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Dave Kennett
Dave Kennett, Attorney
Category: Business Law
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Experience:  25 years practicing law
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If a person uses a company he owns and sues an insurance agency

Resolved Question:

If a person uses a company he owns and sues an insurance agency for insurance commissions totaling more than $100,000.00, knowing that his company does not have a valid insurance license and therefore not entitled to commissions and that the agency cannot pay commissions to any person or entity that does not have a valid lic, is this extortion? fraud? or both?
Submitted: 2 years ago.
Category: Business Law
Expert:  Dave Kennett replied 2 years ago.

-Could you explain your situation a little more?
How is he "using" a company he owns?

Is this a corporation or a proprietorship?

Is he represented by an attorney?

Please explain the circumstances.

Customer: replied 2 years ago.
I replied - do I need to keep waiting? Not sure what happens here
thanks
Expert:  Dave Kennett replied 2 years ago.
I have never received your reply. I have no idea where it went since I have no control over the website.
Customer: replied 2 years ago.
Ok
Since 2005, ABC Corp and XYZ Corp have had a insurance business referral and commission sharing verbal agreement. The relationship broke down in 2010 and neither firm continued payments to the other.
in 2010, XYZ sued ABC for breach of contract. ABC filed a counter claim against XYZ and it's owner. 2 weeks ago we had to check the lic status of another broker and at same time checked on the status of XYZ. We were able to confirm with Dep Dir IL Dept of Ins. that XYZ does not and never has had a valid insurance lic in IL. We filed for a motion to dismiss. The owner has a individual lic and is owner of another firm that has a lic. XYZ does not have a lic and he used a CPA and his lawyer to try and "shakedown" ABC for commissions that ABC could not lawfully pay to XYZ unless it had a ins lic. ABC has a lic and taking position XYZ is guilty of fraud, extortion and maybe deceptive practices, etc.
Expert:  Dave Kennett replied 2 years ago.

Dear JACUSTOMER - This can be reported to the state insurance commission as a violation of the license laws and a counterclaim can be filed for malicious prosecution of the lawsuit and a demand can be made for attorney fees. Whether you can say it is extortion is probably a reach since that would be up to a prosecuting attorney to decide if there is enough for criminal prosecution. Obviously you can file a criminal complaint but it is not your decision to make as to whether the case would be prosecuted. If the agreement was with one corporation and that corporation was not licensed then I see no way that a commission would be owed to an unlicensed agent so you definitely should not have any civil liability. If the person is trying to represent the corporation on a pro se basis and is not an attorney you can also file a motion to have the case dismissed on the basis of the unathorized practice of law by the individual since no non attorney can represent the interests of the corporation.

Here is the website for the IL Dept. of Ins.

http://insurance.illinois.gov/

Dave Kennett, Attorney
Category: Business Law
Satisfied Customers: 27686
Experience: 25 years practicing law
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