United States District Court, E.D. Pennsylvania
This breach-of-contract action arises out of the defendant KEYW Corporation’s (“KEYW”) decision to use a new insurance broker after its former insurance broker, The Loomis Company (“Loomis”), had negotiated an insurance policy on KEYW’s behalf with KEYW’s insurance provider, X.L. America, Inc. (“X.L.”). Loomis claims that it is entitled to commission on the policy it negotiated for KEYW, despite the fact that KEYW purchased its policy through a different broker (also with X.L. as the insurance provider). KEYW has moved for summary judgment as to Loomis’s claims for breach of contract, breach of contract implied in fact, and unjust enrichment. Oral argument was held on May 1, 2015. The Court will grant the defendant’s motion for summary judgment.
I. Summary Judgment Record
Loomis is an insurance producer licensed by the Pennsylvania Insurance Department. Insurance producers (also known as insurance brokers) are the liaison between insured parties and the company that provides the insurance policies (the insurance provider). Harder Tr. 14:1-3, 26:8-11.
KEYW, formed in 2008, provides computer services to the federal government and private businesses. The Jacobs Company (“Jacobs”) has served as KEYW’s insurance broker since 2008. Voigt Tr. 16:5-11.
In 2011, KEYW acquired Flight Landata, Inc. (“Landata”), an airborne intelligence surveillance and recognizance company. When Landata was acquired, Loomis was serving as Landata’s insurance producer. Following the acquisition, KEYW continued to use Loomis as the insurance producer for Landata’s policy; Loomis was the insurance producer for Landata’s 2011-2012 policy. Harder Tr. 16:1-9, 26:8-11; Botha Tr. 26:5-15, 13:19-20; Hughes Cert. Ex. D.
Loomis did not discuss or disclose the commissions it received for Landata’s insurance policies with KEYW; nor did the policies themselves address the commissions earned by Loomis. Additionally, Loomis’s insurance policy with Landata did not set forth any fee in addition to the premiums that Loomis would charge KEYW. KEYW’s representatives testified that they were unaware of the exact commission Loomis earned on Landata’s policies. Botha Tr. 36:12-37:18; Harder Tr. 27:18-28:4, 38:16-39:1, 39:22-40:11; Hughes Cert. Exs. Q-S.
Rather, the commission earned by Loomis on the Landata policy was negotiated between Loomis and the insurance provider X.L. and memorialized in insurance producer agreements between Loomis and X.L. The insurance producer agreements set Loomis’s commission as a percentage of the total premium paid by the insured party (in this case KEYW), and required Loomis to disclose to the insured party the commissions it received on the policies. Neither KEYW nor Landata was a party to the insurance producer agreements. Def.’s Mot. for S.J. Exs. E, F; Harder Tr. 23:21-24:5, 24:22-25:1.
Loomis did not disclose to KEYW the amount of any commissions it was to earn on KEYW’s policies. When Loomis issued an insurance policy to Landata, it would invoice KEYW for the premiums due and then forward the premium payment, net of Loomis’s commission, to X.L. KEYW never paid Loomis a commission; the only payment made by KEYW to Loomis was for KEYW’s insurance premiums. Harder Tr. 25:16-26:7, 27:18-28:4, 35:3-17, 39:22-40:10.
In an October 7, 2011 e-mail from KEYW to Loomis, KEYW confirmed that Loomis would continue to serve as Landata’s insurance broker for its 2011-2012 policy. In the e-mail, KEYW further stated: “we are not promising we won’t transfer the insurance to one broker in the future.” Hughes Cert. Ex. D.
In August 2012, Loomis contacted KEYW to discuss renewing Landata’s 2011-2012 policy for the 2012-2013 policy term. On August 20, 2012, KEYW instructed Loomis to proceed with the renewal of the policy. Once instructed to proceed with the renewal, Loomis negotiated a ten percent premium reduction for Landata with X.L. and delivered the insurance proposal to KEYW. The insurance proposal delivered to KEYW did not refer to the commission Loomis expected to earn on the policy. Hughes Cert. Ex. G-J.
On August 23, 2012, KEYW instructed Loomis to “bind” the insurance policy consistent with the proposal. On October 25, 2012, Loomis provided KEYW with an insurance binder and a proposed premium financing agreement. Hughes Cert. Ex. K, L.
Before X.L. issued the Landata insurance policy negotiated by Loomis, KEYW notified X.L. that it would be naming Jacobs as the insurance agent of record for Landata’s 2012-2013 policy. This gave Jacobs – rather than Loomis – the right to negotiate on behalf of KEYW with X.L. and ultimately the right to the commission on the policy. Harder Tr. 33:21-34:1.
The insurance producer agreement between X.L. and Loomis provided that “should a conflict exist as to which party is authorized to represent an existing or prospective policy holder with respect to any insurance which is the subject of [the agreements], the policyholder’s signed written on company letterhead, ...