Opinion ID: 1848826
Heading Depth: 1
Heading Rank: 1

Heading: Interference with Expirations/Breach of Contract

Text: This cause of action was arbitrated in connection with Lanier's breach-of-contract claim. A comparison of Lanier's claims alleging breach of contract and interference with expirations reveals that the primary right and duty or wrong complained of are the same in both. More specifically, the gravamen of each claim is that Old Republic wrongfully, that is, prematurely, terminated Lanier's agency. A primary component of damages flowing from that termination was, as Lanier's breach-of-contract count stated, the loss of profits, loss of business opportunity, loss of clients and ... similar losses in the future. The trial court ordered depositions of members of the arbitration panel in order to determine the basis for awarding Lanier $400,000 on his breach-of-contract claim. Excerpts of those depositions were read at trial. The testimony revealed that the award was based on a finding that Old Republic had breached two specific provisions of the Agreement, namely, Article X.A. (This Agreement shall be terminable at any time without cause by either party giving to the other party at least [90] days' prior notice of its intent to terminate); and X.D. (In the event of a termination of this Agreement by [Old Republic] for cause under paragraphs B or C above, the ownership of all expirations on insurance written hereunder shall belong to [Old Republic]. Otherwise, the ownership of all insurance expirations shall belong to [Lanier]....). More specifically, the panel concluded that the breach occurred because the 90-day period was not ... followed through on by Old Republic, and that Old Republic was soliciting business during that 90-day period. (Reporter's Transcript, at 1725.) Lanier contends that the claim for interference with his expirations did not even arise until after October 26, 1992, the date his termination became effective. Prior to this date Lanier was an agent and the agency provisions regarding ownership of expirations did not apply. Brief of Appellee, at 12-13. Thus, he argues, he had no cause of action for interference with expirations that the arbitrators could have considered. This argument, however, overlooks the fact that Old Republic treated the agency as terminated immediately, that is, as of July 27, 1992. As the arbitrators found, Old Republic began interfering with Lanier's expirations as of that date. In other words, as of July 27, Old Republic actually (1) treated the Agreement as terminated; (2) disavowed Lanier's agency; and (3) began using the expirations. The arbitration panel necessarily considered that interference when it awarded Lanier $400,000 in damages based on Old Republic's breach of Article X.D. and the use of Lanier's expirations between July 27 and October 26. Moreover, count two of the complaint, in which Lanier sought compensation for breach of contract, specifically requested future loss of profits, loss of business opportunity, [and] loss of clients. Relief for these future losses is precisely the species of relief to which Lanier claims to be entitled for interference with the expirations since October 26, 1992. The arbitrators rejected Lanier's claim for those future losses. Obviously, the correctness of the arbitration award is not before us for review. It is equally obvious (1) that Lanier's cause of action for wrongful termination of the Agreement accrued before October 26, 1992; (2) that it was presented to the arbitration panel under the theory of breach of contract; [4] and (3) that the claim for interference with expirations based on that same cause of action is now barred by the doctrine of res judicata. [5]