Case Title: INSURANCE SPECIALISTS INC v LON

Citation: 

Docket Number: 82-094

State: montana

Court: Montana Supreme Court

Date: 1982-10-27T00:00:00Z

Document:
No. 82-94 I N T H E SUPREBE C O U R T OF T H E STATE OF M O N T A N A i982 INSURANCE SPECIALISTS, INC., P l a i n t i f f and Respondent, V S . D A L E LONGFELLOW, Defendant and Appellant. Appeal from: District Court of t h e T h i r t e e n t h J u d i c i a l D i s t r i c t , I n and f o r t h e County of Yellowstone Honorable Diane G. Barz, Judge p r e s i d i n g . Counsel o f Record : For P l a i n t i f f : Law O f f i c e s o f Russell K. F i l l n e r ; Russell R. F i l l n e r , B i i l i n g s , Montana For Defendant: Towe, B a l l , Enright & Mackey; N e i l D. Enright, B i l l i n g s , Montana Submitted on b r i e f s : J u l y 29, 1982 Decided : OCT 7 1982 F i l e d : d !Jp[ d 7 '!%i! Longfellow s t i l l owes $1,709.63 on t h e n o t e . Longfellow coun- t e r c l a i m e d t h a t 762 s e r v i c e c o n t r a c t s should have been c r e d i t e d t o h i s a c c o u n t . According to Longfellow, n o t o n l y is t h e pro- m i s s o r y n o t e f u l l y p a i d , b u t IS1 owes him $1,810 i n commissions. The D i s t r i c t Court found t h a t t h e e v i d e n c e d i d n o t s u p p o r t Long f e l l o w ' s c o u n t e r c l a i m . Longfellow raises two seemingly c o n t r a d i c t o r y i s s u e s on a p p e a l . F i r s t , he claims t h e District Court e r r e d by a p p a r e n t l y n o t c o n s t r u i n g t h e promissory n o t e and t h e u n d e r l y i n g agreement ( l e t t e r ) as one i n s t r u m e n t . Then, i n t h e second i s s u e , he claims t h e District Court e r r e d by m i s i n t e r p r e t i n g t h e u n d e r l y i n g agreement. There is n o t h i n g i n t h e record to s u p p o r t a p p e l l a n t ' s f i r s t c o n t e n t i o n t h a t t h e D i s t r i c t Court f a i l e d to c o n s t r u e t h e pro- m i s s o r y n o t e and t h e u n d e r l y i n g agreement t o g e t h e r . N e a r l y a l l of t h e e v i d e n c e a t t r i a l went to t h e c o n s t r u c t i o n of t h e u n d e r l y i n g c o n t r a c t , and d e t e r m i n i n g who had r e f e r r e d which car d e a l e r s t o I S I . W e need n o t c o n s i d e r t h i s i s s u e s i n c e it is n o t based on t h e r e c o r d . I n h i s second i s s u e , Longfellow b a s i c a l l y claims t h a t t h e District Court m i s i n t e r p r e t e d t h e word " r e f e r r e d " as it is used i n t h e u n d e r l y i n g agreement. Long f e l l o w c o n t e n d s t h a t h i s u n c o n t r o v e r t e d t e s t i m o n y showed he r e f e r r e d c e r t a i n car d e a l e r s t o I S I , and t h e r e f o r e he should be c r e d i t e d w i t h t h e service c o n t r a c t s s o l d by t h o s e d e a l e r s . According to Long f e l l o w , e v i - dence t h a t a n o t h e r a g e n t f o r I S 1 a l s o r e f e r r e d car d e a l e r s to I S 1 is i r r e l e v a n t because t h e c o n t r a c t does n o t r e q u i r e t h a t Longfellow be t h e sole p e r s o n making t h e r e f e r r a l s . L o n g f e l l o w ' s c o n t e n t i o n must f a i l s i m p l y because it is n o t s u p p o r t e d by t h e r e c o r d . I t is e l e m e n t a r y t h a t each p a r t y must prove h i s own a f f i r - m a t i v e a l l e g a t i o n s . S e c t i o n 26-1-401, MCA, and sect i o n 26-1-402, MCA. The claim of s a t i s f a c t i o n on a promissory n o t e is an a f f i r m a t i v e a l l e g a t i o n and must be proved by a preponderance of t h e e v i d e n c e . Baker N a t i o n a l Bank v. Lestar ( 1 9 6 9 ) , 1 5 3 Mont. 45, 453 P.2d 774; E.H. C o l t h a r p & C o . v. T a y l o r ( 1 9 7 4 ) , 30 Utah2d 448, 519 P.2d 885. Here, a p p e l l a n t Longfellow s i m p l y d i d n o t meet t h i s burden. A t t r i a l , a p p e l l a n t ' s case c o n s i s t e d of h i s own vague testi- mony and t h e noncommittal t e s t i m o n y of one car d e a l e r . Longfellow t e s t i f i e d t h a t p r i o r to May 1978 h e had worked f o r Gamut I n s u r a n c e Company and most of t h e car d e a l e r s i n t h e B i l l i n g s area were h i s customers. S p e c i f i c a l l y , Long f e l l o w t e s t i f i e d t h a