Mills v. Cosmopolitan Insurance Agency, Inc.

• Decision Date: 15 October 1980
• Docket Number: No. 79-413.,79-413.
• Citation: 424 A.2d 43
• Parties: James F. MILLS et al., Appellants, v. COSMOPOLITAN INSURANCE AGENCY, INC., a corporation et al., Appellees.
• Court: D.C. Court of Appeals

424 A.2d 43

James F. MILLS et al., Appellants, v. COSMOPOLITAN INSURANCE AGENCY, INC., a corporation et al., Appellees.

No. 79-413.

District of Columbia Court of Appeals.

Argued May 15, 1980.

Decided October 15, 1980.

Louis Ginberg, Washington, D. C., with whom Louise Eighmie Turner, Washington D. C., was on the brief, for appellants.

Joseph F. Cunningham, Washington, D. C., with whom Martha W. McClellan, Washington, D. C., was on the brief, for appellees.

Before NEWMAN, Chief Judge, and KELLY and KERN, Associate Judges.

NEWMAN, Chief Judge:

This is an appeal by plaintiffs, James F. Mills and Frances W. Crayton (appellants) from a directed verdict in favor of defendants, Cosmopolitan Insurance Agency, Inc. and Z. Jerome Jontiff, Vice President of the agency. Plaintiffs brought the action in a single count alleging fraud, claiming that the defendants misrepresented that both collision and liability insurance were included in a policy they had purchased from the defendants for their automobile. Appellants now contend that the trial court erred by: (1) directing a verdict for appellees after the presentation of all the evidence and (2) dismissing Frances W. Crayton as a party plaintiff. We reverse on both issues.

I

Cosmopolitan, an insurance agency located and doing business in the District of Columbia, acts on behalf of insurance applicants who have difficulty acquiring coverage and attempts to obtain coverage for them. On December 17, 1975, appellant Mills and his mother, appellant Crayton, came to Cosmopolitan seeking liability insurance for a 1973 Mercury Cougar they had purchased at Handley Ford, Inc. They had obtained collision insurance through Handley with the collision premium payment for one year included in the purchase price of the automobile. As a result of appellees' efforts, the liability policy was subsequently issued by National Indemnity Insurance Co. Appellant Crayton was not named as an insured on either policy, although her name did appear as co-owner of the automobile.

On November 26, 1976, the defendant agency notified plaintiff Mills that the collision insurance was due to expire on December 17, 1976. The letter of renewal for the collision policy noted that the premium would be $279, an increase from $199 for the previous year. On December 17, 1976, appellants Mills and Crayton went to Cosmopolitan's office in order to renew their policy. Mrs. Crayton brought $200 with her in order to cover the cost.

There is considerable debate between the parties as to what was said during the negotiations immediately preceding the renewal of the policy. At trial, appellee Jontiff maintained that the appellants specifically indicated that they did not want collision insurance because it was too expensive. As a result, he recommended membership in the Cross Country Motor Club which appellants agreed to purchase. Although the Motor Club included expenses related to towing, bail bond, storage, accidental death and dismemberment, the policy did not provide collision insurance. Appellants then made two deposits — one for $64 and the other for $75 — in order to obtain coverage, while Mr. Mills signed an application for the Motor Club.

Appellants at trial, in contrast, testified that they requested, were assured, and therefore assumed, that they would be receiving both collision and liability insurance. Furthermore, they maintained that appellees made no mention of the Cross Country Motor Club and instead affirmatively indicated that they would be "fully covered."

On December 31, 1976, appellant Mills was involved in an accident while driving his Mercury Cougar. After reporting the accident, appellants were informed by Cosmopolitan that they did not have collision insurance to cover damage to the car.

At trial, defendants moved for a directed verdict at the end of the plaintiffs' case. The motion was denied without prejudice. Defendants then proceeded to present their evidence. After the presentation of all the evidence, the trial court sua sponte dismissed appellant Crayton as a party plaintiff on the basis of lack of privity. Defendants at that time also moved for a directed verdict as to the remaining plaintiff, and the trial judge, concluding that plaintiff had not established a prima facie case of fraud, granted the motion for a directed verdict. This appeal followed.

