10-2814-cv
Royal Palm v. Guy Carpenter


                UNITED STATES COURT OF APPEALS
                    FOR THE SECOND CIRCUIT

                              SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY
ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL
RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT'S LOCAL RULE 32.1.1. WHEN
CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE
EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
"SUMMARY ORDER"). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY
PARTY NOT REPRESENTED BY COUNSEL.

           At a stated term of the United States Court of Appeals
for the Second Circuit, held at the Daniel Patrick Moynihan United
States Courthouse, 500 Pearl Street, in the City of New York, on
the 27th day of May, two thousand eleven.

PRESENT:
            JOHN M. WALKER, JR.,
            BARRINGTON D. PARKER,
            DENNY CHIN,
                           Circuit Judges.

- - - - - - - - - - - - - - - - -x

ROYAL PALM INSURANCE COMPANY,
          Plaintiff-Counter-Defendant-Appellee,

                  -v.-                                10-2814-cv

GUY CARPENTER & COMPANY, INC.,
          Defendant-Counter-Claimant-Appellant.

- - - - - - - - - - - - - - - - -x


FOR PLAINTIFF-COUNTER-DEFENDANT-APPELLEE:

                         STEVEN B. FEIRSON (Steven A. Engel, Jonathan D.
                         Perry, on the brief), Dechert LLP, New York,
                         New York.

FOR DEFENDANT-COUNTER-CLAIMANT-APPELLANT:

                         PAUL R. MONSEES (Jeremy L. Wallison, Akiva M.
                         Cohen, on the brief), Foley & Lardner LLP, New
                         York, New York, and Washington, D.C.

            Appeal from a judgment of the United States District

Court for the Southern District of New York (Hellerstein, J.).
          UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,

AND DECREED that the judgment is AFFIRMED.

          Defendant-counter-claimant-appellant Guy Carpenter &

Company, Inc. ("Guy Carpenter") appeals from the district court's

judgment entered June 22, 2010, in favor of plaintiff-counter-

defendant-appellee Royal Palm Insurance Company ("Royal Palm") in

the amount of $4,243,581, following the district court's ruling

from the bench, on May 21, 2010, on the parties' cross-motions for

summary judgment.   We assume the parties' familiarity with the

facts and procedural history of the case.

          We review an order granting summary judgment de novo to

determine whether the district court properly concluded that there

were no genuine issues of material fact and the moving party was

entitled to judgment as a matter of law.    See Miller v. Wolpoff &

Abramson, L.L.P., 

, 300 (2d Cir. 2003).    "In

determining whether there are genuine issues of material fact, we

are required to resolve all ambiguities and draw all permissible

factual inferences in favor of the party against whom summary

judgment is sought."   Terry v. Ashcroft, 

, 137 (2d Cir.

2003) (internal quotation marks omitted).

          Construed in the light most favorable to Guy Carpenter,

the principal facts are as follows:    In 2006, Royal Palm started

its insurance business in Florida, at a time when reinsurance was

difficult to obtain.   In April 2006, Royal Palm engaged Guy

Carpenter to act as its broker pursuant to a "Reinsurance

Intermediary Authorization" (the "RIA").    The RIA recognized Guy

Carpenter's right to be paid brokerage commissions on its placement

                                 -2-
of reinsurance; no provision was made for Guy Carpenter to remit

any commissions to Royal Palm.    The RIA was cancellable at will.

By June 1, 2006, Guy Carpenter had earned a projected $7 million in

commissions.

          In November 2006, Royal Palm and Guy Carpenter entered

into the "Broker Services Agreement" (the "BSA"), retroactive to

June 1, 2006, whereby Royal Palm recognized Guy Carpenter as its

"primary intermediary in the treaty reinsurance market."     Guy

Carpenter agreed to provide services "in accordance with all

relevant laws and regulations."    The BSA provided for a three-year

term commencing "as of June 1, 2006 and . . . continu[ing] in

effect through May 31, 2009."    The BSA, a letter agreement from Guy

Carpenter to Royal Palm, provided further as follows:

               We will provide services outlined in
          Appendix B attached hereto for as long as we
          continue as your reinsurance intermediary.
          Should you choose to discontinue our
          relationship, Guy Carpenter's obligation to
          provide such services shall terminate. . . .
          If you request additional services outside the
          scope of services set forth in Appendix B
           . . . , such additional services may result
          in extra charges.

          Attached as Appendix A to the BSA was a retention
schedule that provided for Guy Carpenter to retain 50% of the

brokerage commissions for the first year and 60% for the second and

third years with the balance to be remitted to Royal Palm.    The BSA

also provided that it was to be governed by New York law.

Guy Carpenter continued to provide services to Royal Palm.    On

February 15, 2008, however, Royal Palm advised Guy Carpenter that

Royal Palm had elected to award its reinsurance business to another

broker, and that it was discontinuing its relationship with Guy

Carpenter.
                                  -3-
          In December 2008, Royal Palm commenced this diversity

action below for breach of contract and related claims.     Guy

Carpenter answered and counterclaimed.     Following discovery, the

parties cross-moved for summary judgment.     The district court

issued its oral decision on May 21, 2010, relying principally, if

not exclusively, on a Florida statute that provided:


          A transaction between a reinsurance
          intermediary broker and the insurer it
          represents . . . may be entered into only
          pursuant to a written authorization . . .
          [that] must provide, at a minimum, that . . .
          [t]he insurer may terminate the reinsurance
          intermediary broker's authority at any time.

