# U ni te d S ta te s Co ur t of A pp ea ls For the Eig hth Circu it

__ __ __ __ __ __ __ __ __ __ __ __ __ _
No. 1 2- 19 74

__ __ __ __ __ __ __ __ __ __ __ __ __ _ Olym pu s In su ran ce Co m

pa ny

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el la nt

v.

AON Ben fie ld , Inc .; Be nf ie ld , Inc

.

ll ll ll ll ll ll ll ll ll ll l Defe nd

an ts - App el le es

__ __ __ __ __ __ App eal fro m

Uni te d S ta te s Di st ric t Co ur t fo r th e Dis tri ct of M in ne so ta - Mi nn eap ol is

__ __ __ __ __ __
Su bm it te d: Nov em

be r 15 , 20 12 Fil ed : Ap ril 1, 2 01 3

__ __ __ __ __ __
Befo re MUR PHY, BENTON, an d S HEPHERD, Circ ui t J ud ge s.

__ __ __ __ __ __
SHEPHERD, Cir cu it Ju dg e.

Olym pu s In su ran ce Co m

pa ny (“ Olym

pu s” ) ap pe al s th e di st ric t co ur t’s 1
di sm is sa l of it s co m

pl ai nt fo r fai lu re to st at e a cl ai m

. See Fed

. R. Ci v. P. 12 (b )(6 ). Olym pu s a r g u es th at th e di st ric t co ur t erre d in de te rm in in g th at it s co nt ract wit h

The Hon or ab le Pat ric k J. Sch il tz , Uni te d St at es Dis tri ct Ju dg e fo r th e Dis tri ct 1 of Mi nn es ot a.Ben fie ld
, In co rp or at ed (“ Ben fie ld ”) c l earl y an d un am bi gu ou sl y pr ov id ed th at
Ben fie ld di d no t owe Olym pu s an an nu al fee aft er Ben fie ld was no ti fie d of Olym pu s’s
de ci si on to rep la ce Ben fie ld wit h an ot he r rei ns ur an ce br ok er. Hav in g co nd uc te d a de

no vo r e v ie w of th e di st ric t co ur t’s or de r, we affi rm th e di sm is sa l of Olym pu s’s

co m pl ai nt

.

I.

Olym pu s se ll s h o meo wne rs in su ran ce po li ci es in th e St at e of Fl or id a. To

m an ag e th e ris k as so ci at ed wit h th es e h om eo wne rs po li ci es , Olym pu s so ug ht to rei ns ur e an y po rti on of a po li cy ab ov e $7 50 ,00 0 an d ag gr eg at e cat as tro ph e lo ss ab ov e $6 m il li on

. Bec au se rei ns ur an c e po li ci es are sp read am on g m ul ti pl e rei ns ur ers , Olym pu s en ga ge d th e se rv ic es of Ben fie ld a s i t s rei ns ur an ce br ok er. Ben fie ld was

res po ns ib le fo r pl aci ng an d se rv ic in g rei ns ur an ce po li ci es fo r th e h o meown ers in su ran ce po li ci es writ te n by Olym pu s. Afte r Ben fie ld s u cces sf ul ly pl aced a rei ns ur an ce po li cy , it earn ed a br ok erag e co m m is si on , whi ch was typic al ly 10 % of th e
pr em iu m Olym

pu s pa id to th e rei ns ur er. Als o, as is co m m on in th e in du st ry , Olym pu s

an d Ben fie ld en te red in to a br ok erag e sh ari ng ag reem en t, un de r whi ch Ben fie ld

ag reed to sh are pa rt of it s co m m is si on in th e fo rm of an “ Ann ua l Fee” wit h Olym pu s in ret ur n fo r ex cl us iv e st at us as Olym pu s’s rei ns ur an ce br ok er an d th e es ta bl is hm en t of a lo ng -te rm

bro ke rag e rel at io ns hi p.

