Leonard v. Pioneer Finance Co.

• Decision Date: 12 June 1978
• Docket Number: Nos. KCD,s. KCD
• Citation: 568 S.W.2d 937
• Parties: Debra LEONARD and Wanda Leonard, Appellants-Respondents, v. PIONEER FINANCE COMPANY, Respondent-Appellant. 28957, KCD 28960 and KCD 28961.
• Court: Missouri Court of Appeals

Page 937

568 S.W.2d 937

Debra LEONARD and Wanda Leonard, Appellants-Respondents, v. PIONEER FINANCE COMPANY, Respondent-Appellant.

Nos. KCD 28957, KCD 28960 and KCD 28961.

Missouri Court of Appeals, Kansas City District.

June 12, 1978.

Motion for Rehearing and/or Transfer Denied July 20, 1978.

Gene C. Morris, Pieter A. Brower, Rogers, Field, Gentry, Benjamin & Robertson, Kansas City, for appellants-respondents.

Joseph W. Amick, Kansas City, for respondent-appellant.

Before SHANGLER, P. J., and SWOFFORD, C. J., and WASSERSTROM, J.

WASSERSTROM, Judge.

Plaintiff Wanda Leonard and plaintiff Debra Leonard each filed a separate lawsuit against defendant Pioneer Finance Company for damages because of Pioneer's conduct in its efforts to collect notes signed by Debra. Those two cases were consolidated for trial. From a judgment on jury verdicts for both plaintiffs, Pioneer appeals. From a judgment for Pioneer on its counterclaim against Debra, she appeals.

The controversy arose out of the following basic facts. Debra and her husband signed a note to Pioneer in 1971 when she was 18 years old, and she and her husband signed a renewal note in 1972 when Debra was 19 years old. That indebtedness fell delinquent in August, 1973. Pioneer's employees then began collection efforts which included unsuccessful efforts to reach Debra and her husband Darryl at their home.

Pioneer had in its records information that Darryl worked for Joseph A. Leonard. Joseph was Darryl's uncle and was also the husband of plaintiff Wanda. Pioneer's employees made calls to the Joseph Leonard phone number seeking to leave messages for Darryl to call the Pioneer office, because they could not reach him at his home phone. Joseph responded that Darryl did not live at that number, that he no longer worked for Joseph and Joseph asked that Pioneer's employees leave him alone. Nevertheless, Pioneer's employees made three further telephone calls thereafter.

On September 19, 1973, Pioneer's trainee collection agent, James Cook, went out to make collection calls with his supervisor, John Brewer. In the course of their rounds they drove to the home of Darryl and Debra Leonard in Blue Springs, but found no one there. This constituted the last of a series of calls which had been made to the Leonard residence, and on a number of the previous occasions notes had been left for the Leonards to get in touch with Pioneer about their delinquent account. At the time of the call on September 19, the two Pioneer agents left a further note for the Leonards which read as follows: "This is the third time we have tried to reach you at home; we are not Yellow Cab Company, but feel like it. Please contact our office at 756-2020. If not, we will ruin your good credit standings."

The Pioneer agents received information from a neighbor that Debra was working at a beauty shop and they proceeded to ascertain its name and location. After their leaving of the note at the Leonard residence, they proceeded to the beauty shop. Both entered and were greeted by Wanda Leonard, who was the proprietor and the one for whom Debra worked. Wanda was 44 years old. The two collectors asked for Mrs. Leonard, and Wanda responded that she was Mrs. Leonard. The men then told her that they were from Pioneer and wanted to know when she was going to pay her bill. Wanda denied owing any money. Thereupon the men asked about her address and said they had been to her house several times and "you must be trying to duck us, we never get any response." They asked whether she lived at 517 Northeast Third, to which Wanda answered in the negative. They then asked whether her husband's name was Darryl, and she responded "No, my husband's name is Joe." Upon receiving that information, according to Wanda's testimony, "They sort of looked at each other" and started to leave. Wanda further testified that as they started out the door, Brewer said "We will just file suit."

Wanda then called her son and after getting him on the phone, looked out and saw the two Pioneer collectors still there. She beckoned them to come in and directed Brewer to the telephone where he was engaged in conversation by Wanda's son. At that same time, Cook asked Wanda whether Debra Leonard worked in the beauty shop, to which Wanda answered in the affirmative; but when Cook asked for permission to speak to Debra, Wanda refused. When Brewer finished the telephone conversation, both men left. They both got in their automobile which was in a parking lot close to the entrance of the beauty shop, where they waited to talk to Debra when she came out at the noon hour. When Wanda observed this, she called the police, who came to the parking lot and asked the Pioneer collectors to leave, which they did.

