No. 82-94 

IN THE SUPREBE COURT OF THE STATE OF MONTANA 

i982 

INSURANCE SPECIALISTS, INC., 

Plaintiff and Respondent, 

VS . 

DALE LONGFELLOW, 

Defendant and Appellant. 

Appeal from: District Court of the Thirteenth Judicial District, 

In and for the County of Yellowstone 

Honorable Diane G. Barz, Judge presiding. 

Counsel of Record : 

For Plaintiff: 

Law Offices of Russell K. Fillner; Russell R. Fillner, 

Biilings, Montana 

For Defendant: 

Towe, Ball, Enright & Mackey; Neil D. Enright, Billings, 

Montana 

Submitted on briefs: July 29, 1982 

Decided : OCT 7 1982 

Filed: d !Jp[ d 7 '!%i! 
Longfellow still owes $1,709.63 on the note. Longfellow counterclaimed that 762 service contracts should have been credited 

to his account. According to Longfellow, not only is the promissory note fully paid, but IS1 owes him $1,810 in commissions. 

The District Court found that the evidence did not support 

Long fellow's counterclaim. 

Longfellow raises two seemingly contradictory issues on 

appeal. First, he claims the District Court erred by apparently 

not construing the promissory note and the underlying agreement 

(letter) as one instrument. Then, in the second issue, he claims 

the District Court erred by misinterpreting the underlying 

agreement. 

There is nothing in the record to support appellant's first 

contention that the District Court failed to construe the promissory note and the underlying agreement together. Nearly all 

of the evidence at trial went to the construction of the 

underlying contract, and determining who had referred which car 

dealers to ISI. We need not consider this issue since it is not 

based on the record. 

In his second issue, Longfellow basically claims that the 

District Court misinterpreted the word "referred" as it is used 

in the underlying agreement. Long fellow contends that his 

uncontroverted testimony showed he referred certain car dealers 

to ISI, and therefore he should be credited with the service 

contracts sold by those dealers. According to Long fellow, evidence that another agent for IS1 also referred car dealers to IS1 

is irrelevant because the contract does not require that 

Longfellow be the sole person making the referrals. 

Longfellow's contention must fail simply because it is not 

supported by the record. 

It is elementary that each party must prove his own affirmative allegations. Section 26-1-401, MCA, and sect ion 26-1-402, 

MCA. The claim of satisfaction on a promissory note is an 

aff irmative allegation and must be proved by a preponderance of 
the evidence. Baker National Bank v. Lestar (1969), 153 Mont. 

45, 453 P.2d 774; E.H. Coltharp & Co. v. Taylor (1974), 30 Utah2d 

448, 519 P.2d 885. Here, appellant Longfellow simply did not 

meet this burden. 

At trial, appellant's case consisted of his own vague testimony and the noncommittal testimony of one car dealer. 

Longfellow testified that prior to May 1978 he had worked for 

Gamut Insurance Company and most of the car dealers in the 

Billings area were his customers. Specifically, Long fellow 

testified that prior to May 1978 he referred Arnlund Auto Plaza, 

Ryan Oldsmobile , Midland Dodge, D-J Volkswagen, Town and Country 

GMC, and Capital Ford in Helena, to Gamut Insurance. After May 

1978, when Longfellow made the loan agreement with ISI, 

Longfellow began to make referrals for IS1 through the local car 

dealers. He testified that he had nearly daily contact with 

every car dealer in Billings and had repeatedly referred them to 

ISI. He gave no specifics concerning when the referrals took 

place and introduced no evidence showing how many service 

contracts resulted from these referrals. Long fellow just made 

the broad statement that he referred all of his previous Gamut 

customers to IS1 , including Arnlund Auto Plaza, Ryan Oldsmobile , 

Bob Smith Autos and Midland Dodge. 

The only other evidence submitted by Longfellow was the 

testimony of David Pierce, manager of Arnlund Auto Plaza. The 

following testimony by Mr. pierce is very telling: 

"Q. Did Mr. Longfellow refer Plaintiff, 

Insurance Specialists Incorporated, and AWC to 

you? A. Cliff Tophem -- We had been dealing 

back and forth with Dale and Cliff, and at the 

time I would say were competitors. And in 

dealing with Dale, we had signed with some of 

his companies. And he had the Ming Center and 

Dale worked with cars there. And it was a 

convenient location for us. And we did do 

business with him at the Ming Center, also. 

