Farm Bureau Mut. Ins. Co. of Ind. v. Seal

• Decision Date: 24 January 1962
• Docket Number: No. 1,No. 19292,19292,1
• Citation: 179 N.E.2d 760,134 Ind.App. 269
• Parties: FARM BUREAU MUTUAL INSURANCE COMPANY OF INDIANA, Appellant, v. Alvin SEAL, as Administrator of the Estate of Dorothy Louise Action, Appellee
• Court: Indiana Appellate Court

Page 760

179 N.E.2d 760

134 Ind.App. 269

FARM BUREAU MUTUAL INSURANCE COMPANY OF INDIANA, Appellant, v. Alvin SEAL, as Administrator of the Estate of Dorothy Louise Action, Appellee.

No. 19292.

Appellate Court of Indiana, Division No. 1.

Jan. 24, 1962.

Hastings & Allen, Washington, Louis A. Savage, Jasper, for appellant.

Seal & Seal, Washington, Eldo W. Wood, Huntington, Huntingburg, for appellee.

AX, Judge.

Appellee's decedent, Dorothy Louise Acton, commenced an action against appellant corporation, Farm Bureau Mutual Insurance Company of Indiana, for damages allegedly resulting from the fraudulent obtaining of a release of her claim for personal injuries growing out of an automobile accident.

The evidence favorable to appellee substantially shows that on December 31, 1954, Miss Acton (hereinafter called Dorothy) and James R. Dillon (hereinafter called James) spent the evening together celebrating New Year's eve. Early in the morning of January 1, 1955, Dorothy, James and his counsin Charles left the Town of Elnora, Indiana, in a Chevrole pick-up truck and started toward Washington, Indiana. James was driving the truck, which belonged to his father and which was insured by appellant.

Dorothy and James previously had an argument over his drinking. The altercation resulted in a return of an engagement ring given to Dorothy by James. While traveling on Highway #57 from Elnora to Washington James began driving at such a fast rate of speed that both Dorothy and Charles asked him to slow down. He stopped briefly at a filling station in Washington where he picked up a soldier by the name of James Arnold McGuire with whom some of the young people were acquainted. James again speeded up the truck, after getting outside the city limits of Washington on Highway #50, and by turning the steering wheel back and forth he was zig-zagging the truck down the highway. All three of his passengers asked him to slow down and warned him that he would 'wreck them and kill them' if he continued to drive in such a manner. Dorothy became frightened and started crying and begged James to stop the zig-zagging. About three miles out of Washington, while the occupants were still begging the driver to slow down and to stop the zig-zagging, the truck suddenly went off the road on one side, careened over to the other side and turned over a number of times. Dorothy underwent considerable medical care as a result of injuries sustained in the accident and was hospitalized in the Daviess County Hospital at Washington, Indiana.

After being removed from the hospital to her home in Montgomery, Dorothy was visited by David Lee, a claims adjuster of the appellant insurance corporation. She stated that Lee seemed concerned about her progress and was sympathetic and always asked her how she was feeling. Lee made several visits with Dorothy before they agreed upon a settlement in the sum of $522.05.

Dorothy signed the release in question on June 29, 1955, in consideration of a check for $522.05. She stated that at that time Lee told her that the release was only for her hospital and doctor bills and that she would get something at a later date but that he did not know how much. Lee also told her that if she did not sign the paper she would have to pay her own bills and that he would not be back to see her any more. She stated that she wanted to read the paper but Lee told her it was not necessary; that it was just routine. She also stated that at that time Lee also told her that the doctor and hospital were getting impatient for their money.

It was not until she was ready to endorse the check and read the printed matter thereon that Dorothy first noticed that if she endorsed the check she was signing away all of her claim to personal injury damage. It was then that she first contacted her attorney. However, the check was never cashed.

On March 10, 1956, Dorothy filed her complaint for damages against appellant corporation, alleging fraud on the part of appellant, and wilful and wanton misconduct on the part of appellant's insured driver, James Dillon.

In her complaint Dorothy charged that the adjuster fraudulently obtained a release of her claim for damages against James by making the following representations:

'A. That the paper he had for [her] to sign was not a release of her right to damages, but it was only to pay the doctor and hospital bills;

'B. that the doctor and hospital were getting impatient because their bills had not been paid, and she had to sign this paper so they could get their money;

'C. that it wasn't necessary for [her] to read the paper he had, as it was just routine in order to get the doctor and hospital bills paid;

'D. that he stated to [her], 'I don't know how much you will receive for your damages, we've got to get the hospital and doctor bills paid up first;'

'E. that if [she] did not sign the paper that he had with him on that day and sign it that day [she] * * * would have to pay the doctor and hospital bills herself.'

