Professional Underwriters, Inc. v. Continental Ins. Co.

• Citation: 437 Mich. 1036,471 N.W.2d 559
• Decision Date: 09 July 1991
• Docket Number: No. 109149,No. 89150,89150,109149
• Court: Supreme Court of Michigan
• Parties: PROFESSIONAL UNDERWRITERS, INC., a Michigan corporation, Plaintiff-Appellant, v. CONTINENTAL INSURANCE COMPANY, a New York corporation, Continental Corporation, a New York corporation, Firemens Insurance Company of Newark New Jersey, a New Jersey corporation, and National Ben Franklin Insurance Company of Illinois, an Illinois corporation, Alexander & Alexander of Michigan, Inc., a Michigan corporation, Alexander & Alexander, Inc., a Maryland corporation, Jay Allen and Gregory Ball, and John T. Mascotte, Defendants-Appellees. COA437 Mich. 1036, 471 N.W.2d 559

Page 559

471 N.W.2d 559

PROFESSIONAL UNDERWRITERS, INC., a Michigan corporation, Plaintiff-Appellant, v. CONTINENTAL INSURANCE COMPANY, a New York corporation,

Continental Corporation, a New York corporation, Firemens

Insurance Company of Newark New Jersey, a New Jersey

corporation, and National Ben Franklin Insurance Company of

Illinois, an Illinois corporation, Alexander & Alexander of

Michigan, Inc., a Michigan corporation, Alexander &

Alexander, Inc., a Maryland corporation, Jay Allen and

Gregory Ball, and John T. Mascotte, Defendants-Appellees.

No. 89150.

COA No. 109149.

437 Mich. 1036, 471 N.W.2d 559

Supreme Court of Michigan.

July 9, 1991.

ORDER

On order of the Court, the application for leave to appeal is considered, and it is DENIED, because we are not persuaded that the questions presented should be reviewed by this Court.

LEVIN, Justice, would grant leave to appeal and states as follows:

The relationship between the plaintiff insurance agent and the defendant insurance company was set forth in an "agency agreement" dated April 16, 1982, which provided for termination by either party on ninety days written notice and that, in the event of termination, the insurer would renew all policies expiring during the following twelve months.

In 1983, the insurer expressed its dissatisfaction with the agent's performance, and, when they were unable to agree, the agent and the insurer, on July 7, 1983, entered into a "limited agency agreement" ¹ which provided that the April 16, 1982 agency agreement "was cancelled effective October 7, 1983," and that the agent had limited authority, as set forth in the July 7 limited agency agreement, until October 7, 1983. The limited agency agreement did not advert to the language in the earlier agency agreement providing that, in the event of termination, the insurer would renew policies expiring during the following twelve months.

The trial court concluded, and the Court of Appeals agreed, that the limited agency agreement "superseded" the earlier agency agreement because the word "cancelled" expressed that intent, and the terms of the limited agency agreement were clearly inconsistent with the terms of the earlier agency agreement.

I

The earlier agency agreement provided that the "Agent shall have complete control, possession and ownership of all records and renewals covered by this Agreement," and that the insurer shall not "solicit the Agent's customers for insurance contracts...." It further provided that if the agent did not properly account for and pay over all premiums due the insurer that the agent's records "and use and control of renewals shall become the property of the" insurer, and the insurer shall have the right "to sell the renewals to satisfy the indebtedness."

The foregoing provisions of the agency agreement recognize a property interest in respect to renewals in the agent, and that renewals are saleable and thus have value.

The agency agreement provided for ninety days' written notice of termination by either party. The insurer was to make an effort to work with the agent to avoid termination, but if the agency agreement were terminated, the insurer agreed to:

"1. Renew all policies expiring during the twelve (12) month period immediately following the date of termination for a period not exceeding twelve (12) months, except:

"a) for non-payment of premium, or

"b) if, in the Company's opinion, the risk does not meet the...