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FOURTH DIVISION
MAY 10, 2001

1-00-1276

Plaintiff Suburban Insurance Services, Inc. brought thisaction against defendant Virginia Surety Company, Inc. seekingcommissions on insurance policy renewals it claimed defendant owedit pursuant to a sub-producer agreement entered into by theparties. The circuit court denied plaintiff's motion for summaryjudgment and granted defendant's motion for summary judgment,finding that the sub-producer agreement provided no basis forplaintiff to recover the claimed commissions. On appeal, plaintiffcontends that the court erred in determining that it was notentitled to its claimed commissions under the agreement.

Plaintiff, an insurance broker, sold insurance for severalinsurance carriers, including defendant. George Zoscak waspresident, 50% shareholder, and director of plaintiff. JacquelineLivingston acted as the general manager of plaintiff. Plaintiff'stwo largest insurance customers were Prairie Material Sales andPrairie 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 submitapplications for insurance to defendant through defendant's generalagent, Martin Boyer Company, Inc. (Martin Boyer). Under the termsof the sub-producer agreement, plaintiff was entitled to certaincommissions for insurance placed with defendant, but the agreementmade no reference to renewal commissions. The sub-produceragreement remained in effect until September 24, 1997.

Prior to October 1993, plaintiff obtained workers'compensation coverage for Prairie from defendant. Zoscak testifiedat his deposition that prior to October 1, 1993, plaintiff wascompensated for policies that were written for Prairie based on apercentage of the premiums. In October 1993, plaintiff "closed itsdoors" and ceased placing insurance business for insureds.⁽¹⁾ In anagreement dated October 1, 1993, plaintiff sold all its insuranceaccounts, except for the Prairie account, to Concklin InsuranceAgency, Inc.

Livingston testified at her deposition that, beginning onOctober 1, 1993, she went to work for Prairie as insurancecoordinator. In September 1993, she requested that Martin Boyerpresent the quote for Prairie's workers' compensation policy forthe 1993-94 policy year net of any sub-producer commission becauseshe was becoming an employee of Prairie and would take the quotesdirectly. Requesting the quote net of any sub-producer commissionresulted in a reduced premium for Prairie's workers' compensationcoverage. For the policy years 1993-94 and 1994-95, Prairierenewed its workers' compensation policy directly with defendant. Plaintiff provided no service at all with regard to Prairie'sworkers' compensation policies for those years. Plaintiff receivedno commissions from these renewals.

Plaintiff filed an amended complaint alleging defendantbreached the sub-producer agreement by failing to pay plaintiff thecommissions due it for these renewal policies.⁽²⁾ Plaintiffunsuccessfully moved for summary judgment. Defendant successfullymoved for summary judgment on the ground that, under the plainlanguage of the sub-producer agreement, there was no basis forplaintiff's claim for renewal commissions. Plaintiff's motion forreconsideration was denied. Plaintiff appeals.

Summary judgment will be granted when the pleadings,depositions, exhibits, and affidavits on file reveal no genuineissue as to any material fact and establish that the moving partyis 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). Allevidence must be construed in the light most favorable to thenonmoving party and most strictly against the moving party. Gatlinv. Ruder, 137 Ill. 2d 284, 560 N.E.2d 586 (1990). Appellate reviewof 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).

Plaintiff argues that it was entitled to the renewalcommissions under the terms of the sub-producer agreement, byvirtue of the fact that defendant had paid plaintiff commissions onsales of insurance to Prairie in the past pursuant to the sub-producer agreement, thereby acknowledging the fact that Prairie wasplaintiff's customer. The sub-producer agreement was still ineffect when Prairie renewed its workers' compensation policy in1993 and 1994, and plaintiff was entitled to commissions on thoserenewals. Defendant responds that the sub-producer agreement contains no provisions that would entitle plaintiff to recoverrenewal commissions on insurance business placed directly byPrairie with defendant.

The primary objective in construing a contract is to giveeffect to the intent of the parties, as ascertained from thelanguage of the contract. Spectramed, Inc. v. Gould, Inc., 304Ill. App. 3d 762, 710 N.E.2d 1 (1998) (Spectramed). If thecontract is clear and unambiguous, the intent of the parties mustbe determined solely from the contract's plain language, and extrinsic evidence outside the "four corners" of the document maynot be considered. Omnitrus Merging Corp. v. Illinois Tool Works,Inc., 256 Ill. App. 3d 31, 628 N.E.2d 1165 (1993). A court may notadd provisions to an unambiguous contract even if they make thecontract more equitable. J.M. Beals Enterprises, Inc. v.Industrial Hard Chrome, Ltd., 194 Ill. App. 3d 744, 551 N.E.2d 340(1990). Where no ambiguity exists, construction of the document isa question of law. Spectramed, 304 Ill. App. 3d at 770.