In 20 08
, Olym

pu s an d Ben fie ld e n t e r ed in to a on e-p ag e br ok erag e sh ari ng
ag reem en t. As r el ev an t, t he co nt ract pro vi de d i n t he fir st pa rag rap h:

In co ns id erat io n fo r Cl ie nt ap po in ti ng Ben fie ld as it s ex cl us iv e rei ns ur an ce i nt erm ed ia ry -b ro ke r fo r th e p la cem en t an d se rv ic in g of al l of Cl ie nt ’s rei ns ur an ce co nt ract s (th e “ Su bjec t Bu si ne ss ”) fo r th e in it ia l

an nu al pe rio d b eg in ni ng on Ju ne 1, 2 00 8 a nd en di ng on May 31, 2 00 9 ( t h e “ In it ia l Term ”) (eac h Ju ne 1 to May 3 1 m ay al so be refe rre d t o a s

an “ Agr eem en t Year” ), an d fo r ad di ti on al su bs eq ue nt Agr eem en t Years

-2

-( e a c h su ch y ear a “ One -Year Ren ewal Term ”) un le ss ei th er pa r t y

no ti fie s th e ot he r pa rty of it s in te nt no t to ren ew th is Agr eem en t at le as t 30 da y s pr io r to th e en d of th e In it ia l Term or an y su bs eq ue nt One -Year Ren ewal Term
, Ben fie ld ag rees to sh are wit h Cl ie nt Ben fie ld ’s rece iv ed

an d earn ed br ok erag e rev en ue de riv ed fro m th e Su bj ect Bu si ne ss

ex cl ud in g a ny bro ke rag e p ai d t o c or res po nd in g b ro ke rs , in cl ud in g a ny br ok ers affi li at ed wit h Ben fie ld or su b

- br ok ers (“ Net Bro ke rag e Rev en ue ”) by pa y in g Cl ie nt an an nu al fee (“ Ann ua l Fee” ) fo r each Agr eem en t Year eq ua l to 70 % of al l Net Br ok erag e Rev en ue le ss th e Serv ic e Fee set for th in Para gr ap h 2 of t hi s Ag reem en t.

(Ap pe ll an t’s Add en du m at 18 .) Als o rel ev an t to th is cas e is th e th ird pa rag rap h of th e

co nt ract , whi ch pro vi de d:

No Ann ua l Fee sh al l be pa y ab le su bs eq ue nt to an y de ci si on by Cl ie nt to te rm in at e or rep la ce Ben fie ld as it s rei ns ur an ce in te rm ed ia ry -b ro ke r fo r

an y po rti on of th e Su bjec t Bus in es s. In ad di ti on , in th e ev en t Be nf ie ld is te rm ina te d as Cl ient ’s rei ns ur an ce in te rm ed ia ry -b ro ke r for an y Su bj ec t Bu si ne ss pr io r to th e en d of the In it ia l Term
, Cl ie nt sh al l pro m pt ly pa y B en fie ld an y ou ts ta nd in g am ou nt of th e Serv ic e Fee fo r th e c u r r e n t Ag r e e men t Year an d sh al l rei m bu rs e Ben fie ld fo r Ann ua l Fees
p r ev io us ly pa id by Ben fie ld un de r th is Agr eem en t. Cl ie nt ag rees to rei m bu rs e Ben fie ld fo r an y an d al l co st s an d ex pe ns es as so ci at ed wit h

co ll ect in g a ny reim

bu rs em en t.

(Ap pe ll an t’s Ad de nd um

at 1 8.)

In Feb ru ary 20 09
, Olym pu s de ci de d to rep la ce Ben fie ld as it s re i n s ur an ce br ok er wit h Guy Carp en te r & Co m pa ny (“ Guy Carp en te r”). On Mar ch 25
, 20 09
, Guy
C a rp en te r in fo rm ed Ben fie ld by le tt er th at it wou ld rep la ce Ben fie ld as Olym pu s’s
rei ns ur an ce br ok er effe ct iv e Ju ne 1, 20 09

. The pa rti es ag ree th at th is le tt er se rv ed as
pr op er n ot ic e o f te rm in at io n. In Octo be r 20 09 , Oly m pu s d em an de d p ay m en t o f th e Ann ua l Fee du e fo r th e In it ia l Peri od

. Ben fie ld refu se d to m ak e th e pa y m en t, arg ui ng th at it s rep la cem en t by Guy Carp en te r co ns ti tu te d a de ci si on to “ te rm in at e or rep la ce”

-3

-as co nt em

pl at ed by th e th ird pa rag rap h of th e ag reem en t, an d th us th at Ben fie ld was

no t o bl ig at ed to pa y

th e Ann ua l Fe e.

