Automobile Underwriters, Inc. v. Smith

• Decision Date: 12 April 1960
• Docket Number: No. 19030,No. 1,19030,1
• Citation: 166 N.E.2d 341,131 Ind.App. 454
• Parties: AUTOMOBILE UNDERWRITERS, INCORPORATED, Appellant, v. Amanda SMITH, Appellee
• Court: Indiana Appellate Court

Page 341

166 N.E.2d 341

131 Ind.App. 454

AUTOMOBILE UNDERWRITERS, INCORPORATED, Appellant, v. Amanda SMITH, Appellee.

No. 19030.

Appellate Court of Indiana, Division No. 1.

April 12, 1960.

Rehearing Dismissed June 9, 1960.

See 167 N.E.2d 882. Steers, Klee, Jay & Sullivan, Indianapolis, for appellant.

Clair McTurnan, Lawrence H. Hinds, Indianapolis, for appellee.

AX, Judge.

This is the second appeal to this Court in an action to recover damages for alleged fraud in obtaining release of an alleged cause of action for personal injuries. The case was here before [Automobile Underwriters, Inc. v. Smith, 1956, 126 Ind.App. 332, 133 N.E.2d 72] on the same complaint, demurrer, answers, and the same motions to withdraw causes and the same motions for directed verdict as before. The trial Court's rulings were against the demurrers and motions in each trial.

On July 23, 1945, appellee was riding in a motor vehicle operated by her husband, driving easterly on a county highway known as Normandy Pike, a county highway near Tipton, Indiana, which highway intersected with another county road designated as Mary Hamm Road.

A truck owned by Fear Campbell Poultry Company, then being operated by one of its employees, was proceeding southerly on the Mary Hamm Road approaching the intersection with Normandy Pike. The two vehicles collided at the intersection wherein the appellee alleged to have sustained personal injuries. The Fear Campbell Poultry Company was insured with the State Automobile Insurance Association for whom the appellant herein is the attorney in fact. The Association had a policy which was in full force and effect on the date of accident.

On September 26, 1945, an adjuster for the appellant called at appellee's home and settled with the appellee and her husband, Lawrence E. Smith, for their respective damages, both personal and property. The appellant executed and delivered its draft in the sum of Four Hundred ($400.00) Dollars to the appellee and her husband in full settlement therefor, which draft was not cashed until October 19, 1945.

Almost six years after the occurrence of the accident, appellee filed her action for damages by reason of alleged fraud and deceit made by the insurance adjuster in securing the release executed by appellee and her husband for Four Hundred ($400.00) Dollars. The complaint alleged that the appellant company, by its agent, was intent upon depriving the appellee of a valid and just claim and made representation of fact and knowledge which the defendant at that time knew to be false and untrue in that the appellant had experience in matters such as this; that the agent informed appellee that her recovery was in the process of being complete; that appellant's agent was skilled in the law and prepared for plaintiff's own good to render her legal advice and that under a similar situation any lawyer would advise her the same as he would; that she did not need a lawyer; that the appellee would not be entitled to compensation for her injuries because appellee had an accident insurance policy covering doctor bills, etc.; that appellee herself was not entitled to anything from appellant or the said Fear Campbell Company by reason of said collision; that appellee could safely rely upon such statements.

Trial was had by jury resulting in a verdict favoring appellee in the sum of Five Thousand ($5,000.00) Dollars.

The prior appeal to this court resulted in a reversal of the trial court and the cause was remanded for a new trial. A new trial again resulted in a verdict in favor of appellee in the sum of Seven Thousand Five Hundred ($7,500.00) Dollars, and the appellant filed a Motion for New Trial, which motion was overruled, and this appeal followed.

On appeal to this court appellant assigns as errors the overruling of appellant's demurrer to appellee's complaint, and the overruling of appellant's motion for new trial. Under this second assignment of error sixty-five separate errors, or causes, are set out.

The appellant's first assignment of error was the overruling of the demurrer to the complaint on the grounds that the facts alleged failed to state a cause of action. If there be error in overruling a demurrer and that error is harmless as not to prejudice the adverse party, there is no necessity to review the question on appeal. Lane v. Gugsell, 1943, 113 Ind.App. 676, 47 N.E.2d 835. But where a complaint is clearly defective, and a demurrer is entered thereto, the whole of the record must be examined to determine if the cause was fairly tried and determined in the court below. McTurnan v. Dailey, 1938, 214 Ind. 159, 14 N.E.2d 913. It follows therefore that the question of whether or not there appears in the complaint a substantial defect which would act to the prejudice of appellant must be answered.

