Linn v. Employers Reinsurance Corporation

Walter Linn, president of Walter Linn and Company (Linn) (plaintiff), negotiated a reinsurance-brokerage agreement in New York City with William Ehmann, an agent of Employers Reinsurance Corporation (ERC) (defendant), under which Linn would place reinsurance contracts with ERC for a five-percent commission; Ehmann said he needed to consult ERC executives before accepting. Linn returned to Philadelphia, and Ehmann later telephoned from New York to accept, after which the parties performed the agreement for nearly 28 years until ERC stopped paying commissions. Linn sued in Pennsylvania state court; the trial court dismissed, applying New York law and its statute of frauds, and on Linn's appeal the Pennsylvania Supreme Court remanded because no evidence established Ehmann's physical location during the acceptance call. On remand, the jury found the call wasn't placed from New York, and the trial court, applying default Pennsylvania law, found the contract valid; ERC appealed.