May 26, 1993
                   [NOT FOR PUBLICATION]

               UNITED STATES COURT OF APPEALS
                   FOR THE FIRST CIRCUIT
                                        

No. 91-1837

             BENEFIT MANAGEMENT OF MAINE, INC.,

                   Plaintiff, Appellant,

                             v.

            ALLSTATE LIFE INSURANCE CO., ET AL.,

                   Defendants, Appellees.

                                        

        APPEAL FROM THE UNITED STATES DISTRICT COURT

                 FOR THE DISTRICT OF MAINE

 [Hon. W. Arthur Garrity, Jr.,* Senior U.S. District Judge]
                                                          

                                        

                           Before

                    Selya, Circuit Judge,
                                        
               Coffin, Senior Circuit Judge,
                                           
                and Young,** District Judge.
                                           

                                        

Robert W. Harrington for appellant.
                   
William J. Kayatta, Jr. with whom Catherine R. Connors, Pierce,
                                                              
Atwood, Scribner, Allen, Smith &amp; Lancaster, John E. Hughes, III,
                                                          
Walter D. Willson, Wells, Wells, Marble &amp; Hurst, and Ralph J. Elwart
                                                               
were on brief for appellees.
                                        

                                        

                

*  Of the District of Massachusetts, sitting by designation.
** Of the District of Massachusetts, sitting by designation.

               YOUNG,  District  Judge.   From  a welter  of
                                      

various  claims,  sounding  in   both  contract  and   tort,

Appellant Benefit  Management of Maine, Inc.  ("Benefit"), a

retail purveyor  of various insurance products,  here raises

the  propriety  of two  pre-trial  rulings  as well  as  two

aspects of the directed  verdict which ultimately dashed its

hopes.   After a thorough review of the entire trial record,

we affirm.

               Since the  four issues raised on appeal arise

out  of the  contractual relations  between the  parties, we

sketch  those  matters briefly  at  the  outset  to put  the

following discussion in context.1

               On   or  about  September  9,  1983,  Benefit

executed  a  Group  Agency  Agreement  with  Northbrook Life

Insurance  Company ("Northbrook").   Under the  Group Agency

Agreement, Benefit  had an exclusive agency  to sell certain

Northbrook  group health  insurance products  in Maine,  New

Hampshire,  and Vermont.    On  or  about  April  13,  1984,

                    

1  As Benefit's case began  to sink on  summary judgment and
ultimately foundered  upon a  directed verdict, we  draw all
reasonable   inferences   in  Benefit's   favor  throughout.
Continental  Grain  Co.  v.  Puerto  Rico  Maritime Shipping
                                                            
Auth., 972 F.2d 426, 431  (1st Cir. 1992) (inferences  drawn
     
against  party prevailing  on summary judgment);  DiPalma v.
                                                         
Westinghouse Electric  Corp., 938 F.2d 1463,  1464 (1st Cir.
                            
1991) (inferences drawn against party prevailing on directed
verdict).

                            -2-
                             2

Northbrook  and  its  parent  Allstate  Life  Insurance  Co.

("Allstate")  contracted  with   Equitable  Life   Assurance

Society of the United States ("Equitable") to have Equitable

agents sell certain insurance products of Northbrook.  Since

this   Northbrook-Equitable  agreement   arguably  infringed

Benefit's exclusive agency,  Northbrook offered, and Benefit

accepted, an Amended Group Agency Agreement which  permitted

the  sales by the Equitable Agents in return for a reduction

in  Benefit's franchise  fee  as well  as added  contractual

protections for Benefit.

               On  March  18,  1988,   Northbrook,  claiming

severe  business losses,  sent  Benefit a  formal notice  of

withdrawal  and suspension pursuant  to the  Amended General

Agency  Agreement.2   At the  same time,  Northbrook offered

Benefit a limited Service Agreement ("the Northbrook Service

Agreement")  which allowed Benefit certain renewal marketing

and  extended  claims  paying authority  on  the  Northbrook

policies then in force which were being serviced by Benefit.

                    
2 This notice stated, in pertinent part:

       Current   business  conditions   have  caused
       Northbrook  to  revaluate  its  Group  Agency
       operations, resulting in our  withdrawal from
       the small-to-medium sized employer group life
       and health insurance market in certain market
       territories.

                            -3-
                             3

Likewise, Allstate offered Benefit a service agreement ("the

Allstate Service Agreement") which granted Benefit marketing

and  claims  administration  authority  for  certain  future

insurance business under the Allstate name.

               Benefit was reluctant to enter into these two

service   agreements   (collectively   the   "1988   Service

Agreements") since the  offer was extended  for but a  short

time and  then on a 'take  it or leave it  basis,' and since

the termination  provisions were  less favorable to  Benefit

than those found in  the  Amended General  Agency Agreement.

The   alternative,   however,   was   no   further  business

relationship at all  with a most lucrative  account.3  Since

Allstate  was  dangling  the   prospect  of  a  longer  term

relationship,4 Benefit signed.

                    
3 During 1988, Benefit derived more than 65% of its revenues
from its Northbrook  business --  a sum  of over  $2,000,000
from  which Benefit  received  commissions of  approximately
$665,000.

