurance . . . intended to give the 3

applicant protection pending the execution and delivery of a formal written policy.” 16

Williston on Contracts § 49:53 (4th ed. 2009).

 MacGregor and Northern Financial had entered into a “Producer Agreement” on 4

October 11, 2002, approximately one year prior to the contract between Northern

Financial and Lincoln General. That agreement permitted MacGregor to sell insurance

on behalf of Northern Financial. MacGregor’s sales of Lincoln General insurance were

made under this agreement.

4

nonmoving party and draw all inferences in that party’s favor.” Shuman, 422 F.3d at 146

(internal quotation omitted).

I.

Facts

On September 23, 2003, Lincoln General entered into an agency agreement with

Northern Financial that permitted Northern Financial to sell Lincoln General’s

commercial trucking insurance. Under the agreement, Northern Financial was to inform 2

Lincoln General of (1) insurance binders it issued on behalf of Lincoln General and (2) 3

premium financing transactions entered into in connection with Lincoln General policies. 

Northern Financial entered into an agreement with MacGregor whereby MacGregor

would sell insurance on its behalf, and around February 2004, MacGregor began selling

Lincoln General insurance for Northern Financial. In exchange for selling the insurance,

4

MacGregor received a ten percent commission on premiums generated by its sales.

MacGregor sold Lincoln General insurance to the Policyholders and AMGRO

provided insurance premium financing for those transactions. Northern Financial issued

insurance binders to the Policyholders and Lincoln General later issued the corresponding
5

policies. MacGregor, as its agreement with Northern Financial provided, retained a ten

percent commission on premiums generated by those sales.

AMGRO’s payments to MacGregor on behalf of the Policyholders were made

through a Draft Authorization Agreement that permitted MacGregor to issue AMGRO

checks to itself to pay the Policyholders’ insurance premiums. Under normal

circumstances, MacGregor would draft payment to itself from AMGRO, subtract its ten

percent commission, and then forward the remaining premium payment to Northern

Financial. Northern Financial would then forward payment to Lincoln General. This was

not what happened, however. Somewhere along the way, the premium payments

disappeared and Lincoln General never received them. As a result, Lincoln General

cancelled all the Policyholders’ policies for non-payment of premiums. 

After Lincoln General cancelled the policies, AMGRO sought a refund from

Lincoln General for the premium payments it had made on behalf of the Policyholders. 

Lincoln General refused to refund any money to AMGRO because it never received the

premium payments. This litigation ensued.

Procedural History

On February 1, 2006, AMGRO filed suit against Lincoln General for its refusal to

refund the premium payments AMGRO made on behalf of the Policyholders. On August

23, 2006, Lincoln General filed a third-party complaint against Grossbard and MacGregor
 Northern Financial and its CEO, Richard Pisacane, were also named as defendants in 5

Lincoln General’s third-party complaint. Lincoln General charged Northern Financial

with breach of contract and unjust enrichment and Pisacane with fraud, civil conspiracy,

and unjust enrichment. On August 8, 2005, Lincoln General had filed a similar complaint

in the United States District Court for the Middle District of Pennsylvania against

Northern Financial, Pisacane, Grossbard, and MacGregor. That complaint charged

Northern Financial with breach of contract and Pisacane with fraud, civil conspiracy and

unjust enrichment. On May 25, 2006, the United States District Court for the Middle

District of Pennsylvania entered default judgments against Northern Financial on the

breach of contract claim and Pisacane on the fraud claim. On July 14, 2006, the Middle

District of Pennsylvania action was transferred to the District of New Jersey and

consolidated with the case now before us.

6

alleging (1) tortious interference with contract, (2) unjust enrichment, and (3) civil

conspiracy.5

AMGRO moved for summary judgment on its claim against Lincoln General for

the premium payments. That motion was granted and Lincoln General was ordered to

return the premium payments and pay AMGRO a statutory penalty. N.J. Stat. Ann. §

17:29C-4.1 (providing statutory penalty where insurer retains unearned premiums). 

