Don L. Tullis & Associates, Inc. v. Gover

• Decision Date: 18 January 1979
• Docket Number: No. 10555,10555
• Citation: 577 S.W.2d 891
• Court: Missouri Court of Appeals
• Parties: DON L. TULLIS & ASSOCIATES, INC., Respondent, v. Vance K. GOVER et al., Appellants.

Page 891

577 S.W.2d 891

DON L. TULLIS & ASSOCIATES, INC., Respondent, v.Vance K. GOVER et al., Appellants.

No. 10555.

Missouri Court of Appeals, Southern District, Division One.

Jan. 18, 1979.

As Modified on Court's Own Motion Feb. 9, 1979.

Motion for Rehearing or to Transfer Denied Feb. 20, 1979.

Application to Transfer Denied April 10, 1979.

Tom B. Kretsinger, Warren H. Sapp, Kansas City, pro se and for appellants.

Gary R. Cunningham, Francis H. McClernon, Jr., Daniel, Clampett, Rittershouse, Dalton & Chaney, Springfield, for respondent.

Before FLANIGAN, P. J., TITUS, J., MOORE, KENNEDY and CAMPBELL, Special Judges.

FLANIGAN, Presiding Judge.

PlaintiffDon L. Tullis and Associates, Inc., a corporation, brought this action against defendantsM. F. Rippey, W. H. Tate, Kenneth E. Johnston, Vance K. Gover, Tom B. Kretsinger, and Warren H. Sapp.The petition contained eight counts and named additional defendants which included Refrigerated Food Line, Inc.("Refrigerated").Prior to the trial, judgment in favor of plaintiff and against Refrigerated was entered, by stipulation, on Counts I and VII.Plaintiff dismissed all other counts of the petition except Count VI which was against the six defendants first listed and the cause proceeded to trial on Count VI.

Count VI was based on obligations allegedly incurred by the six defendants emanating from a document entitled "Guaranty," Exhibit 2, which is set out marginally.¹The trial court, sitting without a jury, found the issues on Count VI in favor of the plaintiff and awarded judgment in the sum of $10,000 together with interest and costs.The six defendants appeal.

Defendants' brief contains seven "points relied on."Each point advances an independent reason why plaintiff should have been denied any relief on Count VI.

In the trial courtdefendants filed a motion for new trial which included some, but not all, of the seven appellate assignments of error.Plaintiff argues that the assignments which were omitted from the motion have not been preserved for review.Plaintiff's position is incorrect.In a case tried without a jury, a motion for new trial is not necessary "to preserve any matter for appellate review,"Rule 73.01 par. (2)(b), ² and if a motion for new trial is filed, the fact that it may be imperfect does not prejudice the appellant's position on appeal.Coale v. Rickard, 540 S.W.2d 151, 152(1)(Mo.App.1976);South Side Plumbing Company v. Tigges, 525 S.W.2d 583, 586(1)(Mo.App.1975).

Appellate review is limited to those issues presented in defendants' points, Pruellage v. DeSeaton Corporation, 380 S.W.2d 403, 405(3)(Mo.1964);Brewer v. Blanton, 555 S.W.2d 381, 383(1)(Mo.App.1977); and this opinion should be so viewed.

Summarizing the germane evidence has been difficult because portions of the record are vague and disorganized.The facts underlying the instant action had their beginning in 1971.Refrigerated, a corporation, was a motor carrier whose operations were subject to regulation by the Interstate Commerce Commission.Refrigerated was required to carry liability insurance.Its financial condition in that year was not good and it ceased operations in July.

The six defendants are shareholders of Refrigerated.Rippey, Tate, Johnston, and Gover each owned 20 percent of the stock in Refrigerated and Kretsinger and Sapp each owned 10 percent.Rippey is the president of Refrigerated and a member of its board.Some (and probably all) of the other five defendants are also directors.Kretsinger and Sapp are lawyers.

By reason of prior dealings between plaintiff and Refrigerated, the latter, in early 1971, owed plaintiff approximately $18,000.If Refrigerated was forced to cease operations because it could not obtain the required insurance, plaintiff's prospects for collecting that debt were dim.

Plaintiff, a Florida corporation, operated an insurance agency.Don L. Tullis is the president of plaintiff.Another insurance firm in the picture was the Springfield, Missouri firm of Nixon, Shipp and Roderick.For present purposes this firm may be regarded as one person and will be referred to as "Nixon."

In order to continue its business operations it was necessary for Refrigerated to obtain three policies of insurance, each having a policy period commencing March 8, 1971.Two of the policies (providing, respectively, liability insurance and cargo insurance) were being handled through Nixon and the latter received compensation therefor as the selling agent.The third policy (providing "umbrella" insurance) was handled by plaintiff and it was entitled to receive the commission generated by the sale of that policy.