4 Allstate's agents communicated with Benefit as follows:

       The term of the new Allstate contract is one year.
       We anticipate that during this year  major changes
       will   evolve  in   our  strategy   of  healthcare
       delivery.  . .  .   This  provision  has not  been
       included with  the idea  of terminating  without a
       continuation option.   It  has been placed  in the
       contract to prompt renegotiation more favorable to
       all  parties when  the cycle  is complete  and our
       local market strategy is solidified.

                            -4-
                             4

               Less  than  two months  later  Northbrook and

Allstate  gave notice  that they  were terminating  the 1988

Service Agreements with Benefit.

               This action ensued,  Benefit charging,  among

other  claims, breach of contract and fraud.  Certain of its

claims   succumbed  to   summary  judgment;   the  remainder

collapsed  when  the District  Court  allowed  a motion  for

directed  verdict  in  favor  of  Northbrook  and  Allstate.

Benefit's appeal raises four issues.

          1.  Denial  by the Magistrate  Judge of  Benefit's
                                                            

Motion
      

              to Compel
                       

               On April 23, 1991, in the course of preparing

for  trial, Benefit  moved to  compel discovery  of fourteen

documents  which Allstate  and Northbrook had  withheld from

production on the  grounds that they  were protected by  the

attorney-client privilege and the work-product doctrine.  In

support  of its  motion, Benefit  argued that  the documents

were subject to the crime-fraud exception to the privilege.

               After a  hearing and  an in camera  review of
                                                 

the documents, the Magistrate Judge denied the motion due to

Benefit's failure to make  the requisite prima facie showing
                                                    

of fraud.   On  June 10,  1991, Benefit  filed a  motion for

                            -5-
                             5

reconsideration.  No memorandum in support of the motion was

filed,  in violation of Local  Rule 19 of  the United States

District Court for the District  of Maine.  Instead, Benefit

submitted  an amended  Rule 19  Statement of  Material Facts

signed by  counsel for Benefit for  submission in opposition

to  the  pending summary  judgment  motion  by Allstate  and

Northbrook.   After a  hearing, the Magistrate  Judge denied

the motion to reconsider.   No transcript of the  hearing is

available in the record.

               On  July 10,  1991, the  first day  of trial,

Benefit filed a "Motion for Reconsideration By the Presiding

Judge of a 

Decision  of the Magistrate Judge Entered July 2, 1991."  No

supporting  memorandum  was  filed.    The  District   Judge

informed  Benefit that he would not  rule immediately on the

motion,  that he would not reverse the Magistrate Judge on a

"judgment call" on a discovery issue, but that "[i]f, on the

other hand,  there's a  matter of  law  here involved,  some

legal issue  that you  can indicate was  erroneously decided

and you are clearly right, well then, I would maybe hear you

at 4 o'clock  next Friday afternoon or  something."  Benefit

has  presented no  evidence that it  raised the  issue again

with the  District Court  or pressed  for a  ruling thereon.

                            -6-
                             6

Accordingly, we rule that  Benefit has waived this  issue by

its failure to develop the record in the District Court.

               Pursuant to 28  U.S.C.   636(b)(1)(A) (1991),

"[a] judge may designate a magistrate to hear and  determine

any  pretrial  matter   pending  before   the  court   [with

exceptions not relevant  here] . . . . A  judge of the court

may reconsider  any pretrial matter  under this subparagraph

(A) where it has  been shown that the magistrate's  order is

clearly  erroneous or contrary to law."  See also Park Motor
                                                            

Mart, Inc.  v. Ford Motor  Co., 616 F.2d 603,  604 (1st Cir.
                              

1980).   Consideration of discovery matters  by a magistrate

judge comes within the purview  of the above subsection (A).

See Detection Systems, Inc. v. Pittway Corp., 96 F.R.D. 152,
                                            

154  (W.D.N.Y. 1982);  Citicorp v.  Interbank Card  Assn, 87
                                                        

F.R.D.  43, 46  (S.D.N.Y. 1980).5   "Moreover,  in resolving

discovery  disputes,  the   Magistrate  is  afforded   broad

discretion  which   will  be  overruled  only   if  abused."

Detection  Systems, Inc.,  96 F.R.D.  at 154.   Interpreting
                        

                    

5 Subsection (b)(1)(B) of 28 U.S.C.   636 permits a district
judge to  designate a  magistrate judge to  conduct hearings
and to submit proposed  findings of fact and recommendations
regarding dispositive motions and other matters specifically
excepted from subsection (b)(1)(A).   A district judge shall
                                                            
make a de novo review  of these findings if a  party objects
                                           
within the required time period.  It is undisputed, however,
that subsection (b)(1)(A) applies  to the instant  discovery
matter.

                            -7-
                             7

this subsection, the First  Circuit has stated that "[u]nder

subsection (b)(1)(A) certain pretrial matters may be decided

without  further reference  to the  district judge,  but the

judge 'may reconsider . . . where it has been shown that the

magistrate's  order  is  clearly  erroneous or  contrary  to

law.'"  ParkMotor Mart,616 F.2d at604 (omission inoriginal).
                      

