Dawson v. Associates Financial Services Co. of Kansas, Inc.

• Citation: 215 Kan. 814,529 P.2d 104
• Decision Date: 07 December 1974
• Docket Number: No. 47478,47478
• Parties: Kay L. DAWSON, Appellant, v. ASSOCIATES FINANCIAL SERVICES COMPANY OF KANSAS, INC., and Capitol Life Insurance Company of South Bend, Indiana, Appellees.
• Court: United States State Supreme Court of Kansas

Page 104

529 P.2d 104

215 Kan. 814

Kay L. DAWSON, Appellant, v. ASSOCIATES FINANCIAL SERVICES COMPANY OF KANSAS, INC., and Capitol Life Insurance Company of South Bend Indiana, Appellees.

No. 47478.

Supreme Court of Kansas.

Dec. 7, 1974.

Syllabus by the Court

1. A creditor who by extreme and outrageous conduct intentionally or recklessly causes severe emotional distrees to the debtor is subject to liability for such emotional distress, and if bodily harm to the debtor results from it, for such bodily harm.

2. Under K.S.A. 60-405 the proponent of excluded evidence must make known the 'substance' of the expected evidence in a proffer of such evidence.

3. Any evidence with has a tendency in reason to establish a material fact is relevant and may be admitted into evidence.

4. There is no presumption that the exclusion of evidence which was properly admissible and relevant to an issue in the case is harmless. If any presumption is to be indulged the presumption would be that a just result could hardly be expected unless the fact finder has before it all of the relevant evidence which it is entitle to consider.

5. In ruling on a motion for directed verdict the court is required to resolve all facts and inferences, reasonably to be drawn from the evidence, in favor of the party against whom the ruling is sought, and where the evidence is such that reasonable minds could reach different conclusions thereon, the motion must be denied and the matter submitted to the jury.

6. It is for the court to determine, in the first instance, whether a creditor's conduct may reasonably be regarded as so extreme and outrageous as to permit recovery by the debtor or whether it is necessarily so, and where reasonable men may differ, the question is for the jury to determine.

Jerry G. Elliott, of Foulston Siefkin, Powers & Eberhardt, Wichita, argued the cause, and John E. Foulston, Wichita, was with him on the brief for appellees.

Thomas E. Brown, of Irwin Hylton, Barr, Wall & Brown, Wichita, argued the cause, and M. Ralph Baehr, of Mills & Baehr, Wichita, was with him on the brief for appellant.

SCHROEDER, Justice:

This is an action wherein the plaintiff alleged that a finance company, which had financed the plaintiff's purchase of an automobile, intentionally harassed the plaintiff by threats to repossess the plaintiff's automobile knowing full well the plaintiff had multiple sclerosis and knowing full well the plaintiff was mkaing a claim under an insurance policy to cover the loan payments. The trial court directed a verdict in favor of the finance company, and appeal has been duly perfected.

The record discloses on December 15, 1969, Kay L. Dawson (plaintiff-appellant), 25 years of age, purchased an automobile. She financed the purchase by obtaining a loan in the amount of $1,881.11 from Associates Financial Services Company of Kansas, Inc., (defendant-appellee; hereinafter referred to as Associates), a company for which she had worked two years prior to this time. Under the terms of the loan appellant's payments were $93 per month. At the time she obtained the loan she purchased a credit life insurance policy and a health and accident insurance policy underwritten by Capitol Life Insurance Company of South Bend, Indiana, (defendant; hereinafter referred to as Capitol Life). An employee of associates prepared all the insurance papers for the appellant's signature and told her that she should obtain the two insurance polices. It was stipulated by the parties that Capitol Life is a wholly owned subsidiary of Associates Corporation of North America, and Associates Financial Service of Kansas, Inc., is also a wholly owned subsidiary of the same company.

At the time the appellant obtained the loan and insurance policies she was employed at Cessna Aircraft Company and, to the best of her knowledge, she was in good physical condition. Subsequently, on January 7 or 8, 1970, appellant underwent a routine physical examination. Because the appellant complained about some headaches she was hospitalized at Wesley Medical Center in Wichita, Kansas, on January 19, 1970, for a period of two weeks in order for medical tests to be performed. While in the hospital, the appellant was examined by Dr. Ralph L. Drake, a neurologist in charge of the multiple sclerosis clinic in Wichita. Dr. Drake diagnosed appellant's condition as multiple sclerosis.

