3:23-cv-00126•Insurance Distribution Consulting, LLC v. Fidelity & Guaranty Life Insurance Company
Insurance Distribution Consulting, LLC v. Fidelity & Guaranty Life Insurance Company
3:23-cv-00126Txsd02.03.2026
Gesamter Gesetzestext
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS GALVESTON DIVISION INSURANCE DISTRIBUTION CONSULTING, LLC, Plaintiff. V. FIDELITY & GUARANTY LIFE INSURANCE COMPANY, Defendant. § § § § § § § § § § § CIVIL ACTION NO. 3:23-cv-00126 MEMORANDUM AND RECOMMENDATION Pending before me are two motions for summary judgment and a motion to exclude expert testimony filed by Defendant Fidelity & Guaranty Life Insurance Company. See Dkts. 49, 69, 80. Having reviewed the briefing, the record, the applicable law, and having heard the oral arguments of counsel, I recommend that Fidelity’s motions for summary judgment be granted and the motion to exclude expert testimony be denied as moot. BACKGROUND This is a suit filed by Plaintiff Insurance Distribution Consulting, LLC (“IDC”) against Fidelity, a life insurance and annuity company, for breach of an alleged contract to pay IDC commissions for Fidelity insurance policies sold by Freedom Equity Group (“FEG”), an independent marketing organization (“IMO”). IDC also sues Fidelity under 42 U.S.C. § 1981 for racial discrimination in contracting because Fidelity refused to purchase IDC’s interest in a contract between IDC and a nonparty IMO, Syncis Insurance Solutions. Fidelity distributes life insurance through a network of IMOs. IMOs identify and recruit agents to be appointed by carriers like Fidelity. Syncis became an IMO for Fidelity in 2010. Sometimes, an IMO brings another IMO or agency to Fidelity, and Fidelity places the new agency or IMO in the hierarchy or downline of the United States District Court Southern District of Texas ENTERED March 02, 2026 Nathan Ochsner, Clerk Case 3:23-cv-00126 Document 102 Filed 03/02/26 in TXSD Page 1 of 14
2 original IMO. Generally, when a life insurance policy is sold, Fidelity pays the topline agent (here, Syncis or FEG), and the topline agent is responsible for distributing commissions, if any, to the selling agent and any intermediaries in the hierarchy. IDC is an insurance consulting business that provides services to IMOs. IDC is owned by Michael Jones, his wife, and their minor children. Jones is IDC’s sole employee. Jones is a Black man of Jamaican descent. In 2012 or early 2013, IDC’s predecessor, Supreme Alliance, entered into a letter agreement with FEG, under which Supreme Alliance agreed to assist FEG in obtaining direct relationships with insurers. In return, FEG agreed to pay Supreme Alliance a certain percentage of its revenue received from insurance companies. Fidelity was not a party to that letter agreement. In March 2013, Supreme Alliance assigned its rights and obligations under the letter agreement to IDC. In 2014, IDC entered into a Distribution Consulting Agreement (“DCA”) with Syncis, under which IDC agreed to provide services to Syncis in exchange for a portion of Syncis’s commissions. Also in 2014, IDC, FEG, and Syncis entered into a Multi-Party Distribution Agreement under which Syncis and IDC would attempt to have FEG appointed as a sub-agent with various insurers. Fidelity was not a party to either agreement. In October 2014, IDC proposed that Fidelity appoint FEG as an agent to market Fidelity’s life insurance products. Fidelity agreed and placed FEG downline from Syncis. At Jones’s instruction, Fidelity paid all compensation on Fidelity’s products sold by FEG to Syncis or FEG. Syncis and FEG would then pay IDC a portion of those commissions in accordance with the DCA and the letter agreement. As noted, Fidelity was not a party to either of those agreements. Effective July 1, 2019, Fidelity removed FEG from the Syncis hierarchy and contracted directly with FEG. Around the same time, FEG ceased making payments to IDC. On March 24, 2020, IDC sued FEG in this District to recover IDC’s alleged share of commissions on Fidelity products sold by FEG (the “FEG Case 3:23-cv-00126 Document 102 Filed 03/02/26 in TXSD Page 2 of 14
