Plaintiffs Berkley Risk Solutions LLC, an insurance and reinsurance management services provider, and Admiral Insurance Co., an excess and surplus lines insurer, sued Industrial Re-International Inc., a New York reinsurance intermediary, and its founder, concerning certain commissions for public liability insurance placed with municipalities in Puerto Rico through American Foreign Underwriters Corp. (AFU), a licensed general agency. The dispute began when AFU filed a lawsuit against Industrial Re and Plaintiffs in Puerto Rico alleging that Industrial Re had agreed to split the commissions on policies written for 2006-2007 equally with AFU. Industrial Re and AFU resolved their dispute and executed a settlement agreement in which they agreed that the commission on any future policies with the municipalities would be split 60 percent to Industrial Re and 40 percent to AFU. Industrial Re obtained a judgment against AFU for the payment of its portion of the commissions that AFU received on subsequent policies according to the settlement; however, Industrial Re’s attempts to collect against AFU were unsuccessful. Industrial Re then claimed that Plaintiffs owed it for the judgment obtained against AFU. Plaintiffs filed the lawsuit underlying this appeal, seeking a declaration that they were not obligated to Industrial Re for the 2008-2009 and 2009-2010 policy commissions. Industrial Re responded by asserting counterclaims based on promissory estoppel, unjust enrichment and tortious interference.
Plaintiffs prevailed in the trial court, and the appellate court has now affirmed the trial court’s ruling. Regarding promissory estoppel, the court held that Industrial Re did “not dispute that plaintiffs were not parties to the Settlement Agreement [with AFU] and have produced no evidence that plaintiffs agreed to be bound by the Settlement Agreement at any time.” Moreover, it found that “[a]lthough plaintiffs acknowledged in an August 2008 email they ‘were previously advised’ to distribute the commission in accordance with the Settlement Agreement, their willingness to do so […] was explicitly dependent upon receiving a written stipulation from both defendants and AFU to that effect,” which never occurred, and thus, never became binding. The court also affirmed the dismissal of Industrial Re’s claim based on the expiration of the statute of limitations of the State of New Jersey; New Jersey had a “substantial interest” in resolving disputes arising out of business dealings between two of its own corporations and no “exceptional circumstances” justified the application of the law of Puerto Rico. Berkley Risk Solutions LLC v. Indus. Re-Int’l Inc., Case No. A-2366-15T1 (N.J. Super. Ct. App. Div. Sept. 20, 2017).
This post written by Gail Jankowski.
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