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Trip Mate, Inc. v. Stonebridge Casualty Insurance Co.

United States Court of Appeals, Eighth Circuit

October 6, 2014

Trip Mate, Inc., formerly known as Trip Mate Agency, Inc., Plaintiff-Appellee
v.
Stonebridge Casualty Insurance Company; Legacy General Insurance Company; Life Investors Insurance Company of America, also known as Transamerica Life Insurance Company, Defendants - Appellants; Unique Vacations, Inc., Brought over from case no. 4:11-cv-01097-ODS, Plaintiff
v.
Trip Mate, Inc., Brought over from case no. 4:11-cv-01097-ODS; Stonebridge Casualty Insurance Company, Brought over from case no. 4:11-cv-01097-ODS; Life Investors Insurance Company of America; Legacy General Insurance Company, Brought over from case no. 4:11-cv-01097-ODS, Defendants

Submitted: September 8, 2014.

Appeal from United States District Court for the Western District of Missouri - Kansas City.

For Trip Mate, Inc., formerly known as: Trip Mate Agency, Inc., Plaintiff - Appellee: Alan B. Gallas, Gwendelyn M. Garcia, Gallas & Schultz, Kansas City, MO.

For Stonebridge Casualty Insurance Company, Legacy General Insurance Company, Life Investors Insurance Company of America, also known as: Transamerica Life Insurance Company, Defendants - Appellants: Clark H. Cole, Wilbur L. Tomlinson, Armstrong & Teasdale, Saint Louis, MO.

Before BENTON, BEAM, and SHEPHERD, Circuit Judges.

OPINION

Page 780

BEAM, Circuit Judge.

Stonebridge Casualty Insurance Co. (Stonebridge) appeals the district court's judgment in favor of Trip Mate, Inc. (Trip Mate) following a bench trial. The district court held that Stonebridge breached an implied amendment to the parties' Managing General Agent Agreement that was incorporated into the Termination Agreement they executed in 2009. We reverse.

I. BACKGROUND

Trip Mate began doing business in the travel insurance industry in 1989. Trip Mate acts as the agent for insurance companies, and it markets, administers, and

Page 781

sells to travel organizers[1] the right to sell travel insurance policies. The contract between Trip Mate and a travel organizer is known as a Travel Organization Agreement (TOA). The TOA authorizes the travel organizer to offer travelers the option of buying travel insurance issued by the insurers Trip Mate represents.

From 1989 to 2009, Trip Mate served as the agent for various entities from a " family" of insurance companies known as the AEGON group. Stonebridge was the last such insurer, and for purposes of clarity we collectively refer to the members of the AEGON Group as Stonebridge.

In 1997, Stonebridge purchased Trip Mate. At that point, Bradley Finkle, Trip Mate's prior owner, continued to manage the company. As part of the purchase transaction, Finkle and his wife were given the option to re-purchase the company via a stock buy-out option. They exercised this option in 2004 and entered into a Stock Purchase Agreement (SPA) with Stonebridge. The parties simultaneously executed a Managing General Agent Agreement (MGAA), which remained in effect until Stonebridge and Trip Mate terminated their relationship in 2009. The MGAA authorized Trip Mate to " market, underwrite, and service the travel insurance policies" on Stonebridge's behalf. The MGAA also authorized Trip Mate to issue insurance policies and required it to place policy premiums in a Premium Trust Account that Trip Mate held in trust for Stonebridge.

Article C of the MGAA described the parties' rights and obligations with respect to funds in the Premium Trust Account. On a monthly basis, Trip Mate was required to remit all funds in the Premium Trust Account to Stonebridge. However, Trip Mate was authorized to use funds from this account to pay a number of Stonebridge's obligations, including (1) making " refund[s] of premiums to persons entitled to them," and (2) paying Trip Mate's compensation for services performed under the terms of the MGAA. The MGAA did not define the term " premium" or identify which persons or entities might be entitled to a refund of premiums.

Article F of the MGAA contained part of the parties' compensation agreement. However, rather than explaining the details of Trip Mate's compensation, Article F merely stated that Stonebridge " agree[d] to pay [Trip Mate] an amount of compensation to be agreed upon in writing" by the parties. Article F further provided that any costs Trip Mate incurred related to marketing, selling, and administering insurance policies, along with any ...


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