Budget Premium Co. v. Motor Ways, Inc.
| Decision Date | 22 October 1986 |
| Docket Number | No. 85-1220,85-1220 |
| Citation | 400 N.W.2d 60 |
| Parties | BUDGET PREMIUM COMPANY, Plaintiff-Appellant, v. MOTOR WAYS, INC., Defendant-Appellee. |
| Court | Iowa Court of Appeals |
Harold C. Lounsberry, Davenport, for plaintiff-appellant.
Carlton G. Salmons of Austin & Gaudineer, Des Moines, for defendant-appellee.
Heard by DONIELSON, P.J., and SCHLEGEL and HAYDEN, JJ.
This appeal involves a dispute over the refund of an insurance premium. In April of 1977 the insured, Robert W. Fritz of Fritz and Sons Trucking, entered into a "Premium Financing Contract" with plaintiff. Bruce E. Hawkins of Walkup-Huhn Insurance was the issuing agent. Through this agreement Fritz and Sons Trucking borrowed money from plaintiff to purchase an insurance policy to cover its trucking business. The agreement gave plaintiff the right to cancel the policy and receive the unearned premiums from the insurer if Fritz failed to make a payment to plaintiff. The insurance policy was issued by Great West Casualty Company through their regional office, defendant Motor Ways, Inc. Hawkins of Walkup-Huhn was also the issuing agent of this agreement.
In November of 1977, Fritz and Sons, as the insured, failed to make a payment and plaintiff cancelled the policy through Walkup-Huhn. As a result of the cancellation defendant, Motor Ways, Inc., issued a check on December 1, 1977, in the amount of $5,442.50 to the agency, Walkup-Huhn, for the unearned premiums. This check was endorsed and cashed by Cedar Rapids Insurance Agency, an apparent successor corporation to Walkup. Neither the insured nor the plaintiff received the refund.
On September 26, 1982, plaintiff filed suit alleging defendant was liable to plaintiff for the unearned refund premium. The trial court entered a summary judgment for plaintiff and defendant appealed. In a decision filed April 24, 1984, this court reversed and remanded, holding that summary judgment was inappropriate because genuine issues of material fact existed. Specifically, our court found the issues of whether Walkup-Huhn was Fritz's agent for purpose of receiving the unearned premium refund and whether Motor Ways received notice of the contract between Fritz and Budget, were issues of fact requiring trial. Plaintiff's application for further review was denied.
On remand, the trial court granted defendant's motion to amend its answer to add two affirmative defenses: (1) no actual notice of the premium financing contract between the insured and the plaintiff had been received, and (2) the check issued to Walkup-Huhn and endorsed by Cedar Rapids Insurance Agency constituted payment to Fritz and Sons. The trial court found that plaintiff failed to carry its burden in establishing that a copy of the premium financing contract in issue was, in fact, received by the defendant, Motor-Ways, Inc. The trial court also found that the independent insurance agency, Walkup-Huhn, was the insured's agent for the purpose of receiving the unearned premiums. Consequently, the court dismissed plaintiff's petition and later denied plaintiff's motion for new trial. The trial court held that defendant's jurisdictional objection, that plaintiff was a foreign corporation transacting unauthorized business in the State of Iowa, was without merit.
On appeal, plaintiff contends the trial court erred: (1) in finding that an independent insurance agency was the agent of the insured for the purpose of receiving the unearned insurance premiums and in finding that a second insurance agency was the successor of the first; (2) in holding that the court of appeals had correctly limited to two the number of factual issues in the case; (3) in holding that plaintiff failed to prove itself an "account debtor" or entitled to return premiums under an assignment theory because it allegedly failed to carry its burden regarding notice; and (4) in requiring plaintiff to establish that a copy of the premium financing contract was in fact received by the defendant. Defendant asserts that even if reversal is required on other grounds, it is still entitled to affirmance of the trial court's ruling since plaintiff allegedly had no authority to do business in the State of Iowa. Plaintiff contends defendant waived this argument by failing to cross-appeal from the trial court's ruling that defendant's jurisdictional objection was without merit.
Initially we address the issue of whether plaintiff had authority to maintain an action in this state. Budget as a corporation had procured no license or permit to do business in this state and had not registered with the Secretary of State as a foreign corporation. Iowa Code section 496A.120 (1983) provides in pertinent part:
No foreign corporation transacting business in this state without a certificate of authority shall be permitted to maintain any action, suit or proceeding in any court of this state, until such corporation shall have obtained a certificate of authority....
