Hall v. Integon Life Ins. Co.

• Decision Date: 13 July 1984
• Citation: 454 So.2d 1338
• Parties: Lilbourne HALL v. INTEGON LIFE INSURANCE COMPANY, et al. 82-1197.
• Court: Alabama Supreme Court

Page 1338

454 So.2d 1338

Lilbourne HALL v. INTEGON LIFE INSURANCE COMPANY, et al.

82-1197.

Supreme Court of Alabama.

July 13, 1984.

John R. Benn, Florence, for appellant.

Steve A. Baccus of Almon, McAlister, Ashe & Baccus, Tuscumbia, for appellees.

Donald H. Patterson of Patterson, Weathers & Jester, Florence, for appellee J. Harold Barber.

ON REHEARING EX MERO MOTU

FAULKNER, Justice.

This action arose out of the plaintiff's discharge from his position as Integon Life Insurance Company's regional general agent in Florence, Alabama. The complaint alleged fraud, breach of contract, and wrongful discharge against Integon and tortious interference with Hall's contract with Integon against Donald Brackin and Harold Barber. The trial court granted summary judgment in favor of all defendants. The plaintiff, Lilbourne Hall, appeals as to Integon Life Insurance Company and Donald Brackin. We affirm in part and reverse in part.

The following counts are germane to this appeal:

COUNT 1 for breach of contract, alleging that under the terms of their contract Hall was entitled to be Integon's exclusive general agent in the Florence area and that Integon had breached the agreement by appointing another general agent in the area;

COUNT 2 for fraud, alleging that Integon fraudulently induced him into entering into a contract to act as its general agent in the Florence area by falsely representing to him that he would have an exclusive agency in the Florence area;

COUNT 3 for breach of contract, alleging that after their written contract was executed the parties orally agreed to modify the contract to provide that Hall would not be terminated unless he was guilty of gross misconduct;

COUNT 4 for breach of contract, claiming money allegedly due under the terms of the parties' agreement;

COUNT 5 for tortious interference with a contractual relationship, against Donald Brackin.

COUNTS 6 and 7 for wrongful discharge, alleging that his termination was willful and malicious, contrary to the public interest and in violation of an implied covenant of good faith and fair dealing; and

COUNT 8 for fraud, alleging that Integon fraudulently misrepresented to him that he would not be terminated except for gross misconduct.

COUNT I:

Breach of Exclusive Agency Contract

Prior to becoming associated with Integon, Hall was the exclusive agent in the Florence area for the Jackson Life Insurance Company. In 1974, Integon acquired the Jackson Company and began negotiations with Jackson's agents regarding their joining the Integon sales force. Several meetings took place between the Jackson agents and Integon representatives. Hall claims that at one of the meetings John Penry, Integon's vice-president, assured Hall and the other Jackson agents that "all of the benefits from the Jackson contract" would accrue to the agents under Integon's contract. A meeting took place at Integon's office in North Carolina, where Hall met with Penry, with Integon's president, and with its sales director. At the meeting the parties discussed specific changes in Integon's standard agent's contract that would be necessary in order to induce Hall to enter into an agreement to represent Integon.

After the meeting in North Carolina, Hall sent Penry a letter dated October 21, 1974, stating, inter alia:

"Dear John:

"Thank you very much for the kind hospitality extended to me and Tom Hodges and Ozell Hinkle on Thursday and Friday of last week. Please express our thanks and appreciation to the other delightful people we met during our brief visit with you.

"John, I enclose herewith the following items:

"1. A list of amendments to be attached to my General Agent's contract and to my Agent's Contract.

"2. A list of three items that cause great concern on the part of myself and Tom Hodges in particular. Mr. Hinkle appears less concerned about these three items than Tom and myself.

"3. A list of questions still remaining unanswered in regard to some of the problems we are facing in transferring our affiliation from Jackson Life to Integon.

"During my conference with the Integon president, Mr. Ed Collette, he assured me that he and the company would honor any commitments that you make to me in writing. This is, of course, as I expected it to be. I, therefore, respectfully request your signature on the ten listed amendments to be attached to my agent's contract and my general agent's contract. A postage-free envelope is enclosed for your use in returning this list of amendments to me at your earliest convenience."

