Richard Gary MCGUIRE, Plaintiff-Appellant, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY; American Family Life Insurance Company; American Family Standard Insurance Company of Wisconsin, Defendants-Appellees.
No. 10-3226
United States Court of Appeals, Tenth Circuit.
Sept. 9, 2011.
440 Fed. Appx. 801
Before TYMKOVICH, Circuit Judge, BRORBY, Senior Circuit Judge, and MATHESON, Circuit Judge.
Mr. Vermillion also argues that his waiver was not knowing and voluntary because, during the
Although Mr. Vermillion calls into question the voluntariness of his plea, he does not seek to vacate his plea or to forego the advantages he received from his plea agreement. Rather, he simply wishes to avoid the appeal waiver. Thus, the proper focus of this argument is whether he knowingly and voluntarily accepted the waiver. Whether the district court erred in not further confirming whether Mr. Vermillion understood the nature of the evidence against him does not, by itself, make the waiver unknowing and involuntary. See Hahn, 359 F.3d at 1326 n. 12 (describing what it called “the logical failings of focusing on the result of a proceeding, rather than on the right relinquished, in analyzing whether an appeal waiver is unknowing or involuntary“). Further, Mr. Vermillion misplaces his reliance on United States v. Wilken, 498 F.3d 1160 (10th Cir.2007), regarding ambiguities created by a colloquy. Wilken involved the district court‘s error in discussing the waiver itself, not error in discussing some other aspect of the case. Id. at 1166-69.
In evaluating whether a waiver is knowing and voluntary, Hahn directs us to examine the plea agreement and the transcript of the Rule 11 colloquy. 359 F.3d at 1325. Both indicate that Mr. Vermillion knowingly and voluntarily accepted the appeal waiver. See Plea Agt. at 5 (“The defendant knowingly and voluntarily waives any right to appeal ... “); Plea Hr‘g Tr. at 9 (acknowledging the appeal waiver); see also Plea Agt. at 10 (“The defendant is entering into this agreement knowingly, freely, and voluntarily.“); Plea Hr‘g Tr. at 6 (acknowledging that he freely and voluntarily chose to enter into the plea agreement). Mr. Vermillion has not identified any evidence to the contrary.
The motion to enforce is GRANTED, and this appeal is DISMISSED.
Brooks Kancel, William P. Tretbar, Fleeson, Gooing, Coulson & Kitch, LLC, Wichita, KS, for Defendants-Appellees.
ORDER AND JUDGMENT*
WADE BRORBY, United States Circuit Judge.
Appellant Richard Gary McGuire appeals the district court‘s grant of summary judgment in favor of Appellees, American Family Mutual Insurance Co., American Family Life Insurance Co., and American Family Standard Insurance Co. of Wisconsin (collectively referred to as “American Family“). The district court granted summary judgment to American Family on Mr. McGuire‘s claims of breach of contract and breach of the implied covenant of good faith and fair dealing following American Family‘s termination of his agent agreement for rebating a client‘s life insurance premium payments. We exercise our jurisdiction under
I. Factual Background
In granting summary judgment in favor of American Family, the district court relied on various affidavits, depositions, and other attachments submitted in conjunction with American Family‘s motion for summary judgment and Mr. McGuire‘s response thereto. Like the district court, we construe the facts contained therein in the light most favorable to Mr. McGuire as the party opposing summary judgment. The following undisputed facts provide background information and/or are material to our disposition of this appeal.
A. Contract and Company Policy
American Family is a Wisconsin insurance company authorized to do business in
1) Except as provided in paragraph 2) below, this agreement may be terminated by either party with or without cause by giving written notice to the other and shall be deemed terminated as of the date specified in that notice. If both parties give notice, the earlier termination date shall control.
2) After two years from the effective date of this agreement ... [American Family] will give you notice in writing of any undesirable performance which could cause termination of this agreement if not corrected. [American Family] will not terminate this agreement for those reasons for a period of six months after that written notice. In no case shall notice of undesirable performance be required prior to termination if the performance in question involves a violation of [§ ] 4i or any other dishonest, disloyal or unlawful conduct....
