No Express Post-Termination Clause, No Renewal Commissions: Fifth Circuit Clarifies Maryland Law on Captive Agents’ Rights in Sims Agency v. GEICO

Introduction

In Sims Agency, L.L.C. v. Government Employees Insurance Company et al., the United States Court of Appeals for the Fifth Circuit affirmed summary judgment in favor of GEICO in a dispute over whether a captive insurance agent is entitled to collect renewal commissions after the agency agreement is terminated. The case turns on Maryland contract law, selected by a choice-of-law clause in the operative 2020 agency agreement. The central issues were:

Whether the 2020 Agreement’s text—especially its commission schedules and a generic survival clause—granted Sims Agency a right to renewal commissions on policies renewed after termination.
Whether, if the contract did not provide such a right, Sims could recover the commissions in equity under a theory of unjust enrichment.

The Fifth Circuit held that Maryland law requires an express contractual grant to support post-termination renewal commissions, and that a generic survival clause is insufficient. The court also rejected the unjust enrichment claim because the parties’ express contract covered the subject of termination and left no “gap” to be filled in equity.

Summary of the Opinion

Applying de novo review, the Fifth Circuit affirmed the district court’s grant of summary judgment to GEICO. The court concluded:

Under Maryland law, a captive agent’s right to post-termination renewal commissions must be expressly granted by the agency contract. The 2020 Agreement contained no such grant.
The contract’s generic survival clause—providing that provisions that “logically” should survive termination to accomplish the agreement’s “fundamental purposes” would do so—could not supply the necessary express entitlement to post-termination commissions.
Other contract language, notably GEICO’s retention of a “final commission check” for six months to account for amounts owed, reinforced that the parties contemplated finality at termination and no ongoing renewal payments thereafter.
Unjust enrichment was unavailable because an express contract governed the subject matter. The narrow exceptions recognized under Maryland law (including when a contract does not “fully address” a subject) did not apply. The court further observed that, even if unjust enrichment were theoretically available, Sims failed to show that GEICO’s retention of renewal premiums was “unjust.”

Accordingly, the judgment of the district court was affirmed.

Analysis

Precedents Cited and How They Shaped the Decision

Travelers Indemnity Co. v. Merling, 605 A.2d 83 (Md. 1992): The court relied on Merling for the core proposition that an insurance agent’s right to renewal commissions after termination must be granted by the language of the agency contract, and that in the absence of such a provision no right exists. Merling’s clear statement provides the dispositive rule under Maryland law, which controlled this case.
County Commissioners of Caroline County v. J. Roland Dashiell & Sons, Inc., 747 A.2d 600 (Md. 2000): Dashiell holds that unjust enrichment is generally not available where an express contract covers the subject matter. It recognizes narrow exceptions (fraud, bad faith, rescission, or where the contract does not fully address the subject). The Fifth Circuit cited Dashiell to frame the unjust enrichment analysis and then explained why its exceptions do not apply here.
AAC HP Realty, LLC v. Bubba Gump Shrimp Co. Restaurants, 219 A.3d 99 (Md. Ct. Spec. App. 2019) and AXE Properties & Management, LLC v. Merriman, 311 A.3d 376 (Md. App. Ct. 2024): These Maryland appellate decisions underscore how “narrow” the Dashiell exceptions are and note that no reported Maryland decision has upheld a judgment relying on these exceptions. The Fifth Circuit used these authorities to show that Maryland courts have not opened the door to equitable workarounds in circumstances like Sims’s.
Martz v. Day Development Co., 35 F.4th 220 (4th Cir. 2022): The only identified case where a court applying Maryland law allowed unjust enrichment despite a contract. The Fourth Circuit found a true “gap” because the contract did not explain how the plaintiff’s pay rate would be calculated under unforeseen circumstances. The Fifth Circuit distinguished Martz, finding no analogous gap here—just a contract that omitted any post-termination commission right.
Richard F. Kline, Inc. v. Signet Bank/Maryland, 651 A.2d 442 (Md. Ct. Spec. App. 1995): This case provides Maryland’s baseline definition of unjust enrichment. The Fifth Circuit invoked Kline to reinforce that even if equity were theoretically available, Sims did not show why GEICO’s conduct was unjust under Maryland law.
Castellanos-Contreras v. Decatur Hotels, LLC, 622 F.3d 393 (5th Cir. 2010): Cited for the standard of review that the Fifth Circuit applies de novo review to summary judgment rulings, applying the same standard as the district court.

Legal Reasoning

The court’s reasoning proceeds in two principal steps, tracking Sims’s two theories of recovery.

1) Contract Claim: Maryland’s “Express Grant” Rule Controls

Choice of law: The 2020 Agreement contained a Maryland choice-of-law clause. On diversity jurisdiction, the Fifth Circuit enforced that clause and applied Maryland contract law.
Merling’s express grant requirement: Under Maryland law, an agent’s right to renewal commissions post-termination must appear in the contract. The 2020 Agreement nowhere stated that Sims was entitled to renewal commissions after termination. Commission schedules that list renewal rates do not, by themselves, extend commission rights beyond the term of the agreement.
Survival clause is not a grant of economic rights: Sims argued that a generalized survival clause—preserving provisions that “logically” should survive termination to accomplish the contract’s “fundamental purposes”—should carry the renewal rates forward. The court rejected this as too generic to satisfy Maryland’s requirement of an express post-termination grant. Survival clauses typically preserve ongoing obligations like confidentiality, indemnification, or dispute resolution—not new, unenumerated economic entitlements after termination.
Contract text signals finality at termination: The agreement provided that GEICO would withhold a “final commission check” for six months to complete a final accounting after termination. The court read this “finality” language as incompatible with an expectation of ongoing renewal checks for post-termination policy renewals.
Extrinsic evidence unnecessary and immaterial: Sims complained about limited discovery. The court dismissed this, noting that no amount of extratextual evidence could overcome Maryland law’s requirement for an express contractual provision. The dispute is resolved by the four corners of the contract.