Olym pu s br ou gh t th e in st an t act io n in st at e co ur t un de r th eo rie s o f br each of

co nt ract , qu as i-c on tra ct , un jus t en ric hm en t, an d qu an tu m m eru it an d req ue st ed rel ie f
of $6 11 ,85 4, th e am ou nt Olym pu s co nt en ds it is owe d in Ann ua l Fees

. Afte r rem ov al

to fed eral co ur t on th e ba si s of di ve rs it y , B e nf ie ld m ov ed fo r di sm is sa l of th e

co m pl ai nt , arg ui ng th e un am

bi gu ou s te rm s of th e co nt ract pr ov id e th at Ben fie ld do es

no t owe Olym

pu s th e Ann ua l Fee an d th e ex is te nc e o f a co nt ract fo recl os es Olym pu s’s cl ai m s o f qu as i-c on tra ct , un jus t en ric hm en t, an d q ua nt um m eru it

.

Afte r a he ari ng , th e di st ric t co ur t en te red an or de r gr an ti ng Ben fie ld ’s m ot io n
to di sm is s. Ap pl y in g M in ne so ta law, t he di st ric t cou rt con cl ud ed th e un am bi gu ou s la ng ua ge of th e co nt ract rel ie ve d Ben fie ld of an y ob li ga t i on to pa y Olym pu s th e Ann ua l Fee be cau se th e f o r f e i t u re pr ov is io n of th e th ird pa rag rap h was act iv at ed
whe n Ben fie ld was in fo rm ed of Olym pu s’s de ci si on n ot to ren ew th e br ok erag e
ag reem en t. The c o u r t al so de te rm in ed th at th e rem ai ni ng cl ai m s— qu as i-c on tra ct ,

un jus t en ric hm en t , an d qu an tu m m eru it —co ul d no t su ccee d be cau se Olym pu s an d
Ben fie ld were p art ie s t o a n e xp res s co nt ract

.

Olym p u s ap pe al s th e di sm is sa l of it s co m pl ai nt

. W e ha ve juri sd ic ti on un de r 28 U.S.C. § 1 29 1.

II.

In th is ap pe al
, Olym

pu s rai se s fo ur c l a i m s of erro r: (1 ) th e di st ric t co ur t
im pr op erl y li m it ed th e de fin it io n of “ Su bjec t Bu si ne ss ” to only tho se w or ds pr eced in g th e pa ren th et ic al te rm an d ex cl ud in g th e m od ifi cat io n cl au se s fo ll owi ng th e
pa ren th et ic al te rm ; (2 ) th e di st ric t co ur t in co rrec tl y co ns tru ed a no n- ren ewal to ha ve th e sa m e m ean in g as a “ rep la cem en t” o r a “ te rm in at io n” un de r th e co nt ract ; (3 ) th e

-4

-di st ric t co ur t’s in te rp ret at io n of th e co nt ract —t ha t Benf ie ld is on ly ob li ga te d to pa y th e an nu al fee if Olym pu s ren ews th e br ok er ag reem en t fo r an a d d i t i on al

te rm —cr eat es a co nd it io n su bs eq ue nt th at is no t co nt ai ne d in th e co nt ract ; an d (4 ) be cau se th e co nt ract is am bi gu ou s, th eo rie s of e q u i ty—sp eci fic al ly un jus t

en ric hm en t an d q ua nt um

m eru it —ar e av ai la bl e to Oly m

pu s.

Our rev ie w of th e di st ric t co ur t’s gr an t o f a mo t i o n to di sm is s un de r Ru le
12 (b )(6 ) is de no vo

. Co x v. Mo rtg

. Elec

. Reg is tra ti on Sy s., In c., 68 5 F .3d 66 3, 6 68 (8 th Ci r. 20 12 ). Thi s ag reem en t co nt ai ns a ch oi ce-o f-l aw cl au se di ct at in g th at
Mi nn es ot a la w wil l go ve rn th e co nt ract

. The pa rti es ag ree th at Mi nn es ot a la w ap pl ie s
to th e co nt ract

. W e rev ie w de no vo th e di st ric t co ur t’s ap pl ic at io n an d in te rp ret at io n of Mi nn es ot a la w. Id.

