           In the Missouri Court of Appeals
                   Eastern District
                                        DIVISION THREE

AIG AGENCY, INC.,                 )                    No. ED102096
d/b/a ASSOCIATED INSURANCE GROUP, )
                                  )
       Appellant,                 )                    Appeal from the Circuit Court
                                  )                    of St. Louis County
       vs.                        )                    12SL-CC01281
                                  )
MISSOURI GENERAL INSURANCE        )                    Honorable Michael T. Jamison
AGENCY, INC., JIM BAXENDALE AND   )
MITCH O’BRIEN,                    )
                                  )
       Respondents.               )                    Filed: November 3, 3015

       AIG Agency, Inc., d/b/a Associated Insurance Group (“AIG”) appeals the trial court’s

grant of summary judgment in favor of Missouri General Insurance Agency, Inc. (“Missouri

General”), Jim Baxendale, and Mitch O’Brien (collectively “Respondents”) on AIG’s claims

arising from the transfer of insurance agent Martin Tessler’s relationship with Missouri General

to AIG. We affirm in part and reverse and remand in part.

                                   I.      BACKGROUND

       Tessler began working with Missouri General in 1988. Missouri General provided office

space, equipment, bookkeeping, marketing services, and mail service in exchange for Tessler’s

agreement to place all of his insurance sales (his “book of business”) through Missouri General,

sharing the commissions Tessler earned on his book of business. The contract governing the

arrangement (the “Producer Agreement”) specified, “[a]ll insurance business, accounts, records,
and files produced by [Tessler] are the sole and exclusive property of [Tessler] and [Missouri

General] shall not, by virtue of this Agreement, acquire any right, title or interest in such

business.”

           The Producer Agreement specified its term would continue indefinitely until terminated

by either party. However, it also specified that “certain obligations contained in this [Producer]

Agreement shall by their very terms survive the termination of this [Producer] Agreement.” It

did not specify which obligations would endure. Finally, the Producer Agreement contained a

non-assignment clause, which stated “[t]his agreement shall not be assignable by [Missouri

General] or [Tessler].”

           On December 31, 2010, Tessler left Missouri General to become an agent with AIG.

Tessler entered into an Independent Contractor and Asset Purchase Agreement with AIG on that

day and terminated the Producer Agreement with Missouri General. Tessler and his office

assistant moved to AIG’s offices and began servicing clients there starting January 1, 2011.

           Although Tessler serviced all but one1 of his accounts from AIG’s offices, Missouri

General was still the agency of record listed on each client’s account. It is undisputed that this

arrangement is typical in the insurance industry because for an insurer to change the agency of

record in the middle of the policy period, it would have to cancel the policy and reissue a new

policy, leading to higher costs and duplicative paperwork. Therefore, typically agencies instead

send transfer letters to the insurers when an agent moves his book of business, leaving the

original agency as the agency of record until the policy renews, at which point it is rewritten with

the new agency as the agency of record. Because Missouri General was still the agency of

record, Tessler would occasionally forward paperwork he prepared for policy changes to

Missouri General, which then forwarded that paperwork to the insurer. Missouri General billed
1
    The exception account is discussed below.

                                                   2
Tessler for its mail costs associated with this paperwork. It is in dispute in such an arrangement

to whom commissions are owed.

       The one account Tessler did not continue servicing after he left Missouri General

involved a real estate business, Woodson Development (the “Woodson account”). Baxendale,

president of Missouri General, was also an owner of the Woodson account. Thomas Lane,

president of Woodson Development, dealt primarily with Baxendale or his assistant regarding

the account. The parties dispute whether Baxendale told Lane the Woodson account could not

move to AIG due to a non-compete provision for Tessler in the Producer Agreement.

       When Tessler terminated the Producer Agreement with Missouri General and the

Woodson account was not transferred to AIG, Tessler and Gregory Wherry, AIG’s president,

communicated with Lane to discuss moving the account to AIG. Lane testified at his deposition

that he did not recall anyone ever telling him Tessler had a non-compete provision in his contract

with Missouri General, or that Lane was not free to move his business to AIG if he so chose.