t p r i o r to May 1978 h e r e f e r r e d Arnlund Auto P l a z a , Ryan Oldsmobile , Midland Dodge, D-J Volkswagen, Town and Country GMC, and C a p i t a l Ford i n Helena, to Gamut I n s u r a n c e . A f t e r May 1978, when Longfellow made t h e l o a n agreement w i t h I S I , Longfellow began to make r e f e r r a l s f o r I S 1 through t h e l o c a l car d e a l e r s . H e t e s t i f i e d t h a t he had n e a r l y d a i l y c o n t a c t w i t h e v e r y car d e a l e r i n B i l l i n g s and had r e p e a t e d l y r e f e r r e d them to I S I . H e gave no s p e c i f i c s concerning when t h e r e f e r r a l s took p l a c e and i n t r o d u c e d no e v i d e n c e showing how many s e r v i c e c o n t r a c t s r e s u l t e d from t h e s e r e f e r r a l s . Long f e l l o w j u s t made t h e broad s t a t e m e n t t h a t he r e f e r r e d a l l of h i s p r e v i o u s Gamut customers t o I S 1 , i n c l u d i n g Arnlund Auto P l a z a , Ryan Oldsmobile , Bob Smith Autos and Midland Dodge. The o n l y o t h e r e v i d e n c e submitted by Longfellow was t h e t e s t i m o n y of David P i e r c e , manager of Arnlund Auto P l a z a . The f o l l o w i n g t e s t i m o n y by M r . p i e r c e is v e r y t e l l i n g : "Q. Did M r . Longfellow r e f e r P l a i n t i f f , I n s u r a n c e S p e c i a l i s t s I n c o r p o r a t e d , and AWC to you? A. C l i f f Tophem -- W e had been d e a l i n g b a c k and f o r t h w i t h Dale and C l i f f , and a t t h e t i m e I would s a y were c o m p e t i t o r s . And i n d e a l i n g w i t h Dale, w e had s i g n e d w i t h some of h i s companies. And he had t h e Ming C e n t e r and Dale worked w i t h cars t h e r e . And it was a c o n v e n i e n t l o c a t i o n f o r us. And we d i d do b u s i n e s s w i t h him a t t h e Ming C e n t e r , also. C l i f f c a l l e d on u s numerous t i m e s . H e w a s w i t h one and t h e n switched t o a n o t h e r . And Dale was working a t t h e Ming C e n t e r . And I d i d t a l k to him. I c a l l e d him and asked him about C l i f f , because w e were t h i n k i n g of dropping t h e o t h e r t w o companies e n t i r e l y . And he d i d s a y t h a t C l i f f would s e r v i c e t h e account and d o a good job f o r us. And I kind of f e l t t h a t M r . J u s t i c e Gene B. Daly d e l i v e r e d t h e Opinion of t h e Court. Dale Longfellow, t h e maker of a $2,000 p r o m i s s o r y n o t e i n f a v o r of I n s u r a n c e S p e c i a l i s t s , I n c . , a p p e a l s from a judgment i s s u e d by t h e District Court of the T h i r t e e n t h J u d i c i a l District, Yellowstone County. The District Court found t h a t Long f e l l o w ' s c o u n t e r c l a i m of s a t i s f a c t i o n on t h e n o t e was n o t supported by t h e e v i d e n c e and g r a n t e d judgment f o r I n s u r a n c e S p e c i a l i s t s , I n c . i n t h e amount of $2,262.84. A p p e l l a n t Longfellow is an i n s u r a n c e a g e n t . One type of i n s u r a n c e c o n t r a c t he h e l p s to s e l l is t h e extended warranty ser- v i c e c o n t r a c t i s s u e d b y I n s u r a n c e S p e c i a l i s t s , I n c . ( I S I ) t h r o u g h automobile d e a l e r s . I n s u r a n c e S p e c i a l i s t s i s s u e s t h e s e c o n t r a c t s under t h e name, Automobile Warranty C o r p o r a t i o n (AWC) . Longfellow p a r t i c i p a t e s i n t h e s e l l i n g of t h e s e c o n t r a c t s by " r e f e r r i n g " t h e car d e a l e r to t h e i n s u r a n c e company he repre- s e n t s , i n t h i s case, I S I . On May 1, 1978, IS1 lent Longfellow $2,000 f o r a promissory n o t e due on May 1, 1980. Both p a r t i e s admit t h a t a l e t t e r s e n t t o Longfellow .by t h e p r e s i d e n t of IS1 is p a r t of t h e l o a n agreement. The l e t t e r c o n t a i n s t h e f o l l o w i n g r e l e v a n t provi- s i o n s : "1. I t is agreed t h a t w e w i l l c r e d i t your p r o m i s s o r y n o t e a t t h e rate of $5 p e r Automobile Warranty C o r p o r a t i o n s e r v i c e c o n t r a c t i s s u e d and p a i d to Automobile Warranty C o r p o r a t i o n from your Montana d e a l e r s t h a t are r e f e r r e d to u s by y o u r s e l f d u r i