JAMES J. AUXIER v. AMERICAN FAMILY LIFE COLUMBUS, AFLAC; THE ESTATE OF HAROLD TEETER; BRUCE WHITMER; AND ANDY ANDERSON INSURANCE
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RENDERED: May 17, 2002; 2:00 p.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
2001-CA-001490-MR
JAMES J. AUXIER
v.
APPELLANT
APPEAL FROM DAVIESS CIRCUIT COURT
HONORABLE THOMAS O. CASTLEN, JUDGE
ACTION NO. 97-CI-01221
AMERICAN FAMILY LIFE
ASSURANCE COMPANY OF
COLUMBUS, AFLAC;
THE ESTATE OF HAROLD TEETER;
BRUCE WHITMER; AND
ANDY ANDERSON INSURANCE
APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
GUIDUGLI, MILLER AND TACKETT, JUDGES.
GUIDUGLI, JUDGE.
James Auxier ("Auxier") appeals from an order
and judgment of the Daviess Circuit Court confirming an
arbitration panel award in his breach of contract action.
For
the reasons stated herein, we affirm.
On November 3, 1997, Auxier filed the instant action in
Daviess Circuit Court against American Life Insurance Assurance
Company of Columbus ("AFLAC"), two AFLAC employees, namely Bruce
Whitmer ("Whitmer") and Harold Teeter ("Teeter"), and Andy
Anderson Insurance Agency, Inc. ("Anderson").
Auxier alleged in
relevant part that sometime prior to February 4, 1994, he was
offered a management position as District Sales Coordinator by
AFLAC.
In reliance on the representations of AFLAC, Auxier quit
his employment with another insurance company and commenced
employment with AFLAC allegedly pursuant to the terms of a
"memorandum of contract".
Auxier maintained in his complaint that the memorandum
of contract provided that he would be responsible for giving
managerial assistance to associate salespersons in an exclusive
sales territory.
The memorandum of contract allegedly further
provided that Auxier would receive a regular monthly draw against
commissions, as well as commission overrides and renewal
commissions based on the revenue generated by the associates
within his district.
Over the course of his relationship with AFLAC, Auxier
apparently never sold a sufficient amount of insurance to cover
his monthly draw.
On September 13, 1995, the advances and a loan
from AFLAC to Auxier to purchase office equipment were combined
into one loan from AFLAC to Auxier in the amount of $27,804.22.
Auxier's production apparently never increased, and he was
relieved of his District Sales Coordinator position on July 11,
1996.
The instant action alleged below that AFLAC 1) breached
the employment contract by not accurately paying him for
commissions, overrides, and renewals; 2) breached its fiduciary
duty by depriving him of said commissions; 3) intentionally
interfered with prospective contractual relationship; and, 4)
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engaged in fraud and violated Kentucky insurance law by
circumventing the payment of commissions, overrides, and renewal
commissions of each sale.
He alleged that Anderson, Whitmer, and
Teeter acted maliciously, intentionally, and wilfully to deprive
him of said commissions, overrides, and renewal commissions.
Auxier later moved to file an amended complaint.
On
July 31, 1998, the motion was granted, and the amended complaint
added the claim that AFLAC violated the Americans with
Disabilities Act ("ADA") by failing to reasonably accommodate
Auxier's disabilities.
AFLAC, et al., entered general denials to
all claims.
On the same day, the circuit court rendered an order
holding Auxier's complaint and amended complaint in abeyance.
As
a basis for the order, the court found as a matter of law that
Auxier was an independent contractor rather than employee, and
further ordered that the matter be submitted to arbitration in
accordance with language contained in the associate's agreement.
The parties selected a panel of three arbitrators, and
the matter was heard on March 20, 2001.
Arbitration was
conducted over the next four days, with numerous witnesses being
heard and over 120 exhibits being tendered.
The decision of the
arbitrators was rendered on April 18, 2001.
The arbitrators
concluded in relevant part that the rights of the parties were
governed by two written agreements, one referred to as the
"associate's agreement" and the other the "district sales
coordinator agreement."
The panel found that the "memorandum of
contract" relied upon by Auxier pre-dated the other agreements
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and was merged into or superceded by the associate's agreement
and district coordinator's agreement.
It further found that
there was no provision for an exclusive sales territory as argued
by Auxier; that Auxier was properly compensated pursuant to the
terms of the agreement; and, that he failed to carry the burden
of persuasion that Anderson, Whitmer, or Teeter acted
intentionally, maliciously, wilfully and fraudulently to deprive
Auxier of commissions.
It concluded that the overwhelming weight
of evidence showed that Auxier did not actively pursue the
selling of insurance, did not make contact with and train
associates in his hierarchy, nor generate commissions equal to
his monthly draw.
It determined that Auxier was not entitled to
an award.
On June 8, 2001, the circuit court rendered an order
and judgment confirming the arbitration panel's award pursuant to
KRS 417.150 and KRS 417.180, and denying Auxier's motion to
modify the award or reinstate the complaint.
This appeal
followed.
Auxier offers a litany of alleged errors which he
claims were committed by the circuit court.
