Trumble v. Farm Bureau Mut. Ins. Co. of Idaho, an Idaho Corp.
| Decision Date | 17 December 2019 |
| Docket Number | Docket No. 46133 |
| Citation | 166 Idaho 132,456 P.3d 201 |
| Court | Idaho Supreme Court |
| Parties | Brian D. TRUMBLE, Plaintiff-Counterdefendant-Appellant-Cross Respondent, v. FARM BUREAU MUTUAL INSURANCE COMPANY OF IDAHO, an Idaho corporation; Western Community Insurance Co., an Idaho corporation; Farm Insurance Brokerage Co., Inc., an Idaho corporation, Defendants-Counterclaimants-Respondents-Cross Appellants. |
Points Law, PLLC, Boise, and Eberle, Berlin, Kading, Turnbow & McKlveen, Chtd, Boise, attorneys for Appellant. Michelle R. Points argued.
Racine, Olson, Nye & Budge, Pocatello, attorneys for Respondent. Lane V. Erickson argued.
This case is about whether a career agent for Farm Bureau Mutual Insurance Company can collect service bonus commissions that were credited to him during his career, but which became forfeitable after the agent's termination if the agent competed with Farm Bureau within one year of his termination. The district court held that the agent forfeited his commissions by competing with Farm Bureau in violation of the one-year non-competition requirement. We agree, affirming the district court's judgment dismissing the agent's claims.
In addition, this case is about Farm Bureau's counterclaims against the agent, alleging the agent misappropriated trade secrets and intentionally interfered with Farm Bureau's prospective economic advantage after his termination. The district court held that the agent was blameless for his actions after termination and dismissed Farm Bureau's counterclaims. We likewise agree with this determination, and affirm the district court's dismissal of Farm Bureau's counterclaims.
In December 1995, Brian D. Trumble entered into a Career Agent's Contract ("Agent Contract") with Farm Bureau. Under the Agent Contract, Trumble was an independent contractor who procured insurance from interested buyers on Farm Bureau's behalf. The Agent Contract included a non-competition clause which stated:
At about the same time Trumble entered into the Agent Contract with Farm Bureau, Farm Bureau provided Trumble with a separate document titled "Career Agent's Service Bonus Commission Memorandum of Understanding" with an effective date of January 1, 1994 ("1994 Memorandum"). The 1994 Memorandum explained:
As of January 1, 1994, each qualifying, full-time agent under contract [with Farm Bureau] will be eligible to receive a service bonus commission after termination if the agent meets the conditions set forth each year and does not compete with [Farm Bureau] for a period of one year after he or she has terminated.
Neither party signed the 1994 Memorandum.
In 2011, Farm Bureau revised the 1994 Memorandum and issued another version of the "Career Agent's Service Bonus Commission Memorandum of Understanding" ("2011 Memorandum").1 The language quoted above remained substantially unchanged2 but multiple sections were added to the 2011 Memorandum that were absent from the 1994 Memorandum. Those sections read:
From December 1995 until Trumble's termination in May 2016, Trumble was a qualifying agent who met the requirements to earn the service bonus commission every year. On January 26, 2016, Farm Bureau sent Trumble a letter showing that he had qualified for service bonus commissions totaling $251,431.96, if he met "all requirements of the program ... before and after termination of [his] contract."
On May 4, 2016, Farm Bureau terminated Trumble's Agent Contract for alleged dishonesty. The next day, Trumble's counsel sent a letter to Farm Bureau requesting that it restore Trumble as an agent and further requesting that if Farm Bureau did not rescind its termination, that Farm Bureau immediately pay Trumble the bonus commission in full. Farm Bureau's counsel responded on May 9, 2016, explaining that "[Trumble's] [A]gent [C]ontract was ending in part, due to his dishonesty in listing a property in which he held a partial ownership interest, in which he did not reside, as his primary residence, when he knew full well that it was not." Farm Bureau expressed the view that based on the dishonesty provision in the 2011 Memorandum, Farm Bureau had no contractual obligation to pay any service bonus commissions to Trumble. The letter also noted that "even if Mr. Trumble were entitled to his service bonus, the [2011] Memorandum contains a non-competition clause restricting payment until after compliance for a 12-month period."
Two weeks later Trumble filed his complaint, seeking declaratory relief and requesting the district court: (1) find the 90-day covenant not to compete in the Agent Contract unenforceable; and (2) order Farm Bureau to immediately pay Trumble the service bonus commission. Trumble then filed a motion for summary judgment seeking a ruling that (1) the non-competition agreement in the Agent Contract was unenforceable and (2) the non-competition and forfeiture provisions in the 2011 Memorandum were unenforceable.
The district court denied summary judgment, holding that the issue over the non-competition clause in the Agent Contract was moot because more than ninety days had passed. The district court also relied particularly on Anderson v. Farm Bureau Mut. Ins. Co., 112 Idaho 461, 470, 732 P.2d 699, 708 (Ct. App. 1987) (abrogated on other grounds by Metcalf v. Intermountain Gas Co., 116 Idaho 622, 778 P.2d 744 (1989), in ruling that the one-year non-competition and forfeiture clauses in the 2011 Memorandum were enforceable as a matter of law. The district court explained:
[Trumble] ... asserts that the non-competition restriction in the service bonus commission memorandum is only applicable if the agent terminates his or her contract. ... In interpreting this provision, [Trumble] focuses only on the phrase "after they have terminated" rather than considering the sentence as a whole. The plain language of the provision indicates the general terms of eligibility "to receive a service bonus commission after termination." In terms of such eligibility, there is no indication that agents who elect to terminate their contracts are treated any differently from agents who have their contracts terminated by [Farm Bureau]. Under [Trumble's] interpretation, an agent whose contract is terminated by [Farm Bureau] would not be eligible to receive any service bonus commission, because the memorandum contains no separate statement defining eligibility under that circumstance. For these reasons, the court cannot conclude that the non-competition restriction is inapplicable to [Trumble] simply because he did not elect to terminate his contract with [Farm Bureau].
(Emphasis in original).
About six months later, Trumble moved for reconsideration. Significantly, for purposes of this appeal, Trumble asserted generally that the forfeiture clause in the 2011 Memorandum was overbroad and that the forfeiture provision should not be enforced because it was unreasonable. Trumble sought to distinguish Anderson, arguing that it was inapplicable to his case because he had earned the service bonus commissions, unlike the agent in Anderson. Trumble did not argue that the non-competition clause was ambiguous, or that it should be construed against Farm Bureau.
On reconsideration, the district court held that the 2011 Memorandum is not ambiguous. The court also upheld the forfeiture provision in the 2011 Memorandum, noting that "[a]lthough the law does not favor forfeitures, courts will generally uphold contracts that expressly provide for forfeitures." (quoting Hull v. Giesler, 156 Idaho 765, 779, 331 P.3d 507 (2014) ). The court also noted that forfeitures must strictly follow the contract terms and that "[t]here is no showing ... that [Farm Bureau] did not follow the terms of the 2011 Memorandum in denying [Trumble's] request for payment of his service bonus prior to the satisfaction of all the terms of the 2011 Memorandum."
During the litigation, Trumble had generated a list ("Subject List")...
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