Myaer v. Nodak Mut. Ins. Co.

• Decision Date: 10 February 2012
• Docket Number: No. 20110153.,20110153.
• Citation: 812 N.W.2d 345,2012 ND 21
• Parties: Barry MYAER, Plaintiff and Appellee, v. NODAK MUTUAL INSURANCE COMPANY, Defendant and Appellant.
• Court: North Dakota Supreme Court

812 N.W.2d 345

2012 ND 21

Barry MYAER, Plaintiff and Appellee,

v.NODAK MUTUAL INSURANCE COMPANY, Defendant and Appellant.

No. 20110153.

Supreme Court of North Dakota.

Feb. 10, 2012.

Amy Marie Oster (argued) and Gary R. Wolberg (appeared), Bismarck, N.D., for plaintiff and appellee.

Sarah Andrews Herman (argued) and Matthew Allen Kipp (on brief), Fargo, N.D., for defendant and appellant.

VANDE WALLE, Chief Justice.

[¶ 1] Nodak Mutual Insurance Company appealed from a judgment awarding Barry Myaer $34,933.24 plus interest in his breach of contract action against Nodak. We conclude the district court did not err in ruling Myaer was entitled to deferred commissions payable to him in December 2009, but did err in ruling those commissions could exceed 10 percent under the terms of the parties' contract. We affirm in part, reverse in part, and remand for further proceedings.

I

[¶ 2] On July 7, 2009, Nodak terminated Myaer's “Career Producer's Contract” after he had served as a captive insurance agent for the company in Mohall for almost 29 years. The most recent Career Producer's Contract Myaer signed was dated December 28, 2004, but Nodak had subsequently sent similar contracts throughout the years, the last of which was effective January 1, 2009. The contract provided different commission calculations depending on the type of policy written by Myaer. The contract provided for a 10 percent commission on gross premiums for sales of multi-peril crop insurance (“MPCI”).

[¶ 3] The premium payments for MPCI policies were normally paid in two installments by the policyholders. An addendum to the contract provided:

A. Career Producer will receive 50% of the commissions payable in the month following those policies processed by AFBIS.

B. Career Producer will receive balance of commissions due on those policies that are paid in full in the month following processed premium.

According to Myaer, the first installment was paid in August after acreage reports were submitted and the second installment was paid in December after policyholders paid their premiums in full. The contract addendum also provided for reductions of the 10 percent commission under certain circumstances:

C. A commission reduction of 1% will be applied to all gross premiums if all submissions and loss reports are not submitted on-line.

D. A commission reduction of 1% will be applied to all gross premiums if all MPCI notes including any outstanding interest are not paid and received in the home office prior to November 1st.

[¶ 4] The contract also explained when commissions were “earned”:

COMMISSIONS, CREDITS, AND REFUNDS. Commissions on any policy or on added coverage shall be earned when: (1) the policy or added coverage has been accepted by the Company or the other insurers identified in the Addendums to this Contract; (2) the policy is issued; and (3) premium is received and processed by the Company.

The contract provided that it “may be canceled by either party, with or without cause, at any time upon giving notice, in writing, to the other party,” and further provided: “Upon cancellation of this Contract,no further commission or premium credit shall accrue.”

[¶ 5] After Myaer's termination in July 2009, Nodak paid him $20,338.72 in August 2009 for commissions owed to him. Myaer's “MPCI Commission Statement” for the 2009 crop year indicated $22,500.45 in deferred commissions remained to be paid. However, in December 2009, Nodak did not pay Myaer the deferred commissions on the policies he had sold, claiming he was no longer entitled to them. Nodak claimed Myaer was not entitled to further commissions because his contract was terminated before policyholders had paid the second installments on their premiums.

[¶ 6] In April 2010, Myaer brought this action against Nodak claiming, among other theories not relevant to the appeal, that it had breached the Career Producer's Contract by failing to pay him the deferred commissions in December 2009. Both parties moved for summary judgment. Myaer filed an affidavit setting forth his calculations of what he was owed and claiming, “[t]he way MPCI commissions were typically paid, if I did my reports via the Internet and all farmers' notes were paid, my total commission would be 12 per cent....” Nodak presented a copy of the Career Producer's Contract, and filed a “Motion in Limine to Exclude Testimony Contrary to Career Producer's Contract.” Nodak argued Myaer's claim to a 12 percent commission was barred by the parol evidence rule because it conflicted with the express terms of the 2009 contract, which provided for a maximum 10 percent commission.

