||CARL NEWMILLER; NELSON VELAZQUEZ, PLAINTIFF - APPELLANTS,
FARMERS INSURANCE EXCHANGE; TRUCK INSURANCE EXCHANGE; FIRE
INSURANCE EXCHANGE; MIDCENTURY INSURANCE COMPANY; AND FARMERS NEW WORLD LIFE INSURANCE
COMPANY, D/B/A THE FARMERS INSURANCE GROUP OF COMPANIES,
DEFENDANTS - APPELLEES
||On Appeal from the United States District Court for the District of Nevada; D.C. No.
CV-89-815-HDM; Howard D. McKibben, District Judge, Presiding.
||Skopil, Pregerson, and O'Scannlain, Circuit Judges.
||This is an action by two insurance agents against an insurance company alleging
wrongful termination and breach of contract. The district court granted summary judgment
for the company. We agree with the district court that the agents were terminable at-will
and that they each failed to allege facts sufficient to constitute a breach of their
employment contract. We affirm.
||1. Wrongful Discharge
||The district court concluded that the agents were independent contractors and not
employees of Farmers. The agents contend that whether they were employees is a material
question of fact that precludes summary judgment. We disagree. Farmers contracts expressly
state that an employer-employee relationship is not created, but rather that each agent
"is an independent contractor for all purposes." Furthermore, under Nevada law
in effect at the time of the agents' discharge, an insurer was entitled to terminate an
agent's appointment "at any time," subject only to limitations created by
contract. Nev. Rev. Stat. § 683A.290(1) (1986). Here, the contracts provide that the
relationship may be terminated by either the agent or the company on three months written
notice. The contracts do not specify that Farmers must have cause to terminate.
||The agents argue that extrinsic evidence shows that the parties intended to create
employment contracts that could not be terminated without just cause. The Nevada Supreme
Court has stated, however, that general expressions of job longevity, security,
advancement, and established disciplinary procedures are inadequate, as a matter of law,
to rebut the presumption that an employee can be terminated at-will. See Bally's Grand
Emp. Fed. Cr. Union v. Wallen, 105 Nev. 553, 779 P.2d 956, 957 (1989); Vancheri v. GNLV
Corp., 105 Nev. 417, 777 P.2d 366, 370 (1989). The agents' proffered evidence is
insufficient as a matter of law to overcome the presumption of at-will employment. See
Bally's, 779 P.2d at 958.
||The agents argue that regardless of their employment status, an implied covenant of
good faith and fair dealing should extend to their employment contracts. Nevada recognizes
the tort of bad faith discharge where an employer breaches an implied covenant of good
faith and fair dealing, but only in "those rare and exceptional instances where the
employer's conduct goes well beyond the bounds of ordinary breach of contract
liability." Smith v. Cladianos, 104 Nev. 67, 752 P.2d 233, 235 (1988). The doctrine's
application to at-will employees is further restricted to conduct that violates public
policy. See Vancheri, 777 P.2d at 370; Smith, 752 P.2d at 235. The district court
expressly held that Farmers did not violate any public policy of the State of Nevada. We
agree and reject the agents' argument.
||2. Breach of Contract Claims
||The agents contend that Farmers breached their agency contracts by placing certain
underwriting restrictions upon them prior to their discharges. The district court held
that the agents were either estopped from asserting the alleged breaches, or
alternatively, that the agents failed to assert facts which constitute a breach of the
||We conclude that the agents are not estopped from asserting their breach of contract
claims. See American Bank Stationery v. Farmer, 106 Nev. 698, 799 P.2d 1100, 1103 (1990)
(former employee was not estopped from litigating alleged wrongful discharge when
settlement agreement did not expressly prohibit suit). We nevertheless affirm on the
district court's alternative ground that the agents failed to assert facts which if taken
as true would constitute a breach of the agency contracts. Nothing in the contracts
prohibited Farmers from limiting the underwriting policies of the agents. To avoid summary
judgment on the breach of contract claims, the agents were required to show that the
written contracts were ambiguous and extrinsic evidence was required to ascertain the
intent of the parties. See Mullis v. Nevada Nat. Bank, 98 Nev. 510, 654 P.2d 533, 536
(1982). The agents failed to meet that burden and accordingly the district court's summary
judgment on their breach of contract claims is affirmed.
||* October 11, 1991, Submitted, San Francisco, California; The panel unanimously finds
this case suitable for submission on the record and briefs and without oral argument. Fed.
R. App. P. 34(a), Ninth Circuit Rule 34-4.