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State Farm Mutual Automobile Insurance Co. v. Anderson

Decided: December 11, 1961.


Goldmann, Foley and Lewis. The opinion of the court was delivered by Goldmann, S.j.a.d.


Plaintiffs appeal from the Chancery Division order denying their motion for summary judgment. The parties have agreed that we treat the appeal as if defendant had also moved for summary judgment and his motion been denied. At issue is the interpretation of plaintiffs' insurance agency contract.

Plaintiffs are licensed to transact insurance business in this State and have been authorized by the Commissioner of Banking and Insurance to use their trade name, State Farm Insurance Companies. On August 15, 1955 defendant entered into a standard form written agreement with plaintiffs by virtue of which he was appointed and became their local agent. Defendant voluntarily resigned on January 31, 1960, thereby terminating the written agreement and his association with plaintiffs.

On March 25, 1960 plaintiffs filed their verified complaint alleging that ever since his termination of service, defendant had willfully violated the terms of the agency agreement, hereinafter mentioned, by failing to surrender plaintiffs' records, files and policyholder lists used during his representation of the insurance companies, soliciting and serving policyholders, selling and "switching" plaintiffs' policyholders to other insurance companies, and interfering with and confusing policyholders by continuing to make use of the several plaintiff insurance companies' trade names and designations, as well as letterheads and mailing pieces. Plaintiffs sought to enjoin defendant's violation of the restrictive covenant of his agency contract, restrain the several described acts of unfair competition, obtain a turnover of all policyholder lists and other records and materials, and recover damages and costs. Defendant answered and by way of counterclaim sought an accounting for and recovery of service fees, renewal commissions and termination benefits claimed to be due him under the agency agreement.

After considering the parties' counter-affidavits, the Chancery Division granted plaintiffs an interlocutory injunction

restraining defendant from soliciting their customers and using their policyholder lists, and directing that all future telephone directory listings of a certain telephone number be changed to exclude any identification with or reference to plaintiffs. The trial judge noted that defendant in his affidavit admitted he had been soliciting business from plaintiffs' policyholders and had been using a list of those policyholders in that connection. The exhibits accompanying plaintiffs' affidavits not only established that this was so but also that defendant had been using plaintiffs' letterheads, imprinted with the name "The Anderson Agency, Inc.," in soliciting business.

Some months after the entry of the interlocutory judgment, plaintiffs moved for summary judgment. In denying the motion the trial judge said that defendant was entitled to establish at final hearing, if he could, the validity of the claims set out in his counterclaim. The action was pretried the day the order of denial was entered, the pretrial order reciting defendant's admission that he had used the telephone number complained of. We granted plaintiffs' application for leave to appeal the order denying their motion for summary judgment.

Plaintiffs have voluntarily abandoned all claims to affirmative relief, so that there is left remaining for disposition defendant's counterclaimed rights to remuneration under the agency agreement.

The question of defendant's right to recover renewal commissions is no longer in the case. That matter has been resolved between the parties. Since we are to determine the appeal as though there had been cross-motions for summary judgment, we are concerned only with the construction of the agency agreement. Is defendant entitled to service fees and termination benefits? If so, the amounts due him have been stipulated.

The trial judge was in error in holding the case to final hearing so that defendant could establish the validity of his claims. The agency agreement is admittedly valid,

so that we are not faced with a possible factual issue, as where the express contract is found to be void and resort must be had to quasi-contract and quantum meruit recovery, e.g. , as in Shapiro v. Solomon , 42 N.J. Super. 377 (App. Div. 1956). Nor is there any need to take proofs of surrounding circumstances in aid of interpretation, see Casriel v. King , 2 N.J. 45, 50 (1949), for defendant does not plead or rely upon any alleged special surrounding circumstances. Since there is no dispute as to the terms of the agency contract, its construction was for the court. Korb v. Spray Beach Hotel Co. , 19 N.J. ...

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