*1 OLANDER, Plaintiff-Appellant, Brian FARM MUTUAL AUTOMO
STATE COMPANY;
BILE INSURANCE Company; Farm Life Insurance Casualty Farm Fire & Insur Company;
ance State Farm General Company, Defendants-Ap
Insurance
pellees.
No. 01-1947. Appeals,. States Court of
Eighth Circuit. 14, 2001.
Submitted: Nov. Jan.
Filed: Granted;
Rehearing Opinion En Banc March 2002.*
Vacated:
* Judge part BYE took no in the decision in this matter. *2 Department Dakota Insurance
North sus- pended his license. Farm subse- records, quently seized Olander’s business computers, policyholder and other infor- policies assigned His were to oth- mation. in area. agents er Tedards, Jr., Washington, P. William April murder trial commenced in (Irvin Nodland, DC, B. on the argued 2, 1997, jury May 1997. On returned brief), plaintiff-appellant. for man- finding guilty verdict Olander Beckerman, KS, City, Kansas Dale L. slaughter acquitting and him of murder. (Robert Udland, brief), argued J. years to ten in the state He was sentenced defendants-appellees. In March penitentiary. North Dakota Court reversed Olander’s LAY, HEANEY, LOKEN, and Before conviction because of instructional error on Judges. Circuit
the issue of self-defense. In a second trial LAY, Judge. Circuit acquitted. in Olander was Nonethe- less, company spon- an without insurance question of presents This case sor, cannot an in- Olander licensed as whether, under North Dakota agent. surance the ter- permitted evidence agency mination clause of an insurance In Olander instituted this suit granted The district court (1) alleging Farm termi- against State in of the defen- summary judgment favor agency agreement nation of his constitut- companies (collectively, dant (2) contract, ed breach Farm”) plaintiff Brian and denied “State tortiously interfered with the business re- judgment motion to set aside the dander’s lationships developed had with his he 60(b). Because pursuant to Fed.R.Civ.P. (3) clients, unjustly State Farm was yet fact questions we hold there are Farm enriched his termination. State resolved, the district court’s we reverse all summary judgment moved for on summary judgment. grant of his magistrate judge claims. The issued February on Report and Recommendation Background
I. 7, 2001, concluding that State Farm’s mo- considering granted. tion should be After In Brian Olander became a trainee parties’ arguments opposition in Farm and entered into an the agent for State By Report of the and Recom- agency agreement the terms mendation, adopted the indepen- the district court agreement, of the Olander was entirety on magistrate judge’s report dent contractor and authorized to Mandan, February 2001. Olander then filed represent Farm North judgment pursuant to set aside the relationship Dakota. continued satis- motion 60(b) newly years. August seventeen to Fed.R.Civ.P. based factorily for and failure of the de- charged murder discovered evidence Olander was with required neigh- with his fendants to make disclosures after a violent altercation thereafter, plain- denied discovery. The district court Shortly State Farm of- bor. motion, finding newly his discovered tiffs unpaid leave of absence fered Olander to be cumulative charges until the criminal were resolved. evidence already to the court submitted and State terminat- Olander refused regarding result, charges of misconduct As a and his ed the contract. law, parol unsubstantiated. Under North defendants’ disclosures vary appeals the district court’s sum- evidence is not admissible Olander Lacs, ruling on his breach of Des mary judgment terms of a written contract.1 of his Rule However, contract claim and its denial a court *3 60(b) motion. reverse. We accept extrinsic evidence if the contract “vague or uncertain ...
language is
explain the true
explain such terms and
II. Discussion
v. Michael
meaning of them.” Smith
claims the district court erred
Olander
(N.D.
Co.,
232
39
Kurtz Constr.
N.W.2d
report
by adopting
magistrate judge’s
1975) (quoting
Mfg.
Bryan,
Gilbert
Co. v.
granting .summary judgment
favor
(N.D.1918)).
39 N.D.
166 N.W.
808
contract
of State Farm -on the breach of
The North Dakota
Court has
argues
action. He
was am
summary
a succinct
of the law in this
whether, the contract could
biguous as to
area:
be terminated “at will” or whether termi
of
contract
The construction
a written
required “good
nation
cause.” The district
legal
generally
to determine its
effect is
court concluded the relevant terms of the
Pamida,
question
of law.
Inc. v.
unambiguous
were
and created
Meide,
490
N.W.2d
a contract terminable at will. Because the
give
A court must
a contract to
unambiguous,
contract was
under North
mutual
of
effect
intention
present
Olander was unable to
at
as
existed
the time
con
parol
his understand
evidence
9-07-03; Pamida,
§
tracting. N.D.C.C.
ing
Valley
Des Lacs
interpreting
con
written
Corp. Herzig,
Land
tract, a court should ascertain the inten
(N.D.2001) (explaining
parol
evidence
writing
tion of the
from the
alone
is not admissible to contradict the unam
9-07-04;
§
possible.
if
Pami-
N.D.C.C.
contract).
biguous language of a written
da,
agreement super
A
490. written
Thus,
fact,
there was no issue of material
any prior
agreements
sedes
oral
or ne
summary judgment
granted
gotiations
parties in
between the
grant
favor of defendants.
