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January 8, 2004.


The opinion of the court was delivered by: HERBERT HUTTON, District Judge


Presently before the Court is Defendant Jackson National Life Insurance Company's Motion for Summary Judgment (Docket No. 24), Plaintiff David Lipson's response thereto (Docket No. 38), and Defendant's reply (Docket No. 40).


  This suit arises out of Plaintiff David Lipson's resignation from Jackson National Life Insurance Company ("Jackson National") on October 1, 1995. Jackson National is a Michigan corporation selling insurance policies and annuities throughout the United States. Jackson National maintains a network of regional offices through which it derives a great part of its business with independent insurance agents. Each regional office is operated by a regional manager and staffed by brokerage managers. Lipson began working as a brokerage manager for Jackson National in 1985.

  In May 1989, Lipson was promoted to Regional Manager of Page 2 Jackson National's new Delaware Valley regional office. His compensation was outlined in an April 24, 1989 Memorandum, entitled "Compensation Structure — Delaware Valley Regional Manager." Lipson's compensation was a percentage of the insurance premiums, both new and renewals, for business that originated in Pennsylvania, New Jersey, and Delaware. Lipson's commission on term and whole life insurance renewal premiums was set at 1 percent. The compensation structure also required Lipson to pay a portion of his commission earnings to his clerical staff and brokerage managers. In 1990, all the regional managers consented to a slight change on the renewal commission rates. See Lipson Decl. at ¶¶ 4-5 (Docket No. 39, Ex. H); Dec. 13, 1990 Mem. re: "DAC Changes" (Docket No. 24, Ex.G).

 A. New England Servicing

  In early 1994, Lipson was asked to commence preliminary operations in the New England area. Specifically, Lipson was to start marketing Jackson National's products and licensing brokers and agents in the area. In return, Lipson would receive commissions on policies sold in the area until Jackson National officially opened a New England regional office in October 1994.

  According to Jackson National, in the spring of 1995, it discovered an overpayment of $30,000 to the Delaware Valley regional office. See Def.'s Mem of Law at 7 (Docket No. 24); Morrison Dep. at 95-99 (Docket No. 39, Ex. J). The money was Page 3 supposed to go to the New England office but a coding error led to payment to the Delaware Valley office instead. Lipson was notified of the overpayment and that Jackson National planned to recoup the overpayment by deducting approximately $5,000 per month from the Delaware Valley office from July through December 1995.

 B. Project Leapfrog

  In late 1994, Jackson National underwent a major restructuring, known as "Project Leapfrog," which centralized all renewal servicing at the company's headquarters.

  1. Commission Decrease

  Under Project Leapfrog, commission percentages on renewal premiums were decreased from 1 percent to 0.10 percent, effective January 1, 1995 and phased in gradually during the first half of 1995. See Feb. 1, 1995 Mem. re: New Regional Office Compensation Schedule (Docket No. 24, Ex. P). The reduced commission rates applied both to policies already sold and policies to be sold in the future.

  2. Hiring Additional Brokerage Managers

  In addition to changing the commission structure for regional managers, Project Leapfrog also directed the regional offices to focus a greater part of their work on sales and developing new business. In response, Lipson outlined his plans for the Delaware Valley office and wrote,

  I plan to hire at least two additional people to fill positions needed to obtain the growth expected during Page 4 1995. Within the next six weeks I plan on bringing on board another marketing specialist and/or brokerage manager and after the completion of moving all processing to a central location I plan on doing the same again.

 See Letter dated Nov. 18, 1994 re: Regional Office Selection Process — Delaware Valley (Docket No. 24, Ex. H) (emphasis added). According to Lipson, he hired one brokerage manager in March of 1995; however the brokerage manager did not work out and was quickly terminated. See Lipson Decl. at ¶ 9 (Docket No. 39, Ex. H). On March 31, 1995, Jackson National sent a letter to Lipson stating that he was "expected" to hire a new brokerage manager by June 1, 1995 and a second brokerage manager by September 1, 1995. See Mar. 31, 1995 Mem. to Lipson from Morrison (Docket No. 24, Ex. I). However, Lipson determined that, faced with declining sales, he could not afford to hire another brokerage manager at the time.

  On August 7, 1995, Lipson was informed that $4,033 would be deducted from his commission compensation for his failure to hire a brokerage manager. Lipson hired a brokerage manager in early September. On September 3, 1995, Lipson was again informed that $4,033 would be deducted from his compensation because of his failure to hire a second brokerage manager. The deductions were to continue until Lipson hired a second brokerage manager.

 C. Resignation

  Lipson resigned from his position on October 31, 1995. Lipson alleges that his resignation was the result of Jackson National's unlawful deductions from his income for his alleged failure to hire Page 5 additional brokerage managers, for alleged New England commission overpayments to Lipson, and for the ...

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