USI Insurance Services LLC v. Wright

Background

USI Insurance Services LLC and Kenneth Dixon Wright filed cross-motions for summary judgment concerning Wright’s amended counterclaim for declaratory relief. Surety Resource Connection, Inc. doing business as SRC Digital Insurance Services, is also named as a defendant. The dispute concerned whether a 2017 employment agreement superseded earlier agreements containing employment-related terms.

In 2009, Wright sold his insurance brokerage, Cailindsey Partnership, to Wells Fargo Insurance Services of California, Inc. The parties documented that transaction in a purchase agreement that included provisions concerning Wright’s employment, including noncompetition and nonsolicitation terms, benefits, and additional payments. A separate 2009 employment agreement addressed Wright’s employment term, compensation, and obligations concerning trade secrets and confidential information. The court referred to those documents collectively as the “2009 Agreements.”

After USI purchased Wells Fargo’s insurance business in 2017, USI entered into a new employment agreement with Wright. That agreement addressed his compensation, benefits, employment term, conflicts of interest, confidentiality, and solicitation of USI’s prospective clients and client accounts. Its integration clause stated that it superseded prior oral or written agreements between Wright and USI or its predecessor that related to the agreement’s subject matter in any way.

Parties’ positions

USI argued that Wright’s requested declaration concerned the 2009 Agreements, that those agreements had been superseded, and that no live controversy remained concerning them. Wright argued that the 2009 purchase agreement had not been superseded and remained in effect.

Analysis

The parties agreed at the March 15, 2024 hearing that the 2017 employment agreement superseded the 2009 employment agreement. The remaining issue was whether it also superseded the 2009 purchase agreement.

The court held that the plain language of the 2017 agreement’s integration clause covered the 2009 purchase agreement. The 2009 purchase agreement was a prior written agreement between Wright and USI’s predecessor, and the two agreements related to the subject matter of Wright’s employment in the insurance business. Because the 2017 agreement superseded the 2009 purchase agreement, the court concluded that Wright’s counterclaim sought no justiciable claim for declaratory relief concerning that agreement. The court did not reach arguments about whether a “code exception” in the 2009 purchase agreement had been superseded.

The court rejected Wright’s argument that USI should be barred from asserting that the 2009 purchase agreement was superseded because USI had previously pursued a breach-of-contract claim based on that agreement. The court explained that it had never ruled for USI on the merits of that earlier claim, so the asserted basis for applying judicial estoppel was absent.

Disposition

The court granted in part and denied in part USI’s motion for summary judgment. It granted the motion insofar as Wright sought declaratory relief related to the 2009 purchase agreement and denied the motion insofar as he sought declaratory relief related to the 2017 employment agreement. The court denied Wright’s motion for summary judgment. The court also set a case-management conference for April 29, 2024, and terminated docket entries 60 and 61.