Goodwin v. Blu Murray Ins. Agency, Inc.

• Decision Date: 15 September 2006
• Docket Number: No. 5D05-1648.,No. 5D05-1357.,5D05-1357.,5D05-1648.
• Citation: 939 So.2d 1098
• Parties: Richard J. GOODWIN, Appellant, v. BLU MURRAY INSURANCE AGENCY, INC., Appellee.
• Court: Florida District Court of Appeals

Page 1098

939 So.2d 1098

Richard J. GOODWIN, Appellant, v. BLU MURRAY INSURANCE AGENCY, INC., Appellee.

No. 5D05-1357.

No. 5D05-1648.

District Court of Appeal of Florida, Fifth District.

September 15, 2006.

Rehearing Denied October 16, 2006.

COPYRIGHT MATERIAL OMITTED

Richard C. Swank and Donald E. Christopher, of Litchford & Christopher, P.A., Orlando, for Appellant.

Marcia K. Lippincott, of Marcia K. Lippincott, P.A., Lake Mary, for Appellee.

THOMPSON, J.

Richard Goodwin sought unpaid insurance commissions earned as an agent with Blu Murray Insurance Agency, Inc. ("Blu Murray") before and after he terminated a twenty-year relationship with the agency. Goodwin claims the trial court erred in denying his motion for summary judgment as to renewal commissions and pre-termination commissions, ruling he waived his right to an accounting, and denying him attorney's fees as the prevailing party. We reverse.

Blu Murray compensated Goodwin on a commission-only basis for the sale of new and renewal policies based on a percentage of the policy premiums. Most of Goodwin's sales derived from Blue Cross and Blue Shield health insurance products marketed through Blu Murray, the general agent, which acted as an intermediary in processing policy applications and premium checks as well as the commissions. Blu Murray then paid a share of the commission to its individual agent.

After ten years with Blu Murray, Goodwin became concerned in 1992 about the stability of his position. Goodwin claimed that Edward Murray, Blu Murray's principal, assured him that someday he intended to allow Goodwin to take over sole ownership of the South Daytona office as a general agent. In October 1992, Blu Murray and Goodwin entered into a written Commission Agreement drafted by Blu Murray. The Commission Agreement provides, in pertinent part:

Renewals of policies written by the agent will be paid the agent or the agents estate as long as the total monthly renewal commissions payable to the agent equal at least $100 a month. Renewals due the agent must be paid as long as the agency or the agency assigns are collecting money from insurance companies. No sale of the agency, or change in ownership of management will alter this agreement.

* * *

The first year commissions may change at the discretion of the G.A., renewal percentages must be at least one-half of G.A. amount. FIRST YEAR COMMISSION SHOULD NOT EVER BE LESS THAN 1/2 OF GA COMM.

Over the first few years of Blu Murray's sale of Blue Cross products, the insurer paid a flat commission regardless of the size or value of the policy. However, in the late 80's or early 90's, Blue Cross began to pay commissions based on a percentage of a policy's first-year premium. After the change, Blu Murray, as general agent, received ten percent of the first-year premiums and paid half, or five percent, to its individual agent. The Commission Agreement memorialized this change.

Not long after Goodwin and Blu Murray entered into the Commission Agreement, however, Blue Cross increased to thirteen percent its first-year commission structure. Because Blu Murray manually redacted the commission the agency received on the commission statement each agent received, the individual agents were unaware of the commission increase. Blu Murray continued to pay them only 5%, rather than 6.5% of the first-year premium. Goodwin remained unaware of the shortage until the mid to late 90's, when Blu Murray converted to computerized commission statements. The employee responsible for their preparation failed to redact the amount Blue Cross paid Blu Murray. Goodwin discovered for the first time that Blu Murray was not paying him the amount due under their agreement. When he discovered this fact in 1998, Goodwin confronted Murray on three or four occasions, but Murray refused to increase Goodwin's share as their agreement required. In view of Murray's ownership promises and the successful insurance practice he had built with Blu Murray, Goodwin did not pursue the matter further at that time.

Their relationship continued until 1 September 2002 when Goodwin terminated his employment after Murray rejected the possibility that Goodwin would become an owner. Goodwin nevertheless expected to continue receiving commissions due under the Commission Agreement. Once Goodwin left, however, Blu Murray ceased payment of all first-year and renewal commissions.

