## Facts

- Guardian Mutual Life Insurance Co. appointed Fudickar as an insurance agent under an agreement compensating him through commissions on new policies and renewal premiums on policies he procured.
- Before the relationship would otherwise have ended, the company terminated Fudickar’s agency.
- Fudickar alleged the termination was without cause and breached the agency agreement.
- He sought damages including lost compensation and claimed entitlement to prospective profits, including the present value of expected renewal premiums on policies already written through his efforts.
- The dispute focused on whether, and to what extent, expected future commissions—especially renewal commissions—were recoverable after premature termination.

## Issues

1. When an insurance agent is discharged without cause in breach of an agency agreement providing for commissions and renewal premiums, may the agent recover future profits as damages?
2. Are renewal commissions tied to policies already procured recoverable as damages, and what limits apply to prevent awards based on speculation?

## Decision

- The New York Court of Appeals held that a wrongfully discharged agent may recover damages that include prospective profits only to the extent they are established with reasonable certainty.
- The court treated renewal commissions on policies already procured as potentially recoverable expectancy damages when supported by the contract and proof.
- The court rejected open-ended or conjectural claims for indefinite future renewals or other speculative future earnings.
- The court adjusted the damages approach applied below to conform to these limits.

## Legal Principles

- Breach of an agency agreement by termination without cause permits recovery of compensatory damages measured by the agent’s contract expectancy.
- Anticipated profits are recoverable only when they are the natural and probable result of the breach and can be proven with reasonable certainty.
- Renewal commissions connected to policies already obtained by the agent may be part of recoverable damages because they flow from business the agent produced, but recovery is limited to amounts supported by evidence rather than conjecture.
- Damages must not function as a penalty; they must reflect a fair estimate of loss grounded in contract terms and proof of likely future payments.

## Conclusion

The court recognized renewal commissions and other future earnings as potentially recoverable components of expectation damages for wrongful termination of an insurance agency, but limited recovery to reasonably certain, evidence-based amounts and disallowed speculative projections.


Fudickar v. Guardian Mut. Life Ins. Co., 62 N.Y. 392 (1875)