App. Vol. 1 at 113-14 (emphasis added). With respect to § 4i, Mr. McGuire agreed:
To maintain a good reputation in [his] community and to direct [his] efforts toward advancing the interests and business of [American Family] to the best of [his] ability, to refrain from any practices competitive with or prejudicial to [American Family] and to abide by and comply with all applicable insurance laws and regulations.
App., Vol. 1 at 112 (emphasis added).
Section 6i of the agreement, entitled “Termination Review Procedure,” stated, in part, “[i]n the event [American Family] terminates this agreement, you may request a review in accordance with the Termination Review Procedure then in effect.” App., Vol. 1 at 114. Section 7c, entitled “Binding Provisions,” provided:
Rates, rules, regulations and all provisions contained in [American Family‘s] Agent‘s Manuals and all changes to them shall be binding upon you. If any inconsistency or ambiguity exists between this agreement and such rate, rule, regulation, provision or other statement or statements, whether written or oral, this agreement shall control.
App., Vol. 1 at 117. Finally, § 7d required the agreement be interpreted and construed in accordance with Wisconsin law.
In addition to terms of the agreement, American Family also provided manuals and other written resource materials to its agents, including a Life Compliance Manual. It provided the Life Compliance Manual in paper form until May 2002, after which it was provided in electronic format. All American Family agents, including Mr. McGuire, had online access to the electronic manual and its updates.1 With respect to the issue of rebating, the written version of the Life Compliance Manual stated:
Rebating
AN AGENT MAY NOT GIVE A POLICYOWNER OR PROSPECTIVE CLIENT ANYTHING OF SIGNIFICANT VALUE (OVER $10) AS AN INDUCEMENT TO PURCHASE OR
MAINTAIN INSURANCE WITH AMERICAN FAMILY. GENERAL RULES
An agent may not pay all or any part of an initial or renewal premium for a policyowner or prospective client.
. . .
An agent may not give a policyowner or prospective client any item worth over $10.
Payment of cash in any amount to a policyowner or prospective client is prohibited.
App. Vol. 1 at 142 (italic emphasis added).
In 2002, the electronic format of the Life Compliance Manual provided the following provisions and discussion regarding rebating:
Rebating
You may not give a policyowner or prospective client anything of significant value (over $10) as an inducement to purchase or maintain Life Insurance with American Family.
. . . .
General Rules
You may not pay or loan all or any part of an initial or renewal premium for a policyowner or prospective client
. . . .
FAQ (Frequently Asked Questions)
Question
Can I pay a client‘s premium if they are a little short for a given month, and I know they will be able to pay me back in a short period of time?
Answer
No. This is rebating, and is taken very seriously by the Home Office and State Insurance Departments.
Question
Can I advance a premium when the Home Office has lost the client‘s check?
Answer
No. Advancing premiums on behalf of a client is rebating.
App., Vol. 1 at 143 (italic emphasis added). The electronic version of this section of the Life Compliance Manual underwent minor and nonmaterial revisions during Mr. McGuire‘s tenure as an agent with American Family.
In addition to American Family‘s prohibition against rebating, Kansas law prohibits rebating a client‘s insurance premiums, which Mr. McGuire admitted he knew. As discussed hereafter, several Kansas statutes expressly prohibit agents from rebating premiums and came into effect prior to 1989 when Mr. McGuire took his Kansas licensing examination.
Mr. McGuire also took training courses on insurance law prior to taking his Kansas agent licensing examination and participated in law insurance training courses offered by American Family; during his initial training he learned rebating is illegal. In addition, in an email memorandum dated June 10, 2004, and sent to all the insurance agents in Mr. McGuire‘s region, American Family instructed its agents to refrain from certain types of “unacceptable” conduct, including rebating, and that discovery of such unacceptable acts would result in immediate and appropriate action, including dismissal.