Three enclosures were included with the letter. Each enclosure corresponded to one of the three items listed in the body of the letter. Enclosure number one drafted by Hall was in the form of a letter from Penry to Hall. It was addressed to Hall and contained a place at its foot for Penry to sign. The document was dated November 1, 1974, and its introductory paragraph stated:

"I hereby approve the following amendments to be added to your General Agent's Contract and your Agent's Contract with the Integon Life Insurance Company of Winston-Salem, North Carolina, which contracts are dated November 1, 1974."

It then listed ten separately numbered "amendments," including:

"Amendment No. 6

"Integon agrees that those areas which are within the managerial responsibilities of the company's managers and general agents shall remain the exclusive territory of such present managers and/or general agents; and no other managers or general agents with the company will establish offices or hire agents in those areas. In areas where there is overlapping responsibility at the present time, both present managers and general agents may continue to hire new personnel."

Penry replied by way of a letter dated October 31, 1974, that "The amendment requested by you has been prepared and will become part of your contract dated November 1." Penry refused to agree to one of the "amendments," namely "amendment 8," stating that, in his opinion, it was not necessary. Enclosed with Penry's letter was a document in the same form as Hall's enclosure number one, stating, inter alia:

"Amendment 6

"Integon agrees that for purposes of solicitation of life and health insurance, that it will not appoint agents under its Agency or Branch Office Department in Scottsboro or Cullman, Alabama unless such appointment is agreed upon by Mr. Hall. In Florence, Alabama, and Fort Payne, Alabama, where there are presently existing agencies of both Integon and Jackson Life, it will be permissible for the management personnel of the Integon agencies in those two locations to continue to develop those territories while at the same time it will also be permissible for Mr. Hall to recruit and develop agents in those two locations."

The agent's and general agent's contracts Hall and Penry signed were dated November 1, 1974. The contracts, which were Integon's standard form agreements, both provided that the agent's territory was not exclusive.

After signing the agency agreements, Hall began selling Integon's policies. In July of 1978, Donald Brackin signed an agent's agreement with Integon. Initially, Brackin, who maintained an office in Muscle Shoals, was treated as a part of Hall's agency. Hall was paid a percentage of the commissions on policies Brackin sold. In August of 1979 Brackin and Hall had a disagreement. The disagreement apparently involved a type of policy which pays first-year commissions in excess of the amount of actual first-year premiums. Hall claims that Brackin bought and paid for a number of these policies, using the commissions to pay the premiums and thereby netting a profit.

As a result of the dispute, Brackin asked to be removed from the Hall Agency. Integon acceded to the request and entered into a regional general agent's contract with him on August 1, 1979, allowing Brackin to establish his own agency. The establishment of a competing agency created a conflict between Hall and Integon as to the exclusivity of Hall's general agency contract. Integon drafted a document purporting to represent an agreement between it and Hall stating that Hall's contract did not provide for an exclusive agency in the Florence area and that Hall was not entitled to commissions for the business sold by Brackin's agency. Integon informed Hall by certified mail that if he refused to sign the document his contract would be terminated. Hall refused to sign and Integon terminated his contracts.

On appeal the parties disagree as to which of the two paragraphs labeled as "amendment six" became part of the contract. From the evidence in the record, it appears that Integon offered a general agency to Hall on the terms contained in its standard form agreement and that Hall refused to sign until certain changes in the terms could be agreed on. Hall made a counter-offer in the form of the ten amendments. Hall argues that when Penry wrote to Hall that the amendments "would become part of the contract" Penry had accepted Hall's counter-offer. Hall's argument overlooks the provision in his letter to Penry stating that Penry could accept the counter-offer by affixing his signature to the foot of the list of amendments Hall had prepared. Since Penry failed to sign the list which Hall prepared, choosing instead to sign a list he himself had drafted, it appears that Penry's list of proposed amendments constituted a counter-offer rather than an acceptance. When an offeror dictates the manner in which acceptance is to be indicated, a manifestation of assent by some other means will not usually result in the formation of a contract. See 1 Williston on Contracts, § 76 (1957). Furthermore, when Penry redrafted the amendments, he made some changes in them. To be effective as an acceptance, any expression of assent restating the offer must not change the material terms of the offer. See 1 Williston on Contracts, § 77 (1957); 1 Corbin on Contracts § 82 (1963). It appears that Hall signed Integon's standard form...