Sheridan v. Nationwide Retirement Solutions, Inc.

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 08-1240
EDWIN A. SHERIDAN, Executor of Estate of Michael Kirkland
Casey,
Plaintiff – Appellant,
v.
NATIONWIDE RETIREMENT SOLUTIONS, INCORPORATED,
Defendant – Appellee.
Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. Claude M. Hilton, Senior
District Judge. (1:07-cv-00286-CMH-TRJ)
Argued: January 27, 2009 Decided: February 25, 2009
Before NIEMEYER, TRAXLER, and SHEDD, Circuit Judges.
Vacated and remanded by unpublished per curiam opinion.
ARGUED: Brien Anthony Roche, JOHNSON & ROCHE, McLean, Virginia,
for Appellant. Christopher Landau, KIRKLAND & ELLIS, L.L.P.,
Washington, D.C., for Appellee. ON BRIEF: Daniel T. Donovan,
Joseph Cascio, KIRKLAND & ELLIS, L.L.P., Washington, D.C., for
Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Edwin Sheridan, as the executor of the Estate of Michael
Kirkland Casey, brought this breach of contract action against
Nationwide Retirement Solutions, Inc. On cross-motions for
summary judgment, the parties argued that the underlying
contract is unambiguous, the material facts are not in dispute,
and the case could be decided in their respective favor on
summary judgment. J.A. 440. In this posture, the district
court granted Nationwide’s motion and denied Sheridan’s motion.
Sheridan now appeals. On appeal, the parties continue to assert
that the contract is unambiguous and the facts are not in
dispute, but they nonetheless vigorously disagree over the
meaning of the underlying contract. Because we find that the
contract is ambiguous, we vacate the summary judgment in favor
of Nationwide and remand for further proceedings. 1
I
Summary judgment is appropriate “if the pleadings, the
discovery and disclosure materials on file, and any affidavits
1
We note that (1) the district court also ruled on other
claims below and (2) Sheridan also appeals from an order denying
his motion to set aside the summary judgment. However, the
other claims are not before us on appeal, and our analysis of
Sheridan’s appeal of the order denying his motion to set aside
the summary judgment is substantially the same as our analysis
of his appeal of the summary judgment.
2
show that there is no genuine issue as to any material fact and
that the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(c). The relevant inquiry in a summary
judgment analysis is “whether the evidence presents a sufficient
disagreement to require submission to a jury or whether it is so
one-sided that one party must prevail as a matter of law.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986).
We review the district court’s order granting summary judgment
de novo. Jennings v. U.N.C., 482 F.3d 686, 694 (4th Cir.) (en
banc), cert. denied, 128 S. Ct. 247 (2007). In doing so, we
generally must view all facts and draw all reasonable inferences
in the light most favorable to the nonmoving party. Scott v.
Harris, 127 S. Ct. 1769, 1774 (2007). However, “facts must be
viewed in the light most favorable to the nonmoving party only
if there is a ‘genuine’ dispute as to those facts.” Id. at 1776
(quoting Fed. R. Civ. P. 56(c)).
As noted, both parties moved for summary judgment. “When
faced with cross-motions for summary judgment, the court must
review each motion separately on its own merits to determine
whether either of the parties deserves judgment as a matter of
law,” and in considering each motion “the court must take care
to resolve all factual disputes and any competing, rational
inferences in the light most favorable to the party opposing
that motion.” Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th
3
Cir. 2003) (citations and quotation marks omitted). The fact
that both sides moved for summary judgment “neither
establish[es] the propriety of deciding a case on summary
judgment, nor establish[es] that there is no issue of fact
requiring that summary judgment be granted to one side or
another.” Continental Air., Inc. v. United Air., Inc., 277 F.3d
499, 511 n.7 (4th Cir. 2002) (citations and quotation marks
omitted).
We have noted that “[a] court faces a conceptually
difficult task in deciding whether to grant summary judgment on
a matter of contract interpretation.” Washington Metro. Area
Transit Auth. v. Potomac Invest. Props., Inc., 476 F.3d 231, 235
(4th Cir. 2007) (quoting Goodman v. R.T.C., 7 F.3d 1123, 1126
(4th Cir. 1993)). Elaborating on this point, we explained:
Only an unambiguous writing justifies summary judgment
without resort to extrinsic evidence, and no writing
is unambiguous if susceptible to two reasonable
interpretations. The first step for a court asked to
grant summary judgment based on a contract’s
interpretation is, therefore, to determine whether, as
a matter of law, the contract is ambiguous or
unambiguous on its face. If a court properly
determines that the contract is unambiguous on the
dispositive issue, it may then properly interpret the
contract as a matter of law and grant summary judgment
because no interpretive facts are in genuine issue.