The parties agree that the sub-producer agreement is notambiguous. The agreement contains an integration clause whichprovides that the agreement "sets forth the entire understanding ofthe parties with regard to the subject matter hereof."

No Illinois case has addressed the precise question presentedhere: whether an insurance agent is entitled to a renewalcommission where the insured decides to renew its policy directlywith the insurer. Courts from other jurisdictions that haveconsidered the question agree that the right of an insurance agentto commissions on renewal premiums must be ascertained from thecontract existing between the agent and the insurance company. Charles Maggard Agency, Inc. v. Missouri Public Entity RiskManagement Fund, 974 S.W.2d 671 (Mo. Ct. App. 1998) (Maggard); Leev. Wisconsin Physicians Service, 252 N.W.2d 24 (Wisc. S. Ct. 1977)(Lee). See also Repsold v. New York Life Insurance Co., 216 F.2d479 (7th Cir. 1954); 43 Am. Jur. 2d Insurance section 152;Appleman, Insurance Law and Practice section 9003. In Maggard, thecourt held that an insurance agent was not entitled to renewalcommissions where the insured decided to bypass the agent and renewits insurance coverage directly with the insurer because thecontract between the agent and the insurer provided no basis forthe agent to recover the renewal commissions.⁽³⁾

In Lee, relied upon by plaintiff, the court found that the contract between the agent and the insurer specifically providedthat the plaintiff was entitled to renewal commissions on renewalbusiness procured by him; therefore, the plaintiff was entitled toa renewal commission where the insured decided to renew itsinsurance directly with the insurer. By dealing directly with theinsured, the insurer effectively prohibited the plaintiff fromprocuring the renewal business and therefore deprived him ofcontract authorized commissions.

The plain language of the sub-producer agreement, in thepresent case, provides no basis for plaintiff's claim that it isentitled to the renewal commissions. Paragraph 11 of the sub-producer agreement allows the payment of commissions as outlined inthe commission schedule; however, neither paragraph 11, nor thecommission schedule discusses renewal commissions. The onlyprovision in the sub-producer agreement that discusses renewalcommissions is paragraph 16, which is inapposite as it deals withsituations in which the sub-producer agreement has been terminatedor suspended. Here the parties do not dispute that the sub-producer agreement remained in full force and effect untilSeptember 24, 1997.⁽⁴⁾ Unlike the contract in Lee, the sub-produceragreement in the instant case contains no provision entitlingplaintiff to renewal commissions.

Relying on cases involving the commissions of real estatebrokers, plaintiff argues that it is entitled to the renewalcommissions because it was the "procuring cause" of the insurancesales by defendant to Prairie. See Bear Kaufman Realty v. SpecDevelopment, 268 Ill. App. 3d 898, 645 N.E.2d 244 (1994); EdensView Realty & Investment, Inc. v. Heritage Enterprises, Inc., 87Ill. App. 3d 480, 408 N.E.2d 1069 (1980). Plaintiff has cited nocase applying the "procuring cause" rule to an insurance agent'sright to a commission. Moreover, none of the cases relied upon byplaintiff involved a written contract, as here. The present casewas brought pursuant to a written sub-producer agreement whichafforded no basis for the recovery of the claimed commissions.

Plaintiff's argument that defendant disregarded itsobligations of good faith and fair dealing also is without merit.Every contract contains an implied covenant of good faith and fairdealing. Northern Trust Co. v. VIII South Michigan Associates, 276Ill. App. 3d 355, 657 N.E.2d 1095 (1995) (Northern Trust). Notwithstanding this implied covenant, parties to a contract areentitled to enforce its terms to the letter, and an impliedcovenant of good faith and fair dealing cannot overrule or modifythe express terms of a contract. The covenant of good faith andfair dealing does not allow a party to read an obligation into acontract that does not exist. Northern Trust, 276 Ill. App. 3d at368; Bank One, Springfield v. Roscetti, 309 Ill. App. 3d 1048, 723N.E.2d 755 (1999). The sub-producer agreement in the present casecontains no obligation to pay plaintiff renewal commissions whenthe insured chooses to deal directly with the insurer.

Accordingly, for the reasons set forth above, the judgment ofthe circuit court of Cook County is affirmed.

Affirmed.

HOFFMAN and BARTH, JJ., concur.

1. According to Zoscak, plaintiff is still an active entitythat collects residual commissions.

2. The amended complaint contained other counts which weredirected against other parties. Those counts were dismissed withprejudice prior to the entry of summary judgment and are not atissue in this appeal.

3. The Maggard court also considered the fact that it was theinsured who initiated the contact with the insurer to bypass theagent and not vice versa.

4. In its statement of facts plaintiff discusses paragraph 9of the sub-producer agreement which sets forth when defendantwill recognize letters from insureds requesting a change from onesub-producer to another. Paragraph 9 says nothing about renewalcommissions, nor does it address a situation such as this wherethe insured decides to deal directly with the insurer withoutinteraction with any sub-producer.