               In the  instant case, the  District Judge was

under no obligation to review the decision of the Magistrate

Judge.     The  District  Judge  here   offered  Benefit  an

opportunity to  present something concrete showing  that the

decision was clearly erroneous but the opportunity was never

exercised by  Benefit.   Other than  concerns as  to subject

matter jurisdiction, we are  reluctant to consider on appeal

a  matter  upon  which  the  District  Judge  was  given  no

opportunity  to rule.   Park  Motor Mart,  616 F.2d  at 605.
                                        

This  is a corollary of the well settled appellate rule that

"issues  adverted to  [on appeal]  in a  perfunctory manner,

unaccompanied by some effort at developed argumentation, are

deemed  waived."  United States  v. Zannino, 895  F.2d 1, 17
                                           

(1st Cir. 1990), cert.  denied, 494 U.S. 1082 (1990).   Upon
                              

this record, we conclude Benefit waived its challenge to the

ruling of the Magistrate Judge.

                            -8-
                             8

          2.   Exclusion  of  the  Group   Agency  Agreement
                                                            

Claims
      

               Benefit filed its complaint on June 19, 1990.

On the day  prior to the expiration  of its right to  amend,

Benefit moved to amend its  complaint and the District Court

duly  allowed this  motion.   When  Northbrook and  Allstate

challenged  the amended  complaint by  a motion  for summary

judgment, the briefing revealed a dispute concerning whether

Benefit had claimed, in  its amended complaint, a breach  of

the Amended  General Agency  Agreement.  The  District Court

ruled that no such claim  had been set forth in  the Amended

Complaint.  

               Benefit argues that mention of "contracts" in

Counts I and II  of the Amended Complaint are  references to

the  Amended General Agency Agreement as well as to the 1988

Service Agreements.  Benefit  also argues that references to

"agreements"  throughout the  Amended Complaint  are to  the

Amended  General  Agency  Agreement  and  the  1988  Service

Agreements.  Lastly, Benefit urges that it pursued its claim

for  breach of  the Amended  General  Agency Agreement  in a

number  of  significant  pleadings  and  that  Allstate  and

Northbrook  were  fully prepared  and  would  not have  been

prejudiced by the trial of these claims.

                            -9-
                             9

               These  arguments are unpersuasive.  A reading

of   the  Amended   Complaint  as   a  whole   supports  the

determination  of  the  District   Court  that  the  Amended

Complaint does not state  a claim for breach of  the Amended

General Agency Agreement.  In its recitation of the facts in

the Amended Complaint, Benefit makes a perfunctory reference

to Northbrook's  exercise of the  Withdrawal and  Suspension

clause of the Amended  General Agency Agreement by alleging,

"Northbrook  exercised  its   termination  power  under  the

Agreement."  This allegation does not challenge Northbrook's

actions in  any way.  Moreover,  a fair reading  of the word

"contracts"  in  Counts  I  and  II  is  most  reasonably  a

reference to the 1988  Service Agreements.  In fact,  as the

District  Court  observed,  Count  I  (alleging  breach   of

contract against  Allstate) could  not refer to  the Amended

General  Agency Agreement since Allstate  was not a party to

that  agreement and  had  no  contractual relationship  with

Benefit prior to the 1988 Allstate Service Agreement.

               Finally,  Benefit's  argument  that   it  has

pursued its claim  for breach of the Amended  General Agency

Agreement  throughout the  pleadings  and that  Allstate and

Northbrook should therefore have been on notice and prepared

to respond to these claims at trial is 

                            -10-
                             10

without  merit.   This  is tantamount  to  a claim  that the

District  Court ought have allowed a further motion to amend

the complaint -- a motion Benefit never made.  Rule 15(a) of

the Federal  Rules of  Civil Procedure permits  amendment to

the  pleadings "by leave of  court or by  written consent of

the adverse party."  Rule 15(b) provides that  pleadings may

be  amended  to conform  to  the evidence  where  issues not

raised  by the pleadings are tried by the express or implied

consent  of  the parties.    Here,  Northbrook and  Allstate

oppose any such amendment  and the District Court  was never

asked to approve a  further amendment.  Even if  the actions

of the District Court could be  interpreted as a denial of a

motion by  Benefit to  further amend the  Amended Complaint,

such a denial was well within the discretion of the district

judge.  See  Riofrio Anda  v. Ralston Purina  Co., 959  F.2d
                                                 

1149, 1154-55  (1st Cir.  1992) (affirming district  court's

denial of motion to amend after deadline  for amendments has

passed as consistent with purpose of Rule 15[b]).  Here, the

original Complaint was filed on June 19, 1990.  The District

Court ordered that  all amendments to the pleadings  be made

by November 30, 1990.  Since Benefit did not  even raise the

issue before  the summary judgment hearing on  or about June

                            -11-
                             11

24,  1991, there was no  abuse of discretion  in denying any

further motion to amend.

