Brooks v. Club Exchange Corp.

• Decision Date: 17 April 1962
• Docket Number: No. 31039,31039
• Citation: 356 S.W.2d 555
• Parties: George H. BROOKS, Individually and on behalf of all others similarly situated, (Plaintiff) Appellant, v. The CLUB EXCHANGE CORPORATION, a Corporation, (Defendant) Respondent.
• Court: Missouri Court of Appeals

Page 555

356 S.W.2d 555

George H. BROOKS, Individually and on behalf of all others

similarly situated, (Plaintiff) Appellant, v. The CLUB EXCHANGE CORPORATION, a Corporation, (Defendant) Respondent.

No. 31039.

St. Louis Court of Appeals, Missouri.

April 17, 1962.

Motion for Rehearing or for Transfer to Supreme Court Denied

May 15, 1962.

Goldenhersh & Goldenhersh, Samuel J. Goldenhersh, Frank J. Lane, Jr., Dubinsky & Duggan and Jerome Duggan, St. Louis, for appellant.

Douglas B. Remmers, Robert D. Evans, Green, Hennings, Henry, Evans & Arnold, St. Louis, for respondent.

SAMUEL A. DEW, Special Commissioner.

Plaintiff sued to cancel the appointment of defendant as attorney-in-fact for plaintiff and others, subscribers and policyholders in a reciprocal insurance group. From an order of the trial court sustaining a motion to dismiss the action, the plaintiff has appealed.

The plaintiff, in his petition, alleges that he is bringing this action for himself and others in a similar situation; that he is a subscriber and a policyholder in the Automobile Club Inter-Insurance Exchange (hereinafter referred to as Inter-Insurance Exchange), a voluntary reciprocal insurance group; that he and others similarly situated designated the defendant corporation as their attorney-in-fact, thereby creating a trust relationship between them and defendant and that in such fiduciary capacity, defendant has enriched itself at the expense of plaintiff and such other subscribers and Inter-Insurance Exchange, for which unjust enrichment plaintiff asks for an accounting from defendant.

The petition alleges that presently the plaintiff is being sued for damages and that Inter-Insurance Exchange has undertaken the defense. It is stated that the present action is brought in behalf of Inter-Insurance Exchange; that it would be futile to request that group to bring this action since it is managed and directed by an Advisory Board or defendant, although requested; ant; that information and relief pertaining to plaintiff's complaints made herein have not been forthcoming from the Advisory Board appointed and supplied by defendant; that defendant has had an income from Inter-Insurance Exchange over the past five years of approximately $7,800,000 through the acquiescence of the Advisory Board; that said Board is dominated and controlled by the defendant, whereby defendant has been permitted to appropriate for its own use some $7,800,000 over the past five years from the assets of the plaintiff, the other such subscribers and the Inter-Insurance Exchange, in breach of said fiduciary relationship of the defendant; that the Advisory Board, during the last five years, lost for the plaintiff and such other subscribers and the Inter-Insurance Exchange, by investments, the sum of $187,000, as to which defendant has taken no action for recovery of same; that during said period the Reserve and Surplus Fund of Inter-Insurance Exchange has been depleted by $800,000 and defendant, in violation of its fiduciary relationship aforesaid, has taken no steps to recover same. Plaintiff also alleged that defendant and said Advisory Board are proposing a purchase of the common stock of the defendant by Inter-Insurance Exchange, at the unconscionable price of $72 per share, which purchase would work an irreparable harm to plaintiff, to the other subscribers and to Inter-Insurance Exchange; that during the last five years there has been vast depletion of surplus funds, and dividends have been paid out of prior accumulated surpluses; that such misconduct on the part of defendant will expose plaintiff and other subscribers to a contingent assessment; that the agreement appointing defendant as attorney-in-fact provides that the plaintiff can cancel the same upon notice; that the Advisory Board and Inter-Insurance Exchange should cancel said agreement appointing defendant as said attorney-in-fact, and so long as they show no interest in doing so, the plaintiff and other subscribers will suffer irreparable harm.

The petition further states that plaintiff and the other subscribers similarly situated are at the whim and caprice of defendant; that the assets of Inter-Insurance...