B. Thomas & Co. v. Universal Warranty Corp.
| Decision Date | 21 February 2020 |
| Docket Number | 8:18-CV-112 |
| Parties | B. THOMAS AND COMPANY, Plaintiff, v. UNIVERSAL WARRANTY CORP., and ALLY INSURANCE HOLDINGS INC., Defendants. |
| Court | U.S. District Court — District of Nebraska |
This is a contract case involving claims of breach of contract, tortious interference, unjust enrichment, breach of the duty of good faith and fair dealing, fraudulent concealment, and negligent misrepresentation. See Filing 1. Plaintiff claims it is entitled to continuing commission payments on certain contracts it entered into with Defendants. Filing 1 at 19. This matter comes before the Court on Defendants' Motion for Summary Judgment as to all of Plaintiff's claims. Filing 79.
In deciding Defendants' Motion, the Court has reviewed the contracts, the evidence submitted, and the law applicable to the contracts in detail. Upon such review, the Court has concluded the material provisions of the contracts implicated by this lawsuit are unambiguous. The continuing commissions requested by Plaintiff in this lawsuit are not obligations of the Defendants pursuant to the plain language of the agreements that both parties signed.
In its response to Defendants' Motion for Summary Judgment, Plaintiff invites this Court to manufacture ambiguity in contracts that clearly outline the terms upon which commissions are owed through providing "course of performance" and "extrinsic" evidence. Binding Nebraska law and Eighth Circuit precedent do not allow such evidence to control over clear contractual language. For the reasons stated herein, the Court grants Defendants' Motion for Summary Judgment.
Plaintiff, B. Thomas and Company d/b/a/ National Financial ("National Financial"),1 is an independent agent offering vehicle service contracts and related products to motor-vehicle dealers for sale to the dealers' customers. Filing 91 at 11. As an independent agent, National Financial markets vehicle service contracts and guaranteed asset protection ("GAP") contracts to automobile dealers to sell to their customers. Filing 91 at 12. The vehicle service contracts and GAP contracts at issue in this case were administered by Defendants, the Universal Warranty Corporation ("Universal Warranty"), a wholly owned subsidiary of Ally Insurance Holdings, Inc. ("Ally"), who competed with other companies to have automobile dealers sell their products. Filing 91 at 11; Filing 91 at 12. Universal Warranty, in addition to administering the contracts National Financial sold to dealers, also engaged in some direct sales to dealers itself. Filing 91 at 14.
Vehicle service contracts are warranties that protect an automobile against mechanical breakdown. Filing 91 at 11. GAP contracts insure vehicles by paying to a vehicle owner the difference between the cash value and the balance of a lease or loan if the vehicle is destroyed or stolen. Filing 91 at 11. Defendant Universal Warranty marketed VehicleOne-branded vehicle service contracts and VehicleOne Primary-branded GAP contracts. Filing 91 at 11. Universal Warranty also offered another vehicle service contract known as the GM Protection Plan. Filing81-17 at 4. The GM Protection Plan was generally marketed directly to dealers by Universal Warranty's in-house sales employees rather than through the use of independent agents like National Financial. Filing 81-17 at 4; Filing 91 at 14.
In November of 2016, Ally's license to use General Motors' name and trademark expired, so Ally retired the GM Protection Plan. Filing 81-17 at 4. Ally then implemented a new vehicle service contract known as Ally Premier Protection ("Ally Premier"). Filing 81-17 at 5. Defendants designed Ally Premier to replace the GM Protection Plan and potentially the VehicleOne vehicle service contracts as well. Filing 81-17 at 5; Filing 92-10 at 1; Filing 92-17 at 1. Defendants have not allowed National Financial to sell Ally Premier, and thus National Financial has not earned any commissions from that product. Filing 98 at 15; Filing 99-1.
National Financial marketed VehicleOne vehicle service contracts to dealers on Universal Warranty's behalf under a contract with Universal Warranty dated March 26, 2003 (the "2003 V1 Rep. Agreement"). Filing 81-2. Under a separate contract dated August 1, 2008 (the "2008 V1 GAP Rep. Agreement"), National Financial marketed Universal Warranty's VehicleOne Primary GAP contracts. Filing 81-8. Both VehicleOne contracts granted National Financial authority to solicit and service the VehicleOne programs on Universal Warranty's behalf. Filing 81-2 at 1-2, §§ 2, 5(a); Filing 81-8 at 1, §§ 3-4. When National Financial successfully solicited a dealer to sell Universal Warranty's VehicleOne products, Universal Warranty required each solicited dealer to obtain Universal Warranty's direct contractual authorization, subject to Universal Warranty's discretion to reject any dealer, prior to selling Universal Warranty's products. Filing 81-18 at 25; Filing 81-2 at 2, § 5(a); Filing 81-8 at 1, § 6(a).