3 Lawsuit”). The parties settled the FEG Lawsuit in May 2022. See Ins. Distrib. Consulting, LLC v. Freedom Equity Grp., LLC (“IDC v. FEG”), No. 3:20-cv-96, 2022 WL 1491967, at *6 (S.D. Tex. May 11, 2022). In 2023, IDC inquired whether Fidelity would purchase its interest in the DCA. Fidelity declined to acquire that interest. This lawsuit followed. IDC’s claims for breach of fiduciary duty, fraud, intentional interference with contractual and economic relations, and conspiracy were dismissed for failure to state a claim. See Dkt. 24. The remaining claims are for breach of contract and violation of 42 U.S.C. § 1981. Fidelity filed an initial motion for summary judgment addressing both the breach-of-contract and discrimination claims. See Dkt. 44 (sealed); Dkt. 49 (redacted). In response, IDC abandoned its express contract theory and asserted instead that an implied-in-fact contract existed between IDC and Fidelity. See Dkt. 53 at 22. Shortly thereafter, IDC requested and received permission to file a Second Amendment Complaint asserting breach of an implied contract. See Dkt. 66. Fidelity then requested and received permission to file a second motion for summary judgment directed to the implied-in-fact contract claim. See Dkt. 71. Fidelity’s second motion for summary judgment seeks dismissal of IDC’s breach- of-contract claim based on the alleged implied-in-fact agreement. See Dkt. 79 (sealed); Dkt. 80 (redacted). Fidelity has also filed a motion to exclude the expert testimony of Jones and Eddie Mire. See Dkt. 69. I heard oral argument on the summary judgment motions on February 20, 2026. On February 24, 2026, I permitted supplemental briefing on the issue of the terminability of unilateral contracts. See Dkt. 98. Below are my recommendations. SUMMARY JUDGMENT STANDARD Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “No genuine issue of material fact exists if the summary-judgment evidence is such that no reasonable juror could find in Case 3:23-cv-00126 Document 102 Filed 03/02/26 in TXSD Page 3 of 14
4 favor of the nonmovant.” Jenkins v. Methodist Hosp. of Dall., Inc., 478 F.3d 255, 260 (5th Cir. 2007). Evidence is viewed “in the light most favorable to the non- moving party.” QBE Ins. Corp. v. Brown & Mitchell, Inc., 591 F.3d 439, 442 (5th Cir. 2009) (citations omitted). “The moving party bears the initial burden of showing that there is no genuine issue for trial.” Duffy v. Leading Edge Prods., Inc., 44 F.3d 308, 312 (5th Cir. 1995). But where the movant does not bear the ultimate burden of proof at trial, his summary-judgment burden is satisfied by showing that the other party has a “failure of proof on an essential element of its claim.” Joseph ex rel. Est. of Joseph v. Bartlett, 981 F.3d 319, 329 (5th Cir. 2020). “If the defendant succeeds on that showing, the burden shifts to the plaintiff to demonstrate that there is a genuine issue of material fact and that the evidence favoring the plaintiff permits a jury verdict in the plaintiff’s favor.” Id. “[T]he non-movant must identify specific evidence in the summary judgment record demonstrating that there is a material fact issue concerning the essential elements of its case for which it will bear the burden of proof at trial.” Baranowski v. Hart, 486 F.3d 112, 119 (5th Cir. 2007) (quotation omitted). The nonmovant’s “burden will not be satisfied by some metaphysical doubt as to the material facts, by conclusory allegations, by unsubstantiated assertions, or by only a scintilla of evidence.” Boudreaux v. Swift Transp. Co., 402 F.3d 536, 540 (5th Cir. 2005) (quotation omitted). ANALYSIS A. IDC’S § 1981 CLAIM IDC claims that Fidelity discriminated against IDC based on race, in violation of § 1981, when Fidelity refused to purchase IDC’s interest in the DCA. Section 1981 affords everyone “the same right . . . to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens.” 28 U.S.C. § 1981(a). Case 3:23-cv-00126 Document 102 Filed 03/02/26 in TXSD Page 4 of 14
