Todd v. Modern Woodmen of America

• Citation: 620 So.2d 591
• Court: Supreme Court of Alabama
• Decision Date: 16 April 1993
• Parties: Thomas D. TODD v. MODERN WOODMEN OF AMERICA. Thomas D. TODD v. Jimmy Douglas CHAMBERS, et al. 1910497, 1911348.

Page 591

620 So.2d 591

Thomas D. TODD v. MODERN WOODMEN OF AMERICA.

Thomas D. TODD v. Jimmy Douglas CHAMBERS, et al.

1910497, 1911348.

Supreme Court of Alabama.

April 16, 1993.

James P. O'Neal of Gaiser and O'Neal, Birmingham, for appellant.

Ollie L. Blan, Jr. and W. Gregory Smith of Spain, Gillon, Grooms, Blan & Nettles, Birmingham, for appellees.

PER CURIAM.

The plaintiff, Thomas D. Todd, appeals from a summary judgment in favor of the defendant Modern Woodmen of America, made final pursuant to Rule 54(b), Ala.R.Civ.P. Todd also appeals from the denial of his Rule 60(b) motion that was filed during the pendency of the first appeal.

Todd brought an action against Modern Woodmen, a life insurance society, and its agent, Jimmy Chambers, for losses incurred in connection with the sale of fraudulent investment contracts by Chambers to Todd. ¹ The complaint set forth four counts, alleging breach of contract, violation of the Securities Act of Alabama, violation of the Alabama Trade Practices Law, and fraud. The primary issues here are: 1) whether the trial court erred in holding that Todd failed to present substantial evidence that Chambers had authority to bind Modern Woodmen to the fraudulent investment contracts; and 2) whether the trial court erred in holding that Todd failed to present substantial evidence that Modern Woodmen could be held liable in tort for Chambers's acts.

The standard of review applicable to a summary judgment is the "substantial evidence" rule. Under this rule, once the movant has shown, prima facie, that there is no genuine issue as to any material fact and that he is entitled to a judgment as a matter of law, the nonmovant must introduce "substantial evidence" to rebut this showing. "Substantial evidence" has been defined as "evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." West v. Founders Life Assurance Co., 547 So.2d 870, 871 (Ala.1989); Ala.Code 1975, § 12-21-12(c).

The evidence in the record before us is limited to certain documentary evidence and the affidavits of the plaintiff Todd and J.V. Standaert, the national secretary of Modern Woodmen; these documents and affidavits were submitted by the parties in support of their positions on Modern Woodmen's motion for summary judgment. Although Modern Woodmen took Todd's deposition and relied on that deposition in its brief in support of its motion for summary judgment and in oral argument on the motion, that deposition was not filed with the trial court. Modern Woodmen filed a motion to supplement the record on appeal with Todd's deposition, but the trial court denied that motion. Therefore, the deposition is not before us for review.

The facts, as recited in Todd's affidavit, are as follows:

"In March of 1990 I met defendant, Jimmy Chambers. To my knowledge, I had never previously met Mr. Chambers and was not aware of his existence prior to our meeting. At the time we met, Mr. Chambers informed me that he was an agent for defendant, Modern Woodmen of America. Attached hereto as Exhibit '1' is a copy of Mr. Chambers's business card identifying him as 'District Manager' of Modern Woodmen. We did not transact any business during our first meeting, although Mr. Chambers did describe an investment opportunity which Modern Woodmen was offering at the time.

"I was familiar with the name Modern Woodmen as one of my children had previously won an award at school which was sponsored by the company.

"Following this initial meeting, I met with Mr. Chambers on March 26, 1990 at the Modern Woodmen office on Rainbow Drive in Gadsden, Alabama. The office was clearly identified by exterior signage as being the office of Defendant, Modern Woodmen of America and there appeared to be a number of employees in addition to Mr. Chambers present in the office. During my meeting with Mr. Chambers we sat at his desk which was clearly visible to other Modern Woodmen employees in the office. At this meeting in the Modern Woodmen office, I purchased a policy of Modern Woodmen Life Insurance, a copy of which is attached hereto as exhibit '2', and a 'drop-in' contract which I believed to be a Modern Woodmen product, a copy of which is attached hereto as Exhibit '3.' I obtained from Mr. Chambers a copy of his insurance license clearly reflecting the fact that he was employed by Modern Woodmen of America, a copy of which is attached hereto as Exhibit '4.'

"This purchase of the life insurance and the 'drop-in' was consummated in the office of Modern Woodmen within clear sight, view and hearing of any persons who may have been present in the Modern Woodmen office at that time. Several days later I purchased a second 'drop-in' contract. Again, allegedly issued by Modern Woodmen of America, a copy of which is attached hereto as Exhibit '5.'

"At the time I purchased the 'drop-in' contracts I was informed that I had to be a Modern Woodmen policyholder in order to be eligible to purchase the 'drop-ins.' Accordingly, I purchased the Modern Woodmen policy identified on Exhibit '2.'

"At all times and in all respects in my dealings with Mr. Chambers as discussed herein I believed he was acting on behalf of Modern Woodmen and in view of the circumstances described herein I believe I had every right to that belief. At no time would I have ever had any personal financial dealings with Mr. Chambers in his individual capacity and I only dealt with him in his capacity as a representative of Modern Woodmen of America."

Standaert stated in his affidavit, inter alia, that Modern Woodmen did not sell "drop-in" contracts, had not authorized Chambers to do so, did not receive any proceeds or benefits from the sale of the "drop-in" contracts, and did not know of or consent to Chambers's sales of "drop-in" contracts. Each of the "drop-in" contracts in the record shows that Todd gave Chambers $12,000 and was promised payments of $650 per month plus a return of the $12,000 at the end of the year. After receiving a single monthly payment on the "drop-in" contracts from Chambers in cash, Todd received no more monthly payments. Todd cancelled the life insurance policy and brought this action against Modern Woodmen and Chambers.

Todd argues that a jury question was presented on the issue of whether Chambers had authority to bind Modern Woodmen in contract when he sold the "drop-ins" to Todd. The court properly entered the summary judgment on the contract claim,...