          3.   Fraud
                    

               We  next  consider  whether Northbrook's  and

Allstate's conduct was fraudulent.  As to this aspect of the

case, Benefit  relies especially upon the  testimony of Mark

Stadler,  former  general  manager of  Northbrook.   Stadler

administered  the  34  Northbrook General  Agencies  (NGA's)

including Benefit,  and he  and  others at  Northbrook  used

language such as "partners" and "partnerships" as matter  of

course in referring to  the NGA's.  In February,  1988, when

Northbrook  was  considering  withdrawal  from  the  Amended

General  Agency Agreements, however, Stadler, in an internal

memo, opined that the  NGA's "are sitting ducks!"   Two days

later, in  another internal memo, he  sketched this approach

to further contract negotiations:

               -- Terminate Northbrook Contracts - reinstate

under
                  Allstate

               -- Remove Exclusivity Clause

               --  Run  out Northbrook  Certificates  .  . .

rollover to
                  Allstate Paper . . .

               -- Immediately begin writing Allstate . . .

                            -12-
                             12

               -- Limit term of agreement to one year

Benefit also  presented evidence that in  March, 1988, prior

to the issuance of the  notice of Withdrawal and Suspension,

Allstate had  been advised  by  McKinsey &amp;  Co., a  business

consulting company,  that Allstate  would need to  invest at

least $100,000,000 into its  group life and health insurance

business in order to be competitive.

               Then, four days before Northbrook  issued its

formal withdrawal  and suspension  notice, Stadler wrote  to

his superior, noting  that "all  of the NGA's  feel that  we

have Breached [sic]  our agreement  not to act  in a  matter

detrimental to them" and suggesting:

       I  believe  we need  to  ask  ourselves if  the
       tables were turned would  we sign the [proposed
       1988 Service] agreements as they  are currently
       worded.   I doubt it.  The NGA's have been good
       partners.  We should not turn our backs on them
       now.

               During  the  same period,  as  the  negotiations

leading to the execution of the 1988 Service Agreements spun out,

Allstate and  Northbrook agents continued to  claim that Allstate

"will  be a player in the health insurance business," despite the

fact that other Allstate representatives were, even then, meeting

with Goldman  Sachs  investment bankers  to discuss  the sale  of

Allstate's group life and health business.

                            -13-
                             13

               From   this  evidence  and  other  corroborating

circumstances, Benefit  argues strenuously that it can reasonably

be inferred that Northbrook and Allstate -- in league together --

concocted the notice of withdrawal and suspension of the  Amended

General  Agency Agreement  primarily to  get out  from under  its

terms.  Then,  well knowing  that they were  ultimately going  to

dump Benefit just as soon as it suited them, they  offered in its

place the 1988 Service Agreements.

               There is no dispute  as to the  fraud claim  but

that the law of Maine applies.  In Maine,

       [a] defendant is liable for fraud or deceit  if
       he (1) makes  a false representation  (2) of  a
       material fact (3) with knowledge of its falsity
       or in reckless disregard of whether it is  true
       or  false  (4)  for  the  purpose  of  inducing
       another  to act  or to  refrain from  acting in
       reliance  upon   it,  and  (5)   the  plaintiff
       justifiably relies upon  the representation  as
       true and acts upon it to his damage.

Jourdain  v. Dineen,  527  A.2d 1304,  1307  (Me. 1987)  (quoting
                

Letellier v. Small, 400 A.2d 371,  376 [Me. 1979]).  Moreover, to
               

sustain its burden  on the  claim of fraud,  Benefit "must  prove

every element of [its] claim by clear and convincing evidence; in

other words,  evidence that establishes every  factual element to

be highly probable."  Wildes v. Ocean National Bank of Kennebunk,
                                                             

498 A.2d 601, 602 (Me. 1985).

                            -14-
                             14

               Benefit  asserts  that  in   order  to  properly

exercise its rights under the Withdrawal and Suspension clause of

the Amended  General Agency  Agreement,6 Northbrook had  not only

to cease marketing  group life and  health insurance through  the

NGA  distribution  system,  but  also  through  all  distribution

systems in  Benefit's territory  as well, including  Equinet, the

Equitable distribution system.  Benefit argues that the Notice of

Withdrawal and Suspension and accompanying letter dated March 18,

1988  represented  that  "Northbrook was  ceasing  and suspending

marketing group  life and health insurance  policies in Benefit's

territory,"  which  notice,  Benefit   says,  was  false  because

Northbrook maintained an ongoing  contract with Equitable to sell

the same products  in Benefit's  territory.7  In  support of  its

                    

6  The  Withdrawal  and  Suspension clause  of  the  Amended
General Agency Agreement states:
       The  Company [Northbrook]  may withdraw  all or
       any part of the authority granted to the  Group
       Agency  [Benefit] in  Sections 1 and  2 hereof,
       with respect to any line or lines of  insurance
       which the Company has decided to cease or  sus-
       pend writing  in any or all  of the location(s)
       in which  the Group Agency has  been authorized
       hereunder.  The Company will give not less than
       one hundred eighty (180) days advance notice to
       the Group  Agency prior  to  such cessation  or
       suspension.

App. I at 105.

7 Prior to trial in the District Court, Benefit's counsel at
various times had pointed to  other oral statements as being
allegedly false.  These  other promissory estoppel and fraud

                            -15-
                             15

argument,  Benefit has  provided  us with  numerous citations  to

documents and  testimony by  Allstate and Northbrook  officers to

show  that the  Withdrawal  and Suspension  was  not intended  to

affect the Equinet distribution system.