5 1. Burden-Shifting Framework In analyzing § 1981 claims where, as here, the plaintiff offers only circumstantial evidence of discrimination, 1 courts apply the burden-shifting framework established in McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). See Hager v. Brinker Tex., Inc., 102 F.4th 692, 698 (5th Cir. 2024). Under that framework, IDC must first establish a prima facie case of discrimination. See Byers v. Dall. Morning News, Inc., 209 F.3d 419, 425 (5th Cir. 2000). If IDC carries that burden, then Fidelity must provide a legitimate, nondiscriminatory reason for refusing to contract with IDC. See id. If Fidelity gives an adequate, non- discriminatory reason for refusing to contract with IDC, the burden shifts back to IDC who “must then prove, by a preponderance of the evidence, that the proffered reason was mere pretext for discrimination.” Id. 2. IDC Cannot Establish a Prima Facie Case of Discrimination “[T]he elements of the plaintiff’s prima facie case will necessarily vary according to the nature of the claim and the facts of the case.” Jeffrey v. Columbia Med. Ctr. at Lancaster Subsidiary LP, No. 01-10178, 2002 WL 31016499, at *5 (5th Cir. 2002). Where, as here, the alleged discrimination is a refusal to contract, IDC is required to show: (1) that [IDC is a member] of a protected class (this is clearly satisfied), (2) that [IDC] sought and w[as] qualified to receive an available contract, (3) that [IDC’s] contract proposal was rejected . . . , and (4) that a similarly-situated person or entity that was not in a 1 Sometimes a plaintiff offers direct evidence of discrimination. “[D]irect evidence includes any statement or written document showing a discriminatory motive on its face.” Portis v. First Nat’l Bank of New Albany, 34 F.3d 325, 329 (5th Cir. 1994). “Direct evidence is evidence which, if believed, proves the fact without inference or presumption.” Brown v. E. Miss. Elec. Power Ass’n, 989 F.2d 858, 861 (5th Cir. 1993). “If the plaintiff produces direct evidence that discriminatory animus played a role in the decision at issue, the burden of persuasion shifts to the defendant, who must prove that it would have taken the same action regardless of discriminatory animus.” Sandstad v. CB Richard Ellis, Inc., 309 F.3d 893, 896 (5th Cir. 2002). Here, IDC points to no evidence from which a reasonable factfinder could conclude that there was discriminatory intent without inference or presumption. Case 3:23-cv-00126 Document 102 Filed 03/02/26 in TXSD Page 5 of 14
6 protected class received a contract for which [IDC was] rejected or received a similar contract on more favorable terms. Id. Fidelity contends that IDC cannot establish a prima facie case of discrimination because (1) IDC cannot show that it sought and was qualified to receive an available contract, and (2) “IDC cannot show a similarly situated entity that was offered the same or a similar contract.” Dkt. 49 at 32–33. I need to address only the first issue. The law here is simple and straightforward: “The plaintiff must prove by a preponderance of the evidence that [he] applied for an available [contract].” Tex. Dep’t of Cmty. Affs. v. Burdine, 450 U.S. 248, 253 (1981) (emphasis added); see also Int’l Bhd. of Teamsters v. United States, 431 U.S. 324, 358 n.44 (1977) (“Although the McDonnell Douglas formula does not require direct proof of discrimination, it does demand that the alleged discriminatee demonstrate at least that his rejection did not result from . . . the absence of a vacancy in the job sought.”). Burdine and Teamsters are employment cases, but there is functionally no difference between refusal to hire and refusal to buy—both are refusals to contract. If “[a]n employer does not discriminate or retaliate illegally if it has no job opening,” then a company’s failure to accept an unsolicited offer also cannot be enough to support a prima facie case of discrimination. Adams v. Groesbeck Indep. Sch. Dist., 475 F.3d 688, 691 (5th Cir. 2007). IDC did not seek an available contract. Rather, IDC admits that “IDC sent letters [to Fidelity] asking for a purchase of IDC’s income stream.” Dkt. 53 at 35 (emphasis added). It is undisputed that these letters were unsolicited. An unsolicited offer is not an available contract. Because IDC cannot show that it sought an available contract, it cannot establish a prima facie case of discrimination. In its first summary judgment response, IDC acknowledged its burden to establish that it sought “an available contract.” Dkt. 53 at 35. Yet, at oral argument, IDC’s counsel stated that “[a]n available contract is not an element that I have read in the cases that I have seen.” Dkt. 97 at 7. It is well-established that a plaintiff Case 3:23-cv-00126 Document 102 Filed 03/02/26 in TXSD Page 6 of 14
