Insurance Distribution Consulting, LLC v. Fidelity & Guaranty Life Insurance Company

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
GALVESTON DIVISION
INSURANCE DISTRIBUTION
CONSULTING, LLC,
Plaintiff.
V.
FIDELITY & GUARANTY LIFE
INSURANCE COMPANY,
Defendant.
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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
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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
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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
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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).
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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.
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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
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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
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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.
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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
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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
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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
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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
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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