               Where,  as  here, the  District Court  has ruled

that  the  evidence  is  insufficient  to  sustain  a  particular

proposition, our standard of review is well settled:

       [W]e  must find  that, viewing the  evidence in
       the  light most  favorable  to  the  non-moving
       party, reasonable  jurors could come to but one
       conclusion.    We  must  give  [Benefit]  every
       benefit   of    every   legitimate   inference.
       However,  such  inferences   may  not  rest  on
       conjecture  or  speculation,  but   rather  the
       evidence  offered must  make 'the  existence of
       the fact to be  inferred more probable than its
       nonexistence.'

DiPalma v.  Westinghouse Electric Corp., 938 F.2d 1463, 1464 (1st
                                    

Cir. 1991) (quoting Goldstein  v. Kelleher, 728 F.2d 32,  39 [1st
                                       

Cir. 1984], cert.  denied, 469 U.S. 852 [1984])  (other citations
                      

omitted).   Where a plaintiff must establish each of the elements

of  its claim  by clear  and convincing  evidence, a  trial judge

necessarily   must  be  guided  by  this  heightened  evidentiary

                    

theories were dismissed  on summary judgment.  Supp. App. at
pp. 11-13.  Benefit has not appealed the granting of summary
judgment  on  any fraud  claims.   In  its Brief  on Appeal,
Benefit relies only  on the single  alleged theory of  fraud
discussed above.  Appellant's Brief at pp. 18-19 ("The false
statement  was the notice of withdrawal and suspension . . .
.").

                            -16-
                             16

standard in determining,  for purposes of  a motion for  directed

verdict,  whether  a  jury  could reasonably  conclude  that  the

plaintiff has met its  burden.  Anderson v. Liberty  Lobby, Inc.,
                                                             

477 U.S. 242, 255 (1985).

               There  was  no  error in  the  District  Court's

analysis of Benefit's fraud  claim.  While it is true, as Benefit

claims,  that the Notice of  Withdrawal and Suspension states not

only  that   Northbrook  is  planning  to   discontinue  its  NGA

distribution system, of which Benefit was  a part, but goes on to

represent  that Northbrook  is  withdrawing  from "the  small-to-

medium  size employer group  life and health  insurance market in

certain market  territories," App. I at  227, this representation

was  not  false.   After an  exhaustive  trek through  the entire

record, we find no indication that Benefit presented any evidence

from  which it  could  be inferred  that  Northbrook or  Allstate

continued to sell  group policy insurance in Benefit's area after

March,  1988, when  Northbrook  represented that  it would  stop.

Much of the evidence presented by Benefit implies that Northbrook

intended  to  continue selling  products through  Equitable after

that  date, but Benefit has  not shown that  Northbrook ever made

any such  sales.  Since  no jury could reasonably  find that this

representation was false, an essential element of the fraud claim

                            -17-
                             17

is  absent.   The  District  Court thus  appropriately  granted a

directed verdict.8

          4.   Breach of Contract9
          4.   Breach of Contract
                                 

               Benefit   argues   that  the   District   Court,

misinterpreting and misapplying Illinois law, improperly directed

a verdict for Allstate and Northbrook on its claims for breach of

the two  1988 Service Agreements  and breach of the  duty of good

faith and fair dealing.

               Since we  here review a  diversity case  brought

in the United States District Court for the District of Maine, we

must determine the applicable law as  would a court of the  state

of Maine.   Klaxon v. Stentor  Electric Mfg.  Co., 313 U.S.  487,
                                              

                    

8 In  his opinion, the  District Judge stated  that Allstate
and Northbrook could not have marketed group life and health
insurance  in Maine after January 1,  1988, because they had
sold  this portion of the business to Metropolitan.  Even if
there were evidence  to the contrary, as Benefit says, i.e.,
that the  Equitable business was exempted  from the transfer
to Metropolitan, Benefit still has shown no  actual sales by
Equitable, only the potential  for sales.  Any error  by the
trial judge regarding this matter is therefore harmless.

9  Benefit also argues on this point that the District Court
improperly characterized the  testimony of Benefit's damages
expert as contrary to the evidence.   We need not reach this
issue since it was not a ground  on which the District Court
based  its directed  verdict,  viz., "[The  weakness of  the
expert  testimony]  is  not  an independent  ground  of  the
Court's   granting  the   motion   for   directed   verdict,
nevertheless  it's a factor.  It's sort of a background con-
sideration  which the Court has not felt it should ignore. .
. ."

                            -18-
                             18

496-97 (1941).   Each of  the 1988  Service Agreements  contained

choice of law  provisions stating that Illinois law  would govern

each  contract.     Since   a  Maine  court,   under  established

principles, would  honor contractual choice of law  and apply the

law of the state of Illinois in  this case, we shall do the same,

as did the trial  court.  Lincoln Pulp &amp; Paper Co., Inc. v. Dravo
                                                              

Corp.,  436 F. Supp. 262, 268 (D. Me. 1977).
  