7 simply cannot make out a prima facie case of discrimination for failure to contract without first demonstrating that there was an available contract. See, e.g., White v. Carolina Paperboard Corp., 564 F.2d 1073, 1088 (4th Cir. 1977) (holding that, even if the court assumed the employer’s hiring practice was discriminatory, a plaintiff could not establish a prima facie case of discrimination where there was no open position); Jones v. City of Springfield, 554 F.3d 669, 673 (7th Cir. 2009) (“Jones . . . simply has not presented enough evidence from which a jury could find that an open position actually existed. For that reason, he cannot make a prima facie case of discrimination.”); Exum v. U.S. Olympic Comm., 389 F.3d 1130, 1137 (10th Cir. 2004) (“An employer’s failure to promote a plaintiff to a non-existent position is not enough to support a presumption of intentional racial discrimination.”). To satisfy IDC’s burden to establish an available contract, IDC’s counsel argued that “if that is a requirement, [IDC] certainly had the ability to offer Fidelity the same value that they received from Syncis and FEG.” Dkt. 97 at 7. This argument refers to the fact that Fidelity had previously purchased equity stakes in both FEG and Syncis. There are several problems with IDC’s argument. First, the fact that Fidelity purchased equity stakes in Syncis and FEG in the past is not an indication that Fidelity had an available contract at the time IDC sent its unsolicited offer. In Adams—an employment discrimination case—the Fifth Circuit held that the jury’s finding that there was an available position was unsupported by the evidence where the plaintiff “submitted an unsolicited application” for a vacant position that school officials chose not to fill. 475 F.3d at 691. Similarly, the fact that Fidelity purchased equity stakes in the past was no indication that it was looking to purchase additional equity in other entities, and IDC’s unsolicited letter to Fidelity is not evidence of Fidelity’s intent. Second, IDC did not offer to sell equity to Fidelity. IDC offered “to sell its interest in the Distribution Consulting Agreement at a negotiated price consistent with [Fidelity]’s recent purchases of other distribution agreements and/or Case 3:23-cv-00126 Document 102 Filed 03/02/26 in TXSD Page 7 of 14
8 marketing companies.” Dkt. 50-1 at 99. In Haynes v. Pennzoil Co., the Fifth Circuit held that a plaintiff failed to establish a prima facie case of racial discrimination based on refusal to hire where Pennzoil hired four experienced attorneys and not plaintiff, who was only an entry level attorney. See 207 F.3d 296, 300–01 (5th Cir. 2000). Similarly, IDC cannot establish a prima facie case of discrimination by comparing Fidelity’s refusal to purchase an interest in the DCA with its past purchases of equity stakes in FEG and Syncis—comparing the two is “confusing apples with oranges.” Edwards v. Grand Casinos of Miss., Inc., 145 F. App’x. 946, 948 n.2 (5th Cir. 2005) (holding that the plaintiff failed to state a prima facie case of discrimination where his comparators were not similarly situated). 2 Because IDC cannot show that there was an available contract, IDC cannot establish a prima facie case of discrimination. This is an independent and sufficient reason for why IDC’s § 1981 claim fails. 3. IDC Cannot Establish Pretext Even if IDC could establish a prima facie case of discrimination, IDC’s § 1981 claim would still fail because Fidelity has proffered legitimate, non-discriminatory reasons for not contracting with IDC, and IDC has failed to demonstrate that each of those reasons were mere pretext for discrimination. Fidelity offers several reasons why it refused to purchase IDC’s interest in the DCA: (1) “Fidelity was not interested in purchasing an interest in a consulting contract or a stake in a product development company at the time of the transaction”; (2) “the DCA was subject to termination on 30 days’ notice, and, at the time of the proposed transaction, IDC was in breach of the DCA and subject to termination for cause” which Fidelity contends “negatively affected the value of the DCA”; and (3) “IDC’s litigious history was reason alone to reject future transactions.” Dkt. 49 at 34. 