Longview Crop Insurance Agency v. United States

20 Cl. Ct. 564, 1990 U.S. Claims LEXIS 225
CourtUnited States Court of Claims
DecidedJune 6, 1990
DocketNos. 122-88C, 312-88C
StatusPublished
Cited by1 cases

This text of 20 Cl. Ct. 564 (Longview Crop Insurance Agency v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Longview Crop Insurance Agency v. United States, 20 Cl. Ct. 564, 1990 U.S. Claims LEXIS 225 (cc 1990).

Opinion

[565]*565OPINION

ANDEWELT, Judge.

These two related government contract actions are consolidated for purposes of this decision. In their respective actions, plaintiff LongView Crop Insurance Agency (LongView) and plaintiff National Association of Crop Insurance Agents (NACIA) each seeks damages relating to its service as a “master marketer” of crop insurance policies under a contract with the Federal Crop Insurance Corporation (the FCIC). NACIA is a third-party defendant in Long-View’s action (No. 122-88C), and LongView is a third-party defendant in NACIA’s action (No. 312-88C). Each action is presently before the court on cross-motions for summary judgment by the respective plaintiff, defendant United States, and the respective third-party defendant. For the reasons explained herein, in each case, defendant United States’ motion for summary judgment is granted, the respective plaintiff’s motion is denied, and the respective third-party defendant’s motion is denied as moot.

I.

Pursuant to the Federal Crop Insurance Act of 1980, 7 U.S.C. § 1507(c), the FCIC entered into sales and agency contracts, known as master marketing agreements, with LongView and NACIA. Under the terms of these agreements, LongView and NACIA sold and serviced FCIC crop insurance policies and in return received a commission based on a flat percentage of policy premiums. The individual policies provided, in effect, that unless canceled by the applicable cancellation date, the policies automatically would be renewed to cover the next seasonal crop.

The dispute herein involves entitlement to commissions on approximately 1000 crop insurance policies for two distinct periods: (1) crops seeded during the fall of 1985 {e.g., winter wheat) for which the policy cancellation date was September 30, 1985; and (2) crops seeded during the spring of 1986 {e.g., spring wheat) and thereafter. NACIA originally was the master marketer for all of the policies in issue. However, after agents who serviced the policies for NACIA went to work for LongView, Long-View submitted requests to the FCIC seeking transfer of the policies to LongView. These requests, submitted between approximately September 1,1985, and January 31, 1986, were each signed by the policy holder prior to the September 30,1985, policy cancellation date for the fall 1985 crop seed-ings. In response to these transfer requests, the FCIC mailed to LongView and NACIA documents known as “data-mailers” which gave LongView agents authority to acquire the contract folders from NACIA.

NACIA objected to the FCIC’s acceptance of LongView’s transfer requests. The FCIC’s Kansas City Office held a hearing on February 12, 1986, and in a May 16, 1986, decision, permitted the transfer to LongView of all policies in dispute. However, regarding commissions, the Kansas City Office awarded to NACIA the commissions covering those policies for the fall 1985 crop seedings that the FCIC had not actually transferred to LongView prior to the September 30, 1985, policy cancellation date.

Both LongView and NACIA appealed the decision of the Kansas City Office to the FCIC’s national office. LongView argued that the date the policy holders signed the transfer requests was crucial in assessing entitlement to commissions and, therefore, that it was entitled to the commissions for all fall 1985 crop seedings because the policy holders had signed the transfer requests prior to the applicable September 30, 1985, policy cancellation date. NACIA disagreed and contended that it was entitled to the commissions for all fall 1985 crop seedings. In addition, however, NACIA argued that the FCIC should have refused to transfer the policies to LongView because Long-View’s transfer requests were defective for a variety of reasons. NACIA argued that since LongView had never filed valid transfer requests, NACIA was entitled not only to commissions for fall 1985 crop seedings but also to commissions for spring 1986 crop seedings, which had a policy cancellation date of April 15, 1986.

[566]*566After a hearing, on May 26, 1987, the FCIC issued a final agency decision affirming its Kansas City Office’s prior determination. The FCIC held that the crucial date for determining entitlement to the commissions sought by LongView was the date the FCIC issued the data-mailers rather than the date the policy holders signed the transfer requests.1 As to NACIA’s allegation that LongView’s transfer requests should have been denied as defective, the FCIC held that none of the alleged deficiencies was sufficient to warrant such a denial. Pursuant to the May 26, 1987, final decision, NACIA received the commissions for all policies for the fall 1985 crop seedings that had not been transferred by the FCIC prior to the September 30, 1985, cancellation date, and LongView received the commissions for all policies for the spring 1986 crop seedings since those policies had been transferred by the FCIC well before the April 15, 1986, cancellation date.

Thereafter, LongView and NACIA each submitted a certified claim under its respective contract seeking the monies it had been denied as a result of the FCIC ruling. NACIA’s claim, filed April 26, 1988, sought all commissions it would have earned up through the date of its claim had its policies not been transferred. After each of their claims was denied, LongView and NACIA each filed suit in this court pursuant to the Contract Disputes Act, 41 U.S.C. § 601, et seq. At defendant’s request and pursuant to RUSCC 14(a)(2), the court summoned NACIA as a third-party defendant in LongView’s action, and LongView as a third-party defendant in NACIA’s action. Defendant contended that since LongView had been paid the commissions NACIA was seeking in its suit, and NACIA had been paid the commissions LongView was seeking in its suit, each was contingently liable for the commissions sought by the other.

II.

In its suit, LongView contends that the FCIC was wrong in awarding NACIA commissions for the fall 1985 crop seedings because the date the transfer requests were signed by the policy holders, rather than the date of the data-mailers, was controlling in determining entitlement to commissions.

The transfer of policies among master marketers is covered under Section IX of the master marketing agreement. While Section IX(B) provides that “[a] Contractor may accept the transfer of a policy at any time during the crop year,” Section IX(E), which covers entitlement to commissions, provides, in effect, that the transferee does not necessarily receive all commissions for that crop year. Section IX(E) provides:

The Contractor shown by the Corporation on the Corporation’s records to be responsible for the servicing of the policy on the cancellation date for the crop will be entitled to the Commission on amounts collected prior to debt termination for that crop (when due).

LongView argues, in effect, that the transfer requests signed by the policy holders are the pertinent “corporate records” and that the date the policy holders signed those requests is the crucial date for determining who was the contractor “responsible for the servicing of the policpes] on the cancellation date for the crop.” But other subsections of Section IX belie such an interpretation.

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20 Cl. Ct. 564, 1990 U.S. Claims LEXIS 225, Counsel Stack Legal Research, https://law.counselstack.com/opinion/longview-crop-insurance-agency-v-united-states-cc-1990.