Grohusky v. Atlas Assur. Co.

• Decision Date: 11 December 1965
• Docket Number: No. 44227,44227
• Citation: 408 P.2d 697,195 Kan. 626
• Parties: James E. GROHUSKY, Appellee-Cross-Appellant, v. ATLAS ASSURANCE COMPANY, Ltd., Appellant-Cross-Appellee.
• Court: Kansas Supreme Court

Page 697

408 P.2d 697

195 Kan. 626

James E. GROHUSKY, Appellee-Cross-Appellant, v. ATLAS ASSURANCE COMPANY, Ltd., Appellant-Cross-Appellee.

No. 44227.

Supreme Court of Kansas.

Dec. 11, 1965.

Syllabus by the Court

The record in an action to recover damages for the tortious breach of a fire insurance contract is examined, and, as fully set forth in the opinion, it is held: The district court did not err in approving the jury's verdict awarding the plaintiff actual and punitive damages; in overruling the defendant insurance company's motion for a new trial, or in denying an allowance of attorney fees to plaintiff's attorney under K.S.A. 40-256 and 40-908.

Everett Fritz, Kansas City, argued the cause and was on the briefs for appellant.

J. W. Mahoney, Kansas City, argued the cause, and David W. Carson and John K. Dear, Kansas City, were with him on the briefs for appellee-cross-appellant.

FATZER, Justice.

This was an action to recover damages for the tortious breach of a fire insurance contract issued by the Atlas Assurance Company, Ltd., of Chicago, Illinois. The jury returned a verdict in favor of the plaintiff in the amount of $2,217.04 actual damages, and awarded him punitive damages in the sum of $1,000.00.

The facts are briefly summarized: Plaintiff had a fire loss on September 27, 1961, damaging the contents of his dwelling. He reported the loss to Atlas which employed Don E. McCosh, an adjuster with Underwriters Adjustment Company, as its agent to adjust the claim. McCosh's investigation disclosed plaintiff's property was coinsured under a homeowners' policy issued by the Republic Insurance Company of Dallas, Texas. Republic employed McCosh as its agent, so McCosh represented both insurers in the matter.

McCosh consulted with the plaintiff about repairs and replacements and they agreed that the amount of the loss was $877.59. McCosh prepared and submitted for plaintiff's signature, a proof of loss statement for each insurer. Atlas' proof of loss showed the total loss as $877.59, and its portional share as $217.04. On November 2, 1961, the executed documents were forwarded to the home office of the respective insurance companies. Atlas examined the proof of loss in Chicago, circled the amount $217.04 appearing thereon, wrote 'pay assured' upon the face of the proof of loss, and issued a check on November 6, 1961, for $217.04 in payment of the claim. The check was forwarded to Atlas' agent in Kansas City who delivered it to the plaintiff.

The plaintiff received payment for his loss from each insurer. McCosh urged him to immediately deposit both checks and pay the materialmen and repairmen. He endorsed the checks and deposited them in a joint checking account at the Riverview State Bank, upon which his wife was authorized to draw checks. Mrs. Grohusky drew checks on the joint account to pay materialmen and repairmen and other current obligations.

Meanwhile, Atlas discovered what it thought was an error in apportioning the loss between it and Republic. It notified Edward Switz, its state agent in Kansas City, of the claimed error, who in turn telephoned McCosh. During the ensuing conversation, McCosh was advised that Atlas was stopping payment on the $217.04 check it had issued and delivered to the plaintiff. McCosh requested that Atlas not stop payment on the check and suggested since the error involved only a question concerning apportionment, that Atlas should contact Republic and negotiate a settlement. Switz's answer was in the negative. On November 14, 1961, McCosh telephoned plaintiff advising him of Atlas' intention to stop payment on the check but assured him that the difficulty was a matter between the insurance companies and everything would be all right. The conversation was confirmed by letter on November 16, 1961, which also contained a corrected proof of loss showing Atlas' portional share as $121.85. Plaintiff refused to accept the second proof of loss.

