Klapp v. United Insurance Group Agency, Inc.
Michigan Supreme Court
663 N.W.2d 447 (Mich. 2003)
United Insurance Group Agency, Inc.'s (United) (defendant) Agent's Agreement and Agent's Manual contained conflicting commission policies regarding how long an agent had to work for United before earning renewal commissions on former clients' policies; Craig Klapp (plaintiff), a seven-year former United employee, met the tenure requirement under one policy but not the other, and United refused to pay him commissions when his former clients renewed. Klapp sued for breach of contract and introduced evidence that United had historically paid renewal commissions regardless of an agent's tenure; the trial court ruled for Klapp, the court of appeals reversed, and Klapp appealed further.
Whether, when a contract is ambiguous, courts should look to extrinsic evidence first to attempt to determine the parties' intent.