This section is qualified by Iowa Code section 496A.103 (1983). See American Title Insurance Co. v. Stoller Fisheries, Inc., 227 N.W.2d 481, 484 (Iowa 1975). See also Hitachi Sales Corp. v. Commercial Trust and Savings Bank of Storm Lake, 342 N.W.2d 889, 892 (Iowa Ct.App.1983) (). Sections 496A.103(2)(e) and (f) provide:
2. Without excluding other activities which may not constitute transacting business in this state, a foreign corporation or nonadmitted organization shall not be considered to be transacting business in this state, for the purposes of this chapter, by reason of carrying on in this state any one or more of the following activities:
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e. Effecting sales through independent contractors.
f. Soliciting or procuring orders, whether by mail or through employees or agents or otherwise, where such orders require acceptance without this state before becoming binding contracts.
The trial court found that Budget was dealing with Walkup-Huhn as an "independent contractor" in accordance with section 496A.103(2)(e) and Budget accepted the contract "without this state" in compliance with 496A.103(2)(f). On appeal plaintiff questions both of these findings.
Here Hawkins of Walkup-Huhn completed the financing form for Budget. The form was then sent to Budget's Rock Island, Illinois, office where the contract was processed and the check was issued to the insurance agent, Walkup-Huhn. Any approval or acceptance of the contract was manifested by the plaintiff's acts of processing the contract and issuing the check. We conclude that plaintiff procured orders through employees or agents or otherwise, and these orders required acceptance outside of this state. We do not, at this point, make any finding regarding the parties' relationship.
The trial court was correct in finding plaintiff not to be transacting business in Iowa, as set out in section 496A.103(2)(f), and therefore not barred from maintaining a suit pursuant to section 496A.120. See House of Stainless v. Marshall and Ilsley Bank, 75 Wis.2d 264, 268, 249 N.W.2d 561, 563 (1977) ().
Another preliminary issue is whether the trial court erred in holding that this court had limited to two the number of factual issues in the case. This contention is more correctly defined as a "law of the case" issue.
The decision of an appellate court upon a prior appeal becomes the law of the case and is to govern upon a subsequent trial thereof in the district court and upon another appeal unless the facts before the court upon the subsequent trial are materially different from those of the prior trial. Sauer v. Scott, 238 N.W.2d 339, 342 (Iowa 1976); Schroedl v. McTague, 169 N.W.2d 860, 863 (Iowa 1969). This role has two aspects: it applies to proceedings in the trial court after the case is remanded; and it applies to subsequent proceedings in the reviewing courts. Annotation, Law of the Case: Single Suit Preclusion, 87 A.L.R.2d 271, 275 (1963).
Plaintiff contends that the trial court erred in construing this court's earlier order as narrowing the controversy to only two issues. We note that questions involving the sufficiency of evidence to withstand a motion for summary judgment presents an issue of law. Wolfe v. Graether, 389 N.W.2d 643, 651 (Iowa 1986). Therefore, our earlier decision regarding the motion for summary judgment is the law of the case.
But what did our earlier opinion decide? We specifically mentioned two issues: (1) whether Walkup-Huhn was Fritz's agent, and (2) whether Motor-Ways received notice of the contract between Fritz and Budget. But this was not meant to limit the trial court's determinations. Our ultimate conclusion, or law of the case, was that genuine issues of material fact existed in this case, two of which were set forth.
Although the trial court followed the structural analysis proposed by our opinion, we find that the district court did not consider itself strictly bound by the opinion, as a limitation on its decision making authority. Further, we find the trial court's decision is supported by substantial evidence and justified as a matter of law. Therefore, any theoretical harm that may have occurred was actually harmless. Finally, we note that the parties in their pretrial conference order, filed April 12, 1982, agreed these two issues were to be presented to the district court.
Plaintiff contends the trial court erred in finding Walkup-Huhn was the agent of Fritz and Sons Trucking for the purpose of receiving the premium refund and in finding that Cedar Rapids Insurance Agency was its successor.
Our review of the trial court is limited to errors of law. Iowa R.App.P. 4. Therefore, this case is reviewed as tried in the court below. Mosebach v. Blythe, 282 N.W.2d 755, 758 (Iowa 1979). If supported by substantial evidence and justified as a matter of law, the judgment will not be disturbed on appeal. Atlantic Veneer Corp. v. Sears, 232...
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