United States Court of Appeals

For the Eighth Circuit

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No. 12-1974

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Olympus Insurance Company

lllllllllllllllllllll Plaintiff - Appellant

v.

AON Benfield, Inc.; Benfield, Inc.

lllllllllllllllllllll Defendants - Appellees

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 Appeal from United States District Court 

for the District of Minnesota - Minneapolis

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 Submitted: November 15, 2012

 Filed: April 1, 2013

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Before MURPHY, BENTON, and SHEPHERD, Circuit Judges.

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SHEPHERD, Circuit Judge.

Olympus Insurance Company (“Olympus”) appeals the district court’s1

dismissal of its complaint for failure to state a claim. See Fed. R. Civ. P. 12(b)(6). 

Olympus argues that the district court erred in determining that its contract with

The Honorable Patrick J. Schiltz, United States District Judge for the District 1

of Minnesota. 
Benfield, Incorporated (“Benfield”) clearly and unambiguously provided that

Benfield did not owe Olympus an annualfee after Benfield was notified of Olympus’s

decision to replace Benfield with another reinsurance broker. Having conducted a de

novo review of the district court’s order, we affirm the dismissal of Olympus’s

complaint. 

I.

Olympus sells homeowners insurance policies in the State of Florida. To

manage the risk associated with these homeowners policies, Olympus sought to

reinsure any portion of a policy above $750,000 and aggregate catastrophe loss above

$6 million. Because reinsurance policies are spread among multiple reinsurers,

Olympus engaged the services of Benfield as its reinsurance broker. Benfield was

responsible for placing and servicing reinsurance policies for the homeowners

insurance policies written by Olympus. After Benfield successfully placed a

reinsurance policy, it earned a brokerage commission, which wastypically 10% ofthe

premiumOlympus paid to the reinsurer. Also, asis common in the industry, Olympus

and Benfield entered into a brokerage sharing agreement, under which Benfield

agreed to share part of its commission in the form of an “Annual Fee” with Olympus

in return for exclusive status as Olympus’s reinsurance broker and the establishment

of a long-term brokerage relationship. 

In 2008, Olympus and Benfield entered into a one-page brokerage sharing

agreement. As relevant, the contract provided in the first paragraph:

In consideration for Client appointing Benfield as its exclusive

reinsurance intermediary-broker for the placement and servicing of all

of Client’s reinsurance contracts (the “Subject Business”) for the initial

annual period beginning on June 1, 2008 and ending on May 31, 2009

(the “Initial Term”) (each June 1 to May 31 may also be referred to as

an “Agreement Year”), and for additional subsequent Agreement Years

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(each such year a “One-Year Renewal Term”) unless either party

notifies the other party of its intent not to renew this Agreement at least

30 days prior to the end of the Initial Term or any subsequent One-Year

Renewal Term, Benfield agreesto share with Client Benfield’s received

and earned brokerage revenue derived from the Subject Business

excluding any brokerage paid to corresponding brokers, including any

brokers affiliated with Benfield or sub-brokers (“Net Brokerage

Revenue”) by paying Client an annual fee (“Annual Fee”) for each

Agreement Year equal to 70% of all Net Brokerage Revenue less the

Service Fee set forth in Paragraph 2 of this Agreement.

(Appellant’s Addendumat 18.) Also relevant to this case isthe third paragraph of the

contract, which provided:

No Annual Fee shall be payable subsequent to any decision by Client to

terminate or replace Benfield as its reinsurance intermediary-broker for

any portion of the Subject Business. In addition, in the event Benfield

is terminated asClient’s reinsurance intermediary-broker for anySubject

Business prior to the end of the Initial Term, Client shall promptly pay

Benfield any outstanding amount of the Service Fee for the current

Agreement Year and shall reimburse Benfield for Annual Fees

previously paid by Benfield under this Agreement. Client agrees to

reimburse Benfield for any and all costs and expenses associated with

collecting any reimbursement.

(Appellant’s Addendum at 18.) 

In February 2009, Olympus decided to replace Benfield as its reinsurance

broker with Guy Carpenter & Company (“Guy Carpenter”). On March 25, 2009, Guy

Carpenter informed Benfield by letter that it would replace Benfield as Olympus’s

reinsurance broker effective June 1, 2009. The parties agree that this letter served as

proper notice of termination. In October 2009, Olympus demanded payment of the

Annual Fee due for the Initial Period. Benfield refused to make the payment, arguing

that its replacement by Guy Carpenter constituted a decision to “terminate orreplace”

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as contemplated by the third paragraph of the agreement, and thus that Benfield was

not obligated to pay the Annual Fee. 

