Donadio, R. v. Fonner Insurance Associates, Inc.

CourtSuperior Court of Pennsylvania
DecidedDecember 17, 2015
Docket234 EDA 2015
StatusUnpublished

This text of Donadio, R. v. Fonner Insurance Associates, Inc. (Donadio, R. v. Fonner Insurance Associates, Inc.) is published on Counsel Stack Legal Research, covering Superior Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Donadio, R. v. Fonner Insurance Associates, Inc., (Pa. Ct. App. 2015).

Opinion

J. A25032/15

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

RAYMOND M. DONADIO, JR. AS : IN THE SUPERIOR COURT OF PERSONAL REPRESENTATIVE OF THE : PENNSYLVANIA ESTATE OF ELIZABETH C. PALMER, : : v. : : FONNER INSURANCE ASSOCIATES, INC., : : Appellant : : No. 234 EDA 2015

Appeal from the Order December 9, 2014 In the Court of Common Pleas of Montgomery County Civil Division No(s).: 2014-05370

BEFORE: DONOHUE, MUNDY, and FITZGERALD,* JJ.

MEMORANDUM BY FITZGERALD, J.: FILED December 17, 2015

Appellant, Fonner Insurance Associates, Inc. (“Fonner”), appeals from

the order denying its motion for judgment on the pleadings and granting the

cross-motion for judgment on the pleadings filed by Appellees, Raymond M.

Donadio, Jr., as personal representative of the Estate of Elizabeth C. Palmer

(“Estate”). Fonner contends the underlying contract is illegal and,

alternatively, should have been construed in its favor. Fonner also

challenges the award of attorneys’ fees and costs to the Estate. We affirm.

We adopt the facts as set forth in the amended complaint.1 Britton W.

Palmer, Jr., also known as “Britt,” owned an insurance brokerage firm

* Former Justice specially assigned to the Superior Court. J.A25032/15

named Britton W. Palmer & Sons, Inc., and was married to Elizabeth C.

Palmer. On November 1, 2006, Britton and Elizabeth executed an

agreement to sell the brokerage firm to Fonner.

The purpose of the agreement follows:

BACKGROUND

Britt is an independent contractor engaged in the business of selling insurance (“Business”). Britt wishes to sell and Buyer [i.e., Fonner,] wishes to buy certain insurance assets, as more specifically hereinafter described. The parties agree to the foregoing under and subject to the following terms and conditions.

NOW THEREFORE, the parties hereto, intending to be legally bound, agree as follows:

1. On the Closing Date (as hereinafter defined), Palmer[2] shall sell, convey, transfer and assign to Buyer, and Buyer shall purchase from Palmer for the consideration set forth in Section 3 below the following (the “Assets”):

a. all of Palmer’s goodwill, customer lists, prospect lists, accounts and related files existing as of the Closing Date, including, without limitation, the items listed on Schedule 1a (the “Accounts”).[3]

1 “On appeal, we accept as true all well-pleaded allegations in the complaint.” Consolidation Coal Co. v. White, 875 A.2d 318, 325-26 (Pa. Super. 2005) (citation omitted). 2 The agreement defined “Palmer” as Britt, Elizabeth, and Britton W. Palmer & Sons, Inc. 3 Schedule 1a was not part of the record but is not necessary to our disposition.

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b. all of Palmer’s right to and interest in telephone numbers and uniform resource locators used in connection with operating Palmer’s Business.

R.R. at 13a.4

Section 3 governed the purchase price:

3. In consideration of the transferred Assets, Buyer shall pay to Britt or Britt’s Successor-in-Interest (as defined below), as applicable, (i) forty-five percent (45%) of all Retained Commissions, (ii) ten percent (10%) of Broker Business Commissions and (iii) Britt’s Pro Rata Share of Volume Profit Sharing (each as defined below, the Retained Commissions, Broker Business Commissions and the Volume Profit Sharing, collectively, the “Earnout Base” and the amount to be paid to Britt or Britt’s Successor-in- Interest, the “Earnout Payments”) within fifteen (15) days of the end of the month during which such Earnout Base is actually received by Buyer. . . . Palmer shall use Palmer’s best efforts to obtain payment of the Earnout Base due on account of the Assets from any customer or any insurance underwriter providing coverage to Palmer’s customers. Under no circumstances shall Buyer be obligated to pay Britt or his Successor-in-interest any Earnout Payment on account of Earnout Base not actually collected by Buyer. In the event any commissions are refunded or returned by Buyer to Buyer’s customers or any insurance underwriter for any reason, Britt or Britt’s Successor-in-Interest shall return to Buyer the entire Earnout Payment paid to Britt or his Successor-in-Interest, as applicable, in respect of such refunded or returned commissions and this obligation shall survive termination of the Agreement. . . . “Retained Commissions” shall mean net commissions actually paid to, and received by Buyer directly arising from the Accounts;[5] “Broker Business Commissions” shall mean gross commissions, prior to payment of any broker

4 We cite to the reproduced record for convenience. 5 “Accounts” is defined as including, inter alia, the customer accounts of Britton W. Palmer & Sons, Inc.

-3- J.A25032/15

commission-sharing obligations, directly arising from business placed through Haas[6] by an independent third- party broker, “Volume Profit Sharing” shall mean additional bonuses received from insurance underwriters for success in achieving certain levels of business and “Britt’s Pro Rata Share” shall be equal to a fraction, the numerator of which is the amount of business sourced by Britt to such underwriter and the denominator of which is the total amount of business sourced to such underwriter by Britt and Buyer collectively, all calculated over such period of time as is used to calculate the Volume Profit Sharing. The Earnout Base shall only include amounts received from the date of closing until the tenth (10th) anniversary of closing. In the event of Britt’s death after the closing, Buyer shall continue to make Earnout Payments to Britt’s Successor-in-Interest as set forth in this Agreement. Upon Britt’s death, “Successor-in-Interest” shall mean (i) if Britt is survived by his current spouse Elizabeth C. Palmer, then Elizabeth C. Palmer or (ii) if Elizabeth C. Palmer has died, then Britt’s estate.

R.R. at 14a. The Agreement included an integration clause. Britt passed

away on December 20, 2011, and Elizabeth passed away on September 8,

2013.

Appellees filed suit on March 12, 2014, raising claims for declaratory

judgment and breach of contract. Eventually, each party filed a motion for

judgment on the pleadings. On December 10, 2014, the court denied

Fonner’s motion for judgment on the pleadings and granted Appellees’ cross-

6 “Haas” is a third party that Palmer gave a right of first refusal to purchase the Accounts.

-4- J.A25032/15

motion for judgment on the pleadings. Fonner timely appealed and timely

filed a court-ordered Pa.R.A.P. 1925(b) statement.7

Fonner raises the following issues:

1. Whether the Trial Court erred by determining Fonner is obligated to make payments to the Estate as contemplated in an agreement pursuant to which Fonner was to pay a certain percentage of commissions related to the acquisition of clients of Britton W. Palmer & Sons, Inc. dated November 1, 2006 (“Agreement”) for the balance of the 10 year term, since that determination would require both Fonner (payor) and the Estate (payee) to violate the law.

2. Whether the Trial Court erred by failing to determine, consider or properly apply the fact that Fonner is not contractually obligated to make monthly payments to the Estate arising out of the Agreement in light of the unambiguous expression of the parties’ intention that the death of Elizabeth C. Palmer, with her husband Britton W. Palmer, Jr. having predeceased her, terminates the payment obligations.

3.

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Bluebook (online)
Donadio, R. v. Fonner Insurance Associates, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/donadio-r-v-fonner-insurance-associates-inc-pasuperct-2015.