Goodwin promptly filed a two-count complaint against Blu Murray for breach of contract and an accounting. He sought attorney's fees as to both counts. In count one, he sought attorney's fees under chapter 448, Florida Statutes (2002), as an action for lost wages. The court instructed Goodwin to file an amended complaint to plead alternative counts for breach of contract as an independent contractor and as an employee in counts one and two, respectively; he again sought an accounting in count three. Goodwin alleged an entitlement to attorney's fees in count one pursuant to section 448.08. He did not, however, seek attorney's fees under count two as an independent contractor.

The trial court granted Blu Murray's motion for summary judgment on count one, ruling that estoppel barred Goodwin from asserting he was an employee by virtue of his formation of a P.A. and holding himself out as its employee. Goodwin had formed the P.A. in 1989, a few years before executing the Commission Agreement in his individual capacity. The court's order also ruled that the statute of limitations barred claims that arose more than five years before he filed suit.

The court conducted a bench trial on the accounting. Goodwin asserted that Blu Murray's concealment of its gross commissions and the number and complexity of the calculations warranted an accounting. The trial court ruled that Goodwin had waived his right to an accounting by waiting nearly four years to bring suit after discovering the shortchange and denied the claim.

Goodwin subsequently sought leave to amend his complaint to assert a claim as an independent contractor for attorney's fees under section 448.08. Citing the recent case of Elder v. Islam, 869 So.2d 600 (Fla. 5th DCA 2004), he argued that the relevant inquiry is what constituted "wages," rather than what label may be used by the party seeking payment of the wages. The trial court, concluding that an independent contractor could not seek attorney's fees under section 448.08, denied the motion.

Before the jury trial on the remaining count for breach of contract, both parties brought cross motions for summary judgment on renewal commissions. The trial court granted both motions for summary judgment, ruling in part that Goodwin had a vested interest in pre-termination commissions. Relying, however, upon Barr v. Sun Life Assur. Co., 146 Fla. 55, 200 So. 240 (1941), the court ruled that Goodwin was not entitled to any post-termination renewal commissions. The trial court also ruled, as a matter of law, that Goodwin had waived any right to seek damages for the commission shortage.

Based upon the trial court's oral rulings on the respective motions for summary judgment, Goodwin believed that the issue of liability had been resolved. The trial court ruled that the contract was not ambiguous, Goodwin was not entitled to post-termination renewal commissions, but he was entitled to vested commissions for first-year policy sales and renewals prior to his termination. The parties stipulated to the amount of damages based on Goodwin's pre-termination commissions. The stipulation did not apply, however, to any other damages Goodwin sought in the past or might seek in the future upon appeal. The jury returned a verdict for Goodwin on the breach of contract, and the trial court entered a final judgment awarding Goodwin stipulated damages of $58,213.65.

Despite the court's earlier denial of Goodwin's motion for leave to amend, Goodwin filed a post-judgment motion for attorney's fees pursuant to section 448.08 and the recently amended Florida Rule of Civil Procedure 1.525 to preserve for appeal his claim to attorney's fees. The trial court denied his motion for fees, but awarded costs to Goodwin as the prevailing party. This appeal followed.

We first consider the summary judgment on renewal commissions. Goodwin argued that the agreement's plain and unambiguous language required that he or his estate receive renewal commissions for the policy's life regardless of his termination as long as the total monthly renewal commissions equal at least $100. Alternatively, Goodwin contended a jury must resolve any ambiguity. The agreement's language provided:

B. RENEWAL COMMISSIONS:

Those percentages as shown in the schedule of commissions which are percentages of the renewal premiums for the second year and through the life of the policy as the agency receives commissions on that policy.

Renewals of policies written by the agent will be paid the agent or the agents estate as long as the total monthly renewal commissions payable to the agent equal at least $100 a month.

Renewals due the agent must be paid as long as the agency or the agency assigns are collecting money from insurance companies. No sale of the agency, or change in ownership or management will alter this agreement.

(emphasis added).

The trial court erred. The existence of an ambiguity in a contract is a question of law. Centennial Mortgage, Inc. v. SG/SC, Ltd., 772 So.2d 564, 566 (Fla. 1st DCA 2000). To the extent any ambiguity exists in the interpretation of the contract, it will be strictly construed against the drafter. Tannen v. Equitable Life Ins. Co., 303 So.2d 352, 355 (Fla. 3d DCA 1974). We conclude that the contract provided for the payment of post-termination renewal commissions to Goodwin.

The Commission Agreement expressly states the agent or his estate will be paid renewal commissions for the life of the policy as long as the total monthly renewal commissions equal at least $100 per month and that renewal...