Title: Burroughs v. JACKSON NAT. INS. CO.
Citation: 618 So. 2d 1329
Docket Number: 1911250
State: Alabama
Issuer: Alabama Supreme Court
Date: March 26, 1993

618 So. 2d 1329 (1993)
John W. BURROUGHS
v.
JACKSON NATIONAL LIFE INSURANCE COMPANY, et al.
1911250.

Supreme Court of Alabama.
March 26, 1993.
*1330 John F. Whitaker and Stephanie R. White of Sadler, Sullivan, Herring &amp; Sharp, P.C., Birmingham, for appellant.
Thomas A. Woodall and Jeff W. Parmer of Woodall &amp; Maddox, P.C., Birmingham, for appellees.
INGRAM, Justice.
Burroughs sued Jackson National Life Insurance Company and its agent, Robert O. Curtis, alleging fraudulent misrepresentation regarding a Jackson National product known as "Enhanced Ultimate," which Burroughs claims he was induced to purchase. Burroughs appeals from a summary judgment for Jackson National and Curtis.
Burroughs alleged that Curtis, an agent of Jackson National, told him that "he could `get his money out' when he wanted to, though the policy had no cash value for the first two years." He testified in his deposition that he thought the "Enhanced Ultimate" product sounded "too good to be true"; and, therefore, that he took the documents to his accountant, Michael O. Tidmore. Burroughs stated in his deposition that he would not have bought the product if Tidmore had not said that it was "on the up and up."
Jackson National moved for a summary judgment, claiming that Burroughs had not relied on the alleged misrepresentation. Jackson National argued that Burroughs's ultimate reliance on Tidmore's opinion barred Burroughs's claim of fraud.
A summary judgment is appropriate upon a showing that no genuine issue of material fact exists and that the moving party is entitled to a judgment as a matter of law. Rule 56, A.R.Civ.P. In reviewing a summary judgment, this Court will view the evidence in a light most favorable to the nonmovant and will resolve all reasonable doubts against the movant. Fincher v. Robinson Bros. Lincoln-Mercury, Inc., 583 So. 2d 256 (Ala.1991). The present action was filed in May 1988; therefore, the applicable standard of review is the "substantial evidence rule." See § 12-21-12, Ala.Code 1975. "[S]ubstantial evidence is 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. of Florida, 547 So. 2d 870, 871 (Ala.1989). "In determining whether there is substantial evidence to defeat a summary judgment motion, this Court reviews the record in the light most favorable to the nonmovant and resolves all reasonable doubts against the movant." Specialty Container Mfg., Inc. v. Rusken Packaging, Inc., 572 So. 2d 403, 404 (Ala.1990).
In his brief to this Court, Burroughs alleges several instances of misrepresentation; however, his deposition testimony clearly limited his claim to the alleged misrepresentation that he could get back his "investment" of $10,000, less a small amount, at any time after the money was invested. Therefore, we will limit our opinion to addressing the issue of whether Burroughs presented sufficient evidence to show a question of material fact regarding this alleged misrepresentation.
In his deposition, Burroughs testified that Curtis had "told me I could get my money back, which I can't do." Burroughs testified that at the time Curtis allegedly misrepresented the "Enhanced Ultimate" policy to him, Burroughs received several documents describing the product. One of the documents, entitled "Creating the Non-taxable Dollar," contains a subsection, "Long-term Benefits." That section contains the following description of the product:
Burroughs testified that Curtis explained the chart accompanying this document, which showed that the policy had no "cash surrender value" at the end of the first year, but had $9,700 in an "accumulation account." The accumulation account, as explained in the document, was the amount upon which Jackson National would pay interest.
Burroughs also testified that the policy or investment sounded "too good to be true" and that he asked Curtis to meet with his accountant, Tidmore, because Burroughs "wanted to make sure [the Enhanced Ultimate policy] was on the up-and-up." Burroughs testified that he set up the meeting with Tidmore and that Tidmore told him that the policy was "on the up-and-up." Burroughs testified that he made the decision to invest in the product, and, when asked whether he was relying on "what Tidmore [had] told [him] when he made his decision," he replied, "I'm sure that had a bearing on it." He also stated that he "certainly wouldn't have bought" the policy if Tidmore had told him he did not like the way the policy looked.