Wherry testified to the contrary – that Lane told Wherry over the phone that Baxendale told Lane

the Woodson account could not be moved to AIG due to Tessler’s non-compete provision. Lane

also testified he did not consider moving the Woodson account to AIG because he had not done

any due diligence on AIG at the time of AIG’s attempt to win the account, and that he never

received a specific proposal from AIG with respect to the Woodson account.

       After December 31, 2010, although Missouri General was not actively servicing Tessler’s

accounts (except the Woodson account), it retained all the commissions it received from

insurance companies on Tessler’s accounts for which it was the agency of record. As a result,

AIG filed this instant lawsuit against Respondents. Count I claimed breach of contract for

Missouri General retaining the commissions it received on Tessler’s accounts. Though Missouri



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General and AIG did not have a contractual relationship, AIG alleged it acquired Tessler’s

contract rights under the Producer Agreement. Count II claimed tortious interference based on

Missouri General’s alleged representations to Woodson Development that it could not move the

Woodson account to AIG due to a non-compete provision in Tessler’s contract with Missouri

General. Count III alleged unjust enrichment based on the retained commissions, and Count IV

alleged conversion for the same.

       Respondents filed a motion for summary judgment on all counts, which the trial court

granted. Regarding AIG’s breach of contract claim, the trial court held Tessler’s attempt to

assign his contract rights to AIG was ineffective as a matter of law, Tessler could not assign a

future cause of action for breach of contract, and in the alternative, Missouri General did not

breach its contractual obligations as a matter of law. On the unjust enrichment and conversion

claims, the trial court found Missouri General’s retention of the commissions was proper as a

matter of law. For the tortious interference claim, the trial court found Missouri General did not

interfere with AIG’s business expectancy because, (1) Lane did not recall any representations

from Missouri General regarding Tessler’s non-compete clause; (2) Lane had an unrelated

business rationale for deciding to keep the Woodson account with Missouri General; and (3)

Missouri General was justified in any alleged interference as a matter of law because it had an

ownership interest in the Woodson account. This appeal followed.

                                      II.     DISCUSSION

       AIG brings four points on appeal. In its first and second points, AIG asserts the trial

court erred in granting Respondents’ motion for summary judgment on AIG’s breach of contract

claim. In its third point, AIG contends the trial court erred in finding Respondents were entitled

to summary judgment on AIG’s breach of contract, unjust enrichment, and conversion claims. In



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its fourth point, AIG claims the trial court erred in granting Respondents’ motion for summary

judgment on AIG’s tortious interference claim.

A.     Standard of review

       Summary judgment is reviewed essentially de novo and affirmed only where there are no

genuine issues of material fact and the movant is entitled to judgment as a matter of law. ITT

Commercial Finance Corp. v. Mid-America Marine Supply Corp., 854 S.W.2d 371, 376 (Mo.

banc 1993). A defendant may establish summary judgment is appropriate by showing, (1) facts

negating any one of the plaintiff’s elements necessary for judgment; (2) that the plaintiff has not

produced evidence sufficient for the finder of fact to find the existence of one of the plaintiff’s

elements; or (3) facts necessary to support a properly pleaded affirmative defense. Roberts v.

BJC Health System, 391 S.W.3d 433, 437 (Mo. banc 2013). We review the record in the light

most favorable to the party against whom judgment was entered. Id.

B.     Breach of contract claim

       AIG’s first and second points on appeal are closely related in that they both assert the

trial court erred in granting summary judgment on AIG’s breach of contract claim. As such, we

address them together. In its first point on appeal, AIG asserts the trial court erred in granting

summary judgment on AIG’s breach of contract claim because Tessler’s sale of his book of

business was ineffective as a matter of law. Specifically, AIG claims Tessler had the right to

transfer his property as he saw fit, and the Producer Agreement’s non-assignment clause only

governed the parties’ rights and duties under the contract, not the book of business itself. In its

second, related point on appeal, AIG asserts the trial court erred in granting summary judgment

on AIG’s breach of contract claim on the grounds that Missouri law does not allow for the

transfer of potential future causes of action. AIG argues Tessler should have been allowed to



                                                  5
transfer potential future causes of action, including for breach of contract, along with the sale of

his book of business. For the reasons discussed below, we hold that there are disputed issues of

material fact regarding the parties’ contractual relationship, preventing summary judgment.

