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Martin v. Monumental Life Insurance Co.

District Court properly rejected extrinsic evidence of the intent of parties to a contract where the term at issue, "best efforts," was unambiguous, based on a reasonable reading of the contract in the context of the surrounding facts and circumstances.

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Argued: December 4, 2000

OPINION OF THE COURT

The primary issue in this appeal concerns a dispute over the interpretation and compliance with two wor ds — “best efforts” — in a comprehensive written agreement between two sophisticated business entities, an insurance agency and its underwriter. George N. Pegula Agency (“Agency”), CGA Management Corporation (“Management”), George Pegula (“Pegula”), Barbara Pegula, and Monumental Life Insurance Company (“Monumental”) enter ed into an asset and restructuring agreement on December 30, 1993 (“Agreement”).*fn1 Agency brought an action in 1995 in a state court against Monumental which was removed to the United States District Court for the Middle District of Pennsylvania alleging a breach of the Agr eement. Agency claimed that Monumental failed to use its “best efforts” to market insurance programs to Catholic Golden Age (“CGA”) members. CGA is an organization of senior citizens who are Catholic. After a six-day non-jury trial, the District Court held that Agency did not prove that Monumental failed to satisfy its obligations under the Agreement. The District Court, additionally holding that Pegula wilfully br eached the Agreement, imposed personal liability on the Pegulas under the terms of the Agreement. Agency and the Pegulas were ordered to pay $9,112,760 plus interest of $80,053, costs of suit, and attorneys’ fees of $888,048.

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