W he n in t e r p r e t i n g a co nt ract , th e co ur t’s pr im ary go al “ is to as cert ai n an d

en fo rce th e in te nt of th e pa rti es .” Vals pa r Refi ni s h
, I n c

. v

. Gay lo rd ’s, In c., 76 4
N.W .2d 35 9, 36 4 (Mi nn

. 20 09 ). If th e co nt ract is memo r i al iz ed in a writ te n in st ru m en t, th e writ te n co nt ract se rv es as th e be st ev id en ce of th e pa rti es ’ in te nt , an d
th e co ur t de te rm i n e s th at in te nt “ fro m th e pl ai n la ng ua ge of th e in st ru m en t it se lf.”
Trav ert in e Co rp

. v. Lex in gt on -Si lv erwo od
, 68 3 N.W .2d 26 7, 27 1 (Mi nn

. 20 04 ). W e gi ve co nt ract la ng ua ge it s pl ai n an d or di na ry m ean in g, read in g it in th e co nt ex t of th e in st ru m en t as a who le an d vi ewin g each pa rt of th e co nt ract in li gh t of th e ot he rs

. Bro ok fie ld Trad e Ct r., In c. v. Cn ty. of Ram se y , 58 4 N.W .2d 39 0, 39 4 (Mi nn

. 19 98 ).

Olym pu s arg ue s th at th e di st ric t co ur t erre d by di sm is si ng i t s co m pl ai nt be cau se th e br ok erag e co nt ract is am bi gu ou s, sp eci fic al ly as to th e d e f i n i ti on of

“ Su bjec t Bu si ne ss ” an d whe th er “ te rm in at e o r r ep la ce” ha s th e sa m e m ean in g as

“ in te nt no t to ren ew.” Co nt ract la ng ua ge is am bi gu ou s if it is “ reas on ab ly su sc ep ti bl e
t o m or e th an on e in te rp ret at io n.” Bro ok fie ld Trad e Ct r., 58 4 N.W .2d at 39 4

.

“ W he th er a co nt ract is am bi gu ou s is a qu es ti on of la w

. . . .” Carl so n v. All st at e In s. Co
., 74 9 N.W .2d 41
, 45 (Mi nn

. 20 08 ). If th e co ur t de te rm in es th at a co nt ract is

-5

-a mb i g u ou s, it s in te rp ret at io n th en be co m es a qu es ti on of fact fo r th e jury an d t h e

di st ric t co ur t sh ou ld no t g ran t a m ot io n t o d is m is s. See Den el sb eck v. W el ls Farg o & Co ., 66 6 N.W.2d 3 39 , 34 6 (M in n. 2 00 3)

.

App lying th es e pr in ci pl e s , w e ad dr es s fir st Olym pu s’s co nt en ti on th at th e de fin it io n o f “ Su bjec t Bu si ne ss ” is op en to m or e th an on e rea so na bl e in te rp ret at io n

an d th us is am

bi gu ou s. The di st ric t co ur t li m it ed th e de fin it io n of “ Su bjec t Bu si ne ss ”

to th os e wor ds pr eced in g th e pa ren th et ic al refe ren ce, tha t bei ng “ th e pl acement and

se rv ic in g of al l of Cl ie nt ’s rei ns ur an ce co nt ract s.” Olym pu s co nt en ds t h a t th e de fin i t i o n o f “ Su bjec t Bu si ne ss ” m us t al so en co m

pa ss th e la ng ua ge fo ll owi ng th e in te gr at ed p a ren th et ic al
, th at be in g th e ti m e li m it s of th e in it ia l an d ren ewal te rm s. Olym pu s arg ue s th at if it s de fin it io n of “ Su bjec t Bus in es s” is ad op te d, “ rei ns ur an ce

co nt ract s fo r y ears aft er th e no n- ren ewal ne ve r be cam e pa rt of Su bjec t Bu si ne ss no r be cam e su bjec t to th e te rm s of th e Co nt ract

. Thu s th e fo rfei tu re la ng ua ge [in th e th ird

pa rag rap h] co ul d ne ve r ap pl y to Olym pu s’ rei ns ur an ce co nt ract s en te red in to aft er

no n- ren ewal .”