n g t h e p e r i o d of 5/1/78 through 5/1/80. "2. I f t h e t o t a l s e r v i c e c o n t r a c t s are 400 or rnore, t h e n t h e n o t e is p a i d o f f i n f u l l . Anything less t h a n 400 w i l l l e a v e a b a l a n c e due and payable as of 5/1/80. I f t h e total number of s e r v i c e c o n t r a c t s exceeds 400, your p r o m i s s o r y n o t e w i l l be paid o f f and you w i l l r e c e i v e an a d d i t i o n a l $5 f o r e v e r y c o n t r a c t o v e r t h a t amount d u r i n g t h e p e r i o d of t i m e i n d i c a t e d . " The c o n t r o v e r s y h e r e c e n t e r s upon how many s e r v i c e warranty c o n t r a c t s should have been c r e d i t e d to t h e d e b t Longfellow owed o n t h e promissory n o t e . IS1 c l a i m s , and t h e District Court found, t h a t a f t e r d e d u c t i n g a l l p o s s i b l e commissions, C l i f f would. H e would have been v e r y per- s i s t e n t i n t r y i n g to o b t a i n o u r b u s i n e s s upon t h a t recommendation and t a l k i n g w i t h Burt we d i d go w i t h AWC." On r e b u t t a l , IS1 p r e s e n t e d t h e key testimony of C l i f f Tophem. Tophem t e s t i f i e d t h a t he t o o began working f o r I S 1 i n May or J u n e 1978, a f t e r having r e p r e s e n t e d a d i f f e r e n t i n s u r a n c e company. Tophem c o u n t e r e d Longfellow's c l a i m s by s t a t i n g t h a t h e , n o t Longfellow, had s o l i c i t e d t h e c a r d e a l e r s i n B i l l i n g s . Tophem's t e s t i m o n y was b u t t r e s s e d by t h e i n t r o d u c t i o n i n t o evidence of s i x " D e a l e r Agreement" c o n t r a c t s . I n t h e s e d e a l e r agreements, a c a r d e a l e r is a u t h o r i z e d to i s s u e I S 1 (a/k/a AWC) s e r v i c e c o n t r a c t s and r e c e i v e a commission. Tophem s t a t e d t h a t he had n e g o t i a t e d t h e agreements, w r i t i n g i n t h e s p e c i f i c terms. Four of t h e agreements were signed by Tophem as an approved s p e c i a l r e p r e s e n t a t i v e f o r I S I . I n a l l , Tophem had n e g o t i a t e d d e a l e r agreements w i t h Arnlund Auto P l a z a , Ryan Oldsmobile, Town and Country GMC, Car Market, Giv-Way Auto S a l e s , and Bob Smith L i n c o l n Mercury. Tophem's s p e c i f i c testimony, Dave P i e r c e 's testimony and t h e documentation i n t r o d u c e d a t trial s u p p o r t t h e D i s t r i c t C o u r t ' s f i n d i n g t h a t L o n g f e l l o w q s c o u n t e r c l a i m is w i t h o u t merit. T h i s e v i d e n c e a l s o s u p p o r t s t h e c o n c l u s i o n t h a t t h e c a r d e a l e r s used I S 1 c o n t r a c t s mainly because of Tophemqs e f f o r t s . L a s t l y , t h i s e v i d e n c e i m p l i c i t l y s u p p o r t s t h e c o n c l u s i o n t h a t Tophem and Long f e l l o w were competing f o r t h e commissions on t h e service c o n t r a c t s , and t h a t t h e commissions p r o p e r l y went to Tophem. I n c o n t r a s t , Longfellow's case was supported o n l y by h i s own vague testimony. N o evidence was introduced a t trial showing when Long f e l l o w made h i s r e f e r r a l s and which s e r v i c e c o n t r a c t s r e s u l t e d from t h e s e r e f e r r a l s . The District Court had no evidence a t t r i a l to d e t e r m i n e s p e c i f i c a l l y how much Long f e l l o w should r e c e i v e i n commissions. No s p e c i f i c documentation i n t h e t r i a l r e c o r d s s u p p o r t s a p p e l l a n t ' s c o u n t e r c l a i m t h a t 762 s e r v i c e c o n t r a c t s must be cre- d i t e d a g a i n s t t h e promissory n o t e . A s s t a t e d previously, t h e burden w a s on Longfellow t o prove h i s counterclaim by a preponderance of t h e evidence, and he has n o t done so. Therefore, t h e District Court properly denied h i s counterclaim and properly granted judgment t o ISI. IS1 admits t h a t t h e District Court imposed an improper annual i n t e r e s t r a t e of 10 p e r c e n t , s i n c e t h e promissory n o t e r e q u i r e s an 8 p e r c e n t p e r annum i n t e r e s t r a t e . The D i s t r i c t Court is d i r e c t e d t o amend its judgment t o con- form t o t h i s Opinion. W e concur: 3 4 & 4 * % & Chief J u s t i c e J u s t m