Dudley v. Dumont

• Decision Date: 01 July 1975
• Docket Number: No. 35351,35351
• Citation: 526 S.W.2d 839
• Parties: Carl F. DUDLEY, Plaintiff-Respondent, v. John T. DUMONT, Jr., Defendant-Appellant. . Louis District, Division One
• Court: Missouri Court of Appeals

Page 839

526 S.W.2d 839

Carl F. DUDLEY, Plaintiff-Respondent, v. John T. DUMONT, Jr., Defendant-Appellant.

No. 35351.

Missouri Court of Appeals, St. Louis District, Division One.

July 1, 1975.

Motion for Rehearing or Transfer to Supreme Court En Banc

Denied Aug. 7, 1975.

Application to Transfer Denied Oct. 13, 1975.

Jack B. Schiff, Clayton, for defendant-appellant.

Cox, Moffitt & Cox, Dallas W. Cox, Jr., St. Louis, for plaintiff-respondent.

RENDLEN, Judge.

Defendant appeals from a judgment entered pursuant to a jury's verdict awarding plaintiff $1,080 actual and $4,500 punitive damages for fraud. Plaintiff charged that defendant individually or by his agent Ken Gainey intentionally misrepresented the effective date of an automobile liability insurance policy and relying on that misrepresentation, plaintiff purchased insurance coverage which was in fact not effective on the date he was led to believe. Plaintiff's auto was involved in a collision prior to the date a policy of insurance was ultimately issued, and thus uninsured, he personally responded in damages to a claim arising from that collision. Defendant's contention that plaintiff failed to make a submissible case on the issue of liability requires a detailed factual review.

Desiring to obtain automobile liability insurance, plaintiff and his son went to a State Farm Insurance agency on December 20, 1965, in Overland, Missouri, and there spoke with the State Farm agent, Ken Gainey. During this meeting Gainey placed a telephone call but the record does not tell us whom he called or the subject of the conversation. Though plaintiff in his brief states the phone call was 'to defendant', the evidence fails to justify this statement. The only evidence on this was defendant's testimony that he did not talk with Gainey on that date regarding plaintiff or any insurance desired by him, and further, defendant had never heard of, talked with or had business with plaintiff on December 20 or prior thereto. Plaintiff admitted he had no conversation with defendant on December 20 nor at any earlier time. Plaintiff gave Gainey his personal check dated December 20, 1965, in the amount of $131.50 payable to the Dumont Insurance Agency; then Gainey took a blank printed receipt form from his desk drawer, filled it out ¹ and gave a copy to plaintiff. The instrument states it is a receipt to Carl F. Dudley for payment of $131.50, with the words 'For Liab 10/20/5 on 56 Ply.--Effective date 12/20/65'. The handwritten name John T. Dumont appears on the form but no testimony was offered that this was defendant's signature; defendant, on the contrary, testified it was not. The form also bore the printed words 'John T. Dumont, Jr., Insurance'. No further proof appears regarding the receipt or its execution. Plaintiff conceded that defendant at no time told him a policy of insurance was in effect as of December 20, 1965.

Plaintiff's son was involved in an automobile accident December 23 which plaintiff reported by phone to someone other than defendant at the Dumont Agency on December 26 and requested claim forms. Defendant admitted that during his absence a phone call was received by an employee in his office from someone named Dudley who said 'he was a policy holder of my agency', but the caller did not know which company, what policy or any information about it. A perusal of the office files revealed no record of the matter. No claim forms were sent to plaintiff. It was defendant's recollection the phone call (related to him by his employee) came into his office on December 23 or 24.

The $131.50 check given Gainey by plaintiff was received at defendant's office on December 27 with an application on State Farm Insurance Company form. The information from that application was transferred to a Prudence Mutual Insurance Company form by an employee of defendant, and the 'Prudence' application form, prepared December 27, together with plaintiff's check endorsed to Prudence Mutual Insurance Company were forwarded that day to the St. Louis office of the insurance company. Defendant testified that prior to December 27 he had no knowledge that plaintiff desired insurance and this testimony is the only direct evidence on the point. The Prudence policy bearing December 27, 1965, as the date of issuance was thereafter sent to defendant's insurance agency, and on January 7, 1966, mailed from defendant's office to plaintiff. An employee of defendant prepared an invoice dated January 7, 1966, showing payment in full of $116.50 ² for 'Liability $10/20/5,000' coverage on a '1956 Plymouth 4 door' placed with the Prudence Insurance Company and issued '12/20/65' to expire '6/20/66'. This invoice with the policy were forwarded to plaintiff who admitted he received them but stated they came separately on or about January 10, 1966.