[¶ 7] The district court granted summary judgment in favor of Myaer, but did not address Nodak's motion in limine. The court ruled that, under the terms of the contract, Myaer's right to receive the second installment of commissions had already “accrued” at the time Nodak terminated the contract. The court awarded him a 10 percent commission on the policies he had sold in the amount of $22,500.45 and also awarded him a “bonus” in the amount of $9,003.70 in accordance with Myaer's calculations, reasoning “it does not appear that Nodak has actually challenged the work product of Mr. Myaer.” Myaer was also awarded pre- and post-judgment interest.

II

[¶ 8] Nodak argues the district court erred in concluding Myaer is entitled to the deferred commissions payable in December 2009 because the ruling ignores the plain language of the Career Producer's Contract.

[¶ 9] The standard for reviewing a summary judgment is well-established:

“Summary judgment is a procedural device for the prompt resolution of a controversy on the merits without a trial if there are no genuine issues of material fact or inferences that can reasonably be drawn from undisputed facts, or if the only issues to be resolved are questions of law. A party moving for summary judgment has the burden of showing there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. In determining whether summary judgment was appropriately granted, we must view the evidence in the light most favorable to the party opposing the motion, and that party will be given the benefit of all favorable inferences which can reasonably be drawn from the record. On appeal, this Court decides whether the information available to the district court precluded the existence of a genuine issue of material fact and entitled the moving party to judgment as a matter of law. Whether the district court properly granted summary judgment is a question of law which we review de novo on the entire record.”

Riverwood Commercial Park, LLC v. Standard Oil Co., Inc., 2011 ND 95, ¶ 6, 797 N.W.2d 770 (quoting Missouri Breaks, LLC v. Burns, 2010 ND 221, ¶ 8, 791 N.W.2d 33).

[¶ 10] Generally, the interpretation of a written contract is a question of law for the court, making summary judgment an appropriate method of disposition in contract disputes. See Tri–State Ins. Co. v. Commercial Grp. W., LLC, 2005 ND 114, ¶ 10, 698 N.W.2d 483;Garofalo v. Saint Joseph's Hosp., 2000 ND 149, ¶ 7, 615 N.W.2d 160. We construe written contracts to give effect to the parties' mutual intention when the contract was formed, and if possible, we look to the writing alone to determine the parties' intent. See Doeden v. Stubstad, 2008 ND 165, ¶ 14, 755 N.W.2d 859;N.D.C.C. § 9–07–03. Words in a contract are construed in their ordinary and popular sense, unless they are used by the parties in a technical sense, or unless a special meaning is given to them by usage. See Riverwood Commercial Park, LLC, 2011 ND 95, ¶ 7, 797 N.W.2d 770;N.D.C.C. § 9–07–09. Under N.D.C.C. § 9–07–10, “[t]echnical words are to be interpreted as usually understood by persons in the profession or business to which they relate, unless clearly used in a different sense.” We may look to principles of the applicable law at issue to see whether an undefined term has a technical meaning. See Hanneman v. Continental W. Ins. Co., 1998 ND 46, ¶ 29, 575 N.W.2d 445. Although extrinsic evidence is not admissible to contradict unambiguous written contract language, extrinsic evidence may be considered to show the parties' intent if the contract is ambiguous. See Kuperus v. Willson, 2006 ND 12, ¶ 11, 709 N.W.2d 726. Whether a contract is ambiguous is a question of law. Id. We independently examine and construe a contract to determine if the district court erred in its interpretation. See Irish Oil and Gas, Inc. v. Riemer, 2011 ND 22, ¶ 11, 794 N.W.2d 715.

[¶ 11] We have recognized that “one working on commission may not be entitled to commissions made before termination if the contract so provides.” Garofalo, 2000 ND 149, ¶ 14, 615 N.W.2d 160. Nodak argues this is the situation here based on the plain language of the parties' contract. According to Nodak, one of the conditions precedent for Myaer to “earn[ ]” a commission is that the “premium is received and processed by the Company,” and the second installment of the premiums upon which the deferred commissions payable in December 2009 were based had not been received and processed by Nodak at the time of Myaer's July 2009 termination. Therefore, Nodak argues, the December 2009 deferred commissions had not yet “accrue[d]” when Myaer was terminated and he is not entitled to those commissions. Nodak contends this case is similar to Johnson v. Peterbilt of Fargo, Inc., 438 N.W.2d 162, 163 (N.D.1989), in which a majority of this Court held a contractual provision stating no commission will be paid to a salesman where the item sold is not delivered until after the salesman's termination from employment was not void as against public policy. The employment contract in Johnson specifically provided that “ ‘COMMISSIONS WILL NOT BE PAID TO SALESMEN ... ON SALES WHERE THE UNIT OR UNITS ORDERED IS DELIVERED AFTER THE TERMINATION OF SALESMAN'S EMPLOYMENT,’ ” and the employee quit his job before two trucks he had sold were...