We review
any ambiguity.
absence of
Norwest
novo,
summary judgment
viewing
de
Dakota,
Bank North
Nat’l Ass’n v.
any
light
evidence
most favorable
Christianson,
party opposing
motion.
In re
Craig, 144 F.3d
Furthermore,
heavily
subject
relies
law
Olander
series of
California
disputes
evidence in contract
is substan
interpreting
provi
Ninth Circuit cases
similar
tially different from the law of North Dakota.
E.g.,
sions under
state law.
Sand
California
Specifically, California allows the evaluation
Co.,
berg v. State Farm Mutual Auto.
of extrinsic
even
the contract
is
(9th Cir.1999) (unpublished opin
F.3d 927
facially ambiguous.
See Pac. Gas & Elec.
Assocs.,
ion);
Corp.,
Jack Rowe
Inc. v. Fisher
Co.,
Drayage Rigging
Co. v. G.W. Thomas
&
(9th Cir.1987);
A
says nothing
different
It
as to whether the termi
can
made for
arguments
Felco,
meaning.
Inc.
nation must be for cause or
be at will.
positions about
Inc.,
Shop,
arguments
North Hill Bottle
can made
Doug’s
Certainly,
rational
111, P12,
Kaler v.
Soc’y
the
Equitable
Assurance
Life
States,
553 F.2d
574
disagree with the district
We
Assocs.,
1977);
Consulting
LLC v.
Ins. &
characterization of the relevant
court’s
F.Supp.2d
Group,
ITT
Ins.
48
Hartford
“unambiguous.” State Farm re
terms as
(W.D.Mo.1999) (no
1192
language within the
upon
following
the
lies
argument presented was
only
where the
the
to assert
allowing the
of a
the absence
instructing that
unambiguous in
contract is
company if the
agent to sue the insurance
agency relationship with Olander
the
bypass
agent
and deal
insured chose to
at all times terminable will:
insurer); Metro.
Ins.
directly with the
Life
A. This
will terminate
Nabisco, Inc.,
F.Supp.
Co. v. RJR
or
Farm have
your death. You
(S.D.N.Y.1989)
the ab
(holding
Agreement
right to terminate this
allowing
prohibiting of a
sence
the oth-
by
notice delivered to
written
not,
itself,
buy-outs
by
cre
leveraged
could
last known
or mailed to the other’s
er
ambiguity that can avoid
ate an
of termination
address. The date
in
rule
the relevant bond
in the no-
specified
the date
shall be
imposed no debt limita
at issue
dentures
tice,
speci-
in the event no date
but
Inc.,
Finetex,
tions);
F.Supp.
Lewis v.
fied,
of termination shall be
the date
(silence
(D.S.C.1977)
insufficient
delivery if the notice is
the date of
directly
statutory presumption
overcome
delivered,
postmark,
or the date of the
issue);
McMillin
Great
bearing on the
party
is mailed. Either
the notice
TenmApp.
Corp., 63
Southern
termination
can accelerate the date of
(op
(Tenn.Ct.App.1972)
S.W.2d
by giving writ-
specified by the other
as to whether the
agreement’s
tion
silence
in accor-
ten notice of termination
or officer at
employee
optionee must be
paragraph.
this
dance with
ambigu
did not create
the time
exercise
consideration of
section,
face,
ity allowing for the
on its
sets forth the
This
evidence);
Assur-
Equitable
Patillo v.
parties to the
procedure
which the
Life
good
not
Soc’y, Mich.App.
502 N.W.2d nation was made for
and
ance
Kaldi,
H.
(Mich.App.1993);
capriciously.
