Blount v. McCurdy, CA

• Decision Date: 09 January 1980
• Docket Number: No. CA,CA
• Citation: Blount v. McCurdy, 267 Ark. 989, 593 S.W.2d 468 (Ark. App. 1980)
• Parties: Robert L. BLOUNT, d/b/a Aire-Way Real Estate Agency, Appellant, v. Janice McCURDY et al., Appellee. 79-168.
• Court: Arkansas Court of Appeals

Page 468

593 S.W.2d 468

267 Ark. 989

Robert L. BLOUNT, d/b/a Aire-Way Real Estate Agency, Appellant, v. Janice McCURDY et al., Appellee.

No. CA 79-168.

Court of Appeals of Arkansas.

Jan. 9, 1980.

Rehearing Denied Feb. 3, 1980.

Released for Publication by Court of Appeals Feb. 13, 1980.

Paul Petty, Searcy, for appellant.

Lightle, Beebe & Raney by J. E. Lightle, Jr., and A. Watson Bell, Searcy, Hoyt Thomas, Heber Springs, for appellee.

PENIX, Judge.

This case was appealed to the Arkansas Supreme Court and by that court assigned to the Arkansas Court of Appeals pursuant to Rule 29(3).

Appellant, Robert L. Blount, d/b/a Aire-way Real Estate Agency, sold certain real property, including a house and its contents, to appellee Janice McCurdy. Blount had previously owned the property and had sold same to Terry and Holly Roberson on a contract of sale. When Blount acted as agent for the Robersons in selling to McCurdy he did not reveal he still had an interest in the property in that Robersons still owed him $1,000 on the sales price. Robersons were not present September 23, 1977, the closing date. The contract had been signed by the Robersons who had moved to Texas. On September 23 McCurdy made a down payment of $1,850 and signed the contract. The contract provided the buyer was to assume sellers' insurance payments. At the closing, Pat Wolters, Blount's agent, handed McCurdy an envelope containing an insurance policy, and stated she thought it was paid up. The term on the policy was from October 21, 1977 to October 21, 1978. The face amount was $8,000 on the house and $3,000 on its contents. In December 1977 Blount received notice in the mail the policy was being cancelled for non-payment of premiums. Blount testified he made an attempt to notify McCurdy by telephoning McCurdy's ex-husband, Doug Merritt. Merritt denied ever having received notice from Blount the policy was being cancelled. Blount testified he sold the property to the Robersons as an individual and not for his real estate firm. He also stated he was given notice of the lapse of the insurance policy because he was the mortgagee, and such notice indicated it had also been mailed to Robersons.

In February, 1978, McCurdy's house burned. She discovered there was no insurance coverage. Because of this fire loss she defaulted on her payments to the Robersons.

McCurdy sued Blount and the Robersons alleging she was damaged in the amount of $8,000 loss of improvements and $3,000 loss of contents, because of her detrimental reliance in respect to insurance coverage and the failure of each of the defendants to notify her of cancellation of the insurance. McCurdy asks that the Robersons be enjoined and restrained from declaring a default in McCurdy's contract of sale and from dispossessing her from the property, in order to avoid irreparable harm and damage to McCurdy. The Robersons filed a counterclaim against McCurdy for non-payment of the installment contract. Also they filed a cross-complaint against Blount alleging damages suffered because of their reliance upon Blount's representations the insurance policy was paid or would be paid by McCurdy.

After hearing all the testimony and weighing all the evidence the trial judge entered a decree awarding judgment for damages to McCurdy and to the Robersons against Blount for the sum of $8,000 reduced by $1,000 still owing Blount from the Robersons under their original contract and an additional sum of $2,000 against Blount in favor of McCurdy for the unscheduled personal property lost in the fire.

I

Blount contends the court erred in permitting parol evidence on behalf of McCurdy to modify the essential terms of a written contract. The terms being ". . . and buyer agrees to assume seller's insurance payments from date as above written and be responsible for the property as of same date." The dates on the policy were "from October 21, 1977 to October 21, 1978."

It is well recognized parol evidence cannot be introduced to change or alter a contract in writing. However, our Supreme Court has stated many times oral testimony is competent when ambiguity and uncertainty exist in the contract for the purpose of resolving confusion. Kyser v. T. M. Bragg & Sons, 228 Ark. 578, 309 S.W.2d 198 (1958). The testimony may relate to the circumstances attendant to the execution of the written contract, the relationship of the parties, and evidence of conversations. Jefferson Square Inc. v. Hart Shoes Inc., 239 Ark. 129, 388 S.W.2d 902 (1965); Peevy v. Bell, 255 Ark. 663, 501 S.W.2d 767 (1973); Kerby v. Field, 183 Ark. 714, 38 S.W.2d 308 (1931).

The contract is silent on the matter of at what period of time the buyer's obligation to make insurance payment began was it October 21, 1977 or October 21, 1978? McCurdy's testimony reveals she understood perfectly she was to assume the insurance payments but she also understood the payments would not begin until the policy dated October 21, 1977 through October 21, 1978 expired. Exactly when she was to begin the insurance payments is not covered in the contract. The parol evidence rule was not violated because any testimony related to when she was to begin payments is obviously concerned with a collateral, independent fact, or with an ambiguity about which the contract is uncertain. The testimony concerning the obligation to assume sellers' insurance premiums clause of the contract was not introduced to vary or contradict the written document but was concerned with matters not embraced within the language of the covenant and to explain uncertainties in the document. Lane v. Pfeifer, 264 Ark. 162, 568 S.W.2d 212 (1978).

Initially Blount's agent misled McCurdy into believing the insurance was paid up until October 1978. McCurdy relied upon Blount's agent's statement the insurance was paid up. This reliance was certainly to her detriment. The rule of detrimental reliance applies not only to brokers but to laymen, and all members of society who deal in commercial transactions with their fellowman. When it was discovered it was not paid past October 1977 no attempt was made to be certain McCurdy knew such fact.

McCurdy was entitled to rely upon the representation the insurance was in force until October 21, 1978 and the premiums had been paid for such period. McCurdy and the Robersons are entitled to the amount of their loss that would have been paid under the policy...