Olympus brought the instant action in state court under theories of breach of

contract, quasi-contract, unjust enrichment, and quantum meruit and requested relief

of $611,854, the amount Olympus contendsit is owed in Annual Fees. After removal

to federal court on the basis of diversity, Benfield moved for dismissal of the

complaint, arguing the unambiguous terms of the contract provide that Benfield does

not owe Olympus the Annual Fee and the existence of a contract forecloses

Olympus’s claims of quasi-contract, unjust enrichment, and quantum meruit. 

After a hearing, the district court entered an order granting Benfield’s motion

to dismiss. Applying Minnesota law, the district court concluded the unambiguous

language of the contract relieved Benfield of any obligation to pay Olympus the

Annual Fee because the forfeiture provision of the third paragraph was activated

when Benfield was informed of Olympus’s decision not to renew the brokerage

agreement. The court also determined that the remaining claims—quasi-contract,

unjust enrichment, and quantum meruit—could not succeed because Olympus and

Benfield were parties to an express contract. 

Olympus appeals the dismissal of its complaint. We have jurisdiction under

28 U.S.C. § 1291. 

II.

In this appeal, Olympus raises four claims of error: (1) the district court

improperly limited the definition of “Subject Business” to only thosewords preceding

the parenthetical term and excluding the modification clauses following the

parenthetical term; (2) the district court incorrectly construed a non-renewal to have

the same meaning as a “replacement” or a “termination” under the contract; (3) the

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district court’s interpretation of the contract—that Benfield is only obligated to pay

the annual fee if Olympus renews the broker agreement for an additional

term—creates a condition subsequent that is not contained in the contract; and

(4) because the contract is ambiguous, theories of equity—specifically unjust

enrichment and quantum meruit—are available to Olympus. 

Our review of the district court’s grant of a motion to dismiss under Rule

12(b)(6) is de novo. Cox v. Mortg. Elec. Registration Sys., Inc., 685 F.3d 663, 668

(8th Cir. 2012). This agreement contains a choice-of-law clause dictating that

Minnesota law will govern the contract. The parties agree that Minnesota law applies

to the contract. We review de novo the district court’s application and interpretation

of Minnesota law. Id. 

When interpreting a contract, the court’s primary goal “is to ascertain and

enforce the intent of the parties.” Valspar Refinish, Inc. v. Gaylord’s, Inc., 764

N.W.2d 359, 364 (Minn. 2009). If the contract is memorialized in a written

instrument, the written contract serves as the best evidence of the parties’ intent, and

the court determines that intent “from the plain language of the instrument itself.”

Travertine Corp. v. Lexington-Silverwood, 683 N.W.2d 267, 271 (Minn. 2004). We

give contract language its plain and ordinary meaning, reading it in the context of the

instrument as a whole and viewing each part of the contract in light of the others. 

Brookfield Trade Ctr., Inc. v. Cnty. of Ramsey, 584 N.W.2d 390, 394 (Minn. 1998). 

Olympus argues that the district court erred by dismissing its complaint

because the brokerage contract is ambiguous, specifically as to the definition of

“Subject Business” and whether “terminate or replace” has the same meaning as

“intent not to renew.” Contract language is ambiguous if it is “reasonably susceptible

to more than one interpretation.” Brookfield Trade Ctr., 584 N.W.2d at 394. 

“Whether a contract is ambiguous is a question of law . . . .” Carlson v. Allstate Ins.

Co., 749 N.W.2d 41, 45 (Minn. 2008). If the court determines that a contract is

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ambiguous, its interpretation then becomes a question of fact for the jury and the

district court should not grant a motion to dismiss. See Denelsbeck v. Wells Fargo

& Co., 666 N.W.2d 339, 346 (Minn. 2003).

Applying these principles, we address first Olympus’s contention that the

definition of “Subject Business” is open to more than one reasonable interpretation

and thusis ambiguous. The district court limited the definition of “Subject Business”

to those words preceding the parenthetical reference, that being “the placement and

servicing of all of Client’s reinsurance contracts.” Olympus contends that the

definition of “Subject Business” must also encompass the language following the

integrated parenthetical, that being the time limits of the initial and renewal terms. 