               Benefit's  Amended Complaint  asserted  separate

claims for breach of contract (Counts I and II) and breach of the

duty  of good  faith and  fair dealing  (Counts V  and VI).   The

District  Court consolidated  the breach  of fair  dealing counts

with  the breach of contract counts, ruling that Illinois did not

recognize an independent cause  of action for breach of  the duty

of good faith.

               The District Court then  directed a verdict  for

Northbrook and  Allstate  on  the contract  claims.    The  court

reasoned  (1) that  where independent  business people  knowingly

enter into  a contract,  they must  bear  responsibility for  its

terms,  (2) that  the Northbrook  Service Agreement  provided for

termination  upon  90  days   notice  and  the  Allstate  Service

Agreement likewise  provided for termination, albeit  on 180 days

notice,  (3) that the requisite  notices had been  given, and (4)

that,  even in the context of a franchise agreement, the covenant

                            -19-
                             19

of  good  faith  and  fair  dealing does  not  supervene  express

contractual terms.   Benefit here challenges the decision  of the

District Court to fold the issue  of good faith and fair  dealing

into the  two contract counts (thus dismissing  those counts that

asserted  that issue as an  independent cause of  action) and its

ultimate  legal  conclusion  that,  notwithstanding  the  implied

covenant of good  faith, the  express terms of  the 1988  Service

Agreements governed and were fulfilled.

               Benefit relies on  P&amp;W Supply Co., Inc. v.  E.I.
                                                               

DuPont de Nemours &amp; Co., Inc., 747 F. Supp. 1262, 1268 (N.D. Ill.
                          

1990)  for the  proposition that  Illinois recognizes  a separate

cause  of action  for bad  faith termination  of a  franchisee in

violation of state law.  P&amp;W Supply Co., however, held  only that
                                    

an independent  cause of action  exists pursuant to  the Illinois

Franchise Disclosure  Act ("Franchise Act"), Ill.  Rev. Stat. ch.

815,   705/1 et seq. (1993) (formerly ch. 121 ,    1701 et seq.).
                                                            

See 747  F. Supp. at 1267-68.  The instant action was not brought


under the Franchise Act,  but under common law.   Indeed, Benefit

could  not  have  brought this  action  under  the Franchise  Act

because  that  statute  applies  only  to  Illinois  dealerships.

Highway Equipment Co. v.  Caterpillar Inc., 908 F.2d 60,  64 (6th
                                       

                            -20-
                             20

Cir. 1990)  (Franchise Act enacted to  benefit Illinois residents

only).10

               We  agree  with  the  District  Court  that  the

Franchise Act  is inapplicable and, further,  that no independent

cause of action exists under the common law of Illinois.   "Under

Illinois  law, a  covenant  of good  faith  and fair  dealing  is

implied  in  every contract."    Capital  Options Investments  v.
                                                          

                    

10    Allstate and  Northbrook  also assert  that  their re-
lationships with  Benefit did  not satisfy the  requirements
for  a franchise  agreement under  the Franchise  Act.   The
Franchise Act defines a franchise as a contract or agreement
by which --
       (a) a franchisee is granted the right to engage in
       the business of offering, selling, or distributing
       goods  or  services,  under  a  marketing  plan or
       system prescribed or suggested in substantial part
       by a  franchisor; and  (b)  the operation  of  the
       franchisee's business pursuant to  such plan      
       or  system is  substantially  associated with  the
       franchisor's trademark, service mark,  trade name,
       logotype,  advertising,  or  its other  commercial
       symbol designating the  franchisor its  affiliate;
       and (c) the person granted  the right to engage in
       such business is required to pay, directly or  in-
       directly, a franchise fee of $500 or more.

Ill.Rev.Stat.  ch. 815,     705/3 (1993)  (formerly  ch. 121 ,   
1703(1)).

               We need not  decide whether  the District  Court
correctly determined that a reasonable jury could have found that
the  1988 Service  Agreements  between Benefit  and Allstate  and
Northbrook respectively were franchise agreements.  Even if these
agreements were franchise agreements  under the Franchise Act, as
they pertain to businesses outside Illinois they are entitled  to
no more  protection than other agreements.  Highway Equipment Co,
                                                             
908  F.2d at  64 (extraterritorial  franchise agreements  are not
protected by the Franchise Act).

                            -21-
                             21

Goldberg Bros., 958  F.2d 186,  189 (7th Cir.  1992); P&amp;W  Supply
                                                              

Co., 747  F. Supp.  at  1267.   Breach of  the implied  covenant,


however,  does not create an independent cause of action.  Beraha
                                                              

v. Baxter Health Care Corp., 956 F.2d 1436, 1443 (7th Cir. 1992);
                        

Williams  v. Jader Fuel Company,  Inc., 944 F.2d  1388, 1394 (7th
                                   

Cir. 1991).  Claims  for breach of the  implied covenant of  good

faith  and fair dealing are,  therefore, considered as  part of a

claim for breach of  contract.  See e.g., LaScola  v. U.S. Sprint
                                                              

Communications, 946 F.2d 559, 565 (7th Cir. 1991) (no independent
           

action  sounding in contract for breach of an implied covenant of

good faith  and fair dealing in  the employment-at-will setting);

Harrison v. Sears, Roebuck &amp; Co.,  546 N.E.2d 248, 256 (Ill. App.
                             