Fla. Stat. § 626.7492(4)(a).   The district court concluded that

this provision permitted Royal Palm to terminate its relationship

with Guy Carpenter at any time.   The district court rejected Guy

Carpenter's argument that, even though the Florida statute gave

Royal Palm the statutory right to terminate, Royal Palm could still

be liable contractually for terminating the BSA before the

expiration of its three-year term.      The district court ruled that

the Florida statute would be undermined if there were a financial
consequence "every time there was a termination consistent with

Florida law."   The district court held that Guy Carpenter was

obliged to remit to Royal Palm its share of commissions for year 2,

and that Royal Palm had no obligation with respect to year 3.




                                  -4-
            On appeal, Guy Carpenter argues that regardless of

whether the Florida statute gave Royal Palm the right to terminate

the brokerage relationship, Royal Palm still breached the BSA by

terminating it before the end of its three-year term and further

that Royal Palm was liable for damages for that breach.1

            The parties dispute whether the Florida statute bars a

party from seeking contractual damages where an agreement does not

provide, as Florida law requires, a right to terminate the

agreement at will.2   We need not resolve the dispute, for Guy

Carpenter's claim is premised on its assertion that Royal Palm

breached the BSA by terminating the relationship before the

expiration of the three-year term.      We hold, as a matter of law,

that Royal Palm did not breach the BSA.

            First, § 3 of the BSA advises Royal Palm that "[s]hould

you choose to discontinue our relationship," Guy Carpenter's

obligations terminate.   The plain meaning of these words is that

Royal Palm had the right -- contractually -- to discontinue the

relationship at any time.   See AEP Energy Servs. Gas Holding Co. v.
Bank of America, N.A., 

, 729 n.15 (2d Cir. 2010) ("'[A]

        1
             Royal Palm submits that, notwithstanding the New York
   choice-of-law clause in the BSA, the Florida statute governed the
   relationship between the parties, as Royal Palm was a Florida
   insurer and Guy Carpenter was a licensed Florida reinsurance
   intermediary. Guy Carpenter suggests that the district court
   "very well may have erred by applying Florida law contrary to the
   parties' intent," but argues that "there ultimately is no
   conflict between New York and Florida law." We need not resolve
   the choice-of-law question, in light of our disposition below.
   Moreover, both sides acknowledge that New York contract
   principles apply to the construction of the BSA.
        2
             Neither side cites any authority to support its
   respective interpretation of the Florida statute, and our own
   research reveals no case law construing the Florida statute with
   respect to this question.

                                  -5-
written agreement that is complete, clear and unambiguous on its

face must be enforced according to the plain meaning of its

terms.'" (quoting Greenfield v. Philles Records, Inc., 

, 569 (2002))).

          Second, although § 1 of the BSA provided for a three-year

term, the two provisions are not inconsistent.    Together, they

provide for an outside limit of three years, subject to Royal

Palm's right to terminate early, that is, before the end of the

three-year term.   Guy Carpenter's construction of these provisions

would render the language in § 3 meaningless.    See Manley v. AmBase
Corp., 

, 250 (2d Cir. 2003) ("New York law . . .

disfavors interpretations that render contract provisions

meaningless or superfluous.").

          Third, the BSA makes no provision for any modification of

the retention schedule in the event of early termination.    Given

this silence, the plain reading of the BSA is that the retention

schedule in Appendix A continues to apply, for the duration of the

relationship.   "[E]ven though we believe the parties could have

contracted" that forfeiture of commissions would result from early

termination, "it is quite evident that they neglected to do so."

See Westinghouse Credit Corp. v. D'Urso, 

, 102 (2d Cir.
2004).   In contrast, § 3 specifically addresses the scope of Guy

Carpenter's obligations, as set forth in Appendix B, and how those

obligations would change in the event of termination.

          Fourth, Guy Carpenter argues that it had already earned

$7 million in commissions for the first year by June 1, 2006, and

that it agreed to remit 50% only because it was bargaining for a

three-year agreement.   That may be so.   But the fact is that the

                                 -6-
BSA, as executed, makes no provision for modification of Appendix A

in the event of early termination.

           Accordingly, based on the plain wording of the BSA, we

hold, as a matter of law, that Royal Palm did not breach its

contractual obligations.   In view of the lack of ambiguity in the

BSA, we need not consider the extensive extrinsic evidence

submitted by the parties and will enforce the contract as

written.   Hunt, Ltd. v. Lifschultz Fast Freight, Inc., 

, 1277-78 (2d Cir. 1989).

           We have considered Guy Carpenter's other arguments and

conclude they are without merit.    Accordingly, the judgment of the

district court is AFFIRMED.

                                FOR THE COURT:
                                CATHERINE O'HAGAN WOLFE, CLERK




                                   -7-