Grossbard and MacGregor also moved for summary judgment on Lincoln General’s

claims of civil conspiracy against Grossbard, tortious interference with contract against

MacGregor, and unjust enrichment against both Grossbard and MacGregor. The District

Court entered summary judgment in favor of Grossbard on the civil conspiracy and unjust

enrichment claims and in favor of MacGregor on the tortious interference with contract

claim. It denied MacGregor’s motion for summary judgment on Lincoln General’s unjust

enrichment claim. Shortly after the District Court decided the summary judgment

motions, the parties entered into a Consent Order and Final Judgment (the “Consent
 This section, entitled “Return of unearned premiums; penalty,” states: 6

Whenever an insurance policy or contract is canceled, the

insurer on notice thereof shall return to the insured, within a

reasonable time not to exceed 60 days of cancellation or notice,

whichever occurs last, or 60 days after the completion of any

payroll audit necessary to determine the amount of premium

earned while the policy was in force, on a short rate basis the

amount of gross unearned premiums paid; except for a policy or

contract for private passenger automobile insurance, which

amount of gross unearned premium shall be determined on a pro

rata basis. In the event that the insurer fails to return the gross

unearned premiums to the insured within the period provided for

herein, the insurer shall, as a penalty, in addition to the gross

unearned premium, return to the insured an additional amount

equal to 5% of the gross unearned premium computed on a

monthly basis for each month or part thereof past the final date

on which the refund was due.

7

Order”). In the Consent Order, the parties clarified the scope of their appeals and the

amounts at stake in the litigation.

II.

Lincoln General appeals the statutory penalty awarded to AMGRO and the entry

of summary judgment on its tortious interference with contract claim against MacGregor,

and its unjust enrichment and civil conspiracy claims against Grossbard. MacGregor

cross-appeals the denial of summary judgment on Lincoln General’s unjust enrichment

claim against it. Each of these issues will be discussed in turn.

A.

Lincoln General’s first issue on appeal pertains to the statutory penalty awarded to

AMGRO under N.J. Stat. Ann. § 17:29C-4.1. The District Court held that under New 6
N.J. Stat. Ann. § 17:29C-4.1.

 This section, entitled “Application of unearned premiums,” states: 7

(a) Whenever a financed insurance contract is canceled, the

insurer on notice of such financing shall return whatever gross

unearned premiums are due under the insurance contract to the

premium finance company for the account of the insured or

insureds within a reasonable time, not to exceed 60 days after

the effective date of cancellation, or 60 days after the

completion of any payroll audit necessary to determine the

amount of premium earned while the policy was in force. Such

audit shall be performed within 30 days after the effective date

of cancellation.

(b) In the event that the crediting of return premiums to the

account of the insured results in a surplus over the amount due

from the insured, the premium finance company shall refund

such excess to the insured provided that no such refund shall be

required if it amounts to less than $1.00.

(c) In the event that the premium finance company fails to return

the amount due to the insured within the period designated, the

company shall, as a penalty, in addition to the amount due to the

insured, return to the insured an additional amount equal to 5%

of the amount due to the insured computed on a monthly basis

for each month or part thereof past the final date on which the

refund was due.

N.J. Stat. Ann. § 17:16D-14.

8

Jersey law, Lincoln General must pay a penalty of five percent “of the gross unearned

premium,” computed on a monthly basis for each month or part thereof past the final date

on which the refund was due. Id. The District Court also looked to N.J. Stat. Ann. §

17:16D-14(a) for confirmation that New Jersey law places the obligation of returning 7

unearned insurance premiums following a policy cancellation solely on the insurer.
9

Lincoln General raises three arguments against the statutory penalty: (1) that the

two statutes, N.J. Stat. Ann. § 17:29C-4.1 and N.J. Stat. Ann. § 17:16D-14, do not apply

to AMGRO, (2) that AMGRO is equitably estopped from receiving the statutory penalty,

and (3) that AMGRO would be unjustly enriched by the statutory penalty because it was

not damaged by Lincoln General’s failure to return the insurance premium payments. 

None of these arguments is availing.

1.

Lincoln General argues that N.J. Stat. Ann. § 17:29C-4.1 is inapplicable because it

only applies to premiums paid by the insured—not premiums paid by a premium

financing company such as AMGRO. This argument fails. While the statute identifies

“the insured” as the entity permitted to seek statutory penalties from the insurer, N.J. Stat.