2 In its reply brief, IDC argues that “Fidelity failed to inquire whether it could purchase an equity interest in IDC.” Dkt. 53 at 36. IDC is surely not suggesting that it can establish a prima facie case of discrimination because Fidelity failed to inquire about a different interest than the one being offered in IDC’s unsolicited letter. Case 3:23-cv-00126 Document 102 Filed 03/02/26 in TXSD Page 8 of 14
9 IDC “fails to properly address” whether each of these reasons is a legitimate, non-discriminatory reason for why Fidelity refused to contract with IDC. Fed. R. Civ. P. 56(e). At oral argument, IDC’s counsel conceded that the burden fell to IDC to establish pretext. See Dkt. 97 at 18 (“We have that burden to establish pretext and recognize it.”). Accordingly, I consider it “undisputed for purposes of [Fidelity’s] motion” for summary judgment that Fidelity’s proffered reasons for not contracting with IDC are legitimate and nondiscriminatory. Fed. R. Civ. P. 56(e)(2). Thus, to survive summary judgment, IDC “must put forward evidence rebutting each of the nondiscriminatory reasons [Fidelity] articulates.” Jones v. Gulf Coast Rest. Grp., Inc., 8 F.4th 363, 368 (5th Cir. 2021) (quotation omitted). For purposes of this motion, I need to discuss only Fidelity’s third reason. IDC acknowledges Fidelity’s claim “that it did not buy out IDC’s interest [in the DCA] because IDC is a litigious party.” Dkt. 53 at 37. Specifically, Fidelity argues that “at the time IDC proposed [Fidelity buying IDC’s interest in the DCA, IDC] or its affiliate, Insigne, had sued FEG twice.” Dkt. 49 at 34. IDC does not dispute that it or its affiliate had twice sued FEG, or that an entity’s litigious disposition is a legitimate, non-discriminatory reason for refusing to contract with that entity. IDC’s only retort is a single sentence: “However, FEG and its principals are highly litigious.” Id. In support of this single sentence, IDC cites paragraph 24 of Jones’s affidavit: “Based on my work with FEG over the years, I am aware of FEG’s litigation history. FEG and its principals were highly litigious. I know of at least twenty cases in which FEG and its principals were parties during my relationship with them.” Dkt. 53-2 at 7. “Unsubstantiated assertions, improbable inferences, and unsupported speculation are not sufficient to defeat a motion for summary judgment.” Brown v. City of Houston, 337 F.3d 539, 541 (5th Cir. 2003). Jones does not identify the “at least twenty cases” that he contends demonstrate that “FEG and its principals were highly litigious.” Dkt. 53-2 at 7. Nor does Jones attempt to describe how these unidentified cases mirror IDC’s own litigation history or explain how Fidelity’s Case 3:23-cv-00126 Document 102 Filed 03/02/26 in TXSD Page 9 of 14
10 desire to avoid partnering with a litigious entity is pretext. Indeed, it stands to reason that at least two of the cases in which Jones knew FEG and its principals to be parties to litigation were the cases in which IDC or its affiliate sued FEG and its principals. IDC pointing to such suits to demonstrate FEG’s litigiousness does nothing to advance IDC’s pretext argument. “[T]he plaintiff must produce substantial evidence indicating that the proffered legitimate nondiscriminatory reason is a pretext for discrimination.” Laxton v. Gap Inc., 333 F.3d 572, 578 (5th Cir. 2003). A single, unsubstantiated assertion is not substantial evidence. Because IDC has failed to produce substantial evidence that Fidelity’s legitimate, non-discriminatory reason for refusing to contract with IDC—because IDC is a litigious entity—is a pretext for discrimination, Fidelity is entitled to summary judgment on IDC’s § 1981 claim. B. IDC’S BREACH -OF -I MPLIED -CONTRACT CLAIM IDC contends that Fidelity “became bound,” via an implied-in-fact contract, “to allow IDC to control the flow of proceeds derived from FEG’s sale of Fidelity’s products” when IDC “delivered the relationship with FEG to Fidelity.” Dkt. 66 at 10 (cleaned up). In its response to Fidelity’s second motion for summary judgment, IDC argues that its implied-in-fact contract with Fidelity is a unilateral contract. See Dkt. 83 at 17–18. IDC claims that Fidelity breached this implied-in-fact, unilateral contract “by removing FEG from IDC’s downline and no longer allowing IDC to control the flow of payments arising from FEG’s sale of Fidelity products.” Id. at 11 (cleaned up). 