Wirtz v. Massachusetts Mut. Life Ins. Co., 07-94-0083-CV

• Decision Date: 28 April 1995
• Docket Number: No. 07-94-0083-CV,07-94-0083-CV
• Citation: Wirtz v. Massachusetts Mut. Life Ins. Co., 898 S.W.2d 414 (Tex. App. 1995)
• Parties: Jack WIRTZ, Appellant, v. MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, et al., Appellees.
• Court: Texas Court of Appeals

Page 414

898 S.W.2d 414

Jack WIRTZ, Appellant, v.MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, et al., Appellees.

No. 07-94-0083-CV.

Court of Appeals of Texas Amarillo.

April 28, 1995.

John Steven Dwyre and Jay K. Farwell, San Antonio, for appellant.

Crenshaw Dupree & Milam, L.L.P., Cecil Kuhne, and Carr Fouts Hunt Craig Terrill & Wolfe, L.L.P., Donald M. Hunt and Gary M. Bellair, Lubbock, for appellees.

Before REYNOLDS, C.J., and DODSON and BOYD, JJ.

REYNOLDS, Chief Justice.

Presenting six point-of-error contentions, Jack Wirtz seeks the reversal of a take-nothing judgment, rendered on a jury verdict, in his action, predicated on events involving six key man insurance policies issued to him, to recover actual and exemplary damages from Massachusetts Mutual Life Insurance Company, Jay Eagan, and Robert Dan Thompson, III.On the rationale expressed, the points will be overruled and the judgment will be affirmed.

Wirtz was a former owner and officer of Page & Wirtz Construction Company, a general contractor operating as a Texas corporation and a New Mexico corporation in the construction of commercial buildings in the two states.During the time material to this litigation, the Texas corporation was managed by J.C. Page, and the New Mexico corporation was managed by Wirtz.Many of Page & Wirtz's construction contracts required the corporations to provide performance bonds, which insured that Page & Wirtz or its surety would complete the contract.To limit its exposure, the surety asked Page & Wirtz to insure the lives of its key personnel.

Over a period of time, Page & Wirtz secured insurance on the lives of Page and Wirtz, the life of the latter being insured by six Massachusetts Mutual Life Insurance Company insurance policies.At the material times, Jay Eagan was a general agent acting under a contract with Mass Mutual, and Robert Dan Thompson, III was an agent acting under a contract with Eagan.Page & Wirtz paid the annual premium of $60,000 on the policies insuring the life of Wirtz which, in the event of his untimely death, would provide death benefits of $2.5 million to Page & Wirtz.

Although prior to 1985, Page & Wirtz had approximately one hundred million dollars of construction under contract, an economic turndown adversely affected its cash flow.Its bonding agent recommended that it borrow, and Page & Wirtz did borrow, as much as possible from the cash value of the insurance policies which, by 1985 and prior to the loans, had a cash value in excess of $200,000.

The economic turndown prompted a decision by Page to buy Wirtz's stock in Page & Wirtz.By an agreement executed on 29 August 1986, Wirtz exchanged his stock for, among other things, the insurance policies.Wirtz, residing in Albuquerque, New Mexico, sent the policies to Thompson in Lubbock, notified him of his acquisition of the policies and, not being able to afford the premiums, but wanting to retain a significant amount of insurance, asked Thompson for information to enable him to make a decision.At that time, the policies had a cash value in excess of $23,000.

From this point in the developing events, the parties disagree upon the material aspects of their subsequent dealings, a number of which were unrecorded telephone conversations.Wirtz takes the position, in brief, that he instructed Thompson to cash in the policies or get as much paid-up insurance as possible; in reply, Thompson represented that time would not influence the amount of cash value in the policies, but it might go up a little with time.Wirtz recalled discussing with Thompson the intent of Mass Mutual to implement an exchange program by which debt-laden policies would be exchanged for debt-free policies with reduced benefits.¹Wirtz also stated that Thompson offered to provide a paid-up policy with benefits of $500,000 if he would send an $8,108.14 payment.In response, Wirtz sent Thompson this letter dated 1 March 1988:

As per your request, I am enclosing my check for $8108.14.

It is my understanding that this payment will enable you to convert the $2,500,000 in Life Insurance that Page & Wirtz carried on me into $500,000 in Paid UP Life in lieu of the $400,000 in Paid Up Life previously discussed.

Thank you for your persistence to get this problem resolved.Come eat some Chili's.

Wirtz concedes that in response to his letter, he received a telephone call from Thompson, but contends the purpose of it was to inform him that he had not enclosed the check.He sent the check, and it was cashed, but the proceeds were used to pay the premiums on two of his lapsed policies, not to purchase paid up insurance.