2) Unjust Enrichment: Barred by the Express Contract and No Narrow Exception Applies

General rule: Where an express contract covers the subject matter, unjust enrichment is not available under Maryland law (Dashiell).
Narrow Dashiell exceptions: Fraud, bad faith, rescission, or a contract that does not “fully address a subject.” The Fifth Circuit emphasized how Maryland courts have narrowed these exceptions and rarely apply them.
No “gap” here: The 2020 Agreement “fully addresses” termination. It details return-of-property obligations and the “final commission check” process, but omits any right to post-termination renewals. Under Merling, omission is dispositive—not a gap to be filled by equity. The court contrasted this case with Martz, where unforeseen circumstances created a genuine gap in how compensation would be computed.
Not unjust under Maryland law: Even if unjust enrichment were conceptually available, Sims did not show that GEICO’s retention of renewal premiums was unjust. Sims’s assertion that it “expected” future commissions based on the contract founders on the contract’s silence regarding post-termination renewals. The contract contemplated compensation for sales and renewals earned during the agency’s existence, which Sims received.

Impact

For Insurance Agents (Especially Captive Agents)

Express language is essential: Agents seeking renewal commissions after termination must secure explicit contract language granting that right. Rates in a commission schedule, without an explicit post-termination right, are not enough.
Survival clauses will not save the day: Generic survival provisions do not transform in-term compensation provisions into post-termination entitlements.
Litigation posture: Courts applying Maryland law will likely resolve these disputes on the paper record. Extrinsic evidence, practice history, or expectations will not overcome the lack of express contractual language.

For Carriers and Contract Drafters

Draft for clarity at termination: If the business model anticipates no post-termination renewals, state that explicitly and preserve a final accounting mechanism (as GEICO did). If limited “run-off” renewals are intended, say so with duration and rate.
Use of Maryland law: Carriers selecting Maryland law can rely on Merling’s bright-line rule, now reaffirmed and applied by the Fifth Circuit, to prevent post-termination claims absent express grants.
Equity backstops unlikely: The decision confirms that Maryland’s Dashiell exceptions are narrow and rarely applied, reducing the risk that unjust enrichment will be used to rewrite compensation terms.

For Future Litigation

Summary judgment friendly: Disputes over post-termination commissions governed by Maryland law are well-suited to resolution on summary judgment where the contract is silent.
Survival clause arguments: Parties should expect courts to treat survival clauses as preservative of specified obligations, not as an independent source of new post-termination payment rights.
Martz is narrow: Only genuine, unforeseen “gaps” in compensation mechanics may open the door to unjust enrichment. Mere omission of a post-termination entitlement will not.

Complex Concepts Simplified

Captive agent: An insurance agent who sells policies for a single insurer (and its affiliates), rather than multiple insurers.
Renewal commission: A payment to an agent when an existing policy renews for another term.
Post-termination renewals: Policy renewals that occur after the agency contract ends; the question is whether the former agent is entitled to commissions on these renewals.
Survival clause: A contract provision stating that certain terms continue after the contract ends (e.g., confidentiality). Such clauses preserve specified obligations; they do not create new rights absent explicit language.
Choice-of-law clause: A term selecting which state’s law governs the contract. Here, Maryland law applied to the dispute.
Summary judgment: A procedural device allowing a court to decide a case without trial when there is no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law.
De novo review: An appellate standard under which the court reviews the lower court’s legal conclusions anew, without deference.
Unjust enrichment: An equitable doctrine allowing recovery when one party unfairly benefits at another’s expense and no adequate legal (contractual) remedy exists; in Maryland, unavailable where an express contract covers the subject matter, except in narrowly defined circumstances.
“Final commission check” provision: A termination clause allowing the principal to withhold an agent’s last commission payment for a defined period (here, six months) to reconcile accounts; the “final” descriptor signals no ongoing commission stream after termination.

Noteworthy Observations and Drafting Lessons

Commission schedules vs. entitlement: Listing commission rates for renewals within an agreement does not itself entitle the agent to post-termination renewal commissions. Entitlement and rate are different concepts; both must be addressed expressly if post-termination payments are intended.
Expressio unius: By specifying detailed termination mechanics (return of property, final accounting, final commission check) but omitting post-termination renewals, the contract signals that such renewals are not owed. Maryland law treats that omission as conclusive.
Superseding agreements matter: The operative 2020 Agreement superseded a 2016 Agreement. Any earlier practices or expectations are displaced by the superseding contract’s text.
Discovery strategy: When governing law requires an express written provision, discovery into practices, expectations, or extrinsic understandings will rarely change the outcome. The dispute will rise or fall on the contract’s text.

Conclusion

Sims Agency v. GEICO announces a clear, contract-centric rule for post-termination renewal commissions under Maryland law as applied by the Fifth Circuit: without an express contractual grant, there is no right to renewal commissions after termination. A generic survival clause cannot supply the missing entitlement, and the presence of a “final commission check” mechanism underscores that the parties contemplated finality rather than continuing payments. On the equitable side, unjust enrichment is foreclosed where an express contract covers the subject, and Maryland’s narrow exceptions do not convert a deliberate omission into a compensable “gap.”

The decision offers a straightforward roadmap for future disputes: courts will enforce the written allocation of rights at termination, and agents and carriers must draft with precision. If post-termination renewal commissions are intended, they must be stated explicitly. If not, neither survival clauses nor equitable theories will likely create them after the fact.