B. Mr. McGuire‘s Rebating Conduct
In November 2000, Mr. McGuire prepared and submitted to American Family an application for the purchase of $250,000 of term life insurance for Matthew Carney—an American Family insurance adjuster and “good friend.” Mr. McGuire also provided a document he prepared showing his assumption Mr. Carney would
While Mr. Carney did not qualify for the Select rate, Ms. Oakley approved his application for a higher premium for the Nonsmoker rate, after which American Family issued life insurance to him at the premium rate of $472.50 rather than the Nonsmoker/Select rate of $297.50 quoted to him by Mr. McGuire. In so doing, it issued a bill for the balance due, which was paid by Mr. McGuire—not Mr. Carney. Thereafter, for the next four years, American Family issued a bill to Mr. Carney for $472.50; each time, Mr. Carney wrote a check payable to American Family for only $297.50—the price quoted to him by Mr. McGuire—and Mr. McGuire paid the balance.
In December 2005, Connie Kunick—a Life Services Specialist for American Family—received calls from Mr. Carney, who reported the bill for his life insurance reflected a premium due of $472.50 per year instead of the correct rate of $297.50 and explained he received similar erroneous billings over the past five years. After making inquiries into the situation, Ms. Kunick informed Mr. Carney he did not qualify for the Select rate because of his family history of cancer, but he did qualify for the Preferred rate, and his premium would be $352.50 per year if he wished to keep the policy in force, to which he agreed.
Thereafter, American Family conducted an investigation into the payments made by Mr. McGuire on Mr. Carney‘s behalf. One of its employees, Clint Poeschl, interviewed Mr. McGuire, who admitted he paid a portion of Mr. Carney‘s life insurance premiums for the past five years because Mr. Carney did not qualify for the Select rate he initially quoted him. Mr. Poeschl also interviewed Mr. Carney, who confirmed that over the last five years he paid only $297.50 annually on his life insurance premiums. Mr. Poeschl then contacted American Family‘s in-house counsel, who advised him Mr. McGuire‘s payment of premiums on behalf of an insured constituted rebating prohibited under Kansas law.
Mr. Poeschl then submitted a report of his investigation to American Family‘s Kansas Sales Director, Rachelle Burton, who, in turn, discussed the matter with American Family‘s Regional Vice President, Michael Duran. Based on the information obtained during the investigation, Mr. Duran decided to terminate the agent agreement between Mr. McGuire and American Family on grounds Mr. McGuire impermissibly rebated a client‘s premium payments in violation of Kansas law.
On January 3, 2006, Ms. Burton and Mr. Poeschl met with Mr. McGuire to advise him of the termination of his agent agreement. Pursuant to § 6h, they also gave him a written letter notifying him of his termination, reminded him of the termi-
II. Procedural Background
Following his termination, Mr. McGuire filed his complaint alleging claims of breach of contract and implied covenant of good faith and fair dealing. Following discovery, American Family filed a motion for summary judgment, which the district court granted on August 9, 2010. In granting summary judgment, the district court determined Wisconsin substantive law applied to the terms of the agent agreement but that Kansas insurance law governed the issue of whether Mr. McGuire‘s payment of Mr. Carney‘s insurance premiums constituted illegal rebating. After considering the applicable Kansas statutes, the district court held an insurance agent‘s payment of a portion of the premiums due from a customer on an insurance policy sold by that agent constituted rebating in violation of Kansas law.
In so holding, the district court determined
By paying a portion of the premium in violation of Kansas law, the district court determined, Mr. McGuire violated his agreement to abide by and comply with all applicable Kansas insurance laws and regulations, and therefore, American Family could terminate his agent agreement. Accordingly, it determined American Family did not breach the agreement and granted summary judgment to American Family on Mr. McGuire‘s breach of contract claim.
The district court also ruled in favor of American Family on Mr. McGuire‘s claim of breach of implied covenant of good faith and fair dealing, explaining the express terms of the agent agreement permitted termination of the agreement in the event he violated state law, which he did when he rebated Mr. Carney‘s insurance premiums. In so holding, the district court explained it would not “second-guess the business judgment” of the regional vice president who made the decision to terminate the agent agreement based on Mr. McGuire‘s state law violation.
