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Home Life Insurance Co. v. Morris

Decided: March 8, 1950.


Stein, J.s.c.


[7 NJSuper Page 512] This suit is one in the nature of an equitable replevin.

Defendant was a full-time employee of plaintiff under a written contract. His employment and contract were terminated as of June 30, 1949.

After notice of and before termination of his employment, defendant, without plaintiff's knowledge or consent, removed from plaintiff's files the "Planned Estate Folders for Clients" and contents, which are the subject matter of this suit.

The folders constitute the plaintiff's record of the results which defendant and other employees were hired and paid to accomplish.

The defendant, called a "Field Underwriter," like plaintiff's other employees in the same category, was hired to further plaintiff's system of doing business which it designates as "Planned Estates." The plaintiff's system of "Planned Estates" is a substantial aid to it in increasing the volume of its business. It consists of selecting as its prospects persons who have an estate or a reasonable prospect of acquiring one, and renders them service in the form of ascertaining from them in confidence their financial situation, family needs, amount and types of insurance carried, and similar facts, analyzing same and working out and recommending a long range financial plan for the client, having regard to taxes, education of children, and other factors. The plan is then submitted to the prospect for his approval. When approved it is put into effect and thereafter is automatically reviewed annually by the company to ascertain if there has been any change in the client's situation which renders a change in the plan desirable. If so, the matter is discussed with the client and the changes are made.

This service is rendered and continued without charge even though the client never takes insurance from the plaintiff. If his financial situation and family needs make the desirability of insurance or further insurance thereof apparent, the company endeavors to have such insurance placed with it. Experience over the years has shown that this service rendered without charge, results in the client immediately or eventually becoming holders of policies of plaintiff in about 33 1/3% of the cases, and that many of the remaining 66 2/3% because

of the good will created by the service rendered recommend plaintiff to their friends who frequently become policy-holders.

The system is carried out about as follows: The field underwriter of which the defendant was one is furnished a printed booklet outlining the service. He explains this in detail to the prospect. In the name and on behalf of plaintiff, and under a pledge of confidence by the company, he ascertains the confidential facts from the prospect and records them on a form furnished by plaintiff and gives it to the plaintiff's "Planning Department." The plaintiff's local office, in its name over the signature of its manager, acknowledges receipt to the prospect of the confidential facts. The planning department then analyzes the facts and records and works out a "Planned Estate" for the prospect. This is given to the field underwriter who discusses it with the prospect and upon its acceptance by him, the plan is returned to the planning department which then attends to the detail of putting it into effect. This frequently involves correspondence with other insurance companies in order to effect changes suggested by plaintiff's planning department.

Upon completion of the matter the original documents by which existing insurance is changed together with any new policies are delivered to the field underwriter who delivers them to the prospect who receipts for them to plaintiff.

The confidential facts, copies of documents and correspondence and receipts are kept in the folder. The folders are kept in steel cabinets as part of plaintiff's files, and are card indexed in such manner that they automatically come to the attention of plaintiff annually for the purpose of review. If a client asks for information or wishes to discuss his affairs, plaintiff having the folder can give a ready answer or discuss the matter intelligently -- which it could not do if it did not have such folder. If the client moves to another ...

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