1. Texas Contract Law “‘The elements of a contract, express or implied, are identical’ in Texas.” Lifshen v. 20/20 Acct. Sols., L.L.C., 858 F. App’x. 704, 706 (5th Cir. 2021) (quoting Plotkin v. Joekel, 304 S.W.3d 455, 476 (Tex. App.—Houston 2009, pet. denied)). As the Texas Supreme Court has explained: A plaintiff asserting a breach-of-contract claim must prove (1) the existence of a valid contract; (2) the plaintiff performed or tendered performance as the contract required; (3) the defendant Case 3:23-cv-00126 Document 102 Filed 03/02/26 in TXSD Page 10 of 14
11 breached the contract by failing to perform or tender performance as the contract required; and (4) the plaintiff sustained damages as a result of the breach. USAA Tex. Lloyds Co. v. Menchaca, 545 S.W.3d 479, 501 n.21 (Tex. 2018) (cleaned up). Here, it is the first element—the existence of a valid contract—that Fidelity disputes. To prove the first element (the existence of a valid contract), the plaintiff must establish that (1) an offer was made; (2) the other party accepted in strict compliance with the terms of the offer; (3) the parties had a meeting of the minds on the essential terms of the contract (mutual assent); (4) each party consented to those terms; and (5) the parties executed and delivered the contract with the intent that it be mutual and binding. Id. I need not decide, however, whether the parties had a valid contract. Even if I assume, arguendo, that the parties had a valid, implied-in-fact contract, it simply cannot be the case, as IDC suggests, that the contract—or IDC’s rights in the contract—are perpetual. 2. Fidelity Was Free to Terminate the Alleged Implied Contract It is settled Texas law “that contracts which contemplate continuing performance (or successive performances) and which are indefinite in duration can be terminated at the will of either party.” Clear Lake City Water Auth. v. Clear Lake Utilities Co., 549 S.W.2d 385, 390 (Tex. 1977). “Moreover, [the Fifth Circuit] does not favor perpetual contracts and presumes that any such contract is terminable at will.” Trient Partners I Ltd. v. Blockbuster Ent. Corp., 83 F.3d 704, 708 (5th Cir. 1996) (cleaned up). IDC’s only arguments on this point are that (1) “[t]here is certainly no holding that a party cannot breach a terminable-at-will contract”; (2) “Fidelity only terminated upline IMOs for cause, and there was no cause here”; and (3) unilateral contracts are not terminable at will. Dkt. 83 at 24; see also Dkt. 99. But Fidelity has never argued that a party cannot breach a terminable-at- will contract. Rather, Fidelity argues that there was nothing to breach because payments to IDC ceased only after Fidelity took FEG direct, thereby terminating Case 3:23-cv-00126 Document 102 Filed 03/02/26 in TXSD Page 11 of 14
12 whatever contract existed between Fidelity and IDC. See Dkt. 80 at 28 (“Fidelity did not breach the alleged implied in fact contract by terminating it.”). As for IDC’s argument that Fidelity could only terminate upline IMOs for cause, there is simply no evidence in the record to support such an argument. IDC argues that Fidelity’s Vice President of Agency Services for Fidelity, Cindy McGarity, “testified that Fidelity only terminated upline IMOs for cause, and there was no cause here.” Dkt. 83 at 24. That argument misconstrues McGarity’s testimony. McGarity indeed testified about instances in which Fidelity would move a downline agent direct to Fidelity “for cause,” but she also reiterated, repeatedly, that Fidelity had “the right to be able to take the downline [direct] if [Fidelity] chose to.” Dkt. 83-3 at 128:22–129:4. In testifying that Fidelity always had the right to terminate, McGarity admitted