Tidmore, in an untimely affidavit that was considered by the trial court,[1] stated:
*1332 Although Burroughs does not clearly state in his deposition what exactly he was told regarding his ability to get back his "investment," we will assume, for purposes of this appeal only, that he was told by Curtis that he could get some portion of his "investment" returned within the first year, when the policy had no cash surrender value. The question, then, presented by this appeal is whether Burroughs presented substantial evidence that he justifiably relied upon this alleged misrepresentation in purchasing the "Enhanced Ultimate" policy.
Restatement (Second) of Torts § 547 (1965), states the generally accepted common-law rule:
This rule has also been stated as:
37 Am.Jur.2d Fraud and Deceit § 230 (1968).
The standard under which we examine Burroughs's reliance is the standard of justifiable reliance, first adopted in Hickox v. Stover, 551 So. 2d 259 (Ala.1989). That standard is as follows:
551 So. 2d  at 263. When the plaintiff brings in an expert, in this case an accountant, the particular facts regarding the plaintiff's knowledge, understanding, and ability to comprehend change significantly. The knowledge and understanding of the plaintiff's expert are attributed to the plaintiff. Given the facts of this case and the knowledge and understanding of Burroughs and his accountant, Tidmore, Burroughs's burden of presenting substantial evidence to establish an issue of fact as to justifiable reliance increases significantly.
In this case, there is no dispute that the documents given to Burroughs before he signed the insurance contract with Jackson National are accurate and contain no misrepresentation. Further, it is not disputed that Burroughs investigated this policy to the extent that he had his accountant, Tidmore, meet with Curtis. The brochures and the detailed charts included therein that describe the "Enhanced Ultimate" policy clearly show that the policy had no cash value at the end of the first year; in other words, these documents showed that Burroughs could not get back his "investment" until the policy had accumulated a sufficient cash surrender value.[2]
Tidmore's statement reveals that he recognized that "Enhanced Ultimate" was a life insurance policy. Burroughs testified *1333 in his deposition that Curtis explained the chart that showed that the policy had no cash value at the end of the first year. Based upon Burroughs's testimony that he made his own investigation of the policy before he invested his money and based upon the documents he received before he purchased his policy, we hold that Burroughs failed to produce substantial evidence that he justifiably relied upon Curtis's alleged statement that he could get a substantial portion of his investment returned to him at any time after the policy was issued. His claim of reliance directly contradicts the information available to him.
Therefore, we affirm the defendants' summary judgment.
AFFIRMED.
HORNSBY, C.J., and SHORES, ADAMS, HOUSTON, STEAGALL and KENNEDY, JJ., concur.
MADDOX, J., concurs specially.
ALMON, J., concurs in the result.
MADDOX, Justice (concurring specially).
I write separately to state that I believe that the rule of law set out in Hickox v. Stover, 551 So. 2d 259 (Ala.1989), should be modified and that the "justifiable reliance" standard should be replaced with the tried and true "reasonable reliance" standard, which, by its very nature, would allow the factfinder to take into consideration the bargaining power of the parties, whether there was an independent investigation, as there was here, and whether, in view of all the facts and circumstances, the aggrieved party reasonably relied on the alleged misrepresentation to his or her detriment. See McCullough v. McAnalley, 590 So. 2d 229 (Ala.1991) (Maddox and Almon, JJ., dissenting).
Whether the standard is described as "justifiable reliance" or as "reasonable reliance," I believe, is not important, but I do think that the standard set out in Torres v. State Farm Fire &amp; Casualty Co., 438 So. 2d 757 (Ala.1983), is substantially the standard set forth in § 547, Restatement (Second) of Torts, quoted in the majority opinion. The "reasonable reliance" standard, as I understand it, would be easier to apply and would apply in every situation, like this one, where the person who claims he was defrauded had made an independent investigation. The basic holding of the trial court, and this Court, as I view it, is that it was unreasonable for the plaintiff, in view of his own investigation, to claim that he relied on the alleged fraudulent representation to his detriment.
[1]  This Court has held that the trial court, in its discretion, can consider affidavits that are untimely filed. Nolen v. Peterson, 544 So. 2d 863 (Ala.1989).
[2]  The "Enhanced Ultimate" policy, as described above, did provide that the policyholder could take out an interest-free loan each policy year, including the first year.