Novak, et al v. Nationwide Mutual Insurance Co, et al.

Decision Date03 September 1999
Docket NumberDocket No. 204162
Citation599 N.W.2d 546
CourtCourt of Appeal of Michigan — District of US

Wayne Circuit Court, LC No. 95-516999 CK

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] Before: MacKenzie, P.J., and Gribbs and Wilder, JJ.


Plaintiff Terry Novak (plaintiff), who alleged that the Nationwide defendants (defendants) illegally terminated his position as an insurance sales agent because they found his Detroit-area clients economically undesirable, appeals as of right from an order granting defendants' motion for summary disposition of his nine-count complaint. We affirm.

Factual Background

In August 1991, in anticipation of assuming responsibility for his father's insurance agency, Novak & Associates Insurance, Inc., plaintiff signed an employment agreement with defendants. Among other things, the agreement specified that (1) if plaintiff successfully completed a training period, defendants would enroll him in their New Agent Development Program or New Business Agent Program, (2) if plaintiff successfully handled his father's former accounts for two years, he would then begin to receive full commissions on those accounts, (3) plaintiff was not to sell insurance for any insurance carriers other than defendants unless defendants specifically directed him to do so, and (4) plaintiff's employment with defendants was terminable at will by either party.

In March 1993, defendants terminated plaintiff's employment. Plaintiff filed suit, claiming, among other things, that the at-will provision in the employment contract was inapplicable to him and that defendants improperly terminated his employment on the basis of his reluctance to move his agency out of Wayne County. Defendants argued that notwithstanding the at-will provision, they properly terminated plaintiff's employment because he (1) commingled personal and business funds, (2) often remitted premium payments to them in an untimely fashion, and (3) allowed unauthorized individuals to sign insurance certificates.

Standards of Review

Except for his claim under the federal Fair Housing Act (FHA), 42 U.S.C. 3601 et seq., discussed infra, all of plaintiff's claims were dismissed under MCR 2.116(C)(10). We review de novo a trial court's grant of summary disposition under MCR 2.116(C)(10). Paul v. Lee, 455 Mich. 204, 210; 568 N.W.2d 510 (1997). Like the trial court, we look at the entire record, view the evidence in favor of the nonmoving party, and decide if there exists a relevant factual issue about which reasonable minds might differ. Id. If, as in the instant case, the nonmoving party would bear the burden of proof at trial, that party, in order to avoid summary disposition, must provide documentary evidence showing the existence of a disputable issue. Quinto v. Cross & Peters Co, 451 Mich. 358, 362; 574 N.W.2d 314 (1996).

The trial court dismissed plaintiff's FHA claim under MCR 2.116(C)(7) because it concluded that the period of limitation for the claim had run. We review a grant of summary disposition under MCR 2.116(C)(7) de novo. Iovino v. Michigan, 228 Mich.App. 125, 131; 577 N.W.2d 193 (1998). We consider all documentary evidence submitted by the parties and accept the plaintiff's well-pleaded allegations, except those contradicted by documentary evidence, as true. Id.; Patterson v. Kleiman, 447 Mich. 429, 433-435; 526 N.W.2d 879 (1994). We view the uncontradicted allegations in favor of the plaintiff and determine whether the claim is time-barred. Id.

