Underside v. Lathrop

• Decision Date: 27 April 1982
• Docket Number: No. 55392,55392
• Citation: 645 P.2d 514,1982 OK 57
• Parties: R. L. UNDERSIDE, Appellee, v. Tom LATHROP, d/b/a Lathrop-Steele Insurance Agency; and Lathrop-Steele Insurance Agency Inc., an Oklahoma Corporation, Appellants, and Kansas City Fire & Marine Insurance Company, Appellee.
• Court: Oklahoma Supreme Court

Page 514

645 P.2d 514

1982 OK 57

R. L. UNDERSIDE, Appellee, v. Tom LATHROP, d/b/a Lathrop-Steele Insurance Agency; and Lathrop-Steele Insurance Agency Inc., an Oklahoma

Corporation, Appellants,

and

Kansas City Fire & Marine Insurance Company, Appellee.

No. 55392.

Supreme Court of Oklahoma.

April 27, 1982.

Rehearing Denied June 7, 1982.

Appeal from District Court, Oklahoma County; William S. Myers, Jr., judge.

A policy writing agent, one of two defendants in the action, seeks corrective relief from judgment absolving the other defendant, an insurer, of alleged contractual liability for a homeowner's fire loss. Insurer's motion to dismiss this appeal urges that the appellant-agent, who was not a party to the judgment, is not legally aggrieved by the decision sought to be reviewed and hence lacks standing to challenge it in this court. On sua sponte reconsideration of the insurer's motion, the appeal is

DISMISSED.

Daniel R. Sheehan, Durall, Meadows, Sheehan & Walters, Oklahoma City, for appellee, Underside.

Ronald L. Day, C. William Threlkeld, Fenton, Fenton, Smith, Reneau & Moon, Oklahoma City, for appellants.

Clarence P. Green, Green & James, Oklahoma City, for appellee, Kansas City Fire & Marine Ins. Co.

OPALA, Justice:

This case comes to us laden with a fatal postural infirmity. The relief sought by appellant cannot be granted and the appeal must be dismissed. The dispositive question before us is whether appellant is presently aggrieved by a judgment rendered between two other parties in the case. Our answer is in the negative.

I. THE ANATOMY OF LITIGATION

In this dispute over liability for a fire loss the homeowner's action invoked two alternative remedies to recover a single claim. These remedies were pleaded as separate "causes of action". ¹ In the first alternative count-pressed against the alleged insurer and its policy writing agent-liability stood predicated upon an oral insurance contract made by the homeowner with the insurer's agent; ² the second count-advanced against the agent alone-was founded on the latter's negligence in failing to procure a timely arranged-for renewal of the policy. ³ This appeal by the agent seeks to affect the trial court's decision absolving the insurer of its contractual liability on the claim. The tort-based phase of litigation is not directly implicated here.

The trial court's disposition of the ex contractu remedy came in two different stages. Initially, the court entertained the agent's demurrer that was directed to homeowner's ex contractu count. Its order sustaining that demurrer-without allowing leave or time to replead-was doubtless predicated on the familiar common-law principle that one who deals as agent in behalf of the disclosed principal is not liable for the latter's breach of contract. ⁴ The next stage occurred when the court took under consideration the insurer's motion for summary judgment which was submitted together with a stipulation of facts. Upon the issues so tendered the court ruled that at the time of the fire homeowner was not protected by the insurer against the risk for which recovery was sought. ⁵ The instant appeal by the agent is from that decision.

II. THE PRECISE NATURE OF CORRECTIVE RELIEF CLAIMED BY THE AGENT

The agent urges the judgment absolving the insurer of the alleged ex contractu liability for the loss should be clarified to the end that he (the agent) be allowed to prove, in the proceedings to follow on the alternative claim in tort, that insurer's coverage was in effect at the time of the fire "and thereby negate the allegation of negligence for failure to procure insurance".

III. THE AGENT'S CLAIM TO AN APPEALABLE INTEREST

The agent claims the judgment in favor of the insurer is "a determination that there was no coverage (which) forecloses this issue and deprives ... (him) of an affirmative defense to the ... (homeowner's negligence) action (against him) ... without even the opportunity to be heard in this matter."

IV. THE RELIEF SOUGHT CANNOT BE GRANTED

The agent was neither a party nor a privy to the judgment in favor of the insurer. There is no indication in the record that the agent was allowed to participate in the proceedings that culminated in that judgment or that he (the agent) was afforded "full and fair opportunity" to litigate the coverage issue either with the homeowner or with the insurer. ⁶ Nay, when the decision for the insurer was reached below, the ex contractu count plead against the agent already had been effectively removed from the court's consideration by its prior order sustaining the agent's demurrer to that alternative theory of recovery. ⁷ At that point in litigation the only count pending against the agent was one predicated on negligence in failing to procure a timely renewal of the policy. The insurer was not brought in as a party to that claim count. The record reveals no plea in the homeowner's reply on file below by which the affirmative defense in the agent's answer-that homeowner did have coverage for the fire loss-is averred to be barred from relitigation by the judgment rendered against the homeowner and in favor of the insurer in the contract-remedy phase of the case. In short, in its current posture the record reveals no pleading which tenders issue preclusion ⁸ as a presently effective tool of the homeowner's trial strategy.

Standing to prosecute an appeal must be predicated on that interest in the trial court's decision which is direct, immediate and substantial. ⁹ Conjecture or speculation about possible adverse consequences that may flow from the decision at some point in the future will not suffice to support a person's "aggrieved" status. One cannot appeal from a decision, however erroneous, which does not affect one's substantial rights. ¹⁰

The agent clearly is without standing to challenge the judgment rendered in a contest between the homeowner and the insurer. He has no appealable interest in the coverage issue that was litigated and determined solely between these parties. The terms of their judgment cannot be altered here at the instance of the agent merely to allay his fears-based not on pleadings in the case but on pure speculation-that the judgment to be reviewed might be interposed against him for its issue preclusive (collateral estoppel) force. The record simply does not disclose any attempt by the homeowner to bar the agent from litigating the issue of effective coverage as his affirmative defense. Since the agent brought no third-party indemnity claim against the insurer-for a judgment over in the event of homeowner's recovery against the agent-the possible defensive use of issue preclusion by the insurer is, at best, conjectural.

We do not sit to decide hypothetical issues or to give advisory opinions about issues not yet in controversy. No corrective relief may hence be granted here from anticipated interposition of the tendered judgment as a bar...