[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
August 30, 2005
No. 04-14931 THOMAS K. KAHN
________________________ CLERK
D. C. Docket No. 02-80381-CV-DTKH
JIM MOORE INSURANCE AGENCY, INC.,
MICHAEL C. HARTMAN,
Plaintiffs-Appellants,
versus
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY,
STATE FARM FIRE AND CASUALTY COMPANY, et al.,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(August 30, 2005)
Before BARKETT and MARCUS, Circuit Judges, and GEORGE *, District Judge.
PER CURIAM:
*
Honorable Lloyd D. George, United States District Judge for the District of Nevada,
sitting by designation.
This appeal comes before us on a dispute between two insurance agents and
an insurance company over the ownership of flood insurance policies. Jim Moore
Insurance Agency, Inc. and Michael C. Hartman (“Plaintiffs”) filed a class action
petition alleging contract and tort claims against State Farm Mutual Automobile
Insurance Company, Inc, et al. (“State Farm”). The district court denied class
certification and, following a bench trial, entered detailed findings of fact and
conclusions of law, and rendered final judgment against the Plaintiffs. After
thorough review, we affirm.
I.
Plaintiff Jim Moore Insurance Agency, Inc. is an active State Farm agency in
Louisiana run by James Moore who executed a “State Farm Agent’s Agreement”
(“Agent Agreement”) in 1982 and who later executed another Agent Agreement on
behalf of himself and his insurance agency in 1989. Plaintiff Michael Hartman is a
former State Farm agent who maintained agencies in Florida. He executed an
Agent Agreement in 1980 which terminated in May 1997.
The Agent Agreement defines the relationship between State Farm and its
agents. With respect to ownership of insurance policies, the Agreement states at
Section I(D):
Information regarding the names, addresses, and ages of policyholders
of the Companies; the description and location of the insured
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property; and expiration or renewal dates of State Farm policies
acquired or coming into your possession during the effective period of
this Agreement, or any prior Agreement, except information and
records of policyholders insured by the [State Farm] pursuant to any
governmental or insurance industry plan or facility, are trade secrets
wholly owned by [State Farm].
Ownership of the “trade secrets” is tantamount to ownership of the policies. Thus,
State Farm owns its policies except those insured “pursuant to any governmental or
insurance industry plan or facility.”
At issue in this case are flood insurance policies issued pursuant to the
National Flood Insurance Program (“NFIP”), which was established to facilitate
flood insurance coverage in high-risk geographic areas. See National Flood
Insurance Act of 1968, 42 U.S.C. §§ 4001-4129. These policies were originally
written directly through the NFIP (which has since been taken over by the Federal
Emergency Management Agency (“FEMA”)). In order to facilitate coverage,
FEMA created the Write-Your-Own (“WYO”) program in 1983 authorizing
private insurance companies to issue federal flood policies in their own names.
State Farm joined the WYO program in 1985. As an introduction, State
Farm convened a series of meetings with its agents about the WYO program and
the agents’ options going forward. The agents could continue writing policies
directly through FEMA, convert their existing policies to State Farm policies, or
allow their existing policies to expire and write renewals through State Farm.
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Moore converted his existing policies while Hartman wrote renewal policies
through State Farm.
In 1986, State Farm distributed an “Announcement to State Farm Agents
Concerning the WYO Program” (“Announcement”). State Farm informed its
agents that “pursuant to the provision of your Agreement pertaining to additional
policies, coverages, or lines of insurance not specifically provided for in your
Agreement, this Announcement is made to add the Flood Insurance policy” to
agents’ Schedule of Payments. Section II.A of the Agent Agreement states that
State Farm will compensate “the Agent as set forth in the applicable Schedule of
Payments.” The Schedule of Payments distributed with the Announcement, in
turn, states that “[t]he following graded commission scales shall apply to
‘personally produced’ policies credited to your account, subject to the provisions
set forth in this Schedule of Payments.” Included among them is a fifteen percent
commission scale applying to new or converted flood insurance policies. State
Farm, through its Announcement, drew particular attention to the commission scale
for flood insurance and informed agents that “[t]ermination payments apply as with
other policies in the same section.”
Hartman’s Agent Agreement was terminated in 1997. State Farm told
Hartman that he was not free to take his flood business with him or transfer it to
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another WYO carrier.
Moore inquired whether he was permitted to sell flood insurance through
another WYO carrier. State Farm replied that it would violate the Agent
Agreement.
On March 15, 2002, the Plaintiffs brought this class action asserting claims
against State Farm for conversion, breach of contract, promissory estoppel, tortious
interference with existing and prospective business relations, unjust enrichment,
and declaratory judgment. The Plaintiffs sought class certification composed of all
active and terminated State Farm agents who have written flood insurance policies
through the WYO program on or after March 7, 1997.
Thereafter, the district court referred the matter of class certification to the
magistrate judge. On May 6, 2003, the magistrate issued a Report and
Recommendation that the district court deny the Plaintiffs’ motion for class
certification. The district court adopted the magistrate’s recommendation by order
dated September 2, 2003.
