Austin v. Independent Life and Acc. Ins. Co.

• Decision Date: 23 May 1988
• Docket Number: No. 1204,1204
• Citation: 370 S.E.2d 918,296 S.C. 156
• Court: South Carolina Court of Appeals
• Parties: Emmaline AUSTIN, Respondent, v. The INDEPENDENT LIFE AND ACCIDENT INSURANCE COMPANY and Murray Harter, Appellants. . Heard

Page 918

370 S.E.2d 918

296 S.C. 156

Emmaline AUSTIN, Respondent, v. The INDEPENDENT LIFE AND ACCIDENT INSURANCE COMPANY and Murray Harter, Appellants.

No. 1204.

Court of Appeals of South Carolina.

Heard May 23, 1988.

Decided Aug. 1, 1988.

George E. Lewis, and Elbert S. Dorn, both of Turner, Padget, Graham & Laney, Columbia, for appellants.

Gary W. Popwell, Jr., of Lee, Eadon & Isgett, Columbia, for respondent.

CURETON, Judge:

This case involves a suit for fraud and conversion by an insured against her insurer. The insured, Emmaline Austin, obtained two insurance policies from the insurer, Independent Life and Accident Insurance Company. She alleges the agent for the company, Murray Harter, misrepresented the nature of one of the policies and also misrepresented her age on both policy applications. The jury returned a verdict in Austin's favor on both causes of action. On the cause of action for fraud, the jury awarded One Dollar ($1.00) in actual damages and One Hundred Thousand Dollars ($100,000) punitive damages. On the conversion claim, the jury awarded One Thousand One Hundred and Ninety-Two Dollars ($1,192) actual damages and One Hundred Thousand Dollars ($100,000) punitive damages. The trial judge granted a motion for a new trial nisi on the fraud claim unless Austin agreed to remit Fifty Thousand Dollars ($50,000) on the punitive damages award. This sum was remitted by Austin. The insurance company appeals. We affirm the trial court on the fraud claim and reverse on the conversion claim.

I.

Independent appeals from the denial of its motions for directed verdict and judgment notwithstanding the verdict on the fraud and conversion claims. In deciding these motions the trial judge does not weigh the evidence or determine the credibility of witnesses. Rather, the trial judge considers the evidence and all its reasonable inferences in the light most favorable to the nonmoving party and should deny the motions if the evidence yields more than one reasonable inference. Mali v. Odom, 295 S.C. 78, 367 S.E.2d 166 (Ct.App.1988). Our review is limited to determining if there is any evidence to support the verdict of the jury. Woods v. Rabon, --- S.C. ---, 368 S.E.2d 471 (Ct.App.1988).

Viewing the evidence in the light most favorable to Austin, the record indicates she is an elderly woman with no formal education and no business experience. It was admitted she is unable to read and write. Ms. Austin obtained an insurance policy from Independent Life during 1970. She paid the small premium for this policy directly to the insurance agent when he came by to collect on a regular basis. On one such occasion in 1981, the agent, Murray Harter, inquired if she would be interested in more life insurance. Mr. Harter filled out the application form for Ms. Austin and she signed it by making her mark. The application indicated her age at her last birthday was fifty-two (52). Ms. Austin testified Harter did not ask her age and if he had she would have shown him her "birth certificate" which was a Bureau of the Census Report indicating she was five years old when the census was taken in 1910. There is evidence in the record the application for the policy written in 1970 gave her age at next birthday as fifty-three (53). There is also evidence in the record from which a jury could reasonably infer the premium booklets listed the insured's age although Harter could not remember if the booklet for the 1970 policy contained this information. The 1981 and 1983 premium booklets did have Ms. Austin's age noted. Ms. Austin paid weekly premiums of Two Dollars and Fifty-Two Cents ($2.52) on the 1981 policy from June 15, 1981 through July 28, 1986. The 1981 life insurance policy carried benefits of One Thousand Five Hundred Dollars ($1,500), but the policy stated that if the insured's age was misstated the benefits would be those which could be purchased for the premium at the insured's correct age. Additionally, Mr. Harter testified that legally the policy could not have been written on Ms. Austin if she was over seventy years of age. The record shows she was seventy-six in 1981.