Appellant filed a plea in abatement to the complaint, and a demurrer to the plea in abatement was filed by Dorothy. The court sustained the demurrer and appellant filed an amended plea in abatement, to which Dorothy filed a motion to strike from the files. This motion was sustained. Appellant then filed its motion to strike parts of plaintiff's complaint, which was sustained in part and overruled in part.

Dorothy, by her complaint, alleged that her claim was worth by way of compromise the amount of $65,000.00. Her prayer for damages was for $65,000.00.

Trial was by jury, which returned a verdict in favor of Dorothy, assessing damages in the amount of $40,000.00.

Appellant made a written request for interrogatories to the jury to which the jury answered. Appellant filed a motion for judgment on the answers to the interrogatories, which was overruled. Appellant then filed a motion for new trial. During the interim of the filing of the motion for new trial and the court's ruling thereon Dorothy died. Upon this notice a motion to substitute the administrator of Dorothy's estate was sustained. Thereafter, the motion for new trial was overruled.

Appellant's assignment of error consisted of some twelve causes. However, because appellant only discusses errors 1 and 2 we need only consider those and treat all others as waived.

The two errors argued are:

1. The court erred in overruling appellant's motion for a new trial.

2. The court erred in sustaining the demurrer of appellee to the appellant's plea in abatement, filed September 15, 1956.

We shall discuss the second cause first.

Appellant's plea in abatement in effect alleged that the transaction between the appellant and Dorothy had never been consummated. Appellant argued that Dorothy's action against appellant corporation was premature and subject to abatement. Appellant contended that at the time of the filing of the plea Dorothy still had three and one-half months in which to file her suit for damages against James, since the accident in question occurred on January 1, 1955, and up to that time she had not been harmed by the signing of the release in question.

The procuring of a settlement of a cause of action by fraud or deceit is no different from any other action for fraud so far as that particular class of actions is concerned. Automobile Underwriters, Inc. v. Rich (1944), 222 Ind. 384, 53 N.E.2d 775. The essential elements which make up actionable fraud must constitute representations, falsity, scienter, deception and injury. Automobile Underwriters, Inc. v. Smith (Ind.App.1960) 166 N.E.2d 341, rehearing denied 167 N.E.2d 882; Edwards v. Hudson et al. (1938), 214 Ind. 120, 14 N.E.2d 705. A right of action exists where a defendant fraudulently misrepresents certain material facts, sufficient enough to induce a plaintiff to make a settlement of his cause of action for a lesser sum that he might have otherwise received had not the fraudulent representation been made. The method of recovery which he may use has been expressed by both this court and the Indiana Supreme Court.

'1. He can tender or return whatever was received and bring suit on the original right of action, requesting therein that the settlement be set aside, or he can await the interposing of the settlement in bar of his suit and then set up the fraud and payment in accordance.

'2. He can keep what he has received and file suit against the ones perpetrating the fraud and recover such amount as will make the settlement an honest one.' Automobile Underwriters, Inc. v. Rich, supra, 222 Ind. at page 384, 53 N.E.2d at page 777; Automobile Underwriters, Inc. v. Smith, supra.

Dorothy had a choice of methods and the fact that she chose to pursue one does not make it error for failure to pursue the other. The fact that she did not cash the check would not affect her right of action or the method in pursuing it. The cases cited by appellant to show authority to the contrary are not pertinent. The contract was consummated upon the making of the mutual promises. See 61 I.L.E. Contracts § 33, p. 91. The consideration consisted of the promise by Dorothy to forbear from bringing an action against appellant or appellant's insured driver and the promise of appellant to pay Dorothy $522.05. The terms of the contract were contained in the said release. The performance of the contract by appellant was the payment of $522.05. The fraud was alleged to have taken place in the making of the contract and not in its performance. That is, the fraud was consummated the moment Dorothy was induced by fraudulent representations to sign a release of her right of action. The cashing of the check would not have changed the terms of the contract or the fact that a contract was entered into. By returning the check and by filing her complaint Dorothy charged in substance that the check given her was a lesser sum than she would have received had she not been idnuced to sign the release. She...