III. Discussion
A. Issues Presented on Appeal
On appeal, Mr. McGuire asserts the district court erred in granting summary judgment to American Family on his claims of breach of contract and implied covenant of good faith and fair dealing. In making these assertions, Mr. McGuire contends material, disputed facts exist precluding summary judgment, as indicated in his factual allegations: (1) he merely paid the difference on the premiums in an effort to protect both Mr. Carney and American Family while he tried to get American
In addition, Mr. McGuire claims the district court made various legal errors in granting summary judgment. He argues the district court impermissibly determined
As to his other contract claim, Mr. McGuire contends the district court erred when it determined his violation of Kansas law and American Family‘s contractual right to terminate him “trumped” any obligation it had to deal with him fairly and in good faith. He also claims the district court erred in concluding it should not second-guess Vice President Duran‘s business judgment in terminating him. He suggests American Family breached its duty of good faith and fair dealing when Vice President Duran unfairly decided to terminate him on an uninformed basis after Mr. McGuire‘s seventeen years as an agent, as compared with American Fami-
B. Applicable Law and Analysis
In addressing Mr. McGuire‘s many contentions, we begin with a discussion of our standard of review and the applicable law and legal principles we apply in interpreting statutes and contracts under state law. In diversity cases, as presented here, federal law determines the propriety of the district court‘s grant of summary judgment. See Stickley v. State Farm Mut. Auto. Ins. Co., 505 F.3d 1070, 1076 (10th Cir.2007). “We review a district court‘s decision to grant summary judgment de novo, viewing all facts in the light most favorable to the party opposing summary judgment,” which, in this case, is Mr. McGuire. Grynberg v. Total, S.A., 538 F.3d 1336, 1346 (10th Cir.2008) (internal quotation marks omitted). We will affirm a grant of summary judgment if no genuine dispute of material fact exists and the prevailing party, American Family, is entitled to judgment as a matter of law. Id. (relying in part on
The parties agree the district court properly applied Wisconsin contract law to the terms of the agent agreement, as contemplated by § 7d of the agent agreement, and Kansas law with respect to the rebating statutes in question. We proceed under the same assumption. In applying Wisconsin and Kansas law, “[t]his court must determine issues of state law as we believe the highest state court would decide them.” Clark v. State Farm Mut. Auto. Ins. Co., 319 F.3d 1234, 1240 (10th Cir.2003). “Although we are not bound by a lower state court decision, decisions of a state‘s intermediate appellate courts are some evidence of how the state supreme court would decide the issue, and we can consider them as such, even if they are not binding precedent under state law.” Id. (internal quotation marks omitted).
In addressing the terms of Mr. McGuire‘s agent agreement and applying Wisconsin law, “[w]e review de novo a district court‘s application of state law to interpret a contract.” Deer Crest Assoc. I v. Avalon Deer Valley, 566 F.3d 1246, 1248 (10th Cir.2009). Under Wisconsin law, “[w]here a party‘s claims rest on [a] contract, we must apply the contract‘s language.” Brew City Redev. Group v. The Ferchill Group, 289 Wis.2d 795, 714 N.W.2d 582, 585-86 (Wis.Ct.App.2006). A complaint states a claim for breach of contract under Wisconsin law when it alleges: (1) a contract creating obligations flowing from defendant to plaintiff; (2) a breach of those obligations; and (3) damages from the breach. See id. at 588.
In this case, § § 4i and 6h of the agent agreement expressly state no notice of undesirable performance is necessary prior to termination for unlawful conduct, including a violation of all applicable insurance laws and regulations. Therefore, if Mr. McGuire violated Kansas law by participating in the illegal practice of rebating, American Family may, under the agent agreement, terminate the contract without breaching the terms of the contract. Like the district court, we look to Kansas law and its statutes to determine if Mr. McGuire‘s conduct in paying Mr. Carney‘s premiums violated Kansas law and thereby his agent agreement.