Ann. § 17:29C-4.1, an insurance “premium finance company [may] step[] in[to] the shoes

of the insured for all payments and setoffs[.]” Sheeran v. Sitren, 403 A.2d 53, 58 (N.J.

Super. Ct. Law Div. 1979); see also id. at 61 (stating that “unearned premiums ultimately

belong to [the] insureds . . . or those who stand in their shoes, such as [insurance

premium] financing companies”). Here, AMGRO contracted for the right to “any and all

unearned premiums . . . which may become payable under the [Policyholders’] policies”

in its financing agreements with the Policyholders. See, e.g., Qualified Transportation &

Logistics Premium Finance Agreement ¶ 1 (assigning AMGRO “any and all unearned

premiums”). Thus, AMGRO, standing in the shoes of the Policyholders, was properly
 Lincoln General also argues that it did not receive the notice required under N.J. Stat. 8

Ann. § 17:16D-14(a) for that statute to be invoked by AMGRO. But as the District Court

correctly observed, there is no temporal limitation on when notice must be provided. N.J.

Stat. Ann. § 17:16D-14(a) (providing that insurer “on notice of . . . financing” must return

unearned premiums to the premium finance company). Even if notice was not provided

under N.J. Stat. Ann. § 17:16D-14(a), the import of that failure on AMGRO’s ability to

seek statutory penalties under N.J. Stat. Ann. § 17:29C-4.1 is nil.

10

permitted to seek the statutory penalty provided in N.J. Stat. Ann. § 17:29C-4.1. Sheeran,

403 A.2d at 58; see also id. at 61.

According to Lincoln General, an interpretation of N.J. Stat. Ann. § 17:29C-4.1

that permits insurance premium finance companies to seek statutory penalties under that

statute renders N.J. Stat. Ann. § 17:16D-14(a) superfluous because those companies could

always seek relief under N.J. Stat. Ann. § 17:29C-4.1 as agents of the insured. This

argument is beside the point. AMGRO’s ability to stand in the shoes of the Policyholders

stems not from a statutory interpretation of N.J. Stat. Ann. § 17:29C-4.1, but instead from

the assignment of rights to the unearned premiums from the Policyholders to AMGRO. 

See Sheeran, 403 A.2d at 58; A.J. Armstrong Co. v. Janburt Embroidery Corp., 234 A.2d

737, 743 (N.J. Super. Ct. Law Div. 1967) (explaining that “under general principles of

law of assignment, the assignee succeeds to all the rights of his assignor”); N.J. Higher

Educ. Assistance Auth. v. Carlock, 589 A.2d 671, 673 (N.J. Super. Ct. Law Div. 1991)

(same).8

2.

Lincoln General argues that AMGRO should be equitably estopped from receiving

statutory penalties because it enabled Northern Financial to carry out the insurance
11

premium scam by failing to timely notify Lincoln General of its premium financing

arrangements with the Policyholders and granting considerable authority to MacGregor to

draft checks. According to Lincoln General’s brief, AMGRO “unjustifiably relied upon

[Northern Financial] or failed to take the necessary precautions to avoid suffering from

[Northern Financial’s] bad acts.” Thus, Lincoln General argues, AMGRO should be

punished for its failure to “take the necessary precautions to avoid suffering damage as a

result of the bad acts of another party of which it should [have] be[en] aware[.]”

The doctrine of equitable estoppel is “designed to prevent injustice[.]” Knorr v.

Smeal, 836 A.2d 794, 799 (N.J. 2003). Here, Lincoln General’s agent, Northern

Financial, profited from its fraudulent scheme at the expense of Lincoln General and

AMGRO. Indeed, most of Lincoln General’s accusations against AMGRO could also be

leveled against itself. It, too, failed to sniff out Northern Financial’s fraudulent scheme. 

In fact, Lincoln General set the fraud in motion by permitting Northern Financial to act as

its agent. Under these circumstances, in that AMGRO was duped by a fraudulent

scheme, we cannot say that estopping AMGRO’s claim would prevent injustice. See id.

Therefore, the doctrine of equitable estoppel is inapplicable.