Even where a court, however, determines as a matter of
law that the contract is ambiguous, it may yet examine
evidence extrinsic to the contract that is included in
the summary judgment materials, and, if the evidence
is, as a matter of law, dispositive of the
interpretative issue, grant summary judgment on that
basis. If, however, resort to extrinsic evidence in
4
the summary judgment materials leaves genuine issues
of fact respecting the contract’s proper
interpretation, summary judgment must of course be
refused and interpretation left to the trier of fact.
Id. (quoting Goodman, 7 F.3d at 1126). In short, summary
judgment is only appropriate “when the contract in question is
unambiguous or when an ambiguity can be definitively resolved by
reference to extrinsic evidence.” Id. 2
II
The underlying material facts, which are not disputed by
the parties, tend to establish that in October 1981, the City of
Chicago, Illinois, appointed Nationwide’s predecessor 3 as the
exclusive coordinator, administrator, and marketer of the City’s
deferred compensation plan. Under this plan, participants
contribute a portion of their compensation in the form of
deferrals or premiums to the plan, which are invested in life
insurance products, annuity products, and/or mutual funds.
2
This is a diversity case, and the parties agree that the
contract is governed by Oklahoma substantive law. However,
“[t]he roles of judge and jury in the interpretation of
contracts are set by federal law, even in diversity cases.”
Cunningham and Co. v. Consolidated Realty Mgt., Inc., 803 F.2d
840, 842 (5th Cir. 1986); see also General Acc. Fire & Life
Assur. Corp., Ltd. v. Akzona Inc., 622 F.2d 90, 93-94 n.5 (4th
Cir. 1980) (discussing the interplay between state substantive
law and Rule 56 in a diversity contract case).
3
For ease of reference, we will refer to Nationwide’s
predecessor as “Nationwide.”
5
Because Casey was instrumental in helping secure the
contract with the City, Nationwide entered into an Agent
Agreement with him in February 1982. The “Whereas” clause of
the Agent Agreement provides:
WHEREAS, the parties hereto recognize that certain
previous oral Agreements and written Memoranda of
Agreement between the parties have occurred concerning
the employment of [Casey] and [his] compensation with
regard to contracts obtained or to be obtained for
[Nationwide] from the City of Chicago and the parties
hereto wish and desire to collect all said Agreements
aforesaid into one final Agreement for [Casey’s]
compensation.
J.A. 60. Generally, under the terms of the Agent Agreement,
Casey was to act as a liaison between Nationwide and the City,
and he was to be paid compensation in the form of commissions
calculated as a percentage of the premiums Nationwide collected
from plan participants, either initially or for renewal, under
the 1981 agreement. Among other things, the Agent Agreement
provides that “[r]enewal commissions on any given policy shall
be fully vested to [Casey] upon acceptance” by the underwriters
and that he “shall be fully vested for any renegotiation of” the
1981 agreement. J.A. 62-63. Further, the Agent Agreement
contains a “Death and Disability” provision that states:
“Commissions shall be deemed to have been earned [by Casey] on
any executed Agreement with City or any other entity referred to
herein and shall be continued to be payable to [Casey’s] Estate
6
as provided herein in the event of his death.” J.A. 64. Casey
died in February 2000.
In March 1989, Nationwide and the City entered into the
1989 Administrative Services Agreement (“1989 ASA”), under which
Nationwide was the exclusive coordinator, administrator, and
marketer of the City’s deferred compensation plan. The 1989 ASA
was originally set to expire automatically in March 1994.
Thereafter, Nationwide and the City executed nine amendments to
the 1989 ASA. Several of these amendments predate Casey’s
death, including one that set the expiration date of the 1989
ASA for March 2003. An amendment after Casey’s death extended
the 1989 ASA expiration date beyond March 2003.
After Casey’s death, Nationwide continued to pay
commissions to his estate. However, in a December 2002 letter,
Nationwide notified Sheridan that it was exercising its right to
terminate the Agent Agreement. In January 2003, Nationwide
informed Sheridan that the Agent Agreement had terminated by
operation of law on Casey’s death and, therefore, it would not
make any further payments to the estate after March 2003.