Ben fie ld arg ue s th at th e “ Su bjec t Bu si ne ss ” m ean s al l of Ol ym pu s’s
rei ns ur an ce pl acements , n ot jus t t ho se m ad e in th e cu rren t y ear. Thi s is so be cau se in dr aft in g th e co nt ract , th e pa rti es ut il iz ed th e in te gr at ed de fin it io n con ve nt io n and pl aced “ Su bjec t Bu si ne ss ” di rect ly aft er “ th e pl acement an d se rv ic in g o f a ll of
Cl ie nt ’s rei ns ur an ce co nt ract s.” Fu rth er, Ben fie ld cl ai m s it en te red in to a br ok erag e sh ari ng ag reem en t be cau se Ben fie ld ha d an in te res t in es ta bl is hi ng a lo ng -te rm rel at io ns hi p w i t h Olym

pu s an d, wit ho ut th e po ss ib il it y of a lo ng -te rm rel at io ns hi p, th ere wo ul d b e n o ju st ifi cat io n fo r pa y in g p art of i ts co m m is si on to Oly m

pu s.

W e ag ree wit h th e di st ric t co ur t’s so un d re as on in g th at th e pr op er read in g of
th is co nt ract is to de fin e “ Su bjec t Bu si ne ss ” as th e pl acement an d se rv ic in g of al l of Olym pu s’s rei ns ur an ce c on tra ct s. Olym pu s’s arg ue d de fin it io n— th at “ Su bjec t
Bu si ne ss ” refe rs to al l of Olym pu s’s rei ns ur an ce co nt ract s un le ss it el ect s no t to

-6

-r en ew—i s no t pl au si bl e. Thro ug h th e us e of th e in te gr at ed de fin it io n, th e pa rti e s

de m on st rat ed th ei r in te nt io n to de fine “ Su bj ec t Busi ne ss ” to m ean “ al l of [Olym pu s’s]
rei ns ur an ce co nt ract s” wit ho ut a te rm li m it at io n. See Ken ne th A. Ada m s, A Man ua l
of St y le fo r Co nt ract Draft in g § 5.3 4 (2 d ed

. 20 08 ) (“ [A]n in te g r a t e d de fin it io n

co ns ti tu te s pa rt of th e su bs ta nt iv e pr o vi si on s of a co nt ract , an d th e de fin ed te rm is
de fin ed by tu ck in g it at th e en d of th e de fin it io n, in pa ren th es es .”). Acco rd in gl y , th is

pa rt of th e co nt ract is no t su bjec t to more th an on e reas on ab le in te rp ret at io n an d
th eref or e is no t am

bi gu ou s.

Nex t, Olym

pu s arg ue s th at ev en if t h e “Sub ject Bu si ne ss ” de fin it io n

un am bi gu ou sl y in cl ud es th e pl acement an d se rv ic in g of co nt ract s be y on d th e In it ia l
Term
, th e di st ric t co ur t erre d whe n it he ld th e te rm s “ te rm in at e,” “ rep la ce,” an d “ no nren ew” to ha ve th e sa m e m ean in g. Olym pu s ar g u e s t h at it di d no t “ te rm in at e” or

“ rep la c e ” Ben fie ld an d th eref or e th e fo rfei tu re pr ov is io n do es no t ap pl y

. Olym pu s cl ai m s th at in se le ct in g Guy Carp en te r to be gi n pl aci ng an d se rv ic in g it s rei ns ur an ce

co nt ract s in Ju ne 20 09
, it was el ect in g no t to ren ew Ben fie ld an d th at th is el ect io n is

no t t he same as “ te rm in at [in g]” o r “ rep la c[i ng ]” Benf ie ld

.