Lincoln General also argues that it need not reimburse AMGRO for the

commissions that MacGregor kept from the sales of insurance policies to the

Policyholders. This argument fails for two reasons. First, Lincoln General waived this

argument in the Consent Order. It agreed that it “w[ould] not appeal [the] part of the

[District] Court’s Opinion and Order concerning [its] obligation to pay AMGRO the
12

unearned premiums for the policies at issue[.]” Consent Order Background ¶ 5; see Keefe

v. Prudential Prop. & Cas. Ins. Co., 203 F.3d 218, 222-23 (3d Cir. 2000) (explaining

waiver in the context of consent judgments). Lincoln General agreed to return the entire

amount of the unearned premiums, not the unearned premiums less MacGregor’s

commissions. Second, even if this argument was not waived, the statute demands full

payment of “gross unearned premiums” by the insurer. N.J. Stat. Ann. § 17:29C-4.1.

3.

Lincoln General argues that the statutory penalty should not apply because

AMGRO did not suffer damages from its failure to return the insurance premium

payments. Awarding the statutory penalty, Lincoln General argues, would unjustly enrich

AMGRO. The text of the statute belies Lincoln General’s assertion that AMGRO must

produce evidence of damages to avail itself of the statutory penalty. N.J. Stat. Ann. §

17:29C-4.1 (stating that “the insurer shall, as a penalty, . . . return to the insured an

additional amount equal to 5% of the gross unearned premium computed on a monthly

basis for each month or part thereof past the final date on which the refund was due”)

(emphasis added). The use of the word “shall” in a statute “normally creates an

obligation impervious to judicial discretion,” Lexecon Inc. v. Milberg Weiss Bershad

Hynes & Lerach, 523 U.S. 26, 35 (1998) (quoting Anderson v. Yungkau, 329 U.S. 482,

485 (1947)), and Lincoln General produces no compelling authority suggesting that this

statute should be interpreted otherwise. Accordingly, Lincoln General’s argument fails

because the plain meaning of the statute does not support its interpretation. Rubin v.
 A claim for tortious interference with contractual relationship requires “(1) the 9

existence of the contract[;] (2) interference which was intentional and with malice; (3) the

loss of the contract or prospective gain as a result of the interference; and (4) damages.” 

Velop, Inc. v. Kaplan, 693 A.2d 917, 926 (N.J. Super. Ct. App. Div. 1997) (citing

Printing Mart-Morristown v. Sharp Elecs., 563 A.2d 31, 37-38 (N.J. 1989)).

13

United States, 449 U.S. 424, 430 (1981). In sum, Lincoln General’s arguments against

the statutory penalty award are unavailing and we conclude that the District Court

properly awarded AMGRO the statutory penalty.

B.

Lincoln General challenges the District Court’s entry of summary judgment for

MacGregor on Lincoln General’s tortious interference with contract claim. It asserts that 9

MacGregor tortiously interfered with its contract with Northern Financial by issuing

unauthorized temporary identification cards. According to Lincoln General, had

MacGregor not issued those cards it would have quickly discovered that Northern

Financial was not delivering insurance binders and premium payments to it in a timely

fashion.

Lincoln General has not shown evidence that MacGregor interfered with its

contract with Northern Financial. As the District Court explained, “[e]ven if MacGregor

did[] as Lincoln General asserts[,] . . . such conduct may constitute inappropriate or

negligent business practices but it in no way ‘interfered’ with the contract between

Northern Financial and Lincoln General.” Moreover, in effect, Lincoln General seeks to

hold MacGregor responsible for Northern Financial’s non-payment of premiums and for
 “To establish unjust enrichment, a plaintiff must show both that defendant received a 10

benefit and that retention of that benefit without payment would be unjust.” VRG Corp.

v. GKN Realty Corp., 641 A.2d 519, 526 (N.J. 1994). “The unjust enrichment doctrine

requires that plaintiff show that it expected remuneration from the defendant at the time it

performed or conferred a benefit on defendant and that the failure of remuneration

enriched defendant beyond its contractual rights.” Id.

14

this reason, it must fail: “[T]he rule of tortious interference was not meant to upset the

rules governing the contractual relationship itself.” Printing Mart-Morristown, 563 A.2d

at 38. “Where a person interferes with the performance of his or her own contract, the

liability is governed by principles of contract law.” Id. Here, Lincoln General’s

allegations are essentially based on Northern Financial’s non-payment of insurance

premiums—an issue that is “governed by the principles of contract law,” not tort law. Id.

