Opinion ID: 1207962
Heading Depth: 2
Heading Rank: 4

Heading: Premium Payments

Text: Having found the Reinsurance Contract provided reinsurance coverage as intended by the parties, we next address Appellants' argument the BAP erred in finding Granite Re was entitled to the full $15 million premium because the Reinsurance Contract had a fixed five-year term and made no provision for early termination. Appellants claim they were not required to pay the $3 million premium deposits due on January 1 of 2003, 2004, and 2005, because the NDOI placed American Growers in receivership and prohibited American Growers from writing any insurance after November 2002. The Reinsurance Contract provides: This Contract shall become effective as of July 1, 2000 and shall remain in full force and effect ... from that date through June 30, 2005. The Reinsurance Contract further provided, in pertinent part: The liability of the Reinsurer for the term of the treaty shall not exceed $40,000,000 in all. With regard to the premium, the Reinsurance Contract required Appellants to pay Granite Re a minimum and deposit premium of $6,000,000 at the signing of this treaty for the crop year 2001 and 2002 and [] a minimum deposit premium of $3,000,000 on January 1, 2003, a minimum deposit of $3,000,000 on January 1, 2004 and a minimum deposit of $3,000,000 on January 1, 2005. The Reinsurance Contract made no provision for early termination. The bankruptcy court considered the term and premium provisions of the Reinsurance Contract and a letter Symons wrote to the Indiana Department of Insurance (IDOI) on behalf of IGF. In the letter, Symons explained the terms of the Reinsurance Contract and wrote: [Granite Re] will be paid $3,000,000 per year for the duration of the risk. [Five year maximum]. The bankruptcy court found as follows: Since the insurance risk being covered by the reinsurer is an annual risk limited to any particular crop year, neither the Acceptance Companies nor Granite Re would have any risk in those years in which crop insurance was not in force. Neither [American Growers] nor AIC sold or put in place any multi-peril crop insurance for the crop years 2003, 2004, and 2005. No premiums were due for those years because no risk of loss was reinsured for those years. The BAP reversed the bankruptcy court, determining neither the term provision nor the premium provision were ambiguous. The BAP declared, The contract does not indicate that the installment payments are yearly renewal premiums or that the debtor may opt out of the contract to avoid paying any of the installments. The BAP explained the Reinsurance Contract provided a cumulative $40 million in reinsurance coverage over the five-year term, rather than providing $40 million in coverage per year. While the BAP determined there was no need to resort to extrinsic evidence because the language was unambiguous, the BAP noted Symons also wrote in the letter to the IDOI, [Granite Re] will reinsure $40 million of risk for MPCI layer 140% to 150% for five years. The BAP found the letter, when read in its entirety, supported its conclusion Granite Re was entitled to the full $15 million premium. Reviewing the bankruptcy court's decision de novo, we agree with the BAP. We need look no further than the language of the Reinsurance Contract to reach this conclusion. While the Reinsurance Contract permitted Appellants to pay the $15 million premium in deposit payments on specified dates, the Contract had a definite term of five years from July 1, 2000, to June 30, 2005, with a definite liability limit of $40 million over those five years. The Reinsurance Contract had no provision for early termination; thus, this was not a renewable contract where Appellants had the option to terminate after one year or two years. The parties unequivocally agreed to five years of reinsurance coverage up to a cumulative $40 million. Additionally, the Reinsurance Contract explicitly states the payments due on January 1 of 2003, 2004, and 2005 were only minimum deposits. This further convinces us Appellants are incorrect in their assertion that Appellants were only required to pay the 2003, 2004, and 2005 deposits if American Growers were writing insurance during those years. We need not consider extrinsic evidence, such as Symons's letter to the IDOI (although the Symons letter supports our view), to reach this conclusion because the Reinsurance Contract's language is unambiguous on this point. See Tom Riley, 521 N.W.2d at 759.