Olympus argues that if its definition of “Subject Business” is adopted, “reinsurance

contracts for years after the non-renewal never became part of Subject Business nor

became subject to the terms of the Contract. Thus the forfeiture language [in the third

paragraph] could never apply to Olympus’ reinsurance contracts entered into after

non-renewal.” 

Benfield argues that the “Subject Business” means all of Olympus’s

reinsurance placements, not just those made in the current year. This is so because

in drafting the contract, the parties utilized the integrated definition convention and

placed “Subject Business” directly after “the placement and servicing of all of

Client’s reinsurance contracts.” Further, Benfield claims it entered into a brokerage

sharing agreement because Benfield had an interest in establishing a long-term

relationship with Olympus and, without the possibility of a long-term relationship,

there would be no justification for paying part of its commission to Olympus. 

We agree with the district court’s sound reasoning that the proper reading of

this contract is to define “Subject Business” as the placement and servicing of all of

Olympus’s reinsurance contracts. Olympus’s argued definition—that “Subject

Business” refers to all of Olympus’s reinsurance contracts unless it elects not to

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renew—is not plausible. Through the use of the integrated definition, the parties

demonstrated their intention to define “Subject Business” to mean “all of[Olympus’s]

reinsurance contracts” without a term limitation. See Kenneth A. Adams, A Manual

of Style for Contract Drafting § 5.34 (2d ed. 2008) (“[A]n integrated definition

constitutes part of the substantive provisions of a contract, and the defined term is

defined by tucking it at the end of the definition, in parentheses.”). Accordingly, this

part of the contract is not subject to more than one reasonable interpretation and

therefore is not ambiguous. 

Next, Olympus argues that even if the “Subject Business” definition

unambiguously includes the placement and servicing of contracts beyond the Initial

Term, the district court erred when it held the terms “terminate,” “replace,” and “nonrenew” to have the same meaning. Olympus argues that it did not “terminate” or

“replace” Benfield and therefore the forfeiture provision does not apply. Olympus

claims that in selecting Guy Carpenter to begin placing and servicing its reinsurance

contracts in June 2009, it was electing not to renew Benfield and that this election is

not the same as “terminat[ing]” or “replac[ing]” Benfield. 

Under the forfeiture provision, Benfield is relieved of its obligation to pay the

Annual Fee “subsequent to any decision by [Olympus] to terminate or replace

Benfield as its reinsurance intermediary-broker for any portion of the Subject

Business.” Olympus points out that the contract usesthe phrase “intent not to renew”

in the first paragraph, but then uses the terms “terminate” and “replace” in the

forfeiture paragraph. Olympus argues the parties must have intended different

meanings because they employed different terms. Specifically, Olympus claims the

terms “terminate” or “replace” refer to a decision made during either the Initial Term

or a Renewal Term, whereas “non-renewal” pertains only to a decision to use a

different broker at the completion of the Initial Term or a Renewal Term. 

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Again, we find ourselves in agreement with the district court,which determined

that “intent not to renew” encompasses both termination and replacement. As the

district court pointed out, Olympus would have no reason to replace or terminate

Benfield prior to the end of the Initial Term or Renewal Term because Benfield

earned its commission upon the placement of the reinsurance and received no other

benefit from servicing the reinsurance policiesthrough the end of the term. It is clear

that the parties added the forfeiture provision to the contract to encourage Olympus

to maintain a long-term relationship with Benfield. When Guy Carpenter informed

Benfield that it would be taking over as Olympus’s reinsurance broker, this activated

the forfeiture provision of the contract and released Benfield from the obligation to

pay the Annual Fee to Olympus, regardless of whether it is viewed as a termination,

replacement, or intent not to renew. As this is the only reasonable interpretation of

the contract, no ambiguity exists. 

2

Finally, because we find the contract to be clear and unambiguous, Olympus’s

claims for equitable relief must be rejected. Under Minnesota law, “‘equitable relief

cannot be granted where the rights of the parties are governed by a valid contract.’”

M.M. Silta, Inc. v. Cleveland Cliffs, Inc., 616 F.3d 872, 880 (8th Cir. 2010) (quoting

U.S. Fire Ins. Co. v. Minn. State ZoologicalBd., 307 N.W.2d 490, 497 (Minn. 1981)). 

III.

Accordingly, we affirm the district court’s dismissal of Olympus’s complaint

for failure to state a claim. 

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We similarly reject, for the reasons explained, the argument that this provision

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created a condition subsequent in the contract. 

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