The three policies required a total premium of $71,012.Refrigerated was able to make, and did make, a cash down payment of $6,012.It was necessary to obtain financing for the $65,000 balance.Nixon was unable to arrange that financing.Refrigerated (and the six defendants) requested plaintiff to arrange it.

Pursuant to the foregoing request, Tullis (acting for plaintiff) on some date or dates shortly prior to March 11, 1971, had a series of conversations with Rippey.Tullis also "met with the board" of Refrigerated "several months" prior to March 1971.The "insurance problems" of Refrigerated were discussed.Acting at the request of the defendants, Tullis negotiated with a bank (State Bank of Arlington) located in Jacksonville, Florida.Those negotiations culminated in the execution of a document entitled "premium contract."That document will be referred to as "Appendix A" for the reason that it is so denominated in the guaranty, Exhibit 2, set forth in footnote 1.

On March 11, 1971, Refrigerated (acting through its president Rippey and its secretary Gover) and the bank executed Appendix A.That document identified the three policies and listed their respective premiums.It recited that the bank had paid $65,000 to the respective insurance companies.Among the provisions of Appendix A were the following:

1.A promissory note was to be executed by Refrigerated in favor of the bank calling for the payment of the $65,000 (plus certain finance charges) in nine equal monthly installments, the first commencing April 10, 1971.This note, so executed, was incorporated in Appendix A.

2.As security for the payment of the note, Refrigerated assigned to the bank all "unearned or returned premiums at any time payable on said policies."

3.In the event of nonpayment of any installment when due, the bank had the option of declaring, without notice, the entire balance due and the bank was given the right to cancel the policies and receive all returned or unearned premiums for application to the indebtedness.Refrigerated would deliver the policies to the bank for that purpose.

4.Refrigerated appointed the bank its attorney in fact to cancel the policies and to receive the unearned or returned premiums.

The reverse side of Appendix A contained a guaranty agreement whereby plaintiff and Nixon guaranteed the prompt payment to the bank of all monies due it from Refrigerated under the note.

It was not uncommon for plaintiff to arrange for the financing of insurance premiums in the manner accomplished by Appendix A.When doing so plaintiff usually required from its customer (the insured) a down payment of 20 percent or 25 percent of the policy premium.Such a payment (coupled with the anticipated refund of each unearned premium) would adequately protect plaintiff from loss to which plaintiff would be exposed by reason of its acting as a guarantor of the loan which the bank would make to the insured.

For the instant three policies plaintiff, customarily, would have required a cash down payment in the neighborhood of $16,000.Refrigerated, however, could make a cash down payment of only $6,012.Thus other arrangements had to be made.All these factors were known by defendants prior to March 8, 1971, the inception date of the three policies.

Prior to the execution of Appendix A there was an understanding between plaintiff and the six defendants that the latter would furnish plaintiff with some type of guaranty whereby the defendants would indemnify plaintiff for any loss plaintiff incurred in its role as a guarantor of Appendix A. Plaintiff felt that if such a guaranty had a collectible amount of $10,000 it would provide a sufficient "cushion" for plaintiff's exposure.That cushion would be a sufficient inducement for plaintiff to make the appropriate arrangements with the bank.Appendix A was the product of those arrangements.

On March 11, 1971, after Appendix A had been executed, plaintiff sent Refrigerated a document, not in evidence, for execution by the six defendants.The document plaintiff sent Refrigerated was not signed by any of the six defendants.Instead the six defendants signed Exhibit 2 and sent it to plaintiff.³At least a portion of Exhibit 2 was drafted by defendants"Kretsinger and/or Sapp."

Upon receiving Exhibit 2 plaintiff, according to president Tullis, felt that "it appeared to be adequate."Tullis telephoned Rippey, discussed Exhibit 2 with him and, in essence, accepted Exhibit 2.Plaintiff was then in possession of the insurance policies and plaintiff, satisfied with Exhibit 2, "allowed Appendix A to remain in force."Defendants introduced evidence to the effect that if Exhibit 2 had been unacceptable to plaintiff, plaintiff could have cancelled the policies and obtained the refund of unearned premiums.

Refrigerated made the first three monthly payments to the bank but, in the summer of 1971, defaulted on the fourth payment.Refrigerated went out of business at that time and Nixon and plaintiff took the steps necessary to cancel the three insurance policies.

Refrigerated's initial obligation to the bank, under the note, amounted to $65,000 plus interest, so that the total amount due was $67,787.15.The following table reflects payments on the note which were derived from sources other than the plaintiff:

(...