From the time the appellant was released from Wesley she was only able to work on a part-time basis at Cessna.

Subsequently, the appellant was referred to the Kansas University Medical Center. She remained at the center from February 24, 1970, until March 16, 1970. During her stay more tests were conducted, she received some treatment, and she underwent a therapeutic abortion due to the fact that the doctors did not believe she would be able to care for a child because of her inability to walk.

The appellant was next hospitalized for her condition from April 27, 1970, through May 11, 1970, at Wellington Hospital in Wellington, Kansas. At this time the appellant was being treated by Marcus L. Lee, an osteopath practicing in Wellington. When the appellant was admitted into the hospital she was having difficulty walking; had lost sensory perception in her legs; was experiencing double vision, and had difficulty with bladder control. Dr. Lee testified that reassurance is a primary treatment method for multiple sclerosis patients, so he gave supportive-type treatment and physical therapy. When the appellant was released she was ambulatory and, according to the doctor, was doing excellently. Dr. Lee again examined the appellant in October 1970 and she was walking without a noticeable limp and was 'doing fine'.

On June 23, 1970, the appellant quit working upon the advice of her doctors.

During the latter part of 1970 the appellant received a telephone call from an employee at Associates. The caller asked when the appellant was going to make another payment on the car. The appellant responded that she did not feel responsible for the payments and that Associates should check with Capitol Life.

The appellant received a second call from Associates during the latter part of December 1970. This time the caller stated Associates was going to repossess the car if the payments were not made. The appellant replied that was all right. At this time the balance on the loan was $1,600 and caller stated that appellant's car would be sold at auction and she would be held responsible for the deficiency. The appellant reiterated that she did not believe she was responsible for the payments because of the health insurance policy she had purchased through Associates.

A few days later the appellant received a third call from Associates. On this occasion the caller asked appellant if she would be home that morning in order for them to come to her house and repossess the car. The appellant answered that if Associates wanted to repossess her automobile they had better have a court order. At that time a Mr. Byrd from Associates talked with the appellant and told her that a repossession would ruin her credit and make it very difficult to purchase another automobile; he was doing business with the appellant's parents which appellant understood to mean he 'could hurt my parents in their business'; and if the car was repossessed the appellant and her parents would have to buy a bond. The appellant replied that Mr. Byrd should contact her attorney.

The appellant received a fourth and final telephone call from Mr. Byrd at Associates several days later in January 1971. The appellant began to cry during the call and told Mr. Byrd not to call during the call to call her attorney. Mr. Byrd replied that he could not locate her attorney's phone number, and also asked if she was sure she wanted to go through an attorney.

The appellant testified that after receiving these phone calls her physical condition worsened; that is, she lost control of her bladder, could not walk without assistance and had difficulty with speech and holding objects such as dishes. She was admitted into Wellington Hospital by Dr. Lee on January 15, 1971. The appellant stated that the phone calls made her extremely nervous and she became so upset at the calls because her parents were in business and she was afraid they would be hurt. Also, she was afraid the repossession would hurt her credit rating so that she would not be able to borrow any money for additional hospitalization if she could not afford it.

Dr. Lee testified the appellant suffered an acute relapse of her condition in January 1971; that stress is an aggravating factor of multiple sclerosis; stress aggravated the appellant's condition; and while the appellant was released after four days of hospitalization and she was ambulatory, her condition was permanently impaired by the relapse.

The appellant stated on cross-examination that no one from Associates ever used any profane language or called her a dead best or anything similar to that; the callers were firm and stern; at the time of the calls her account was not current, but had been delinquent 'all along'; as a former employee she had no special deal with Associates; and while employed at Associates she had made collection calls to people with delinquent accounts and she was not treated any differently than the people she had called.

The appellant was asked on direct examination whether or not phone calls concerning her delinquent payments were made to any parties, other than herself, by Associates and the trial court sustained Associates' objection as to relevancy. The appellant's counsel then proffered evidence that would disclose Associates made calls and visits to the appellant's mother, Mrs. Claude Shoffner, for the purpose of obtaining payments on the appellant's loan, and that Mrs. Shoffner explained to Associates that a claim had been filed with Capitol Life for payment of benefits under the accident and health...