Und er th e fo rfei tu re pr ov is io n, Ben fie ld is rel ie ve d of it s ob li ga ti on to pa y th e Ann ua l Fee “ su bs eq ue nt to an y de ci si on by [Olym pu s] to te rmi n a t e or rep la ce Ben fie ld as it s rei ns ur an ce in te rm ed ia ry -b ro ke r fo r an y po rti on of th e Su bjec t
Bu si ne ss .” Olym

pu s po in ts ou t th at th e co nt ract us es th e ph ras e “ in te nt no t to ren ew”
in th e fir st pa rag rap h, bu t th en us es th e te rm s “ te rm in at e” an d “ rep la ce” in th e fo rfei tu re pa rag r a p h

. Olym pu s arg ue s th e pa rti es m us t ha ve in te nd ed di ffer en t

m ean in gs be cau se th ey em pl oyed di ffer en t te rm s. Sp eci fic al ly, Olym pu s cl ai m s th e
te rm s “ te rm in at e” or “ rep la ce” refe r to a de ci si on m ad e du ri ng ei th er th e In it ia l Term

or a Ren ewal Term
, whe reas “ no n- ren ewal ” pe rta in s on ly to a d e c i s i on to us e a di ffer en t b ro ke r at th e co mpl et io n of t he Ini ti al Term or a Ren ewal Term

.

-7

-Aga in
, we fin d ou rs el ve s in ag reem en t wit h th e dis tr ic t co ur t, w hic h de te rm in ed
th at “ in te nt no t to ren ew” en co m pa ss es bo t h t e r m in at io n an d rep la cem en t. As th e di st ric t co ur t po in te d ou t, Olym pu s wou ld ha ve no re as on to rep la ce or te rm in at e Ben fie ld pr io r to th e en d of t h e In it ia l Term or Ren ewal Term be cau se Ben fie ld

earn ed it s com m is si on up on th e pl acement of th e rei ns ur an ce and rece iv ed no ot he r be ne fit fro m se rv ic in g th e rei ns ur an ce po li ci es th ro ug h th e en d of th e te rm

. It is cl ear th at th e pa rti es ad de d th e fo rfei tu re pro vi si on to th e co nt ract to en co ur ag e Olym pu s
to m ai nt ai n a lo ng -te rm rel at io ns hi p wi th Ben fie ld . W he n Gu y Carp en te r in fo rm ed
Ben fie ld th at it wou ld be ta ki ng ov er as Olym pu s’s rei ns ur an ce br ok er, th is act iv at ed
th e fo rfei tu re p ro vi si on of t he co nt ract an d rele as ed Ben fie ld fro m th e o bl ig at io n t o
pa y th e Ann ua l Fee to Olym pu s, reg ard le ss of whe th er it is vi ewed as a te rm in at io n,
rep la cem en t, o r in te nt no t t o re ne w. As th is is th e o nl y reas on ab le in te rp ret at io n o f
th e co nt ract , no am

bi gu it y ex is ts

. 2

Fi na ll y , be cau se we fin d th e co nt ract to be cl ear an d un am bi gu ou s, Olym

pu s’s
cl ai m s fo r eq ui ta bl e rel ie f m us t be reject ed

. Und er Mi nn es ot a la w, “ ‘equ it ab le rel ie f

can no t be gr an te d whe re th e rig ht s of th e pa rti es are go ve rn ed by a va li d co nt ract .’ ”
M.M. Si lt a, In c. v. Cl ev el an d Cl iff s, In c., 61 6 F.3 d 87 2, 88 0 (8 th Ci r. 20 10 ) (q uo ti ng U.S. Fi re In s. Co

. v. Mi nn

. St at e Zoo lo gi cal Bd
., 30 7 N.W .2d 49 0, 49 7 (Mi nn

. 19 81 )).

III.

Acco rd in gl y , we affi rm th e di st ric t co ur t’s di sm is sa l of Olym pu s’s co m

pl ai nt fo r fai lu re t o s ta te a cl ai m

.

__ __ __ __ __ __ __ __ __ __ __ __ __ __ __

W e si m il arl y reject
, fo r th e reas on s ex pl ai ne d, th e arg um en t th at th is pr ov is io n 2

crea te d a co nd it io n s ub se qu en t i n t he co nt ract

.
-8

-