Ms. Austin obtained another policy from Harter and Independent Life in 1983. Again, viewing the evidence in the light most favorable to Austin, the record indicates the application was completed by Mr. Harter. At that time her age was indicated as fifty-three (53). The policy was an accident policy with coverage limits of Three Thousand Dollars ($3,000). The text of the policy indicates it will terminate at age sixty-five (65). Ms. Austin testified she was led to believe she was purchasing another life insurance policy and would not have purchased an accident policy. Her monthly premium was Six Dollars ($6.00) which she paid from October 1983, through April 1986. The policy states that if an incorrect age is given the company will be liable for no more than the return of premiums.

Sometime during 1986 Ms. Austin's daughter had occasion to examine her mother's insurance policies. At that time she discovered the problem with the statements of her mother's age. She testified she went to the office of Independent Life and told Floyd Bruton, the district sales manager, about the problem. He asked for proof of her mother's age and she testified she took the census report to him. He indicated he would get in touch with the home office. The record is confusing as to exactly what request was made about the policies. The daughter indicated at one point in the record she did not ask Mr. Bruton to cancel the policies. She testified she did not ask him to change the policies.

Mr. Bruton testified Ms. Austin's daughter asked to get her mother's money back and the company offered a refund of the premiums which was not accepted because counsel had been retained. Ms. Austin testified no one from the company ever told her they would refund her premiums. She did testify a man from the company came by her house shortly after she got out of the hospital in June 1986 and told her the company had dropped her life insurance and offered her One Dollar ($1.00) if she would sign a paper which she refused to sign. No claim was made under the policies.

II.

In its exceptions Independent asserts error by the trial court in denying its trial motions on the fraud claim because there was no evidence Ms. Austin had a right to rely upon the representations of the company and there was no evidence of damage to her. These are the only two elements of fraud challenged by Independent. Independent specifically does not contend there were no misrepresentations made by it. Independent also asserts Ms. Austin failed to prove fraud by evidence which is clear, cogent, and convincing.

South Carolina Rule of Civil Procedure 50(a) requires a party to state the specific grounds for a directed verdict motion. The record does not indicate Independent moved for directed verdict on the ground there was no evidence of damage to Ms. Austin. Since the issue was not raised at the trial level, this court will not determine an issue presented for the first time on appeal. Potomac Leasing Co. v. Bone, 294 S.C. 494, 366 S.E.2d 26 (Ct.App.1988).

Concerning the element of reliance, the district sales manager of Independent testified an applicant for insurance would have a right to rely upon the statements of an agent if the agent is trying to sell insurance to the person and knows the individual cannot read or write. Independent argues Ms. Austin had the policies in her possession and had a duty to read them or have them read to her. A person cannot complain of fraud and misrepresentation in the contents of a document if the truth can be ascertained by reading it; however, this rule is subject to the exception that failure to read may be excused if the party is ignorant and unwary. Burwell v. South Carolina National Bank, 288 S.C. 34, 340 S.E.2d 786 (1986). To determine if a person may be classified as ignorant and unwary the factors of the individual's education, business experience, and intelligence are all considered. Burwell, 288 S.C. at 40, 340 S.E.2d at 790. Ms. Austin worked as a sharecropper. She had no formal education. Mr. Harter, the agent of Independent, knew she could not read or write. Under these facts, there was evidence from which a jury could find Ms. Austin had a right to rely upon the representations of Mr. Harter. See Thomas v. American Workmen, 197 S.C. 178, 182, 14 S.E.2d 886, 887 (1941) ("[A] wrongdoer cannot shield himself from liability by asking the law to condemn the credulity of the ignorant and unwary.")

Independent also asserts Ms. Austin failed to prove fraud by the standard of clear, cogent, and convincing evidence. There are no exceptions to the jury charge. We assume the trial judge correctly instructed the jury about the burden of proof and the jury followed the court's instructions. It is not the function of this court to weigh the evidence in a law case, but rather to determine if there is any evidence to support a jury verdict. Townes Associates Ltd. v. City of Greenville, 266 S.C. 81, 221 S.E.2d 773 (1976). We have considered the exceptions raised by Independent on the fraud claim and find there is evidence to support the jury verdict.

III.

Independent assigns error to the failure of the trial court to grant its trial motions on the conversion cause of action. Independent asserts no conversion was demonstrated. We agree.

Conversion is defined as an unauthorized assumption and exercise of ownership over goods or personal chattels belonging to another to the exclusion of the owner's rights. Steele v. Victory Savings Bank, --- S.C. ---, 368 S.E.2d 91 (Ct.App.1988). Ms. Austin had possession of the two...