In other words, Northern Financial was “interfer[ing] with the performance of [its] own

contract” by engaging in its fraudulent scheme. Id. Even if MacGregor interfered with

Lincoln General’s contract with Northern Financial, its actions do not rise to the

intentional infliction of harm “without justification or excuse” needed to show malice. 

Velop, Inc., 693 A.2d at 926 (quoting Printing Mart-Morristown, 563 A.2d at 39). 

Accordingly, we agree with the District Court that Lincoln General’s tortious interference

with contract claim cannot survive summary judgment.

C.

Lincoln General also appeals the District Court’s entry of summary judgment for

Grossbard on its unjust enrichment claim against him. It appears that Lincoln General is 10

arguing that Grossbard was unjustly enriched both as an agent of Northern Financial and
 Civil conspiracy requires showing a “combination of two or more persons acting in 11

concert to commit an unlawful act, or to commit a lawful act by unlawful means, the

principal element of which is an agreement between the parties to inflict a wrong against

or an injury upon another, and an overt act that results in damage.” LoBiondo v.

Schwartz, 970 A.2d 1007, 1029 (N.J. 2009) (internal quotation omitted).

15

in his individual capacity. Under either theory, Lincoln General’s claim fails to survive

summary judgment. First, to the extent that Lincoln General’s claim is based on

Grossbard’s actions as a Northern Financial officer, any such claim would be governed by

the express contract between Northern Financial and Lincoln General. See C.B. Snyder

Realty Co. v. Nat’l Newark & Essex Banking Co., 101 A.2d 544, 553 (N.J. 1953); Moser

v. Milner Hotels, Inc., 78 A.2d 393, 393 (N.J. 1951); Winslow v. Corporate Express, Inc.,

834 A.2d 1037, 1046 (N.J. Super. Ct. App. Div. 2003). “In light of this express contract,

there is no basis . . . for [Lincoln General] to pursue a . . . claim for unjust enrichment.” 

Winslow, 834 A.2d at 1046. As for an unjust enrichment claim against Grossbard in his

individual capacity, after examining the record, and in light of Lincoln General’s failure

to identify evidence suggesting otherwise, we agree with the District Court’s

determination that Grossbard received no benefit from Lincoln General. Grossbard

cannot be held liable for unjust enrichment when he received no benefit. VRG Corp., 641

A.2d at 526. Thus, we agree with the District Court that summary judgment on this claim

was proper.

D.

Lincoln General also appeals the District Court’s entry of summary judgment for

Grossbard on its civil conspiracy claim. This claim fails to survive summary judgment 11
 Grossbard testified during his deposition that he never had business dealings with 12

Pisacane prior to Pisacane’s introduction to him by a colleague:

Q: Did you have any form of business relationship [before

your colleague introduced you to Pisacane]?

A: No.

Q: Were you ever involved in any business dealings

together—

A: No.

Grossbard interacted with Pisacane only “at the very beginning and very end” of the

relationship between MacGregor and Northern Financial:

Q: Other than Rich Pisacane did you ever deal with anybody

else at [Northern Financial]?

A: Well, I never really dealt with Rich except for at the very

beginning and very end. 

In total, Grossbard interacted with Pisacane a handful of times and none of those

interactions suggested a conspiratorial agreement between the two individuals.

 Grossbard testified as follows: 13

Q: Now, during the ‘03-‘04 time period did MacGregor

continue to underwrite business for [Northern Financial]?

A: From what I knew then or what I know now?

16

because Lincoln General never sets forth any evidence showing that Grossbard and

Pisacane entered into an “agreement . . . to inflict a wrong against . . . another.” 

LoBiondo, 970 A.2d at 1029. “An unwitting party[, like Grossbard,] may not be liable

under a conspiracy theory.” Banco Popular N. Am. v. Gandi, 876 A.2d 253, 263 (N.J.

2005). Grossbard’s undisputed testimony shows that he had extremely limited

interactions with Pisacane. He had almost no knowledge of the day-to-day dealings 12

between MacGregor and Northern Financial. Thus, at best, Grossbard was an 13
Q: What you knew then.

A: I didn’t know very much then because I don’t get that

involved in this aspect of the business.