He maintains that
the agreements covering his employment are non-arbitrable; that
the memorandum of contract is binding, and was affirmed and
ratified by the associates's agreement and district sales
coordinator agreement; that the decision of the arbitrators
worked a manifest injustice on him; that the court was misled and
misinformed by AFLAC; and, that arbitration is not the final step
in dispute resolution.
He goes on to claim that AFLAC is barred
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by estoppel and latches from relying on the associates's
agreement and district sales coordinator agreement; that he was
an employee; that AFLAC, through counsel, violated Supreme Court
Rules by concealing facts from the court; that he is entitled to
relief under the ADA; that he is entitled to compensation under
the theory of quantum meruit; and, that the panel ruled on
matters not submitted to them and improperly failed to award
commissions.
He seeks to have the circuit court order and
judgment reversed, the arbitration panel's decision vacated, and
a judgment entered in his favor.
Alternatively, he seeks a new
trial.
We have closely studied the record, the law, and the
parties' written arguments, and find no error.
Rather than enter
into a protracted, detailed analysis of each of Auxier's claims
of error, we believe the issues at bar properly may be distilled
into a few dispositive questions.
First among these is Auxier's
assertion that his employment agreement is not subject to
arbitration.
misplaced.
His reliance on KRS 417.050 for this assertion is
It states in relevant part as follows:
A written agreement to submit any
existing controversy to arbitration or a
provision in written contract to submit to
arbitration any controversy thereafter
arising between the parties is valid,
enforceable and irrevocable, save upon such
grounds as exist at law for the revocation of
any contract. This Chapter does not apply
to:
(1) Arbitration agreements between employers
and employees or between their respective
representatives . . . .
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If Auxier was a contractor, as the circuit court properly so
found, then KRS 417.050 is applicable and makes valid any
arbitration agreement between the parties; conversely, even if he
was an employee rather than a contractor, the statute states in
clear and unambiguous terms that it is not applicable.
Either
way, KRS 417.050 is not a bar to arbitration under the facts now
before us.
The corpus of Auxier's claim, though, relates to
whether the "memorandum of contract" is controlling, or, as the
arbitration panel found, the subsequent associates's agreement
and district sales coordinator agreement are controlling.
The
arbitration panel found as follows on this issue:
The rights of the parties in this matter
are governed and controlled by two contracts,
American Family Life Assurance Company of
Columbus' Associate's Agreement, and American
Family Life Assurance Company of Columbus'
District Sales Coordinator's Agreement
(hereinafter referred to as the Agreements).
Any prior agreements or understandings were
merged into or superceded by the aforesaid
Associate's Agreement's paragraph 12 which is
incorporated into the District Sales
Coordinator's Agreement by reference. The
parole [sic] evidence rule prohibits the
variation of a written agreement by paroleoral [sic] testimony absent an ambiguity.
The two above Agreements contain no
ambiguities at issue in this arbitration.
In examining these writings, we find no basis for concluding that
the circuit court erred in confirming the arbitration panel's
award on this issue.
As AFLAC, et al., properly note, parol
evidence is not admissible to alter the terms of a written
contract unless the terms of the contract are ambiguous or
incomplete.
Clearly, the "memorandum of contract" referenced by
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Auxier is parol evidence.
The original agreement was not offered
into evidence, and the AFLAC representative who allegedly signed
it had no recollection of said signature.
More importantly, even if the memorandum of contract
was a valid, enforceable writing, the Associate's Agreement
states that, "[T]his agreement supercedes and replaces all
previous contracts between the parties . . . ", and goes on to
provide that any modification thereto must be in writing and
signed by AFLAC's President, Vice President, or Secretary.
language is subject to but one meaning.
This
The memorandum of
contract, if it were in fact an enforceable agreement at the time
it allegedly was executed, was superceded by the associates's
agreement and district sales coordinator agreement.
This leads us to the question of whether the
arbitration panel properly construed the associates's agreement
and district sales coordinator agreement.
The panel found in
relevant part that the agreements made no provision for an
exclusive territory; that Auxier was to be paid in accordance
with a schedule of commissions prepared by AFLAC; and, that any
unpaid draw became a liability to AFLAC.
It further found that
Auxier failed to carry the burden of persuasion that Teeter,
Anderson, and Whitmer wilfully and fraudulently deprived Auxier
of commissions.
An arbitration award may be set aside only " . . . if
there has been a gross mistake of law or fact resulting in undue
partiality."
Carrs Fork Corp v. Kodak Mining Co., Ky., 809
S.W.2d 699, 701 (1991), citing Taylor v. Fitz Coal Co., Inc.,
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Ky., 618 S.W.2d 432 (1981).
We find nothing herein even
remotely approaching the gross mistake required by Taylor and its
progeny.
Auxier was faced with an extremely high burden which he
failed to meet.
The circuit court properly confirmed the panel's
award, and we find no error.
For the foregoing reasons, we affirm the order and
judgment of the Daviess Circuit Court.
ALL CONCUR.
BRIEF FOR APPELLANT PRO SE:
BRIEF FOR APPELLEES:
James J. Auxier
Owensboro, KY
Richard H. C. Clay
Patrick Shane O’Bryan
Louisville, KY
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