Cirilli v. Country Ins. & Financial Serv.
| Decision Date | 28 October 2009 |
| Docket Number | No. 2008AP3071.,2008AP3071. |
| Citation | 776 N.W.2d 272,2009 WI App 167 |
| Parties | Alan CIRILLI, Brian Carlson, Christina Johnson and John Shepperd, Plaintiffs-Respondents, v. COUNTRY INSURANCE & FINANCIAL SERVICES, Country Life Insurance Company, Country Investors Life Assurance Company, Country Mutual Insurance Company, Country Casualty Insurance Company, Country Preferred Insurance Company, Mutual Service Life Insurance Company, Mutual Service Casualty Insurance Company, Modern Service Insurance Company And MSI Preferred Insurance Company, Defendants-Appellants. |
| Court | Wisconsin Court of Appeals |
On behalf of the defendants-appellants, the cause was submitted on the briefs of Todd G. Smith and Hamilton E. Arendsen of Godfrey & Kahn, S.C., Madison.
On behalf of the plaintiffs-respondents, the cause was submitted on the brief of James W. Hammes of Cramer, Multhauf & Hammes, LLP, Waukesha.
Before BROWN, C.J., NEUBAUER, P.J. and ANDERSON, J.
Country Insurance & Financial Services appeals from a circuit court order denying its motion to compel arbitration of a complaint brought by its former agents. The former agents allege that Country breached their Agent's Agreement by refusing to pay them termination commissions. The Agent's Agreement contains a mandatory arbitration provision applicable to any claim or controversy relating to or arising out of the agency relationship with Country, the Agent's Agreement or termination of the Agent's Agreement. The agents contend that the arbitration provision is inapplicable because, in a separate settlement agreement and release, Country released any claims or defenses it could assert as justification for refusing to pay the termination commissions due to them under their Agent's Agreements. The trial court agreed and found that the release, which does not contain an arbitration clause, governs this dispute and effectively supersedes the Agent's Agreement's mandatory arbitration clause. We disagree. Because the former agents' complaint seeks payment of commissions under the Agent's Agreement, this dispute falls squarely within that agreement's mandatory arbitration clause. Whether Country released any claim or defense to the agents' claims for commissions requires an analysis of the merits of the dispute, resolution of which is to be considered exclusively in arbitration. We reverse and remand with an order to compel arbitration.
¶ 2 On July 18, 2007, Alan Cirilli, Brian Carlson, Christina Johnson, and John Shepperd (the "Cirilli Plaintiffs") filed a complaint in the Waukesha county circuit court, naming Country Insurance & Financial Services and the insurance companies it encompasses as defendants ("Country"). The Cirilli Plaintiffs, who are former Country agents, allege they are due certain termination commissions under their respective Agent's Agreements. They contend that Country has refused to pay these termination commissions because of alleged violations of a noncompete provision in the Agent's Agreement arising from their subsequent relationship with Couri Insurance Agency, Inc., and Couri Insurance Associates, LLC ("Couri"). The plaintiffs further allege that Country breached a Settlement Agreement and Release involving other former Country agents and Couri, whereby Country allegedly released all claims or defenses against the plaintiffs.
¶ 3 On September 28, 2007, Country filed a motion to compel arbitration (or in the alternative, to dismiss the complaint) pursuant to WIS. STAT. § 788.02 (2007-08).1 Country requested the action be stayed and arbitration compelled in accordance with the terms of the Cirilli Plaintiffs' Agent's Agreements upon which their claims to commissions are based. Country maintains this dispute comes squarely within the plain and unambiguous language of the mandatory arbitration clause contained in each of the four Agent's Agreements signed by the plaintiffs and Country. The arbitration clause contained in the Agent's Agreement reads as follows:
[A]ny claim or controversy relating to or arising out of the relationship between the Agent and the Companies, this Agreement (and/or any agreement superseded by this Agreement), or the termination of this Agreement, whether the parties' rights and remedies are governed or created by contract law, tort law, common law or otherwise, or by federal, state or local statute, legislation, rule or regulations, shall be resolved exclusively by binding arbitration in Bloomington, Illinois (unless otherwise provided by law), by one arbitrator selected by the Companies and the Agent, all in accordance with the commercial arbitration rules of the American Arbitration Association then in effect. Judgment upon any arbitration award lawfully rendered may be entered and enforced in any court having jurisdiction. Any claim governed by this arbitration clause must be brought within one year of the events giving rise to the claim or controversy by serving on the other party within such time a written request for arbitration stating the grounds for the claim and the relief requested. (Emphasis added.)