Cliff called on us numerous times. He was with 

one and then switched to another. And Dale 

was working at the Ming Center. And I did 

talk to him. I called him and asked him about 

Cliff, because we were thinking of dropping 

the other two companies entirely. And he did 

say that Cliff would service the account and 

do a good job for us. And I kind of felt that 
Mr. Justice Gene B. Daly delivered the Opinion of the Court. 

Dale Longfellow, the maker of a $2,000 promissory note in 

favor of Insurance Specialists, Inc., appeals from a judgment 

issued by the District Court of the Thirteenth Judicial District, 

Yellowstone County. The District Court found that Long fellow's 

counterclaim of satisfaction on the note was not supported by the 

evidence and granted judgment for Insurance Specialists, Inc. in 

the amount of $2,262.84. 

Appellant Longfellow is an insurance agent. One type of 

insurance contract he helps to sell is the extended warranty service contract issued by Insurance Specialists, Inc. (ISI) 

through automobile dealers. Insurance Specialists issues these 

contracts under the name, Automobile Warranty Corporation (AWC) . 

Longfellow participates in the selling of these contracts by 

"referring" the car dealer to the insurance company he represents, in this case, ISI. 

On May 1, 1978, IS1 lent Longfellow $2,000 for a promissory 

note due on May 1, 1980. Both parties admit that a letter sent 

to Longfellow .by the president of IS1 is part of the loan 

agreement. The letter contains the following relevant provis ions : 

"1. It is agreed that we will credit your 

promissory note at the rate of $5 per 

Automobile Warranty Corporation service 

contract issued and paid to Automobile 

Warranty Corporation from your Montana dealers 

that are referred to us by yourself during the 

period of 5/1/78 through 5/1/80. 

"2. If the total service contracts are 400 or 

rnore, then the note is paid off in full. 

Anything less than 400 will leave a balance 

due and payable as of 5/1/80. If the total 

number of service contracts exceeds 400, your 

promissory note will be paid off and you will 

receive an additional $5 for every contract 

over that amount during the period of time 

indicated . " 

The controversy here centers upon how many service warranty 

contracts should have been credited to the debt Longfellow owed 

on the promissory note. IS1 claims, and the District Court 

found, that after deducting all possible commissions, 
Cliff would. He would have been very persistent in trying to obtain our business upon 

that recommendation and talking with Burt we 

did go with AWC." 

On rebuttal, IS1 presented the key testimony of Cliff Tophem. 

Tophem testified that he too began working for IS1 in May or June 

1978, af ter having represented a different insurance company. 

Tophem countered Longfellow's claims by stating that he, not 

Longfellow, had solicited the car dealers in Billings. Tophem's 

testimony was buttressed by the introduction into evidence of six 

"Dealer Agreement" contracts. 

In these dealer agreements, a car dealer is authorized to 

issue IS1 (a/k/a AWC) service contracts and receive a commission. 

Tophem stated that he had negotiated the agreements, writing 

in the specific terms. Four of the agreements were signed by 

Tophem as an approved special representative for ISI. In all, 

Tophem had negotiated dealer agreements with Arnlund Auto Plaza, 

Ryan Oldsmobile, Town and Country GMC, Car Market, Giv-Way Auto 

Sales, and Bob Smith Lincoln Mercury. 

Tophem's specific testimony, Dave Pierce 's testimony and the 

documentation introduced at trial support the District Court's 

finding that Longfellowqs counterclaim is without merit. This 

evidence also supports the conclusion that the car dealers used 

IS1 contracts mainly because of Tophemqs efforts. Lastly, this 

evidence implicitly supports the conclusion that Tophem and 

Long fellow were competing for the commissions on the service 

contracts, and that the commissions properly went to Tophem. 

In contrast, Longfellow's case was supported only by his own 

vague testimony. No evidence was introduced at trial showing 

when Long fellow made his referrals and which service contracts 

resulted from these referrals. 

The District Court had no evidence at trial to determine 

specifically how much Long fellow should receive in commissions. 

No specific documentation in the trial records supports 

appellant's counterclaim that 762 service contracts must be credited against the promissory note. 
As stated previously, the burden was on Longfellow to prove 

his counterclaim by a preponderance of the evidence, and he has 

not done so. Therefore, the District Court properly denied his 

counterclaim and properly granted judgment to ISI. 

IS1 admits that the District Court imposed an improper annual 

interest rate of 10 percent, since the promissory note requires 

an 8 percent per annum interest rate. 

The District Court is directed to amend its judgment to conform to this Opinion. 

We concur: 

34&4*%& 

Chief Justice 

Jus tm