James
Initially, paragraph B of section III, argument This is without merit. Putnam immediately provi which follows the issue, v. Dickinson held evidence was ad sion at to a entitles review missible where a deed was silent on a following agreement by termination matter, the court indicated the by State Farm.2 While no means foreclos did ing “to interpretations, other one rational ex intend the be a com planation plete for the existence of the and final statement of the whole any them,” is to ensure that termi- the transaction between and the procedures approved 2. The reads: Agree- Companies, B. In the event we terminate this the Board of Directors of the ment, you upon request are entitled as amended from time to time. review in accordance with the termi- Pamida, Meide, Inc. inappropriate.” with the consistent extrinsic Putnam, light In terms However, Da conclusion, unnecessary ad- the North it is of this this to has held regarding never claims his Rule kota Court dress dander’s parol evi 60(b) where only circumstance be motion. dispute. in a contract admissible
dence is judgment of the district Accordingly, the Crow, instance, Jorgensen For and REMANDED. court is REVERSED (N.D.1991), supreme the state had erred the trial court court held LOKEN, Judge, dissenting. Circuit “that varied admitting parol evidence respectfully I dissent. The for deed.” the contract purchase price of Farm and between State contract However, it found no error Id. at that, “You or provided Brian dander prior “a oral admitting the trial court’s right to terminate have the payment due yearly Agreement by written notice delivered this would satis for deed under contract mailed to the other’s last to the other or pasture use of the by one season’s fied before us is known issue address.” testimony does not contradict because that un- term made whether this contract.” of the written Id. a term ambiguously terminable will. that, when explicitly stated court exists, “parol evidence admis simply finding ambiguity, court existing essential terms explain sible principle per ignores general Bye v. El parties’ intent.” to show the dura contract of indefinite sonal services vick, at will either tion terminated with presented are That is the situation we LORD,Williston On party. 1 Riohaed See *6 agent’s agree or not the here. Whether (4th 4.20, § at 461 & n. 7 CONTRACTS be entire transaction expressed ment Deere ed.1990); v. Plow Meredith John of no dander tween State 481, Moline, Illinois, F.2d Co. of consequence. Dakota has codified North employment. for contracts principle of case, present we are In the instant § And 34-03-01.3 See N.D. Cent. Code si that is a contractual ed with of North Dakota Supreme Court subject of cause. Both lent types per of to other applied principle for this plausible silence explanations offer Myra Foun See contracts. sonal services provisions us to has directed and dander 436, 437 Harvey, 100 v. dation supporting his agreement itself within the (N.D.1960), Pump Amer. in followed North Therefore, per reasonable interpretation. Corp., 199 N.W.2d Clay Equip. Corp. v. that the termi rationally argue sons could Da (N.D.1972). Applying South pro merely sets forth the nation virtually which includes statute kota of termination notice giving cedure for 34-03-01, in Martin § we held identical to or not termi whether specifying without Society Equitable Assurance “Because reason requires cause. nation Life States, 573, 574 653 F.2d arguments make rational people could able 1977), agency an insurance ... there contrary positions in at terminable term was having no fixed ren of material fact genuine was a issue general That is the party. issue will either summary judgment on this dering other, except when otherwise to the having specified term on notice employment no 3. "An by this title.” party provided will of may at the either be terminated Apple- *5); rule. See 13 ERic at view Melnick Holmes, Holmes’ (1999). Co., §2D 99.2 Farm Mut. Auto. Ins. 106 N.M. man On INSURANCE (N.M.1988), 749 P.2d 1110-11 cert. general rule makes all the differ denied, U.S. S.Ct. deciding ence this case. The court con (1988); L.Ed.2d 44 Vitkauskas v. State ambiguous cludes the contract is because Co., Ill.App.3d Farm Mut. Auto. Ins. says nothing as to “ti]t whether the termi 109 Ill.Dec. 509 N.E.2d nation must for cause or at (Ill.App.Ct.1987); Mooney v. State p. general will.” Ante 797. But under the Companies, F.Supp. Farm Ins. rule, agen silence as to the duration of an (D.N.H.1972) (discussing 699-700 the ter cy relationship is an unambiguous declara procedure). mination excep tion that the contract is terminable at will. unpublished tion is Ninth Circuit’s Martin, In addition to our decision in nu opinion Sandberg, which the court cor merous cases have held that an insurance rectly concludes is irrelevant because agency contract of indefinite duration con California law allows the use of extrinsic taining precise language here at is evidence to determine a contract is am sue—that the contract is terminable biguous. Ante note 1. party notice either terminable —is will as a matter of law. See Kaldi impact The immediate of this decision Exch., 16, 18, Farmers 21 P.3d 20 may prove slight, to be because the ulti- (Nev.2001); Equitable Patillo v. As Life likely mate fact-finder is to find either that States, Soc’y surance the United the State contract was ter- Farm/Olander (Mich. Mich.App. minable without or that State Farm App.1993); Washington James H. good in protecting policy- had cause Agency v. Nationwide Mut. Ins. reputation by removing holders and its App.3d Ohio 643 N.E.2d 147 captive agent facing who was a criminal (Ohio App.1993). These cases also estab prosecution for homicide. But contract provisions lish that similar to the termi predictable, law should be and this deci- procedure quoted in footnote potentially disrupts sion expec- the settled 2 of opinion the court’s do not render the tations countless to this standard termination-upon-notice provision ambigu form State Farm *7 States Kaldi, ous. As the court said in 21 P.3d at hope other than California. I therefore 21: Dakota, that the Court of North process gives review board if presented the opportunity, squarely will opportunity to assert that it is reject this distortion of North Dakota con- not in the best of [the interest insurer] tract law. sever relationship.... requirement even without a
cause, the review board serves a viable
purpose under the contract.
Significantly, every court but one that interpreted specific
agreement here at issue has concluded is unambiguously terminable
will. See Gardner v. State Farm Mut. (Ala.Civ.
Auto. Ins.
App.2001) (discussing the termination re-