National Financial was eligible to receive a "representative fee" or commission on certain Universal Warranty contracts. Specifically, National Financial received a representative fee when three requirements were met: a dealer National Financial had solicited sold a contract to a consumer, Universal Warranty had "received the Dealer Cost, and . . . [National Financial wa]s currently servicing such Dealer account on behalf of [Universal Warranty]." Filing 81-2 at 2, § 7(b); Filing 81-8 at 3, § 8(b). Both the 2003 V1 Rep. Agreement and 2008 V1 GAP Rep. Agreement limited representative fee payments to the sale of VehicleOne products. Filing 91 at 16. Either National Financial or Universal Warranty could terminate the 2003 V1 Rep. Agreement and 2008 V1 GAP Rep. Agreement without cause sixty days after giving the other party written notice. Filing 81-2 at 4, § 16; Filing 81-8 at 5, § 17.
On March 12, 2003, Universal Warranty sent a signed letter to, National Financial's then-owner, Charles Ballou informing him that Universal Warranty would pay commissions under the 2003 V1 Rep. Agreement even after its termination provided certain requirements were met, including that National Financial continued to service the dealer accounts on behalf of Universal Warranty. Filing 81-3. The parties have honored the promises made in this letter as to the 2003 V1 Rep. Agreement and payments as promised in the letter are not in dispute because Defendants have made and continue to make such payments. Filing 81-18 at 14.
On October 2, 2003, National Financial and Universal Warranty executed a contract (the "2003 Universal Warranty Rep. Agreement") authorizing National Financial "to solicit and service [Universal Warranty's] vehicle service contract program." Filing 81-5 at 1. This contract did not specify a particular type or category of vehicle service contract. See generally Filing 81-5. However, National Financial's then-owner, Ballou, returned a signed copy of the agreement toUniversal Warranty with an accompanying transmittal letter stating, "I am faxing you the agency agreement authorizing [National Financial] to offer other Universal Warranty programs in addition to VehicleOne." Filing 81-4. However, Ballou later stated he understood the contract as authorizing him to solicit a specific product known as the AutoMax service program. Filing 99-4 at 10.
On May 1, 2005, National Financial and Universal Warranty executed a contract authorizing National Financial to solicit and service Universal Warranty's AC Delco vehicle service contract program (the "2005 AC Delco Rep. Agreement"). Filing 81-6. On October 20, 2005, Universal Warranty and National Financial executed a contract authorizing National Financial to solicit and service Universal Warranty's SAAB vehicle service contract program (the "2005 SAAB Rep. Agreement"). Filing 81-7. Similar to the V1 Rep. Agreement, these contracts allowed National Financial to receive a representative fee only if Universal Warranty had already received payment from the dealer and National Financial was currently servicing the dealer "on behalf of [Universal Warranty]." Filing 81-5 at 2-3, § 7(b).
On March 24, 2010, National Financial and Universal Warranty executed another contract (the "2010 Universal Warranty Rep. Agreement") authorizing National Financial "to solicit and service [Universal Warranty]'s vehicle service contracts." Filing 81-9. This contract did not reference any specific branded product and stated it "constitute[d] the entire agreement between the parties with respect to its subject matter, and any prior agreement, whether oral or written, shall be of no further force or effect." Filing 81-9 at 4, § 18. The 2010 Universal Warranty Rep. Agreement specifically stated that National Financial was not entitled to representative fees after termination of the agreement. Filing 81-9 at 4, § 16(g).
In 2013, National Financial and Universal Warranty executed another contract (the "Core Rep. Addendum") which amended and supplemented both the "VehicleOne Program Representative Agreement in effect as of March 24, 2010, and the VehicleOne Primary GAP Program Representative Agreement in effect as of August 1, 2008." Filing 81-10 at 1. The Core Rep. Addendum did not further clarify whether it applied to the 2003 V1 Rep. Agreement executed on March 26, 2003, or the 2010 Universal Warranty Rep. Agreement executed on March 24, 2010. Filing 81-10. The Core Rep. Addendum allowed National Financial to share in the profits of its vehicle service contract sales in exchange for exclusively offering VehicleOne products. Filing 81-10 at 1-1, §§ 1(a)(i), (b). This was in contrast to the previous arrangement which only allowed National Financial to receive a representative fee. However, the new fee-sharing arrangement only applied to ...
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