Thompson's version of the events was that when Wirtz asked for information to enable him to make a decision about the policies, he explained that the automatic premium provision of the policies would keep them in effect for a period of time.Afterwards, Thompson informed Wirtz that the policies had a cash value of approximately $23,000, and offered various suggestions concerning the retention of insurance and applying for a new policy.He also informed Wirtz that the $23,000 cash value of his policies might purchase a paid-up policy with death benefits of approximately $100,000.Thompson further suggested that Wirtz might be able to purchase a policy with benefits in the $400,000 to $500,000 range if he was willing to pay premiums of $1,000 a month for ten years, but he denied he told Wirtz that the $23,000 cash value was sufficient to purchase a paid-up policy with benefits of $400,000.

Because of Mass Mutual's intent to implement an exchange program and Wirtz, according to Thompson, thought the program was worth waiting for, Thompson notified Wirtz that two of his policies would lapse unless he remitted an $8,108.14 payment, which would keep all the policies in force and allow him to obtain the maximum amount of insurance or paid-up insurance, depending upon what Wirtz decided to do.Subsequent to that notification, Wirtz sent his 1 March 1988 letter without enclosing his check.

Upon receipt of the letter, Eagan and Thompson discussed their belief that Wirtz had misunderstood Thompson's explanations of his possible options, and agreed that Thompson should call Wirtz to rectify the misunderstanding.Thompson called Wirtz, informed him that the check was not enclosed and when he explained that the $8,108.14 was to reinstate the lapsed policies to enable details of the exchange program to be secured, Wirtz said, "Okay.That is fine."When Thompson received the check, he applied it to reinstate the lapsed policies.

Thompson then informed Wirtz that he had two options under the exchange program: He could purchase a paid-up policy with benefits of $100,000, or he could purchase a policy which would pay benefits in the $442,000 range if he was willing to pay additional premiums.Thompson also told Wirtz that he could get back his payment if he chose not to participate in the exchange program.Wirtz responded, "Well, we will see."

Without notifying Thompson of his decision, or requesting the return of his payment, Wirtz initiated the action underlying this appeal.He sought actual, as well as exemplary damages, from Mass Mutual, Eagan, and Thompson, upon allegations of their breach of contract and duty of good faith and fair dealing, violations of the Texas Deceptive Trade Practices ActandTexas Insurance Code, common law fraud, conversion, negligent misrepresentation, and usury.

Upon submission of the multi-causes of action to the jury, the jury found, in our paraphrasing,

(1) that Eagan was the agent or apparent agent, and Thompson was acting as the agent or apparent agent of Mass Mutual, and Thompson was acting as the agent or apparent agent of Eagan, in their dealing with Wirtz relating to the six insurance policies;

(13) that there was a written or oral agreement in effect between Wirtz and Mass Mutual after September of 1986 regarding the making of loans for making payment of premiums on unconverted policies or the charging of interest on such loans; and

(14) the specific interest rates agreed to or approved by Wirtz after September of 1986 for Mass Mutual to continue making loans against each of the six policies' cash values without converting the existing policies.

However, the jury failed to find that Mass Mutual, Eagan, or Thompson, in our paraphrasing,

(2) engaged in any false, misleading, or deceptive act or practice that was a producing cause of damage to Wirtz;

(3) engaged in any unfair or deceptive act or practice in connection with the solicitation, sale or conversion of insurance to Wirtz;

(5) engaged in any unconscionable action or course of action in connection with insurance policies that was a producing cause of damages to Wirtz;

(7) committed any fraud or (8) made any negligent misrepresentations proximately causing damages to Wirtz;

(12) breached a contract in failing to convert the life insurance policies of Wirtz; or

(15) breached a fiduciary obligation to Wirtz.

Having failed to find any of the actionable allegations lodged against Mass Mutual, Eagan, or Thompson, the jury, following the trial court's instructions, did not answer the actual and exemplary damage questions nor the question concerning attorney's fees.

After the court received the jury's verdict and before it rendered judgment, Wirtz filed five motions.On 16 July 1993, he prematurely moved for a new trial, contending, inter alia, that the failure of the jury to find the matters inquired about in questions 3, 12, and 15 was contrary to the great weight and preponderance of the evidence.With two other motions, Wirtz also moved for judgment on the verdict, i.e., on the jury's answer to question 14, with respect to his excessive interest claim, and for judgment non obstante veredicto in the principle amount of $500,000 on the ground that his 1 March 1988 letter was the acceptance of an offer and constituted a valid contract as a matter of law.In each of...