17

“unwitting party” to Northern Financial’s fraudulent scheme. See Banco Popular N. Am.,

876 A.2d at 263. Lincoln General points to nothing in the record suggesting a

conspiratorial agreement between Grossbard and Pisacane. As such, we agree with the

District Court that Lincoln General’s conspiracy claim against Grossbard cannot survive

summary judgment.

E.

Having disposed of Lincoln General’s appeal, we now turn to MacGregor’s crossappeal of the District Court’s denial of its motion for summary judgment on Lincoln

General’s unjust enrichment claim against it. MacGregor argues that it lacked a direct

relationship with Lincoln General and therefore could not have been unjustly enriched. 

See Callano v. Oakwood Park Homes Corp., 219 A.2d 332, 335 (N.J. Super. Ct. App.

Div. 1966). But MacGregor’s own Statement of Undisputed Material Facts filed in

support of its motion for summary judgment states otherwise:

• MacGregor contacted Lincoln General directly when Northern Financial

“failed to respond to [its] efforts to procure the final policy [for a

Policyholder.]” Statement of Undisputed Material Facts in Support of Mark

Grossbard and Bancar Associates, Inc. d/b/a David MacGregor Company’s

Motion for Summary Judgment ¶ 107.

• MacGregor and Lincoln General directly communicated to resolve

discrepancies in insurance coverage created by Northern Financial’s

actions. For example, on February 26, 2005, MacGregor wrote Lincoln

General, outlining discrepancies in coverage between Northern Financial’s
18

binders purporting to provide Lincoln General insurance and Lincoln

General’s actual insurance policies. Id. ¶ 115. MacGregor asked Lincoln

General to “honor the binders issued by [Northern Financial].” Id. 

“MacGregor [also]. . . sent a number of subsequent letters to [Lincoln

General] concerning problems with [Northern Financial].” Id. ¶ 117.

• Lincoln General directly contacted MacGregor to inform MacGregor that it

had not received premium payments from Northern Financial. Id. ¶ 121. 

MacGregor responded by sending Lincoln General copies of its checks to

Northern Financial. Id. ¶ 122.

• Lincoln General notified MacGregor that it had cancelled several policies

MacGregor procured for its clients through Northern Financial. Id. ¶ 123. 

Given these facts, the relationship between Lincoln General and MacGregor was

sufficient enough for the unjust enrichment claim against MacGregor to survive summary

judgment. Unlike the plaintiff in Callano, Lincoln General repeatedly communicated

with MacGregor and both parties recognized that they were in some form of business

relationship. See Callano, 219 A.2d at 335. MacGregor expected the Lincoln General

policies to be issued to its clients and Lincoln General expected to be paid for those

policies. While both companies undoubtedly had relationships with Northern Financial,

they also had a relationship with each other that could give rise to an objective

expectation that MacGregor should return the commissions it earned in connection with

Northern Financial’s fraud. See Insulation Contracting & Supply v. Kravco, 507 A.2d

754, 760 (N.J. Super. Ct. App. Div. 1986). MacGregor’s retention of commissions for

sales of policies that were never delivered to the Policyholders could be viewed as the

receipt of an unjust benefit. See Callano, 219 A.2d at 334 (“The key words are enrich

and unjustly.”) (emphasis in original). Indeed, Lincoln General’s agreement to return all
19

unearned premiums to AMGRO, Consent Order Background ¶ 5, makes MacGregor’s

retention of the commissions seem unjust. The amount Lincoln General has agreed to

pay includes the commissions that MacGregor has retained. In other words, the Consent

Order requires Lincoln General to reimburse AMGRO for the cash that MacGregor is

retaining as commissions for sales of insurance policies that were never delivered. Any

recovery Lincoln General would receive from MacGregor would merely offset the

amount that it must already pay AMGRO. As such, we agree with the District Court and

conclude that denial of summary judgment on this claim was proper.

III.

Lincoln General has failed to show that the statutory penalty awarded to AMGRO

was improper. Except for the unjust enrichment claim against MacGregor, Lincoln

General has also failed to identify genuine issues of material fact that would permit its

claims against Grossbard and MacGregor to survive summary judgment. For these

reasons, we will affirm the District Court’s judgment.