State Farm Mutual Automobile Insurance v. West

181 F. Supp. 779, 1960 U.S. Dist. LEXIS 3099
CourtDistrict Court, W.D. Arkansas
DecidedMarch 18, 1960
DocketCiv. A. No. 1477
StatusPublished
Cited by5 cases

This text of 181 F. Supp. 779 (State Farm Mutual Automobile Insurance v. West) is published on Counsel Stack Legal Research, covering District Court, W.D. Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Farm Mutual Automobile Insurance v. West, 181 F. Supp. 779, 1960 U.S. Dist. LEXIS 3099 (W.D. Ark. 1960).

Opinion

JOHN E. MILLER, District Judge.

The question before the court is presented by motion filed by plaintiffs for summary judgment on Count 2 of defendant’s counterclaim and the cross motion filed by the defendant. All other issues have been disposed of, and the only remaining issue in this case is the claim of defendant against the plaintiffs on Count 2 of his counterclaim. The parties have stipulated the relevant and material facts.

The defendant and plaintiffs entered into a written agreement effective January 1, 1954, by which the defendant was appointed Local Agent for plaintiffs. A copy of the contract and defendant’s acceptance of the appointment are attached to the stipulation, and designated as Form LA 540. The acceptance provision, omitting the formal parts, is as follows:

“I hereby acknowledge receipt of executed Local Agent’s Appointment Form LA 540 dated January 1, 1954, and attached Schedule of Payments Forms A 541, L 541, F 541, applicable to the respective Company as indicated, constituting the entire offer of appointment and agreement by each Company as set forth therein all of which I hereby accept effective as of the date above and as evidence thereof have hereunto affixed my signature, properly witnessed, this 16th day of December 1953.”

The defendant’s appointment as Local Agent was terminated March 31,1958, by the plaintiffs in accordance with the pro[780]*780visions of the agreement. He does not claim to be entitled to any payment by reason of the termination of the agreement, or that any commissions or other payments are due him under Form L 541 and Form F 541.

It is agreed, also, that the plaintiffs have paid the defendant all sums due under paragraph 1 of Form A 541.

The claim of defendant is based upon paragraphs 2, 3, and 4 of Form A 541, which is “Schedule of Payments and Conditions referred to in Local Agent’s Appointment Form LA 540, Section II A as respects insurance written by the Company.” The claim of defendant involves only the plaintiff State Farm Mutual Automobile Insurance Company. The relevant and material paragraphs are as follows:

“2. For services rendered in any month while this Agreement is in force, in importing, investigating and handling claims and otherwise servicing policyholders, the Local Agent shall be paid an amount equal to Ten Percent (10%) of the net premium collections, as hereinafter defined, received and recorded by the Company during the sixth preceding month on policies credited to the Local Agent during the month for which such payment is computed irrespective of whether such policies were secured by the Local Agent. Net premium collections are defined to be gross premium collections, less Selling Expense, if any, and less dividends paid or credited to policyholders. Membership Fees are not to be considered as gross or net premiums.
“Payments shall not be allowed under this paragraph in event the Local Agent is or becomes an employee or relative by blood or marriage of a supervising district or state agent or is or becomes a partner of or has any form of joint financial interest as respects the insurance business with his supervising district or state agent.
“3. On insurance written on any plan other than as provided in Section 1 hereof, the agent shall receive such payments as may be fixed from time to time by the Company.
“4. Upon termination of this Agreement by death or otherwise as provided in Section III A, any unpaid amounts for securing new business under Section 1 hereof, shall be paid as soon as ascertainable. Payments for the agents services under Section 2 hereof for the particular month of termination by death or otherwise shall be prorated and paid as soon as ascertainable and shall constitute the final payment due under this Schedule for such services.”

Section III of Form LA 540, inter alia, provides:

“Upon termination however occurring, the Agent shall be entitled to receive only such payments as shall be then due or become due the Agent from such terminated Company or Companies as provided for in the applicable Schedules of Payments hereto attached and in Section IV.”

Section IV A deals with termination by death, and is inapplicable. Section IV B provides certain termination benefits which are not involved in this litigation because, as provided in Paragraph 4 of Section IV B, the Agent in order to be entitled to these benefits is required to surrender all records and files used by the Agent in his representation of the company and all unused materials and supplies, and provided:

“the Agent has agreed in writing not to service policyholders of the Company or to compete with the Company or interfere with its business for one full year from the date of termination.”

Defendant did not agree in writing as required by this provision to not compete with the Company for one full year from the date of termination. However, no [781]*781claim is asserted under this provision of the policy.

Numbered paragraphs 5, 6 and 7 of the stipulation are as follows:

“5.
"It is further stipulated and agreed that Stanley M. West had not been employed as an agent or representative of the plaintiff prior to January 1, 1954, and therefore had no policies recorded or credited to him at that time. That beginning with the month of July, 1954, the State Farm Companies paid a service fee, under Paragraph 2 of Form A 541, to West each month equal to 10% of the net premium collections (as defined in the contract) on policies recorded or credited to the said Stanley M. West during the sixth preceding month. That is to say the service fees paid in July, 1954, equaled 10% of the premium collections on policies credited to West for the month of January. That similar payments were made each month to March 31, 1958, based on policies recorded or credited to West during the sixth preceding month. It is further agreed that the amounts so paid were correct for all payments made through and for the month ending March 31, 1958. It is further stipulated and agreed that no other or further payments have been made to West by State Farm, and that West has rendered no service to State Farm since March 31, 1958.
“6.
“It is further stipulated and agreed that the premium collected on policies recorded or credited to West for the months of October, November and December, 1957, and' January, February and March, 1958, amount to $30,746.39.
“7.
“It is the contention of West that he is entitled to 10% of said net premiums set out in the last above numbered paragraph, and it is the
contention of the State Farm Companies that West is not entitled to any payment, but that under the terms of the contract West has received his full compensation.”

In his brief the defendant states that the sole question for the court to determine is whether or not under the Local Agent’s appointment, he is entitled to 10 percent of the premiums collected during the last six months of his employment.

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Cite This Page — Counsel Stack

Bluebook (online)
181 F. Supp. 779, 1960 U.S. Dist. LEXIS 3099, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-farm-mutual-automobile-insurance-v-west-arwd-1960.