Ohio Farmers Ins. Co. v. Dakota Agency, Inc.
| Decision Date | 24 July 1996 |
| Docket Number | No. 960016,960016 |
| Citation | 551 N.W.2d 564 |
| Parties | OHIO FARMERS INSURANCE COMPANY, Plaintiff and Appellee, v. DAKOTA AGENCY, INC., Defendant and Appellant. Civil |
| Court | North Dakota Supreme Court |
Rebecca S. Theim (argued), of Zuger Kirmis & Smith, Bismarck, for plaintiff and appellee.
James J. Coles (argued), of Snyder Coles Lawyers, Bismarck, for defendant and appellant.
Dakota Agency, Inc. (Dakota), appeals from a summary judgment awarding Ohio Farmers Insurance Company (Ohio) $300,000 in damages for breach of contract. We affirm.
In November 1989, Dakota entered into an "Agency Agreement" with Ohio. Randall L. Standaert, an employee and licensed insurance agent of Dakota, signed the agreement on behalf of Dakota as its general manager. The agreement incorporated the terms of the Underwriting Guide and Limit of Authority for Fidelity and Surety Bonds which required prior approval from Ohio before Dakota could issue certain Ohio bonds to Dakota customers.
In December 1989, Ohio requested that Dakota update the powers of attorney for individuals working in the agency. Ohio issues powers of attorney solely to employees and licensed agents of its corporate agencies, relying on the agency's representations that the individual is licensed and qualified to execute undertakings on behalf of the agency and Ohio. Ohio had previously granted Standaert powers of attorney through Dakota's predecessor and other insurance agencies where Standaert had worked. In April 1990, powers of attorney were issued to Standaert and another Dakota employee, and both signed an underwriting guide and letter of authority with Ohio.
In May 1990, Standaert executed, as attorney-in-fact for Ohio, a $150,000 performance bond guaranteeing the contractual obligations of S & G Packing Company (S & G) to the United States Department of Agriculture (USDA) for fiscal year ending September 30, 1990, to package unprocessed honey. In October 1990, Standaert again executed, as attorney-in-fact for Ohio, another $150,000 performance bond guaranteeing the contractual obligations of S & G to the USDA for fiscal year ending September 30, 1991. Both performance bonds were issued without the prior approval of Ohio. Neither Ohio nor Dakota received any premium payments for the bonds.
A fire occurred at S & G on October 26, 1990, destroying more than one million pounds of USDA-owned honey. S & G did not perform its contractual obligations to the USDA, and the USDA notified Ohio of a loss in excess of the $300,000 amount of the performance bonds. Ohio had no prior knowledge of the bonds and would not have approved their issuance if approval had been requested by Standaert.
Ohio paid the USDA $300,000 in full satisfaction of its obligations under the performance bonds and USDA gave Ohio a release and assignment of its $300,000 claim. Ohio's collection efforts against S & G and Standaert were unsuccessful, and Ohio sued Dakota for $300,000, alleging Dakota was responsible for Standaert's unauthorized conduct.
The trial court granted Ohio's motion for summary judgment, concluding as a matter of law that Standaert was acting as an agent and employee of Dakota when he issued the performance bonds to S & G, that Ohio had not given Dakota authority to issue the bonds, and that, under the unambiguous terms of the agency agreement, Dakota's breach entitled Ohio to $300,000 in damages. The trial court also ruled, as a matter of law, Dakota was liable to Ohio under principles of tort law and respondeat superior. Dakota appealed.
Summary judgment is a procedural device for the prompt and expeditious disposition of a controversy without trial if either party is entitled to judgment as a matter of law, if no dispute exists as to either the material facts or the inferences to be drawn from undisputed facts, or if resolving disputed facts would not alter the result. Osterman-Levitt v. MedQuest, Inc., 513 N.W.2d 70, 72 (N.D.1994). It is unnecessary for us to consider whether Dakota is liable under general principles of tort law and respondeat superior because we agree with the trial court that, as a matter of law, Ohio is entitled to summary judgment against Dakota under the clear and unambiguous terms of the agency agreement.
We interpret contracts to give effect to the mutual intentions of the parties at the time of contracting. Pamida, Inc....
To continue reading
Request your trial
-
26th St. Hospitality, LLP v. Real Builders, Inc.
...from the writing alone, the interpretation of the contract is a question of law for the court to decide. Ohio Farmers Ins. Co. v. Dakota Agency, Inc., 551 N.W.2d 564, 565 (N.D.1996).State ex rel. Stenehjem v. Philip Morris, Inc., 2007 ND 90, ¶ 14, 732 N.W.2d 720 (quoting Grynberg v. Dome Pe......
-
Global Financial Services, Inc. v. Duttenhefner, 970215
...the inferences to be drawn from undisputed facts, or if resolving disputed facts would not alter the result. Ohio Farmers Ins. Co. v. Dakota Agency, 551 N.W.2d 564, 565 (N.D.1996). As Jensen v. North Dakota Workers Comp. Bureau, 1997 ND 107, p 9, 563 N.W.2d 112, explained, interpretation of......
-
State ex rel. Stenehjem v. Philip Morris
...from the writing alone, the interpretation of the contract is a question of law for the court to decide. Ohio Farmers Ins. Co. v. Dakota Agency, Inc., 551 N.W.2d 564, 565 (N.D.1996). We also recognize that there is a strong state and federal public policy favoring the arbitration process, a......
-
Earthworks, Inc. v. Sehn
...dismissing both Earthworks' complaint and Sehn's counterclaim. Summary judgment is, as we said in Ohio Farmers Insurance Company v. Dakota Agency, Inc., 551 N.W.2d 564, 565 (N.D.1996), a procedural device to promptly and expeditiously dispose of a controversy without trial if either party i......