Wrongful Discharge and Breach of Legitimate Expectations

Plaintiff argues that the termination of his employment violated an implied just-cause employment agreement and that the trial court therefore should not have summarily disposed of his wrongful discharge and breach of legitimate expectations claims. He bases this argument on an alleged oral statement by one of defendants' employees that the at-will termination provision in the written employment contract would not apply to him. This alleged oral statement, however, did not negate the at-will provision in the written contract, which also contained a provision requiring that modifications of the contract be in writing and be signed by a company representative. When an employment contract expressly provides for employment at will, a plaintiff, by signing the contract, assents to employment at will and cannot maintain a cause of action based on a prior oral agreement for just-cause employment. Nieves v. Bell Industries, Inc., 204 Mich.App. 459, 463; 517 N.W.2d 235 (1994); see also Stopczynski v. Ford MotorCo., 200 Mich.App. 190, 193; 503 N.W.2d 912 (1993). Thus, the trial court properly dismissed plaintiff's wrongful discharge claim. The court also properly dismissed plaintiff's breach of legitimate expectations claim, because a claim based on legitimate expectations rests on the employer's promises to the work force in general-for example, promises contained in a company handbook-rather than on promises made to an individual employee, and because plaintiff made no claim that defendants promised just-cause employment to the work force in general. Nieves, supra at 464; see also Dolan v. Continental Airlines/Continental Express, 454 Mich. 373, 384, 386-387; 563 N.W.2d 23 (1997).

Insurance Code Anti-Redlining Provisions

Plaintiff argues that notwithstanding the employment contract's at-will provision, defendants nevertheless improperly terminated his employment because the Insurance Code precludes the termination of an agent's employment for certain specified reasons even if an employment contract otherwise allows for it. Specifically plaintiff claims that there was a question of fact regarding whether defendants discharged him because of the loss history and geographic location of his Wayne County agency and thereby violated the anti-redlining provisions contained in 209 of the Michigan Insurance Code, MCL 500.1209; MSA 24.11209, which states, in pertinent part, as follows:

(3) As a condition of maintaining its authority to transact insurance in this state, an insurer transacting automobile insurance or home insurance in this state shall not cancel an agent's contract . . . except for 1 or more of the following reasons:

(a) Malfeasance.

(b) Breach of fiduciary duty or trust.

(c) A violation of this act.

(d) Failure to perform as provided by the contract between the parties.

(e) Submission of less than 25 applications for home insurance and automobile insurance within the immediately preceding 12-month period.

(4) Subsection (3) shall not be construed as permitting a termination of an agent's authority based primarily upon any of the following:

(a) The geographic location of the agent's home insurance or automobile insurance business.

(b) The actual or expected loss experience of the agent's automobile or home insurance business, related in whole or in part to the geographical location of that business.

* * *

(5) Subsection (3) . . . shall not apply with respect to an agent who is an employee of an insurer . . . if the property rights in the renewal are owned by the insurer . . . and the cancellation or termination of the agent's contract does not result in the cancellation or nonrenewal of any home or automobile insurance policy. [Emphasis added.]

Plaintiff argues that he did not fall within the parameters of subsection 5-and that he was therefore protected by subsections 3 and 4-because his discharge resulted in the cancellation of home and automobile insurance policies. He additionally argues that even if subsection 5 had applied to him, defendants nevertheless impermissibly terminated his employment because subsection 4, which prohibits termination based on location and loss experience, is not inextricably linked to subsection 3 and is thus unaffected by subsection 5. We disagree with both of these arguments.

First, there was no genuine factual dispute regarding whether plaintiff fell within the parameters of subsection 5. Plaintiff did not and does not dispute that he was an employee of defendants or that defendants owned the property rights in his customers' policy renewals. Accordingly, the only question relevant to the requirements of subsection 5 is whether plaintiff's termination resulted in the cancellation or nonrenewal of any home or automobile insurance policies. Although the record did suggest that after plaintiff's discharge a slightly higher cancellation rate of automobile insurance policies occurred than was usual, there was no evidence that any of these policies were canceled for invalid reasons. As the party who opposed summary disposition and who would bear the burden of proof at trial, plaintiff had the obligation to show that at least one home or automobile policy cancellation resulted from his termination as an agent and not from a legitimate reason. See Quinto, supra at 362. Plaintiff failed to do so. He implies that some customers' policies were "constructively" canceled because Nationwide made the servicing of their policies so difficult that the customers were forced to seek other insurance. We agree with the trial court, however, that inefficient servicing of an account cannot be equated with a policy cancellation under the unambiguous language of subsection 5. Because plaintiff was defendants' employee, because defendants owned the renewal rights in the policies, and because plaintiff did not produce evidence that his termination caused...

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