Atlas' order stopping payment on the check caused the plaintiff's personal checks to 'bounce.' The Reverview State Bank rejected them for insufficient funds. The plaintiff was harassed by creditors who sought to recover the value of their dishonored checks. After discussing the matter with the bank, the plaintiff visited with John Lillig, Atlas' local agent from whom he had purchased the fire insurance policy. The plaintiff enumerated the events that transpired by testifying:

'* * * I asked John, 'What's going on?' I says, 'I have got these checks bouncing.' I says, 'Why did they stop payment on this check?' and he said, 'I don't understand it,' and he got on the phone and immediately called somebody and they told him that everything would be all right, to just go ahead and tell them people to send their checks back through; and John said, 'Don't worry about it, just go on home, they will okay this check.' * * *'

Atlas was well aware of plaintiff's domestic and financial affairs. It knew he was married; that he had four minor children; that he worked for the City Health Department during the day and had to supplement his income as an automobile salesman at night and on weekends; that he lived from one paycheck to the next, and that his checking account was joint. Atlas' continual refusal to honor its check compelled the plaintiff, in order to protect his credit, to make personal loans from friends with which to reimburse the holders of his dishonored personal checks.

The trial consumed three days and the issues were vigorously contested. At the conclusion of the defendant's evidence, the case was submitted to the jury which returned its verdict for the plaintiff, and Atlas has appealed.

Atlas first contends the district court erred by admitting in evidence checks drawn by Mary H. Grohusky, the plaintiff's wife, on the joint bank account. It argues that checks are not legally binding upon a plaintiff regardless of the surrounding circumstances unless he actually wrote them. We do not agree. The checks were dishonored because of insufficient funds rather than because of an unauthorized signature. Moreover, there was no evidence that the plaintiff failed to authorize or refused to ratify Mrs. Grohusky's acts.

We agree that neither husband nor wife has the power to act as the other's agent merely by virtue of the marital relation, however, an agency on the part of the wife to draw checks may be created by a deposit of money of the husband in a bank to the account of himself and his wife. (41 C.J.S. Husband and Wife § 65c, p. 539.) In Wilson v. Haun, 97 Kan. 445, 155 P. 798, it was held:

'To establish the relation of agency, an express appointment and an acceptance thereof is not essential, but it may be implied from other facts such as the statements of the parties, their conduct, and the relevant circumstances.' (Syl. p1.)

see, also, Fritchen v. Mueller, 132 Kan. 491, 297 P. 409; State Exchange Bank v. Naylor, 144 Kan. 703, 62 P.2d 887; Greep v. Bruns, 160 Kan. 48, 159 P.2d 803, and Stevens v. Stag Drilling, Inc., 173 Kan. 770, 252 P.2d 616. Under the facts and circumstances disclosed by the record, we think the district court did not err in admitting in evidence the checks written by Mrs. Grohusky on the joint bank account.

Atlas next contests the propriety of the district court's admission of plaintiff's testimony relating to statements made by McCosh, contending the statements were hearsay evidence. We have searched the record and find no objection by Atlas to the evidence or statements it claims were erroneously admitted into evidence, and we are compelled to be guided by K.S.A. 60-404 in disposing of the contention. This rule establishes a must requirement for trial court practice and requires a timely and clear objection to the admission of evidence. The rule simply restates the practice prevailing prior to the adoption of the section requiring specific and timely objections and the ignoring of harmless admission of evidence. (4, Vernon's Kansas Statutes Annotated, Code of Civil Procedure, pp. 191, 193, 194; Gard, Kansas Code of Civil Procedure, Sec. 404, p. 367.)

Atlas next contends the district court erred in permitting Achilles V. Wheat to testify as an expert witness as to ordinary practices and procedures of the insurance business, claiming that Wheat was not an expert in the general meaning of the term. We do not agree. K.S.A. 60-456(b) and (c) provide:

'If the witness is testifying as an expert, testimony of the witness in the form of opinions or inferences is limited to such opinions as the judge finds are (1) based on facts or data perceived by or personally known or made known to the witness at the hearing and (2) within the scope of the special knowledge, skill, experience or training possessed by the witness.

'Unless the judge excludes the testimony he shall be deemed to have made the finding requisite to its admission.'

The uncontroverted evidence reveals that Wheat had 17 years experience in the insurance business. During that period, he became familiar with various insurance policies and adjusting procedures. In the course of his duties, he appointed adjusters to dispose of insurance claims and worked with them to solve the various problems that arose. He testified, 'we do inject ourselves into loss adjustment situations.'

Atlas complains that Wheat was not qualified because he had little or no formal training. A witness, in order to be competent as an expert, must show himself to be skilled or experienced in the business or profession to which the subject relates. There are no precise requirements as to the mode in which skill or experience shall have been acquired. Scientific study and training is not always essential to qualify a witness as an expert. A witness may be competent to testify as an expert although his knowledge was acquired through the medium of practical experience rather than by scientific study and research. (20 Am.Jur., Evidence, Sec. 784, pp. 657, 658.) Fundamentally,...