Under Kansas law, “[i]nterpretation of a statute is a question of law,” and “[t]he most fundamental rule of statutory construction is that the intent of the legislature governs if that intent can be ascertained.” Fisher v. DeCarvalho, 45 Kan. App.2d 1133, 260 P.3d 1218, 1224 (Kan.Ct.App.2011) (slip.op.) (emphasis added). “The legislature is presumed to have expressed its intent through the language of the statutory scheme it enacted.” Goldsmith v. State, 255 P.3d 14, 17 (Kan.2011) (internal quotation marks omitted). “When construing statutes to determine legislative intent, ... courts must consider various provisions of an act in pari materia with a view of reconciling and bringing the provisions into workable harmony if possible.” State v. Casey, 42 Kan.App.2d 309, 211 P.3d 847, 850 (2009). When attempting to “ascertain the legislature‘s intent through the statutory language it employs,” courts must give “ordinary words their ordinary meaning.” Fisher, 260 P.3d at 1224 (internal quotation marks omitted).
Where the statute is plain and unambiguous, statutory construction is unnecessary. See Goldsmith, 255 P.3d at 17; Fisher, 260 P.3d at 1224. Only if a statute‘s language or text is unclear or ambiguous are the canons of construction or legislative history applied to construe the legislative intent. See Fisher, 260 P.3d at 1224. “[W]e interpret state laws according to state rules of statutory construction,” Finstuen v. Crutcher, 496 F.3d 1139, 1148 (10th Cir.2007), and “we are permitted to construe ambiguous state statutes and to extrapolate the true meaning of such statutes according to traditional rules of statutory construction.” Phelps v. Hamilton, 59 F.3d 1058, 1070 (10th Cir.1995). Thus, if “the statute is ambiguous on its face,” we may “look at the historical background of [the] statute‘s enactment, the circumstances surrounding its passage, the statute‘s purposes, and its effect.” Goldsmith, 255 P.3d at 17.
With these principles in mind, we turn to the Kansas rebating statutes on which the parties rely.
40-2404. Unfair methods of competition or unfair and deceptive acts or practices; title insurance agents, requirements; disclosure of nonpublic personal information; rules and regulations.
The following are hereby defined as unfair methods of competition and unfair or deceptive acts or practices in the business of insurance:
. . . .
(7) Unfair discrimination. (a) Making or permitting any unfair discrimination between individuals of the same class and equal expectation of life in the rates charged for any contract of life insurance or life annuity or in the dividends or other benefits payable thereon, or in any other of the terms and conditions of such contract.
. . . .
(8) Rebates. (a) Except as otherwise expressly provided by law, knowingly permitting, offering to make or making any contract of life insurance, life annuity or accident and health insurance, or agreement as to such contract other than as plainly expressed in the insurance contract issued thereon; paying, allowing, giving or offering to pay, allow or give, directly or indirectly, as inducement to such insurance, or annuity, any rebate of premiums payable on the contract, any special favor or advantage in the dividends or other benefits thereon, or any valuable consideration or inducement what[so]ever not specified in the contract; or giving, selling, purchasing
or offering to give, sell or purchase as inducement to such insurance contract ... any stocks, bonds or other securities of any insurance company ... or anything of value whatsoever not specified in the contract.
In construing the ordinary words of these statutes and applying Kansas‘s most fundamental rule in determining the legislature‘s intent from those words, it is clear the legislature‘s intent in passing
In arguing the statute applies a subjective standard with regard to an agent‘s intent or the insured‘s reason for purchase, Mr. McGuire provides no useful analysis with respect to the plain and ordinary words of the statute to convince us his assertion is correct, other than to provide a definition of the word “inducement” and contend the use of that word alone in
In examining in pari materia the other Kansas statutes relating to insurance rebating, none provide an exception to the prohibition on rebating or otherwise suggest a subjective standard applies in determining if an agent‘s payment of a premium constitutes rebating or an inducement. See
Even if we believed the statute was ambiguous after examining the statutory scheme enacted, we may consider the interpretation given the statute by those charged with enforcing it. See Phelps, 59 F.3d at 1070. While Kansas law applies “[n]o significant deference” to an agency‘s interpretation or construction of a statute, see In re Lemons, 289 Kan. 761, 217 P.3d 41, 42 (2009), we may nevertheless consider it for its persuasive value even if it is not binding. See Graham v. Dokter Trucking Group, 284 Kan. 547, 161 P.3d 695, 701 (2007). In 1983, the Kansas Insurance Commissioner issued an insurance bulletin concerning
Although the parties have not provided, nor have we found, any on-point Kansas case law, regulatory or administrative laws, or legislative history to definitively resolve the rebating issue presented, our review of Kansas anti-rebating statutes and the interpretation given to
Given Mr. McGuire violated the law, American Family could terminate his agent agreement without prior notice, as provided by § 6h of that agreement. Therefore, American Family did not breach the agreement, as alleged by Mr. McGuire in his breach of contract claim, and the district court properly granted summary judgment to American Family on that claim.