Wanda testified that this episode upset her and made her nervous. She took tranquilizers for two or three days and returned to normal within a week. Debra testified that as a result of the occurrence on September 19, she was very upset, cried a good deal and did not return to normal for approximately two or three months.

Wanda submitted her claim to the jury on the theory of outrageous conduct. Debra submitted to the jury a claim based on outrageous conduct and also a separate claim for invasion of privacy. The jury awarded Wanda actual damages of $2,000 and punitive damages of $8,000. It awarded Debra actual damages of $1,000 and punitive damages of $1,500 for outrageous conduct and $500 actual damages for invasion of privacy. The trial court, however, set aside the award to Debra for invasion of privacy. Pioneer's counterclaim against Debra for the unpaid balance on the note indebtedness was tried to the court and resulted in a judgment in favor of Pioneer for $1,262.00.

On this appeal, Pioneer contests the judgment in favor of Wanda on the grounds that: (1) her claim for outrageous conduct was beyond her pleadings; and (2) that her evidence did not support a finding of outrageous conduct. It contests the judgment in favor of Debra on the ground of insufficiency of the evidence to show outrageous conduct. For their part, both Wanda and Debra challenge Pioneer's right to maintain this appeal on the ground that Pioneer made a payment in partial satisfaction of the two judgments and is therefore estopped to deny the judgments. Debra further contends on her separate appeal that she had no liability on the note indebtedness on the ground of infancy.

I. Wanda's Right to Recover

The first count of Wanda's petition set forth classic allegations for slander, while her second count contained classic allegations of trespass to real estate. Pioneer argues that Wanda should not have been permitted to depart from those theories and submit to the jury on an unpleaded cause of action for outrageous conduct. That issue need not be resolved in view of our determination that Wanda's evidence was insufficient to sustain a verdict on the theory ultimately chosen by her for submission, namely outrageous conduct.

Missouri does recognize a cause of action for outrageous conduct as defined by Section 46 of the Restatement (Second) of Torts. Pretsky v. Southwestern Bell Telephone Co., 396 S.W.2d 566 (Mo.1965); Warrem v. Parrish, 436 S.W.2d 670 (Mo.1969); Smith v. Standard Oil, Nos. 38802 and 38803, 567 S.W.2d 412, St. Louis District, Missouri Court of Appeals, decided May 2, 1978. The elements of this action are that the defendant must have by extreme and outrageous conduct intentionally or recklessly caused severe emotional distress to the plaintiff from which bodily harm results. This doctrine has found extensive expression in cases in which collection agencies have engaged in harsh and oppressive collection methods. The wide spread existence of abusive debt collection practices has been the subject of Congressional legislative findings in Fair Debt Collection Practices Act, 15 U.S.C.A., Section 1692. The right to recover damages in appropriate cases of this character is well recognized. Clark v. Associated Retail Credit Men,70 App.D.C. 183, 105 F.2d 62 (1939); Barnett v Collection Service Co., 214 Iowa 1303, 242 N.W. 25 (1932); Moorhead v. J. C. Penney Co., Inc.,555 S.W.2d 713 (Tenn.1977); 38 Am.Jur.2d Fright, Shock, Etc., Sec. 44, p. 57; Annotation, Recovery For Emotional Distress Or Its Physical Consequences Caused By Attempts To Collect Debt Owed By Third Party, 46 A.L.R.2d 772. This right of recovery of damages for extreme cases of improper collection methods has also been recognized by the Missouri courts. Liberty Loan Corporation of Antioch v. Brown, 493 S.W.2d 664 (Mo.App.1973). See also Zimmerman v. Associates Discount Corp., 444 S.W.2d 396 (Mo. banc 1969) and Biederman's of Springfield, Inc. v. Wright, 322 S.W.2d 892 (Mo.1959).

Nevertheless, some leeway must be accorded to creditors to exercise legitimate efforts to collect debts due to them. As stated in Dawson v. Associates Financial Serv. Co. of Kan., Inc., 215 Kan. 814, 529 P.2d 104, l.c. 110 (1974):

"When one accepts credit, the debtor impliedly consents for the creditor to take reasonable steps to pursue payment even though it may result in actual, though not actionable, invasion of privacy. * * * In the debtor-creditor situation the right of a debtor to privacy is subject to the right of a creditor to take reasonable steps to collect the debt. * * *.

"In this area of the developing law, the business community must be given some latitude to pursue reasonable methods of collecting debts even though such methods often might result in some inconvenience or embarrassment to the debtor. * * * Debtors cannot object to some inconvenience in connection with their creditor's efforts to collect a debt. It has been held that debtors' tender sensibilities are protected only from oppressive, outrageous conduct. * * *."

See also Public Finance Corp. v. Davis, 66 Ill.2d 85, 4 Ill.Dec. 652, 360 N.E.2d 765 (1977). In short, there are interests on the creditor's side as well as that of the debtor in this...