       The trial court found the parties did not have a contractual relationship of their own and

the Producer Agreement was not assignable, such that Tessler’s attempted assignment of his

property rights under the contract was ineffective as a matter of law. The Producer Agreement

specified “[a]ll insurance business, accounts, records, and files produced by [Tessler] are the sole

and exclusive property of [Tessler] and [Missouri General] shall not, by virtue of this

Agreement, acquire any right, title or interest in such business.” Further, in his deposition,

Baxendale testified Tessler “owned the commissions flowing from [the] book of business,” and

“Missouri General did not own that flow of commission.” Essentially, when Tessler and

Missouri General executed the Producer Agreement, Tessler agreed by contract to assign a

certain percentage of his commissions – a benefit generated by the property interest he owned in

the book of business – in exchange for Missouri General’s office services. Because the

commissions forming the subject matter of the contract flowed from Tessler’s ownership of the

book of business, when he sold his book of business to AIG, AIG acquired the right to pursue

Tessler’s contract rights. See Korte Const. Co. v. Deaconess Manor Ass’n, 927 S.W.2d 395, 403

(Mo. App. E.D. 1996) (finding an assignment of contract “transferred all past, present and future

causes of action arising from the contract”).

       Missouri General argues that AIG cannot bring a cause of action for contractual rights it

received via assignment from Tessler, however, due to the Producer Agreement’s explicit non-

assignment clause. However, as we discussed in Korte, a non-assignment clause does not

prevent all contractual assignments in all cases. Korte involved a contract with a mandatory



                                                  6
arbitration clause and a non-assignment clause between a construction company and two housing

developments. Id. at 397, 399. The construction company attempted to prevent arbitration,

because while a valid arbitration agreement existed between the construction company and

predecessor housing development (the “assignor”), the assignor assigned its contractual rights

(including the right to compel arbitration) to the subsequent housing development (the

“assignee”), in violation of the contract’s non-assignment clause. Id. at 397, 400.

       This Court held the assignment of the contractual rights and the accrued causes of action

arising from the contract were valid. Id. at 404. In so holding, we applied the so-called Ocean

Accident doctrine, first appearing in the case Ocean Accident & Guarantee Corp. v.

Southwestern Bell Telephone Co., 100 F.2d 441 (8th Cir. 1939), which dictates that even when a

contract is non-assignable by its own terms, it may still be validly assigned where the contract is

no longer executory vis-à-vis the assigning party. Korte, 927 S.W.2d at 401. That is, the

assignment is valid where the events creating the liability occur while the contract is still held by

the assignor, because the contract rights assigned will not be affected by the personal change in

the party. Id.

       In applying the Ocean Accident doctrine to the contract at hand, the Korte Court held the

contract was no longer executory, because the assignor had completely fulfilled its obligations

under the contract at the time of the assignment. Id. at 402-03.

       In this case, there remain genuine issues of material fact as to whether the Producer

Agreement remained executory for Tessler. While the parties terminated the contract before

Tessler moved to AIG, the Producer Agreement by its own terms specified “certain obligations

contained in this [Producer] Agreement shall by their very terms survive the termination of this

[Producer] Agreement.” When Tessler made a sale, he would then receive monthly commissions



                                                  7
for the term of the insurance policy – usually one year. Therefore, Tessler made sales during the

lifetime of the Producer Agreement that entitled him to commissions flowing after his departure

from Missouri General, but the record does not indicate whether he had continuing obligations

that entitled him to those proceeds. The parties agree that Tessler performed additional tasks to

“service” the accounts after the sale and after his move to AIG, but it is not clear from the record

what “servicing” entailed, or more importantly, whether servicing the accounts was necessary to

continue to receive commission payments on prior sales. If Tessler was entitled to receive the

commission payments for sales he made during the lifetime of the Producer Agreement

regardless of his future actions, the contract was no longer executory, and Tessler’s contract

rights were assignable, regardless of the non-assignment clause.

