Christensen v. Rice

• Citation: 114 Idaho 929,763 P.2d 302
• Decision Date: 05 October 1988
• Docket Number: No. 17187,17187
• Court: Court of Appeals of Idaho
• Parties: Donald P. CHRISTENSEN dba Don Christensen & Associates, Plaintiff-Respondent, v. Roy RICE & Jane Doe Rice dba Vista Pawn Shop, Defendants-Appellants.

Page 302

763 P.2d 302

114 Idaho 929

Donald P. CHRISTENSEN dba Don Christensen & Associates, Plaintiff-Respondent, v. Roy RICE & Jane Doe Rice dba Vista Pawn Shop, Defendants-Appellants.

No. 17187.

Court of Appeals of Idaho.

Oct. 5, 1988.

Dennis J. Sallaz, Sallaz & Doolittle, Boise, for defendants-appellants.

Peter D. Shearer, Boise, for plaintiff-respondent.

WALTERS, Chief Judge.

Roy and Jane Rice (Rice) appeal from a magistrate's judgment holding them liable for breach of a contract to purchase insurance from Marsh & McLennan of Idaho, Inc. The respondent, Donald P. Christensen of Christensen & Associates (Christensen),) is assignee of that contract. On appeal, the district court affirmed the magistrate's judgment. Appealing further, Rice raises three issues: (1) whether the trial court erred in deciding this case on a theory of "open account," after allowing Christensen to present evidence supporting recovery under that theory, when the complaint alleged only a theory of "account stated;" (2) whether Christensen's business records were inadmissible as evidence of an insurance contract between the parties; and (3) whether the trial judge erroneously disregarded Rice's testimony at trial. We hold that Christensen's complaint was sufficient to apprise Rice of the nature of the claims against him and to permit recovery on more than one theory, that Christensen's business records were properly admitted as exceptions to the hearsay rule, and that the trial court acted within its authority in assessing the credibility of Rice's testimony at trial. We affirm.

In 1984, Roy Rice operated three businesses--Vista Pawn Shop, Rice's Small Engine Repair, and Mercury Publications--all from the same location in Boise. As a result of increases in his insurance premiums, Rice contacted Marsh and McLennan of Idaho, Inc. (M & M) requesting quotes for fire and casualty insurance on the pawn shop business. Rice spoke with Margaret West, a service representative for M & M, regarding rates and coverage. Mrs. West referred Rice's inquiry to one of M & M's insurance underwriters, the Industrial Indemnity Company (Industrial Indemnity). Industrial Indemnity inspected Rice's pawn shop business, and subsequently sent him an insurance binder and copy of its policy. M & M, operating as the underwriter's agent, handled all correspondence between Rice and Industrial Indemnity, including billings.

In October of 1984, thieves stole a compressor and motorcycle from a fenced-in area at Rice's place of business. Rice sent a loss claim to M & M under the Industrial Indemnity policy. Industrial Indemnity sent an insurance adjuster to speak with Rice about his claim. At the same time, Pat Pinkham, an employee of Industrial Indemnity, conducted a loss control survey of Rice's businesses to evaluate what could be done to avoid similar losses in the future. After evaluating the situation, Industrial Indemnity denied the claim. Rice then sent a loss claim to the Maryland Casualty Company (Maryland Casualty), insurers of the Small Engine Repair Shop, who paid him for his loss.

Subsequent to denial of Rice's claim, M & M made various attempts to collect the premium owed on the Industrial Indemnity insurance policy. Mrs. West sent Rice several letters requesting payment, all of which went unanswered. On March 21, 1985, Mrs. West informed Rice by letter that Industrial Indemnity had canceled his policy, and that he owed M & M $1,040 in unpaid premiums for the period the policy was in force. Again, Rice did not respond. M & M then assigned its account to Christensen, who filed this suit for collection.

Following a trial, a magistrate ruled in favor of Christensen, deciding as a matter of fact and law that either an express or implied-in-fact contract existed between the parties, and that Christensen was entitled to an award in the amount of $2,470.39, representing the unpaid insurance premium, interest, and costs. During trial, Christensen relied heavily on the correspondence between Rice and Mrs. West to establish the existence of the contract. In rebuttal, Rice categorically objected to admission of this evidence on hearsay and relevancy grounds, stating that he had never intended to form an insurance contract with M & M. Rice also asserted that Christensen's complaint specifically alleged that an "account stated" existed between the parties, and that Christensen should be denied relief on any other grounds.