Ct. 1989) (same);  Gordon v. Matthew  Bender &amp; Co., Inc.,  562 F.
                                                     

Supp. 1286, 1290 (N.D. Ill. 1983) (same); Foster Enters., Inc. v.
                                                           

Germania Fed. Sav. and Loan Ass'n, 421 N.E.2d 1375, 1380-81 (Ill.
                              

App. Ct. 1981)  (discretion authorized under a contract but exer-

cised  in bad faith results in an actionable breach of contract).

But see BA Mortgage and  Int'l Realty Co. v. American Nat'l  Bank
                                                              

and  Trust Co.  of Chicago,  706 F. Supp.  1364, 1373  (N.D. Ill.
                       

1989)  (limiting  the holding  of  Gordon  v.  Matthew Bender  to
                                                          

employment at will situations). 

                            -22-
                             22

               Unlike  the  result  which   obtains  under  the

Franchise   Act,11    we    conclude   that,    absent    special

circumstances,  the duty of good  faith implied at  common law in

Illinois may not  supplant the express terms  of a contract.   In

Illinois, the term "good faith" refers to "an implied undertaking

not to take opportunistic  advantage in a way that could not have

been contemplated at  the time of  drafting, and which  therefore

was not resolved explicitly by the parties."  Kham &amp; Nate's Shoes
                                                              

No. 2,  Inc. v. First Bank  of Whiting, 908 F.2d  1351, 1357 (7th
                                   

Cir. 1990); see  also Capital  Options Investments,  988 F.2d  at
                                               

189.   Thus,  while  principles  of  good  faith  --  such  as  a

requirement of good  cause for termination  -- may  be imposed to

fill the  gap where  a  contract is  silent, see  e.g., Dayan  v.
                                                          

McDonald's  Corp.,  466 N.E.2d  958,  973  (Ill. App.  Ct.  1984)
              

(stating  in dicta  that  where a  franchise  contract is  wholly

silent on the issue of termination, "the implied covenant of good

faith restricts franchisor discretion  in terminating a franchise

agreement  to   those  cases  where  good   cause  exists"),  "no

obligation can be  implied which would  be inconsistent with  the

explicit terms of  the contract."   Williams, 944  F.2d at  1394.
                                         

                    

11 Under  the  Franchise Act  the implied  covenant of  good
faith may override  the express  terms of a  contract.   P&amp;W
                                                            
Supply  Co,  747  F.  Supp.  at  1268  (franchisor  may  not
          
terminate absent  good cause  even though contract  provided
for termination on 30 days notice with or without cause).

                            -23-
                             23

"Firms  that have  negotiated contracts  are entitled  to enforce

them to the letter, even to the great discomfort of their trading

partners,  without being mulcted for lack of 'good faith.'"  Kham
                                                              

&amp; Nate's Shoes, 908 F.2d at 1357; Highway Equipment Co., 908 F.2d
                                                    

at  64,  n.3 (at  common law  "no case  in  ... Illinois  ... has

applied  a  good  cause  obligation"  to  contravene  an  express

termination at will provision);  Hentze v. Unverfehrt, 604 N.E.2d
                                                  

536,  539  (Ill.  App. Ct.  1992).    Thus,  compliance with  the

explicit terms  of a termination agreement is, absent actual "bad

faith" or "opportunistic advantage-taking," Hentze, 604 N.E.2d at
                                               

539 (citing  Kham &amp; Nate's Shoes,  908 F.2d at  1357), good faith
                             

conduct  notwithstanding the  economic consequences  imposed upon

the terminated party.

               The    present     case,    though     factually

distinguishable from both  express and silent  termination clause

cases,  falls  comfortably  within  the ambit  of  the  former.12

                    

12  It must be candidly recognized, however, that in each of
the  cases   cited  by  Allstate  and   Northbrook  for  the
proposition that  where a  contract  expressly provides  for
termination without cause  there is no  room for implying  a
requirement of good cause,  the termination clause was some-
what  more  explicit than  that in  the  present case.   See
                                                            
Highway Equipment Co., 908 F.2d at 64  (right   to terminate
                     
"without   cause");  Valley   Liquors,   Inc.  v.   Renfield
                                                            
Importers,  Ltd., 822 F.2d  656, 669 (7th  Cir. 1987), cert.
                                                            
denied, 484 U.S. 977 (1987) (right to terminate "at any time
      
and for  any reason");  see also  Corenswet,  Inc. v.  Amana
                                                            
Refrigeration,  Inc., 594  F.2d  129, 132  (5th Cir.  1979),
                    
cert. denied, 444  U.S. 938 (1979)  (right to terminate  "at
            

                            -24-
                             24

Here, each of  the 1988  Service Agreements  contains an  express

termination-upon-notice provision which may be exercised "without

regard  to the terms above"  -- terms which  detailed the grounds

for  termination for cause.13   We agree with  the District Court

and rule that the  contract language adopted by the  parties here

authorized termination at will upon notice and that this language

may not, under the common law of Illinois, be vitiated absent bad

faith.

