Shipley v. Baillie

547 N.W.2d 711, 250 Neb. 88, 1996 Neb. LEXIS 105
CourtNebraska Supreme Court
DecidedMay 17, 1996
DocketS-94-656
StatusPublished
Cited by4 cases

This text of 547 N.W.2d 711 (Shipley v. Baillie) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shipley v. Baillie, 547 N.W.2d 711, 250 Neb. 88, 1996 Neb. LEXIS 105 (Neb. 1996).

Opinions

Per Curiam.

Glenn H. Shipley filed this action against Alexander A. Baillie, Professional Diversified Services, Inc. (PDS), and Federal Kemper Life Assurance Company (Kemper), seeking an accounting of, and damages for, alleged unpaid commissions for the sales of Kemper insurance policies. The district court granted Kemper’s motion for summary judgment and dismissed Shipley’s action as against Kemper. Shipley appeals.

Shipley assigns as error: The district court erred in finding that no genuine issue of material fact existed as to Kemper’s obligation to Shipley, and in determining that Kemper was entitled to judgment as a matter of law.

PDS was the general agent for Kemper. Pursuant to an agreement with Kemper, PDS was authorized to recruit sub-agents to sell Kemper products. The agreement between Kemper and PDS also authorized PDS to request that commissions be paid directly to the selling agents rather than to PDS. According to Kemper’s policies and procedures, direct payment meant making the check payable to the particular agent entitled to the commission, but still sending the check to [90]*90the general agent for disbursement. Specifically, the agreement stated:

You may contract directly with approved Agents or Brokers under agreements suitable for governing solicitation of insurance as authorized by us. In the event you request us to pay commissions earned by your Agents or Brokers directly to them or to provide you with separate checks for the commissions earned by them, then you shall use the printed forms of AGENT’S, BROKER’S, AND SINGLE CASE AGREEMENTS furnished by us. None of these AGREEMENTS shall be in force until we receive notice of your intention to use them and the notice has been acknowledged in writing by an officer of [Kemper].

This agreement between Kemper and PDS stated, in regard to PDS’ position, “You shall be deemed to be an independent contractor and nothing contained in this AGREEMENT shall be deemed to make you, your Agents, Brokers or any of your employees an employee of ours.”

On August 3, 1990, Shipley, president of GSA, Inc., and Baillie, president of PDS, executed an agreement procuring the services of Shipley and his agents, referred to as the “GSA unit,” to sell Kemper life and annuity insurance products. This agreement stated that it was only between PDS and GSA, Inc. The “compensation” section of this agreement stated:

The level of compensation received by GSA will be determined by a MA26 level Kemper contract executed this day by and between GSA and Kemper, a copy of which is attached and hereby made a part of this agreement. The difference between the agent level and the MA26 level will be the applicable commission percentage that should be paid by Kemper directly to GSA for business issued and paid for by agents in the GSA unit. A copy of the contract is attached and hereby made a part of this agreement.

This agreement was signed by only Shipley and Baillie.

Attached to this agreement was a commission authorization form dated August 1, 1990, in which PDS authorized Kemper to pay commissions directly to members of the GSA unit pur[91]*91suant to a commission schedule. The top of this authorization contained the Kemper insignia. Shipley testified that this commission authorization was the MA26 contract referred to in the PDS/GSA agreement. The authorization provided in pertinent part: “I hereby authorize Federal Kemper Life Assurance Company and or Fidelity Life Association to pay the following Agent(s)/Broker(s) commissions according to the schedule indicated. This agreement can be cancelled by the Company or me by written notice at any time.”

Baillie, as a representative of PDS, was the only party to sign the commission authorization form. It was not signed by a Kemper official. Kemper contends that it did not receive this commission authorization until the lawsuit was filed. Kemper, however, acknowledges receiving a fax from GSA in October 1990 containing a list of agents to receive direct commissions but not containing the authorization.

Prior to Shipley’s agreement with PDS, Shipley had been a general agent for Kemper for approximately 4 years. Shipley testified in his deposition that he had a general understanding of Kemper’s policies and procedures.

Kemper paid commissions to PDS, and some of these commissions were then paid to Shipley and his agents. It is not entirely clear from the record whether the commission checks issued by Kemper were directly made out to Shipley and his agents as payees, or whether the checks were made out to PDS.

Shipley filed a petition against Baillie, PDS, and Kemper seeking an accounting of these commissions and damages. He alleges in his petition that the defendants failed to comply with the terms of the PDS/GSA agreement and the commission authorization form. In his deposition, Shipley testified that he believed that Kemper had paid all commissions to PDS that were due to the GSA unit. Shipley testified, however, that PDS failed to pay Shipley all commissions to which he believed he and his agents were entitled.

Kemper moved for summary judgment. The district court concluded that Kemper had paid all amounts to PDS that might be due to Shipley, and determined that Kemper was not a party to the PDS/GSA contract. The court granted Kemper’s [92]*92motion for summary judgment and dismissed Shipley’s petition as against Kemper.

In regard to this court’s standard of review, summary judgment is proper only when the pleadings, depositions, admissions, stipulations, and affidavits in the record disclose that there is no genuine issue as to any material fact or as to the ultimate inferences that may be drawn from those facts and that the moving party is entitled to judgment as a matter of law. Zion Wheel Baptist Church v. Herzog, 249 Neb. 352, 543 N.W.2d 445 (1996).

On a motion for summary judgment, the question is not how a factual issue is to be decided, but whether any real issue of material fact exists. Kocsis v. Harrison, 249 Neb. 274, 543 N.W.2d 164 (1996).

In reviewing a summary judgment, an appellate court views the evidence in a light most favorable to the party against whom the judgment is granted and gives such party the benefit of all reasonable inferences deducible from the evidence. Zion Wheel Baptist Church, supra.

Shipley contends that Kemper is not entitled to judgment as a matter of law because, as PDS’ principal, Kemper is liable for its general agents’ actions. Restatement (Second) of Agency § 458 (1958) addresses this issue. Section 458 at 378 provides, in pertinent part: “The authorized employment of a subservant or other subagent does not thereby subject the principal to contractual liability to the subagent . . . . ” Comment a. to § 458 expands on this principle, stating at 378:

Ilf an agent employs a subagent, the agent is the employing person, and the principal is not a party to the contract of employment, except where, by express promise or otherwise, he becomes a surety. He is not, therefore, subject to pay the agreed compensation, nor is he subject to contractual liability to indemnify the subagent, to maintain friendly relations with him, or to keep accounts.

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Related

Sawyer v. State Surety Co.
558 N.W.2d 43 (Nebraska Supreme Court, 1997)
Dutton v. Travis
551 N.W.2d 759 (Nebraska Court of Appeals, 1996)
Shipley v. Baillie
547 N.W.2d 711 (Nebraska Supreme Court, 1996)

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Bluebook (online)
547 N.W.2d 711, 250 Neb. 88, 1996 Neb. LEXIS 105, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shipley-v-baillie-neb-1996.