Bret and Marti Kunz v. Nield, Inc.

398 P.3d 165, 162 Idaho 432, 2017 WL 2952305, 2017 Ida. LEXIS 211
CourtIdaho Supreme Court
DecidedJuly 11, 2017
DocketDocket 43724
StatusPublished
Cited by6 cases

This text of 398 P.3d 165 (Bret and Marti Kunz v. Nield, Inc.) is published on Counsel Stack Legal Research, covering Idaho Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bret and Marti Kunz v. Nield, Inc., 398 P.3d 165, 162 Idaho 432, 2017 WL 2952305, 2017 Ida. LEXIS 211 (Idaho 2017).

Opinion

JONES, Justice.

I. Nature of the Case

This appeal arises from an agent contract (the “2009 Contract”) entered into between Bret Kunz (“Bret”) and Nield, Inc. (“N.I.”) authorizing Bret to sell insurance on behalf of N.I. N.I. is owned by two brothers, Bryan Nield (“Bryan”) and Benjamin Nield. A dispute arose concerning the method and type of compensation available to Bret under the 2009 Contract. Bret filed a complaint seeking, inter alia, a declaratory judgment interpreting the 2009 Contract. The district court held, inter alia, that the 2009 Contract did pot provide for profit sharing as Bret claimed. Bret and his wife, Marti, (collectively, the “Kunzes”) appeal.

II. Factual and Procedural Background

The crux of this appeal is whether Bret is entitled to profit sharing payments under the 2009 Contract, and if so, what percentage of the profit sharing should be distributed to him. Profit sharing is a unique type of commission that insurance agents earn by meet *435 ing certain goals. 1 If an insurance agent qualifies for profit sharing, the payment is made the year after it is earned. Ordinary insurance commissions, which are a percentage of the premiums for new and renewed policies, are paid monthly.

The business relationship between Bret and N.I. began in 1996 when the parties entered into a written contract (the “1996 Contract”) for Bret to sell insurance as a subcontractor for N.I. As a subcontractor for N.I., Bret worked under his brother Michael, who was also a subcontractor for N.I. and had been since 1982. Pursuant to a contract Michael signed with N.I. in 1982, he and N.I. split his book of business 50/50. While Bret’s 1996 Contract was substantially similar to Michael’s 1982 Contract, it did not contain a provision addressing the ownership of the book of business.

Bret and Michael agreed that Michael would cover all of the overhead expenses and Bret would receive the entire 80% monthly commission to which he was entitled under the 1996 Contract. Michael did not make any money from Bret, but received profit sharing from sales attributable to Bret due to the fact that Michael owned 50% of the book of business. According to Bret’s testimony, he did not expect to receive profit sharing under his 1996 Contract because that contract did not address the ownership of the book of business.

On July 4, 2008, Michael died. Thereafter, the Kunzes purchased Michael’s insurance agency and Michael’s share of the business placed with N.I. from Michael’s surviving spouse. Around October 2008, Bret and N.I. began to discuss the need for a new contract that would include an ownership provision similar to the ownership provision in Michael’s 1982 contract. Bret testified that Bryan brought a draft of the 2009 Contract to his office that mirrored Michael’s 1982 contract.

Sometime around the end of October, or the beginning of November 2008, Bret signed a final version of the 2009 Contract. Bret testified that he did not review the 2009 Contract closely and was not aware that the language therein was different from the language in the draft contract. Bret testified that at the time he signed the 2009 Contract, Bryan mentioned that “they had some pretty good profit sharing checks with [Michael].” Bret also recalled that between November 2008 and February 2009, Bryan mentioned the profit sharing checks again, likely in an attempt to motivate Bret to sell more insurance.

The pertinent provisions of the 2009 Contract are as follows:

(5) Responsibilities of Agent: The agent is a sub-contractor and as such has responsibility for all expenses related to his or her business.... Agent is to place all insurance business through company. Company has final underwriting authority for all business placed.... Agent is responsible for all premium and return commissions on business placed. When collections are not on time, deduction may be made from payment of commissions due. When the collection is completed the deducted commission will be paid.
(6) Responsibilities of Company: Company will maintain contracts with companies for placing of insurances. Company will do all billing and accounting functions (except collections). Agent is personally responsible for "the collection of premiums and returned commissions on business placed.... [provide Bret with a commission check based on agreed percentages on the 15th of each month, and other functions based upon commission split and individual agreement]. 2
(7) Terms of Compensation: Agent will receive 80 percent of commissions received on insurance placed by agent with compa *436 ny. Company will receive 20 percent of commission placed by agent with company. (8) Ownership: This is subject to change, but only as agreed between Company and Agent. The agent will own 50% of the book of business and the company will own 50% of the book of business.

As previously mentioned, the crux of this appeal is whether Bret is entitled to profit sharing under the 2009 Contract. More specifically, the issue is whether Bret is entitled to profit sharing for business he wrote with Gem State Insurance Company (“Gem State”), Farmers Alliance Mutual Insurance Company (“Farmers Alliance”), Acuity Mutual Insurance Company (“Acuity”), and Allied Insurance Company (“Allied”). The following is a summary of payments that N.I. made to Bret, which the Kunzes allege were profit sharing payments. In 2009, Bret received his first alleged profit sharing check from N.I. for 2008 business done with Gem State. Bret’s work in 2009 did not qualify for profit sharing; accordingly, he did not receive an alleged profit sharing check in 2010. In 2011, Bret received an alleged profit sharing check for 2010 business done with Gem State and Acuity. Bret testified that, at the time he received the check, he believed the amount he received was the appropriate percentage of the profit share. However, he did not have access to data to enable him to verify that he received the appropriate amount of the profit share. He did, however, have access to Gem State data because he had exclusive control over the Gem State book of business. In 2012, Bret received an alleged profit sharing check for 2011 work done with Gem State and Farmers Alliance. Bret testified that the profit sharing amount he received for Gem State business reflected a 50/50 split, but that the profit sharing for Farmers Alliance was less than 10% of the 80% he believed he was owed.

Bryan testified that N.I. does not pay profit sharing or contingent commissions and characterized the payments made to Bret as bonuses. Notwithstanding the foregoing, Bryan conceded that N.I. paid Bret 50% of the profit sharing that N.I. received from Gem State. The district court concluded that the Gem State profit sharing agreement was an “individual agreement,” which Bryan described as follows:

Gem State is a separate issue by itself.... the whole book of business is totally separate from ours. Therefore anything that he would receive as profit sharing is paid directly to Bret from Gem State....

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Cite This Page — Counsel Stack

Bluebook (online)
398 P.3d 165, 162 Idaho 432, 2017 WL 2952305, 2017 Ida. LEXIS 211, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bret-and-marti-kunz-v-nield-inc-idaho-2017.