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

Heading: Acceptance Insurance Company (AIC)

Text: Appellants first claim the BAP erred in finding AIC was a party to the Reinsurance Contract. Appellants contend: (1) AIC was not mentioned in the Reinsurance Contract, (2) AIC did not intend to be a party to the Reinsurance Contract, and (3) AIC did not ratify the signature of Martin, AICI's representative. We dispose of Appellants' first contention easily. The Reinsurance Contract stated AICI would be referred to as the `Company' throughout the document. On the next line, the Reinsurance Contract provided, Wherever the word `Company' is used in this Contract, such term shall be held to include any and/or all of the subsidiary companies which are or may hereafter come under the management of the Company. (emphasis added). Appellants do not dispute AIC is a wholly owned subsidiary of AICI. Thus it is beyond dispute AIC was not only mentioned unambiguously in the Reinsurance Contract, but also repeatedly referred to wherever the term Company appeared. Appellants next assert neither AICI nor AIC intended AIC to be a party to the Reinsurance Contract. Martin, president and CEO of AICI and AIC, testified at trial he executed the Reinsurance Contract on behalf of AICI and had no authority to execute the Reinsurance Contract on behalf of AIC. Martin also testified, at the time of execution, he anticipated only AICI and American Growers would benefit under the Reinsurance Contract [b]ecause all the crop reinsurance risk was housed at American Growers. Martin's testimony actually supports a conclusion AIC was a party to the Reinsurance Contract, because like AIC, nowhere in the Reinsurance Contract, did AICI indicate it was executing the Reinsurance Contract on behalf of American Growers. The language of the Reinsurance Contract makes no distinction between AICI, AIC, or any other subsidiaries of AICI. We find Appellants' after-the fact oral explanations of intent at the time of execution cannot trump the unambiguous language of the Reinsurance Contract, which states, [t]he Company will pay [Granite Re] the scheduled premium deposits in exchange for Granite Re providing reinsurance at the 140-150% layer of the Company's subject net retained premium income for each crop year. (emphasis added). See Tom Riley Law Firm, P.C. v. Tang, 521 N.W.2d 758, 759 (Iowa Ct.App.1994) (citation omitted) ([I]ntent is determined by the language in the contract, unless it is ambiguous.). Appellants also maintain AIC was not a party to the Reinsurance Contract because AIC did not ratify Martin's signature. On June 4, 2001, two days before the Reinsurance Contract was executed, AIC's board of directors, including Martin, adopted various resolutions and signed a written consent. The written consent stated, RESOLVED, that the Asset Purchase Agreement ..., each of the Ancillary Agreements (as defined in the Purchase Agreement) and related agreements, the performance by AIC of its obligations under the Purchase Agreement, each of the Ancillary Agreements and the related agreements and the consummation by AIC of the transactions contemplated by the Purchase Agreement, each of the Ancillary Agreements and related agreements is hereby ratified, approved, authorized and adopted; and FURTHER RESOLVED, that [AICI] and each of the officers designated by it and each of the President, Chief Financial Officer and Chief Administrative Officer of AIC and any other officer of AIC designated by the President of AIC... is hereby empowered, directed and authorized to execute and deliver in the name of AIC, the Purchase Agreement, each of the Ancillary Agreements, related agreements and all other required agreements.... FURTHER RESOLVED, that each of the Authorized Officers may take any and all actions as may, in his opinion, be necessary, appropriate, convenient or desirable to consummate the transactions contemplated by the Purchase Agreement, the Ancillary Agreements and related agreements or to implement the intent and purpose of the foregoing resolutions and the signing or execution... of any instrument ... that [the Authorized Officer] deems ... to be necessary, appropriate, convenient or desirable; and FURTHER RESOLVED, that all of the acts and deeds of each of the Authorized Officers in connection with the negotiation, execution and delivery of the Purchase Agreement, the Ancillary Agreements and the related agreements and any related documents to carry out the intent and purposes of the foregoing resolutions are hereby authorized[,] adopted ratified, confirmed and approved as the acts and deeds of AIC [in] all respects as if such resolutions had been adopted prior to taking such action. (emphasis added). The parties agree the Reinsurance Contract was one of the ancillary agreements contemplated by the APA. Based upon the broad language of the written consent authorizing the execution of the ancillary agreements and the unambiguous language in the Reinsurance Contract, we conclude AIC was a party to the Reinsurance Contract.