no exceptions. See id. at 130:16–17 (“Fidelity always had the right to terminate agents.”); id. at 130:25 (“I mean, our agreements allowed us to terminate.”). IDC offers no evidence beyond McGarity’s testimony to support its argument that its terminable-at-will contract with Fidelity was terminable only for cause. Thus, assuming that Fidelity and IDC had an implied contract, such a contract was terminable at will, and Fidelity effectively terminated any such contract when it took FEG direct. Finally, IDC did not have a unilateral contract with Fidelity. “IDC alleges a bilateral contract: it admits it promised to manage agents in its downline and promised to guarantee certain debts of FEG, and that these promises were necessary for FEG to be placed in its downline. These obligations terminated when Fidelity took FEG direct.” Dkt. 101 at 2 (cleaned up). In his affidavit, Jones declares that carriers like Fidelity rely on IMOs like IDC (IDC considers itself an IMO) to manage the agents who distribute the carriers’ products. See Dkt. 53-2 at 2. Moreover, Jones admits that he had to “guarantee any obligations of FEG” in order for Fidelity to accept FEG through Syncis. See id. at 3. “As such, [IDC] assumed all the risk of bringing FEG on board with Fidelity.” Id. at 4. IDC’s assumption of FEG’s risk was a continuing obligation on IDC’s part, which made any implied Case 3:23-cv-00126 Document 102 Filed 03/02/26 in TXSD Page 12 of 14
13 contract that IDC had with Fidelity a bilateral contract that was terminable at will. When Fidelity took FEG direct, IDC’s continuing obligation to assume FEG’s risk ceased. IDC’s continuing obligation to assume FEG’s risk not only made any contract that IDC had with Fidelity bilateral and terminable at will, but that continuing obligation of risk is also the reason the IDC does not have a vested right in any contract it may have had with Fidelity. 3. IDC Did Not Have a Vested Right Through Fidelity IDC’s only retort to the inescapable fact that any implied contract it had with Fidelity was terminable at will is to argue that IDC had a vested right in Fidelity keeping FEG in IDC’s downline. IDC’s only support for its vested-right argument is a snippet of my memorandum and recommendation in IDC v. FEG. See Dkt. 83 at 25. What IDC conveniently ignores is that even in IDC v. FEG—where the parties had an express contract—I said: “I cannot say for certain whether any rights to compensation vested prior to FEG’s termination of the Purported Contract. From my perspective, the contractual language at issue is far from definite and conclusive.” 2021 WL 5545231, at *6. Here, as Fidelity notes, Jones’s own declaration defeats any vested rights argument. According to Jones, Fidelity’s acceptance of FEG was conditioned on IDC’s management of FEG and Fidelity’s “being able to recover any funds owed by FEG to Fidelity arising out of the relationship . . . from Syncis’ stream of income from Fidelity.” Dkt. 83-2 at 3. Thus, IDC’s rights under any contract with Fidelity were not vested—they were contingent on IDC continuing to manage FEG and guarantee FEG’s debts. Once Fidelity took FEG direct, IDC no longer managed FEG and no longer guaranteed FEG’s debts. Any implied-in-fact contractual relationship ended when Fidelity took FEG direct, and there was no breach. Thus, Fidelity is entitled to summary judgment on IDC’s breach-of-contract claim. Case 3:23-cv-00126 Document 102 Filed 03/02/26 in TXSD Page 13 of 14
14 CONCLUSION For the reasons discussed above, I recommend that Fidelity’s motions for summary judgment (Dkts. 44, 79) be granted and Fidelity’s motion to exclude expert testimony (Dkt. 69) be denied as moot. The parties have 14 days from service of this memorandum and recommendation to file written objections. See 28 U.S.C. § 636(b)(1)(C); Fed. R. Civ. P. 72(b)(2). Failure to file timely objections will preclude appellate review of factual findings and legal conclusions, except for plain error. SIGNED this ____ day of March 2026. ______________________________ ANDREW M. EDISON UNITED STATES MAGISTRATE JUDGE Case 3:23-cv-00126 Document 102 Filed 03/02/26 in TXSD Page 14 of 14
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