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Suburban Insurance Services, Inc. v. Virginia Surety Company

May 10, 2001

SUBURBAN INSURANCE SERVICES, INC., PLAINTIFF-APPELLANT,
v.
VIRGINIA SURETY COMPANY, INC., DEFENDANT-APPELLEE.



The opinion of the court was delivered by: Presiding Justice Hartman

Not Released For Publication

SUBURBAN INSURANCE SERVICES, INC., PLAINTIFF-APPELLANT,
v.
VIRGINIA SURETY COMPANY, INC., DEFENDANT-APPELLEE.

The opinion of the court was delivered by: Presiding Justice Hartman

Appeal from the Circuit Court of Cook County.

Honorable Richard Siebel, Judge Presiding.

 Plaintiff Suburban Insurance Services, Inc. brought this action against defendant Virginia Surety Company, Inc. seeking commissions on insurance policy renewals it claimed defendant owed it pursuant to a sub-producer agreement entered into by the parties. The circuit court denied plaintiff's motion for summary judgment and granted defendant's motion for summary judgment, finding that the sub-producer agreement provided no basis for plaintiff to recover the claimed commissions. On appeal, plaintiff contends that the court erred in determining that it was not entitled to its claimed commissions under the agreement.

Plaintiff, an insurance broker, sold insurance for several insurance carriers, including defendant. George Zoscak was president, 50% shareholder, and director of plaintiff. Jacqueline Livingston acted as the general manager of plaintiff. Plaintiff's two largest insurance customers were Prairie Material Sales and Prairie Administration Corp. (collectively Prairie). John Oremus, Zoscak's co-shareholder in plaintiff, was a shareholder, officer, and director of Prairie.

On November 1, 1992, plaintiff entered into a written sub-producer agreement with defendant which allowed plaintiff to submit applications for insurance to defendant through defendant's general agent, Martin Boyer Company, Inc. (Martin Boyer). Under the terms of the sub-producer agreement, plaintiff was entitled to certain commissions for insurance placed with defendant, but the agreement made no reference to renewal commissions. The sub-producer agreement remained in effect until September 24, 1997.

Prior to October 1993, plaintiff obtained workers' compensation coverage for Prairie from defendant. Zoscak testified at his deposition that prior to October 1, 1993, plaintiff was compensated for policies that were written for Prairie based on a percentage of the premiums. In October 1993, plaintiff "closed its doors" and ceased placing insurance business for insureds. *fn1 In an agreement dated October 1, 1993, plaintiff sold all its insurance accounts, except for the Prairie account, to Concklin Insurance Agency, Inc.

Livingston testified at her deposition that, beginning on October 1, 1993, she went to work for Prairie as insurance coordinator. In September 1993, she requested that Martin Boyer present the quote for Prairie's workers' compensation policy for the 1993-94 policy year net of any sub-producer commission because she was becoming an employee of Prairie and would take the quotes directly. Requesting the quote net of any sub-producer commission resulted in a reduced premium for Prairie's workers' compensation coverage. For the policy years 1993-94 and 1994-95, Prairie renewed its workers' compensation policy directly with defendant. Plaintiff provided no service at all with regard to Prairie's workers' compensation policies for those years. Plaintiff received no commissions from these renewals.

Plaintiff filed an amended complaint alleging defendant breached the sub-producer agreement by failing to pay plaintiff the commissions due it for these renewal policies. *fn2 Plaintiff unsuccessfully moved for summary judgment. Defendant successfully moved for summary judgment on the ground that, under the plain language of the sub-producer agreement, there was no basis for plaintiff's claim for renewal commissions. Plaintiff's motion for reconsideration was denied. Plaintiff appeals.

Summary judgment will be granted when the pleadings, depositions, exhibits, and affidavits on file reveal no genuine issue as to any material fact and establish that the moving party is entitled to judgment as a matter of law. 735 ILCS 5/2-1005 (West 1998); Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 607 N.E.2d 1204 (1992) (Outboard Marine). All evidence must be construed in the light most favorable to the nonmoving party and most strictly against the moving party. Gatlin v. Ruder, 137 Ill. 2d 284, 560 N.E.2d 586 (1990). Appellate review of orders granting summary judgment is de novo. Outboard Marine, 154 Ill. 2d at 101; Anderson v. Alberto-Culver USA, Inc., 317 Ill. App. 3d 1104, 740 N.E.2d 819 (2000).

I.

Plaintiff argues that it was entitled to the renewal commissions under the terms of the sub-producer agreement, by virtue of the fact that defendant had paid plaintiff commissions on sales of insurance to Prairie in the past pursuant to the sub-producer agreement, thereby acknowledging the fact that Prairie was plaintiff's customer. The sub-producer agreement was still in effect when Prairie renewed its workers' compensation policy in 1993 and 1994, and plaintiff was entitled to commissions on those renewals. Defendant responds that the sub-producer agreement ...


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