       Further, there remain genuine issues of material fact as to whether Missouri General

breached its obligations under the contract. As noted above, the Producer Agreement dictated

that certain obligations, by their very nature, would extend beyond the contract’s termination, but

it does not identify which obligations those are. Further, the Producer Agreement does not

address whether Missouri General would be entitled to retain commission payments after

Tessler’s departure. There is no evidence in the record as to what Tessler and Missouri

General’s expectations were on this issue at the time they executed the agreement, and there is

no evidence of the standard practices within the insurance industry in such situations. As such,

genuine issues of material fact remain unresolved as to whether Missouri General breached its

obligations. Summary judgment is only appropriate where there are no genuine issues of

material fact. ITT, 854 S.W.2d at 376.

       AIG’s second, related point on appeal claims that the trial court erred in granting

summary judgment on the breach of contract claim on the grounds Tessler could not assign



                                                 8
future causes of action for breach of contract under Missouri law. The trial court found “at the

time of the purported assignment, Mr. Tessler had no cause of action for breach of the contract

against Missouri General, such that he could not, as a matter of law, assign such a cause of action

even if it was otherwise assignable.” This finding was in error. Assignment of a contract

“transfer[s] all past, present and future causes of action arising from the contract,” regardless of

whether those causes of action are yet ripe for adjudication. Korte, 927 S.W.2d at 403.

Therefore, even if the cause of action for breach of contract had not yet accrued for Tessler at the

time of the assignment, it was still transferable.

        Based on the foregoing, the trial court erred in granting summary judgment on AIG’s

breach of contract claim. Points one and two are granted.

C.      Unjust enrichment and conversion claims

        In its third point on appeal, AIG claims the trial court erred in granting summary

judgment on its claims for unjust enrichment and conversion, because the evidence in the record

demonstrates outstanding disputes of material fact.2 Specifically, AIG argues it presented

evidence Missouri General wrongfully retained money belonging to AIG and that Missouri

General converted property rightfully belonging to AIG. We agree there remain outstanding

disputes of material fact.

        To establish the elements of an unjust enrichment claim, a plaintiff must show, (1) it

conferred a benefit on the defendant; (2) the defendant appreciated the benefit; and (3) the

defendant accepted and retained the benefit under circumstances that are inequitable or unjust.

Howard v. Turnbull, 316 S.W.3d 431, 436 (Mo. App. W.D. 2010). Similarly, to state a claim for

conversion, a plaintiff must show, (1) it was the owner of the property in question or was

2
 AIG also claims in this point on appeal that the trial court erred in granting summary judgment on AIG’s claims for
breach of contract due to outstanding disputes of material fact as to whether Missouri General failed to perform its
contractual obligations. We agree, and that discussion is set out in section II.B.

                                                         9
otherwise entitled to its possession; (2) the defendant took possession of the property with the

intent to exercise control over it; and (3) the defendant thereby deprived the plaintiff of the right

to possession. Weicht v. Suburban Newspapers of Greater St. Louis, Inc., 32 S.W.3d 592, 596

(Mo. App. E.D. 2000). A key element of both causes of action, therefore, is which party had a

right to the property at issue, and whether the other party withheld the property in violation of

that right. This element was the basis for the trial court’s grant of summary judgment.

        The evidence in the record does not establish whether AIG or Missouri General had a

right to receive the insurance agency’s portion of the commission payments after the termination

of the Producer Agreement. In drafting the Producer Agreement, Missouri General and Tessler

seem to have not expressly contemplated this set of circumstances, as the document is silent on

the issue of what happens to these payments after Tessler leaves the agency but while Missouri

General remains the agency of record on the individual policies.3

        Missouri General claims the Producer Agreement required it to continue to provide

servicing to Tessler’s accounts, and since it did so, it performed all of its obligations and was

therefore the rightful owner of the commissions. However, the evidence in the record presents

conflicting information on this point. While Missouri General remained the agency of record,

after December 31, 2010, the record shows Pat Hieneman, Tessler’s assistant who moved with

him to AIG, performed tasks to “service” the account on Tessler’s book of business. She

performed this work from AIG’s offices on Tessler’s behalf. The only limitation to Hieneman’s

exclusive servicing of the accounts was for a handful of accounts that were written through

insurance companies with which AIG did not have active agency contracts. For those accounts,

Hieneman had to fill out the servicing requests, and forward those requests to Missouri General,


3
  Missouri General did not retain any commissions after each policy’s renewal, because once AIG was the agency of
record, it began receiving the commissions directly from the clients’ insurers.