The rule in Indiana on construing a pleading in the face of a demurrer is to give that pleading a liberal construction in favor of the pleader. Lincoln Operating Co. v. Gillis, 1953, 232 Ind. 551, 558, 114 N.E.2d 873. In this light the various essential allegations of the complaint will now be considered.

The complaint alleges that appellant sustained injuries due to the negligent operation of a truck driven by the appellant's assured and that she would have had a valid claim against the assured. This is a necessary allegation. Automobile Underwriters, Inc. v. Rich, 1944, 222 Ind. 384, 53 N.E.2d 775. The allegations continue by making the claim that appellant's agent made false and untrue representations with knowledge of such falsity to the appellee concerning her injuries and her right to recover damages therefor. It was further alleged that appellant's agent represented to appellee that he was experienced in such matters and that appellee had no need of consulting a lawyer. Finally, the allegations set forth the charge that through such false representations the agent thereby induced the appellee to sign a settlement paper and that such inducement was for the willful purpose of depriving said appellee of her just claim.

The appellant's basic argument rests upon the case of Automobile Underwriters, Inc. v. Rich, supra, which was originally decided by the Supreme Court in 1944, and subsequently brought to this court, which in essence reaffirmed the original holding of the Supreme Court. Automobile Underwriters, Inc. v. Rich, 1946, 116 Ind.App. 511, 64 N.E.2d 305. This case, however, is clearly distinguishable in that the cause was not taken out in either decision of that case upon demurrer. In both appeals both the Supreme Court and this Court held that the evidence was not sufficient to sustain the verdict. In neither was the overruling of the demurrer held error. In fact, the Supreme Court held that the overruling of the demurrer was not error.

The elements necessary to state a cause of action for fraud are representations of material facts and reliance thereon, falsity, scienter, deception and injury. Rochester Bridge Co. v. McNeill, 1919, 188 Ind. 432, 122 N.E. 662; Baker v. Meenach, 1949, 119 Ind.App. 154, 84 N.E.2d 719; Holder v. Smith, 1952, 122 Ind.App. 371, 105 N.E.2d 177. The rule applicable in the case at bar corresponds similarly to Hadcock v. Osmer, 1897, 153 N.Y. 604, 608, 47 N.E. 923, as quoted in Rochester Bridge Co. v. McNeill, supra [188 Ind. 432, 122 N.E. 664]:

'Where a party represents a material fact to be true to his personal knowledge, as distinguished from belief or opinion, when he does not know whether it is true or not, and it is actually untrue, he is guilty of falsehood, even if he believes it to be true; and if the statement is thus made with the intention that it shall be acted upon by another, who does so act upon it to his injury, the result is actionable fraud.'

Also, Automobile Underwriters, Inc. v. Rich, supra [116 Ind. App. 511, 53 N.E.2d 778], (1944), reaffirmed the statement made in Rochester Bridge Co. v. McNeill, supra, to the effect that:

'The mere fact that a statement takes the form of an expression of opinion is not always conclusive, for, as the question is now presented, it must be interpreted by the facts and surrounding circumstances shown by the complaint. The rule that actionable fraud cannot be based upon the mere expression of an opinion has been qualified until now, an expression of an opinion may amount to fraud where it is a mere contrivance of fraud, or if the person to whom it was expressed has justly relied on it and has been misled, or when it is coupled with other circumstances.'

The complaint, in the light of the foregoing considerations, therefore, sufficiently includes the necessary allegations and the demurrer was properly overruled.

The appellant's second assignment of error was that the court erred in overruling a motion for a new trial. Under this assignment, as allowed by Supreme Court Rule 2-6, some sixty-five separate errors, or causes, are set out.

The first cause states that paragraph No. 10 of complaint should have been stricken before trial. The same situation presents itself here as it did in the consideration of the demurrer, therefore, for reasons already stated the motion to strike out part of the complaint was properly overruled. The appellant contends that the allegations of paragraph No. 10 of the complaint were mere opinions and should not have been submitted to the jury. Automobile Underwriters, Inc. v. Rich, supra, (1944), so heavily relied upon by appellant, restricted its ruling to the facts and did not state that circumstances could not arise in which similar assertions would amount to actionable fraud.

Cause number two stated that the court erred in overruling the appellant's motion for a directed verdict at conclusion of appellee's evidence. This is of no avail to appellant, because an overruled motion for a directed verdict at the close of the appellee's evidence followed by introduction of appellant's evidence is a waiver to any consideration of the motion. Taylor...