Subsequently plaintiff was threatened with suit in Illinois for his son's accident; though plaintiff was somewhat confused as to the nature of the proceeding, the claim was settled for $300 which plaintiff paid plus attorney fees of $100 and $75 for a bond as security deposit with the Missouri Department of Revenue.

Defendant had been acquainted with Ken Gainey for approximately 15 years and on occasion received referral business from that office; but in the management of his business defendant did not personally process or prepare any of the papers involved with the issuance of plaintiff's policy of insurance. Defendant had no authority to issue a binder on behalf of Prudence and though the company rejected or accepted applications following their own investigations, he recalled no rejections by Prudence of applications from his office.

According to Dumont, Dudley later demanded a refund of his premium since no insurance had been issued that would cover the accident and the refund was in fact made. Gainey, the State Farm agent, was not called to testify. Further facts necessary to the resolution of the issues will be set forth where appropriate.

Defendant contends the trial court erred in overruling his motion for a directed verdict since the evidence was insufficient to establish Gainey as defendant's agent and thus he was not liable for Gainey's representations to plaintiff. '(I)n determining whether a submissible case was made, we must consider the evidence in the light most favorable to plaintiffs, must accord to them the benefit of all supporting inferences fairly and reasonably deducible from the evidence, and must disregard defendant's evidence except insofar as it may aid plaintiffs' case.' Foote v. Scott-New Madrid-Mississippi Electric Co-op., 359 S.W.2d 40, 41 (Mo.App.1962). 'In ruling a motion for a directed verdict at the close of the entire case, the court must take into consideration all of the evidence . . . as well as favorable inferences that may reasonably be drawn.' Black v. Kansas City Southern Ry. Co., 436 S.W.2d 19, 23 (Mo. banc 1968). See also Penberthy v. Penberthy, 505 S.W.2d 122, 126(3, 4) (Mo.App.1973).

Defendant correctly states the relationship of principal and agent cannot be presumed but must be proved by the party asserting the existence of that relationship, citing Martin v. Mercantile Trust Co., 293 S.W.2d 319 (Mo.1956), and Dell-Wood Tires v. Riss & Co., 198 S.W.2d 347 (Mo.App.1946). Similarly, the existence and scope of agency cannot be established by declarations of the alleged agent. Quinn v. Graham, 428 S.W.2d 178 (Mo.App.1968). Having carefully examined the record, we find plaintiff failed to prove that Gainey was acting as agent of defendant. The facts and inferences therefrom, taken in a light most favorable to plaintiff, would permit the conclusion that defendant gave Ken Gainey certain receipt forms imprinted with defendant's name for the purpose of enabling Gainey to refer insurance clients to defendant and that such referrals occurred frequently over a period of years. These were apparently 'high risk' applicants whom Gainey could not place with State Farm. Plaintiff sought out Gainey as a State Farm agent who found it necessary to refer the business elsewhere. Gainey used his State Farm Mutual application form which he forwarded to defendant's office and we note he did not send the customer to defendant but apparently made the referral by mail, as much for his own benefit and that of the customer as for any other purpose. It could be found that defendant knew or should have known that Gainey would execute receipts given to him by defendant. Further, it could be concluded that Gainey completed a State Farm Insurance application form for plaintiff with the understanding it would be forwarded to defendant who would process and obtain insurance for plaintiff, and it was so forwarded to defendant, who by the January 7 invoice confirmed the intention to obtain insurance for plaintiff. The facts permit the inference that Gainey, on December 20, 1965, represented to plaintiff he would receive automobile insurance effective that date through the efforts of defendant. However, there was no evidence nor supportable inference that Gainey or plaintiff communicated with defendant on December 20. The mere fact that Gainey placed a telephone call on December 20 of an undisclosed nature to an unidentified third party is no proof of agency.

Plaintiff argues that Gainey's agency for defendant is established by one or more theories: Express agency, implied agency, apparent authority, agency by estoppel, agency by ratification or alter ego. The argument portion of plaintiff's brief does not nicely separate these theories; we nevertheless examine them individually.

Express agency is not a viable issue since there is no evidence of a specific agreement between Gainey and defendant authorizing the one to act for and under the control of the other.

Implied or inferred agency is actual authority given implicitly by the principal to his agent, '. . . circumstantially proved, or evidenced by conduct, or inferred from a course of...