I

On this appeal, Rice argues that the magistrate erred by admitting testimony and evidence of an open account or implied-in-fact contract, when the only cause of action pleaded in Christensen's complaint was for an account stated. Rice contends that he never intended to enter into a binding insurance contract with M & M. He claims that he contacted M & M only to obtain a quote for the cost of insurance, and did not agree to purchase the policy. He points out that he never signed an insurance contract, and that while he never rejected M & M's offer of coverage in writing, he made several phone calls to Mrs. West stating he did not want to be insured through their agency. Rice also argues that the loss claim filed with M & M was a mistake made by his business manager, and that the claim forms should have been sent to his current insurer, Maryland Casualty. Further, he asserts that at the time he was visited by Industrial Indemnity's insurance adjuster and Mr. Pinkham, he was unaware of the purpose of their visit, assuming that they had visited him to conduct inspections for insurance quotes only. In summary, Rice argues that because the facts adduced at trial do not prove an account stated, and because Christensen has failed to plead any other cause of action, he is entitled to reversal of the magistrate's judgment.

We disagree. A party's pleadings should be liberally construed to secure a "just, speedy and inexpensive" resolution of the case. I.R.C.P. 1(a); see Deaton v. Leibrock, 114 Idaho 614, 759 P.2d 905 (Ct.App.1988). With the advent of notice pleading, a party is no longer slavishly bound to stating particular theories in its pleadings. Dursteler v. Dursteler, 108 Idaho 230, 697 P.2d 1244 (Ct.App.1985), later proceeding, 112 Idaho 594, 733 P.2d 815 (Ct.App.1987). Rather, a complaint need only state claims upon which relief may be granted. Id.; see generally I.R.C.P. 8(a)(1). However, the liberality of our modern pleading rules is not without its limits. To insure fair adjudication, a plaintiff may be required to refine the issues once litigation has commenced. Dursteler v. Dursteler, supra. For instance, where there is concern about vagueness in the complaint, a motion for a more definite statement may be granted. Deaton v. Leibrock, supra; I.R.C.P. 12(e); see Nelson v. Gish, 103 Idaho 57, 644 P.2d 980 (Ct.App.1982). In cases dealing with actions on accounts, I.R.C.P. 12(e) states that a complaint is sufficient if it summarizes "all transactions on the account." ¹ In addition, where issues not raised by the pleadings are either expressly or impliedly tried, the trial court has discretion to decide those issues and to permit the pleading party to amend its pleadings to conform to the proof offered at trial. I.R.C.P. 15(b); Murr v. Selag Corp., 113 Idaho 773, 747 P.2d 1302 (Ct.App.1987); see also M.K. Transport, Inc. v. Grover, 101 Idaho 345, 612 P.2d 1192 (1980). The trial court has broad discretion in permitting a party to amend its pleadings, and will only be reversed when this discretion has been abused. Smith v. King, 100 Idaho 331, 597 P.2d 217 (1979). However, the trial court is under no obligation to compel the pleading party to amend his or her complaint. The emphasis of the rule is to insure that a "just result" is accomplished, rather than requiring strict adherence to rigid forms of pleading. See Sines v. Blaser, 98 Idaho 435, 439, 566 P.2d 758, 762 (1977).

In the present case, we are satisfied that Christensen's claims were fairly litigated. In reviewing the record, it appears that Christensen's complaint was sufficient to apprise Rice of the nature of the relief he sought. The complaint, in pertinent part, states:

The account assigned is based upon an obligation in the amount of $1,164.80 incurred by the Defendant ... by reason of services rendered ... to Defendant by plaintiff's Assignor, MARSH AND MCCLENNAN....

Plaintiff has made previous demands for payment of this account, as its Assignor had made before Assignment, but the Defendant has entirely failed, neglected, or refused to pay for the same or the balance thereof and an account stated is therefore alleged to exist....

Although the complaint specifically alleges an account stated, taken on the whole the language implies that the basis of the complaint was recovery of an account for services rendered to Rice by M & M. It is apparent that Rice should have realized the complaint was based on his dispute with M & M over the insurance contract.

Further, upon reviewing the transcript at trial, we are convinced that Rice consented to trying the existence of the underlying contract with M & M. Although Rice denied consenting to trial of this issue, a colloquy at trial demonstrated that he questioned the existence of an insurance contract. For instance, when Rice took the witness stand, he repeatedly denied the contract's existence:

[CHRISTENSEN'S ATTORNEY]: And, now you had mentioned that you recalled several of these letters and statements you received from Marsh and McClennan; Roy, what did you do, if anything, at the time you received some of this correspondence and invoices we've talked about?

[RICE]: I would call ... Margaret [Mrs. West] and ask her what was going on. All I wanted was quotes; I was not looking for insurance, I wanted quotes. I told her that I had insurance; I wanted quotes.

Further, Rice's counsel suggested there was no proof to show Rice had signed a contract with M & M for insurance:

THE COURT: What document are we going to get...