¶ 4 The Cirilli Plaintiffs opposed the motion to compel arbitration based on conclusions reached in two prior lawsuits. The Cirilli Plaintiffs asserted that Country's refusal to pay the disputed termination commissions constituted a breach of their contract rights under the Settlement Agreement and Release executed by Country and Couri in settlement of lawsuits in Minnesota, and as adjudicated in a final judgment of the circuit court of Waukesha county, Wisconsin, in litigation brought by the Reis Plaintiffs, as discussed below. The relevant background of the Minnesota and Reis litigation is as follows:
The Minnesota Litigation
¶ 5 Beginning on or about April 6, 2006, Country filed complaints against seven former Country agents, as well as Couri, in various counties in Minnesota. A mediation session was conducted for purposes of resolving Country's claim against Couri and the seven former Country agents. Following the mediation session, Country, Couri, and the seven former Country agents executed a Settlement Agreement and Release on December 1, 2006. Paragraph two of the Settlement Agreement and Release provides as follows:
Couri shall, within 10 days after the execution of this Agreement, pay to Country the sum of $75,000.00, which sum shall be consideration for the execution of this Agreement. Couri, as of the date hereof by execution of this Agreement, releases and forever discharges all claims, causes of action, defenses, offsets, or counterclaims, whether known or unknown, which it has, or may have, against Country relative to any cause of action arising out of the kinds of allegations referenced in the lawsuits. Country, as of the date hereof by execution of this Agreement, releases and forever discharges all claims, causes of action, defenses, offsets, or counterclaims, whether known or unknown, which it has, or may have, against Couri, and all former Country agents who have terminated an agency relationship with Country and have entered into a business arrangement or agreement with Couri under the same, or substantially the same, business arrangement or agreement with Couri under the same, or substantially the same, business arrangement as between Couri and the individual Defendants which gave rise to this litigation. (Emphasis added.)
¶ 6 On April 5, 2006, prior to the filing of the Minnesota litigation, five former Country agents ("the Reis Plaintiffs") filed suit against Country in the Waukesha county circuit court. The Reis Plaintiffs sought to recover termination commissions due under their respective agent's agreements with Country. Country filed a motion to compel arbitration, pursuant to the mandatory arbitration clause contained in the agent's agreement, which was granted by the court.
¶ 7 Following the signing of the Settlement Agreement and Release in the Minnesota litigation on December 1, 2006, the Reis Plaintiffs filed the Settlement Agreement and Release with the arbitrator. The arbitrator found that the language of the release was clear and unambiguous and that Country had released any claims, causes of action, defenses, offsets or counterclaims, whether known or unknown, which Country possessed and was asserting as justification for refusing to pay the termination commissions due to the Reis Plaintiffs under their agent's agreements. Judgment was entered in the Waukesha county circuit court in accordance with the arbitrator's findings.
¶ 8 On November 5, 2007, a hearing was held with regard to Country's motion to compel the arbitration in this matter. After oral argument, the trial court denied Country's motion to compel arbitration. The trial court determined that (1) the Cirilli Plaintiffs were substantially the same as those individual defendants in the Minnesota litigation2 and (2) the Settlement Agreement and Release executed by Country in the Minnesota litigation was a global release containing no arbitration clause, which effectively superseded the underlying Agent's Agreement and its mandatory arbitration provision.3 Country appeals the order denying its motion to compel arbitration.4
¶ 9 Country challenges the circuit court order denying its motion to compel arbitration under the Wisconsin Arbitration Act. Country asserts that the trial court erred in ruling that Country's right to enforce the mandatory arbitration clause in the Agent's Agreement was superseded by the execution of the Settlement Agreement and Release, which does not contain an arbitration clause. Country contends that the circuit court erred by considering the merits of the case. Country seeks reversal of the circuit court's order denying Country's motion to compel arbitration and remand for entry of an order to compel arbitration.
¶ 10 At the outset, we note that the...
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