               Under  Illinois   law,  "bad  faith"  has   been

described   as   "opportunistic  advantage-taking   or   lack  of

cooperation  depriving   the  other  contracting  party   of  his

reasonable expectations," Hentze, 604  N.E.2d at 539 (citing Kham
                                                              

&amp;  Nates Shoes,  908 F.2d  at 1357),  or as  conduct "violat[ing]
           

community standards of decency, fairness or reasonableness," Zick
                                                              

                    

any time for any reason").

13 The  termination provisions provided that:   "Termination
of  the  Agreement at  the  option of  either  party without
regard  to the terms  set out above may  be effected by such
party providing the  other with one hundred  and eighty days
(180)  written  notice"   [ninety days  in  the case  of the
Northbrook Service Agreement].  The terms "set out above" in
the 1988 Service Agreements provided a number of reasons why
Allstate  and Northbrook  could  terminate  for cause  (e.g.
bankruptcy  of  the  Administrator's  [Benefit's]  business,
gross    negligence,   fraud   or    embezzlement   by   the
Administrator,   etc.).    Indeed,  Benefit  refers  to  the
termination  provision  in the  1988  Service  Agreements as
"much  more favorable  to  Allstate" than  were the  cognate
provisions of the Amended General Agency Agreement.

                            -25-
                             25

v. Verson  Allsteel Press Co., 623  F. Supp. 927, 929  (N.D. Ill.
                          

1985), or "generally implying or involving actual or constructive

fraud, or a design to mislead or deceive another, or a neglect or

refusal to fulfill some duty or some contractual obligation,  not

prompted by an honest mistake as to one's rights or duties but by

some interested or sinister motive."  Valley Liquors, 822 F.2d at
                                                 

670 (quoting Black's Law Dictionary 127 [5th Ed. 1979]).
                                

               Here, Benefit  itself adduced  the evidence that

in 1988 Allstate needed  an infusion of $100,000,000 in  order to

remain competitive in this  market.  This evidence,  coupled with

the  fact that Northbrook and  Allstate treated all  the NGA's as

shabbily  as  they  had  Benefit  conclusively  demonstrates  the

absence of malice toward Benefit.  True, Allstate and  Northbrook

did not cover  themselves with  glory in their  retreat from  the

market  that sustained Benefit.  The "good hands" people are here

revealed as  much less  than the  cooperative partners they  held

themselves out  to  be.   Instead, this  record makes  abundantly

clear that  both Allstate and Northbrook  single-mindedly pursued

their economic advantage with  little regard for the consequences

to Benefit and the other NGA's and maneuvered in such a way as to

squeeze the  last bit of service  out of their soon  to be dumped

"partners."

                            -26-
                             26

               Their  conduct, however,  driven  as  it was  by

economic necessity, does not rise to the level of bad faith under

the law of Illinois.  Although this Court is aware of no Illinois

law directly on  point, it has  generally been  held that when  a

product  line is withdrawn from the market, good cause exists for

terminating the contract.   See Medina &amp; Medina v.  Country Pride
                                                              

Foods,  Ltd., 858 F.2d 817, 824 (1st Cir. 1988) (following answer
         

of  the Supreme Court of  Puerto Rico to  certified question from

the First Circuit, good faith withdrawal from the market does not

violate Puerto Rico  franchise act); Lee  Beverage Co. v.  I.S.C.
                                                              

Wines of California, 623 F. Supp. 867, 868 (E.D. Wis. 1985) (good
                

cause  for termination  where dealer  withdrew product  line from

market) (Wisconsin  state law);  St. Joseph Equipment  v. Massey-
                                                              

Ferguson,  Inc.,  546 F.  Supp.  1245  (W.D. Wisc.  1982)  (same)
            

(Wisconsin state  law).14  Compare  Hentze, 604  F.2d at  539-540
                                       

(termination  of dealership  contract  amounted  to  "bad  faith"

                    

14 In Wright-Moore Corp.  v. Ricoh Corp., 908 F.2d  128, 138
                                        
n.4 (7th Cir. 1990), the Seventh Circuit reserved the market
withdrawal issue for  another case but stated in  dicta that
other   courts   have  considered   market   withdrawals  to
constitute  good cause  since  they carry  little chance  of
unfair dealing.  The  Seventh Circuit rejected, however, the
broad  holding in American Mart Corp. v. Joseph E. Seagram &amp;
                                                            
Sons, Inc., 824 F.2d  733, 734 (9th Cir. 1987), relied on by
          
Allstate, that business considerations of a franchisor could
constitute good cause for termination.  Id. at 138.
                                           

                            -27-
                             27

because of tactics aimed at running  terminated dealership out of

business).

               Since  here there  was  good cause  to  withdraw

this insurance  product line from the market,  the District Court

was  correct  in  ruling  that   Benefit  presented  insufficient

evidence  for  a  jury  to  find  that  Allstate   or  Northbrook

terminated the 1988 Service Agreements in bad faith.

                         CONCLUSION
                                   

               The District  Court having  dealt properly  with

the discovery  matter addressed  by the Magistrate  Judge, having

appropriately   declined  to  permit  further  amendment  of  the

complaint, and having justifiably directed  a verdict as to  both

the contract and fraud counts, its decision is, in all respects,

               Affirmed.
                       

                            -28-
                             28