III
The gist of this case is whether Nationwide is obligated by
the Agent Agreement to pay commissions to Casey’s estate after
March 2003. Purporting to rely on basic principles of contract
7
interpretation, the parties have presented conflicting arguments
as to what they contend is the plain, and only, reading of the
Agent Agreement on this point.
Generally speaking, Nationwide argues that it is not
obligated to continue paying commissions to Casey because, in
its view, the Agent Agreement is a “personal services contract”
and, after Casey’s death, “by definition he was unable to
perform any further services, so by definition he could earn no
further commissions.” Brief of Appellee, at 11. For support,
Nationwide points to the “Death and Disability” provision of the
Agent Agreement, arguing that under its plain terms “Casey is
deemed to have ‘earned’ commissions for services performed on
contracts ‘executed’ before his death, but not on contracts
‘executed’ after his death.” Id. (emphasis in original).
Accepting Nationwide’s argument, the district court concluded:
The plain meaning of the Agent Agreement clearly shows
that Casey’s estate was entitled to receive only
commission payments for commissions Casey already
earned, not to commissions that Casey could not earn
after his death. [Nationwide], therefore, properly
ended its commission payments to Casey’s estate on
March 29, 2003 - the date when the executed agreement
in place when Casey passed terminated.
J.A. 446-47.
Sheridan generally contends that the court erred in making
this determination and that Nationwide is obligated under the
Agent Agreement to pay commissions to Casey’s estate for as long
8
as Nationwide has any executed agreement with the City to
administer a deferred compensation plan. In essence, Sheridan
argues that the payments to Casey are not, as Nationwide
contends, simply for the retention of his personal services;
instead, they are also in recognition of his significant
contribution to Nationwide in obtaining the 1981 agreement with
the City. Like Nationwide, Sheridan points to the “Death and
Disability” provision of the Agent Agreement, and he notes that
its language states that Casey’s commissions shall be deemed to
have been earned and payable on “any executed Agreement” between
Nationwide and the City. J.A. 64. In Sheridan’s view,
Nationwide’s argument requires the “Death and Disability”
provision to be read as if it states that Casey’s commissions
shall be deemed to have been earned and payable on “any executed
Agreement in effect on the date of Casey’s death.” See Brief
of Appellant, at 23.
As we have noted, the first step for a court presented with
a summary judgment motion based on a contract’s interpretation
is to determine whether, as a matter of law, the contract is
ambiguous or unambiguous on its face, and a contract is
ambiguous if it is susceptible to two reasonable
interpretations. We have carefully considered the parties’
competing interpretations of the Agent Agreement, as set forth
in their briefs and their oral arguments, and we conclude that
9
it is ambiguous with respect to the issue of Nationwide’s
obligation to pay commissions to Casey’s estate after 2003. The
parties have presented two seemingly reasonable interpretations
of the Agent Agreement, and we are not persuaded that either
interpretation is compelled as a matter of law by the language
of the Agent Agreement read as a whole. Accordingly, the
district court erred in entering summary judgment in favor of
Nationwide.
We note that Sheridan has presented extrinsic evidence
(especially the affidavit of Jay Wilkinson) 4 that supports his
interpretation of the Agent Agreement. However, because the
parties’ litigation positions have been that the Agent Agreement
is unambiguous, we decline to decide in the first instance if
the ambiguity in the contract can be definitively resolved by
extrinsic evidence and, consequently, whether either party is
entitled to summary judgment. Bearing in mind our determination
that the Agent Agreement itself is ambiguous, the district court
is free on remand to conduct any further proceedings that it
deems appropriate, including further consideration of summary
judgment for either party. See, e.g., Atalla v. Abdul-Baki, 976
F.2d 189, 195 (4th Cir. 1992) (“Because the parties assert
conflicting intentions on the basis of the same language, which
4
Jay Wilkinson, as Nationwide’s president, negotiated and
signed the Agent Agreement on Nationwide’s behalf.
10
supports both interpretations, it is our opinion that the
contract is ambiguous and that the question of intent raises a
genuine issue of material fact, rendering summary judgment
inappropriate. Accordingly, the entry of judgment for Atalla is
reversed, and the case is remanded to the district court for
consideration of additional evidence of intent, if necessary,
and a factual determination as to the actual intent of the
parties.”).
IV
Based on the foregoing, we vacate the summary judgment in
favor of Nationwide and remand for further proceedings
consistent with this opinion.
VACATED AND REMANDED
11