II

A directed verdict may be granted "`[o]nly where the probative facts are undisputed and where reasonable minds can draw but one inference from them does the question [of a directed verdict] become one of law for the court.'" Aylor v. Intercounty Construction Corp., 127 U.S.App.D.C 151, 155, 381 F.2d 930, 934 (1967), quoting Capital Transit Co. v. Bingman, 94 U.S.App. D.C. 75, 76, 212 F.2d 241, 242 (1954). See also Corley v. BP Oil Corp., D.C.App., 402 A.2d 1258, 1263 (1979) (directed verdict appropriate where "`evidence is so clear that reasonable men could reach but one conclusion'"), quoting Bauman v. Sragow, D.C. App., 308 A.2d 243, 244 (1973); Klein v. District of Columbia, 133 U.S.App.D.C. 129, 132, 409 F.2d 164, 167 (1969) (directed verdict proper where "`no reasonable man could reach a verdict in favor of the plaintiff'") quoting Shewmaker v. Capital Transit Co., 79 U.S.App.D.C. 102, 103, 143 F.2d 142, 143 (1944). Where "the case [however] turns on controverted facts and the credibility of witnesses, the case is peculiarly one for the jury," Corley v. BP Oil Corp., supra at 1263, quoting Aylor v. Intercounty Construction Corp., supra, 127 U.S.App.D.C. at 155, 381 F.2d at 934; see also Capital Transit Co. v. Bingman, supra, 94 U.S.App.D.C. at 76, 212 F.2d at 242, and the court should not intercede.

When applying this standard, the evidence must be construed in a manner most favorable to the party against whom the motion was made. Corley v. BP Oil Corp., supra; Smith v. District of Columbia, D.C.App., 399 A.2d 213 (1979); Bauman v. Sragow, supra; Klein v. District of Columbia, supra; 5A Moore's Federal Practice ¶ 50.02[1], at 50-53 (2d ed. 1980). The nonmoving party is therefore entitled to every legitimate inference from the evidence and neither the trial judge nor the appellate court on review is to evaluate the credibility of witnesses nor weigh the conflicting testimony. Corley v. BP Oil Corp., supra; Marshall v. District of Columbia, D.C.App., 391 A.2d 1374 (1978); Klein v. District of Columbia, supra; Capital Transit Co. v. Bingman, supra; 9 Wright & Miller, Federal Practice and Procedure: Civil § 2524 at 543-44 (1971). Thus, if a jury could reasonably return a verdict for the nonmoving party, the trial court may not direct the verdict. Smith v. District of Columbia, supra at 215.

These principles were applied in Lee v. Fisco Enterprises, Inc. of Washington, D. C., D.C.App., 233 A.2d 44 (1967). In reversing the trial judge's grant of a directed verdict, we stated, "if any evidence of fraud was presented, or if reasonable inferences of fraud could have been drawn from appellant's evidence, she was entitled to have her case submitted to the jury." Id. at 45 (citations omitted). Even if the evidence did "not compel a finding of fraud or deception, [the fact that] reasonable men could find" such to be the case mandated a jury determination. Id. at 47 (emphasis added). See also Johnson v. Harris, D.C.Mun.App., 110 A.2d 537, 538 (1955) (reversal of trial court's grant of directed verdict where appellant alleged fraud and deceit holding "conflicting testimony required a weighing of the accuracy and reliability of the evidence, and this, of course, was a function of the trier of facts" (footnote omitted)); Tucker v. Beazley, D.C.Mun.App., 57 A.2d 191 (1948); Rosenberg v. Howle, D.C.Mun.App., 56 A.2d 709 (1948). The essential elements of a cause of action for fraudulent misrepresentations are: (1) a false representation; (2) in reference to material fact; (3) made with knowledge of its falsity; (4) with the intent to deceive; and (5) causing one to act upon the representations. Bennett v. Kiggins, D.C.App., 377 A.2d 57, 59 (1977), cert. denied, 434 U.S. 1034, 98 S.Ct. 768, 54 L.Ed.2d 782 (1978).

After reviewing the record in this case, we conclude that there was sufficient evidence of fraud to warrant the submission of the case to a jury. Testimony by the appellants, if believed by the jury, and the reasonable inferences from their evidence, established a prima facie case for recovery since that testimony covered each of the elements of the cause of action for fraud. See Bennett v. Kiggins, supra. Both appellants at trial testified that at the time the new policy was purchased they requested, were assured, and therefore assumed that they would receive collision as well as liability insurance. Specifically, Mr. Mills testified that he had been a party to the conversations between his mother and Z. Jerome Jontiff, Vice President of Cosmopolitan Insurance Agency, Inc., where his mother was told that collision insurance would be included in the new policy. Specifically at trial he stated:

So he [Mr. Jontiff] told me that another insurance company, which is GEICO, would be handling my insurance from now on. You know. So my mother said well okay, well we just want to go ahead on and get it straight. I said well okay then. He said well GEICO will be handling my liability and collision insurance from now on.

Q. All right. And was there any further conversation that you recall about the kind of insurance that you would have?

A. No, naw, no. We just, we discussed, he already told me that we have, GEICO would be handling my liability and collision insurance from now on. [Tr. 23] (Emphasis added).

In response to the following questions, Mr. Mills testified further:

Q. When you were there with your mother and speaking to Mr. Jontiff on December 17th, 1976, was there any discussion between any of the three of you as to carrying collision insurance?

A. Yes, sir. He had, he had told me that, he had told me that GEICO...