                                                       10
which would forward the requests on to the companies. However, it is not clear that even this

mail forwarding would entitle Missouri General to retain the commissions as the rightful servicer

of the account, because it sent Tessler bills at AIG for its mail expenses. If Missouri General

were still performing its contractual duties as it claims, it would not be entitled to bill Tessler for

mail expenses, as mail service was one of the duties it agreed to provide Tessler in exchange for

commissions under the Producer Agreement.

       In light of the Producer Agreement’s silence on the issue and actions taken by both

Missouri General and AIG which they contend rightfully establish themselves as the servicing

agency for the commissions in question, genuine issues of material fact remain unresolved as to

which party had the right to retain the commissions. As such, the trial court erred in granting

summary judgment on AIG’s claims for unjust enrichment and conversion. ITT, 854 S.W.2d at

376. Point three is granted.

D.     Tortious interference claim

       In its fourth and final point on appeal, AIG claims the trial court erred in granting

summary judgment on its claim for tortious interference on the grounds Missouri General did not

interfere with AIG’s business expectancy. AIG claims the evidence in the record demonstrates

outstanding disputes of material fact on this issue. We disagree.

       AIG’s tortious interference claim stems from a statement Baxendale, the president of

Missouri General, allegedly made to Lane, the president of Woodson Development, that AIG

could not assume the Woodson account due to a non-compete clause for Tessler in the Producer

Agreement. The parties disagree as to whether Lane recalled Baxendale’s alleged statement,

whether Lane made inconsistent statements about his recollection, and whether evidence

demonstrating the alleged inconsistencies is admissible.



                                                  11
       To state a claim for tortious interference, a plaintiff must show, (1) a valid business

expectancy; (2) the defendant’s knowledge of the contract or relationship; (3) a breach caused by

the defendant’s intentional interference; (4) absence of justification; and (5) damages. Stehno v.

Sprint Spectrum, L.P., 186 S.W.3d 247, 250 (Mo. banc 2006). As stated above, summary

judgment is appropriate where the defendant produces facts negating any one of the plaintiff’s

elements necessary for judgment. Roberts, 391 S.W.3d at 437. Therefore, the parties’

disagreements on the alleged misrepresentation are immaterial if AIG cannot demonstrate the

alleged tortious representation caused it damages, as the trial court found Lane had an unrelated

business rationale for its decision not to do business with AIG.

       In his deposition, Lane gave undisputed testimony that he did not consider moving his

account to AIG because he had not done any due diligence on AIG at the time of AIG’s attempt

to win the account. He also testified that he never received a specific proposal from AIG with

respect to the Woodson account. Thus, AIG’s alleged damages stemmed from Lane’s lack of

information on AIG and AIG’s failure to submit a specific proposal. Therefore, AIG has

presented no evidence to show that it was damaged as a result of any alleged tortious

representation, because the undisputed evidence shows Lane would not have moved his business

to AIG regardless of the alleged misrepresentation regarding Tessler’s non-compete clause.

Missouri General has negated an element necessary for judgment, and the trial court did not err

in granting summary judgement in its favor. Point four is denied.

                                     III.    CONCLUSION

       The trial court’s grant of summary judgment in favor of Respondents on AIG’s claims for

breach of contract, unjust enrichment, and conversion is reversed and remanded for proceedings




                                                12
consistent with this opinion. The trial court’s grant of summary judgment in favor Respondents

on AIG’s tortious interference claim is affirmed.




                                             ROBERT M. CLAYTON III, Presiding Judge

Lawrence E. Mooney, J. and
James M. Dowd, J., concur.




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