Then, on August 30, 2004, following pretrial stipulations and the
presentation of testimony and evidence by the parties, the district court rendered
judgment for State Farm. Pursuant to Fed. R. Civ. P. 52(a), the court found that
“State Farm explicitly amended the Agent Agreements by issuing new Schedule
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I(C) of State Farm’s ‘Schedule of Payments.’” Moreover, the court found that “the
Schedule of Payments specifically characterizes the WYO flood policies as
‘personally produced’ policies,” defined as “all policies credited to your account by
[State Farm] except . . . policies issued pursuant to any governmental or insurance
industry plan or facility.” Therefore, the district court concluded that State Farm
did not breach its Agent Agreements with the Plaintiffs because the WYO policies
were not issued pursuant to any governmental plan, but rather were owned by State
Farm. The district court also concluded that State Farm could not have committed
any of the other claims alleged by the Plaintiffs for the same reason.
II.
It is by now axiomatic that in an action tried to the district court without a
jury, the district court’s findings of fact “shall not be set aside unless clearly
erroneous, and due regard shall be given to the opportunity of the trial court to
judge of the credibility of the witnesses.” Fed. R. Civ. P. 52(a). We will not hold a
factual finding to be clearly erroneous unless “after assessing the evidence, we are
left with a definite and firm conviction that a mistake has been committed.” Am.
Dredging Co. v. Lambert, 153 F.3d 1292, 1295 (11th Cir. 1998) (citation omitted).
Finally, we review the district court’s conclusions of law, including interpretation
of the Agent Agreement, de novo. Bragg v. Bill Heard Chevrolet, Inc., 374 F.3d
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1060, 1065 (11th Cir. 2004).
The Plaintiffs claim that the district court’s opinion should be reversed for
two basic reasons. First, the Plaintiffs say that the district court’s finding that State
Farm amended the Agent Agreement by distributing the new Schedule of
Payments was clearly erroneous because the evidence was insufficient to find that
State Farm complied with the terms of the Agent Agreement that “no change,
alteration or modification of the terms of this Agreement may be made except by
agreement in writing signed by an authorized representative of [State Farm] and
accepted by you.” We disagree.
The absence of a party’s signature is not the death knell of a binding contract
or amendment. Both Florida and Louisiana law acknowledge that the validity of
an agreement may be shown by other actions of the parties. See, e.g., Integrated
Health Servs. of Green Brier, Inc. v. Lopez-Silvero, 827 So. 2d 338, 339 (Fla. Dist
Ct. App. 2002); Hurley v. Fox, 520 So. 2d 467, 469 (La. Ct. App. 1988) . As
explained, “[t]he object of a signature is to show mutuality of assent, but these
facts may be shown in other ways, for example, by the acts or conduct of the
parties.” Lopez-Silvero, 827 So. 2d at 339. State Farm communicated its intent to
amend the Agent Agreements by distributing the new Schedule of Payments and
the Announcement stating as much. And the Plaintiffs signaled their acceptance of
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the terms by continuing to write flood policies through State Farm after the terms
of the new Schedule of Payments were disclosed. Indeed, according to the district
court, the Plaintiffs even admitted that the new Schedule of Payments was part of
their Agent Agreements. After review of the entire record, we are satisfied that the
district court’s findings were not clearly erroneous.
Second, the Plaintiffs argue that the district court misinterpreted the Agent
Agreement by holding that WYO policies are not policies issued “pursuant to any
governmental or insurance industry plan or facility.” In particular, the Plaintiffs
argue that the WYO flood policies are “governmental” in light of federal regulation
of the WYO program. A principle of contract construction recognized in both
Florida and Louisiana law is that “where parties contract on a subject which is
surrounded by statutory limitations and requirements, they are presumed to have
entered into their engagements with reference to such statute, and the same
becomes a part of the contract.” Northbrook Prop. & Cas. Ins. Co. v. R&J Crane
Serv., Inc., 765 So. 2d 836, 839 (Fla. Dist. Ct. App. 2000); see also Heck v.
Lafourche Parish Council, 860 So. 2d 595, 603 (La. Ct. App. 2003) (“[L]aws
existing at the time a contract is entered into are incorporated into and form a part
of the contract as though expressly written.”). The Plaintiffs say that the
application of this principle to the Agent Agreement compels the conclusion that
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the WYO flood policies were issued “pursuant to any governmental or insurance
industry plan or facility.”
Federal regulation of the WYO program, however, is silent on the issue of
whether an insurance company or its agents own the WYO policies. Indeed, the
only federal regulation bearing on the subject states that “WYO companies may
offer flood coverage to policyholders insured by them under their own property
business lines of insurance, pursuant to their customary business practices,
including their usual arrangements with agents and producers.” 44 C.F.R. § 62.23
(emphasis added). Consequently, State Farm and its agents were free to
contractually define WYO flood policies as not issued “pursuant to any
governmental or insurance industry plan or facility” without running afoul of any
federal regulation or case law addressing the nature of such policies. In short, the
district court’s conclusion that State Farm did not breach the Agent Agreement was
amply supported by the language of the agreement and extrinsic evidence adduced
at trial.
III.
Finally, we decline to reach the Plaintiffs’ claims regarding the district
court’s denial of class certification. As has been recognized by our sister circuit,
“[the Plaintiffs] certainly ha[ve] no interest in continuing to litigate the class
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certification issue where [their] own claims, as a matter of law, will not afford the
basis for any relief to the class.” Kas v. Fin. Gen. Bankshares, Inc., 796 F.2d 508,
519 (D.C. Cir. 1986). State Farm, for its part, expresses no interest in proceeding
on the question of class certification. To consider the denial of class certification
under these circumstances -- where the district court has entered final judgment for
State Farm in all respects -- would amount to little more than an academic exercise.
In short, the issues of class certification raised by the Plaintiffs are better left for
another day.
AFFIRMED.
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