We next turn to Mr. McGuire‘s argument American Family breached the implied covenant of good faith and fair dealing when it terminated him. As Mr. McGuire contends, Wisconsin law presumes “‘[e]very contract implies good faith and fair dealing between the parties to it’ and mere compliance with the form but not the substance of a contract breaches that covenant of good faith.” Brew City, 714 N.W.2d at 589 (quoting Bozzacchi v. O‘Malley, 211 Wis.2d 622, 566 N.W.2d 494, 495 (Wis.Ct.App.1997)). In Wisconsin, whether a party has breached its implied duty of good faith is ordinarily a question of fact. See Wis. Nat‘l Gas Co. v. Gabe‘s Constr. Co., 220 Wis.2d 14, 582 N.W.2d 118, 122 n. 6 (Wis.Ct.App.1998). However, where one of the contracting parties complains of acts specifically authorized in the agreement, there is no breach of good faith and fair dealing as a matter of law. See M & I Marshall & Ilsley Bank v. Schlueter, 258 Wis.2d 865, 655 N.W.2d 521, 525 (Wis.Ct.App.2002). In Wisconsin, “[b]ehaviors recognized as a lack of good faith are: evasion of the spirit of the bargain, lack of diligence and slacking off, willful rendering of imperfect performance, abuse of power to specify terms, and interference with or failure to cooperate in the other party‘s performance.” Tang v. C.A.R.S. Protection Plus, Inc., 301 Wis.2d 752, 734 N.W.2d 169, 183 (Wis.Ct.App.2007) (internal quotation marks omitted). Here, Mr. McGuire suggests American Family evaded the spirit of the bargain when it unfairly terminated him after seventeen years as an agent and failed to terminate at least one other agent who also participated in rebating.
In applying Wisconsin law, it is clear the agent agreement clearly stated American Family had the right to terminate Mr.
IV. Conclusion
For the foregoing reasons, we AFFIRM the district court‘s summary judgment decision in favor of American Family on Mr. McGuire‘s claims of breach of contract and breach of the implied covenant of good faith and fair dealing.
Kenneth D. HILL, Plaintiff-Appellant, v. CITY OF OKLAHOMA CITY; Kenneth Jordan; Stacey Davis, William Citty, Defendants-Appellees.
No. 11-6088
United States Court of Appeals, Tenth Circuit.
Sept. 14, 2011.
Notes
App., Vol. 1 at 117 (emphasis added). Even where an affidavit or deposition is based on personal knowledge and sworn, we have said it may be insufficient to create a triable issue of fact if, as here, it is merely self-serving and not otherwise supported by the record. See Salguero v. City of Clovis, 366 F.3d 1168, 1177 n. 4 (10th Cir.2004) (relying on Murray v. City of Sapulpa, 45 F.3d 1417, 1422 (10th Cir. 1995)). As the district court indicated, the Life Compliance Manual as well as the 2004 email to all agents categorically prohibited rebating, which Mr. McGuire violated in addition to Kansas rebating law.Rates, rules, regulations and all provisions contained in [American Family‘s] Agent‘s Manuals and all changes to them shall be binding upon you. If any inconsistency or ambiguity exists between this agreement and such rate, rule, regulation, provision or other statement or statements, whether written or oral, this agreement shall control.