Title: REAVES v REINBOLD
Citation: N/A
Docket Number: 80-139
State: Montana
Issuer: Montana Supreme Court
Date: August 25, 1980

No. 80-139 IN THE SUPREME COURT OF THE STATE OF MONTANA 1980 ROBERT REAVES , Plaintiff and Appellant, -vs- JOSEPH REINBOLD, Defendant and Respondent. Appeal from: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone, The Honorable Willian J. Speare, Judge presiding. Counsel of Record: For Appellant: Jerrold L. Nye; Stacey and Nye, Billings, Montana For Respondent : H. Elwood English, Billings, Montana Submitted on Briefs: July 10, 1980 Decided : 2 5 1980 Filed: -&u& 2 5 I Clerk M r . J u s t i c e Gene B. Daly delivered t h e Opinion of t h e Court. P l a i n t i f f appeals from an order of t h e District Court, Yellowstone County, the Honorable William J. Speare pre- siding, whereby p l a i n t i f f ' s motion f o r summary judgment was denied and defendant's motion f o r summary judgment was granted. I n November 1975 defendant Joseph Reinbold w a s hired by Lincoln Benefit L i f e Company t o sell l i f e insurance as a d i s t r i c t representative. Reinbold was t o work under t h e supervision of p l a i n t i f f Robert Reaves, a general agent f o r Lincoln Benefit Life. Under a "Submitted Annualized Commission Agreement," dated November 21, 1975, Reinbold's income w a s t o be based on commissions from s a l e s of insurance p o l i c i e s . I n addi- t i o n , t h e agreement provided t h a t Lincoln Benefit L i f e would advance $1,250 per month a g a i n s t f u t u r e earned f i r s t year commissions. Reinbold, as d i s t r i c t representative, Reaves, as general agent, and D. L. Sayler, as v i c e president of Lincoln Benefit L i f e Company, were s i g n a t o r i e s t o t h i s agreement. O n November 20, 1975, p r i o r t o signing the commission agreement, Reinbold received a letter from Reaves s t a t i n g i n p e r t i n e n t part: "Joe, you have your $900 gurantee [ s i c ] b u t I think you w i l l f a r exceed t h a t i n earnings. J u s t as a l i t t l e help I ' l l throw i n $100.00 each month expense money." Reinbold c l a i m s t h i s letter evidences an o r a l agreement between p l a i n t i f f and himself whereby p l a i n t i f f gave h i s personal guarantee t h a t Reinbold would receive $900 a month without regard t o t h e advance payments from Lincoln Benefit Life. Reaves has denied any such o r a l agreement with defen- dant. ~ e i n b o l d q u i t h i s employment with Lincoln Benefit L i f e i n March 1976. A t t h a t t i m e it w a s determined t h a t Lincoln Benefit L i f e had paid Reinbold $2,341.65 more i n advance payments than he had earned i n commissions. The money owed by Reinbold was c o l l e c t e d by Lincoln Benefit Life from Reaves under a company agreement they had with him a s a general agent. Reaves, i n turn, sued Reinbold t o recover t h e money Reaves had paid t o the company. Upon the s u i t being f i l e d , Reinbold moved f o r dismissal on t h e b a s i s of lack of j u r i s d i c t i o n . This motion w a s heard and denied. A preliminary p r e t r i a l conference was then held on December 11, 1979, during which the c o u r t ordered a l l discovery be completed by February 6, 1980. On January 24, 1980, Reaves f i l e d a motion f o r summary judgment a l l e g i n g t h e r e w a s no question of e i t h e r law o r f a c t . Reinbold responded with h i s own motion f o r summary judgment on February 7, 1980. Argument on t h e motions w a s held i n chambers a t t h e t i m e s e t f o r f i n a l p r e t r i a l con- ference on February 1 4 , 1980. On February 26, 1980, Loren " P i " Page, regional v i c e p r e s i d e n t f o r Lincoln Benefit Life, w a s unexpectedly i n B i l l i n g s , Montana, from h i s o f f i c e i n Denver, Colorado. Reaves's attorney used t h a t opportunity t o take h i s deposi- t i o n t o preserve h i s testimony f o r use a t trial. I n t h e deposition, Page explained t h e r e l a t i o n s h i p t h a t general agents, d i s t r i c t representatives and regional v i c e p r e s i - dents have with Lincoln Benefit L i f e Co. and each other. On March 11, 1980, t h e c o u r t entered summary judgment f o r defendant. The D i s t r i c t Court, i n granting defendant's motion, found t h a t t h e r e w a s an o r a l agreement between Reaves and Reinbold wherein Reaves personally guaranteed ~ e i n b o l d $900 a month and t h a t t h e letter of November 20, 1975, w a s a w r i t t e n memorandum of t h a t o r a l agreement. P l a i n t i f f ' s a t t o r n e y f i l e d a motion t o a l t e r and amend t h e judgment on March 1 4 , 1980. The D i s t r i c t Court denied t h i s motion and p l a i n t i f f appeals. O n appeal p l a i n t i f f raises t h r e e i s s u e s : 1. Whether it w a s e r r o r and an abuse of d i s c r e t i o n f o r t h e D i s t r i c t Court t o g r a n t summary judgment f o r defendant. 2. Whether it w a s e r r o r f o r t h e D i s t r i c t Court n o t t o e n t e r summary judgment f o r p l a i n t i f f as a matter of l a w . 3. Whether it was e r r o r and an abuse of d i s c r e t i o n f o r t h e D i s t r i c t Court n o t t o consider t h e testimony of Loren "Pi" Page p r i o r t o any decision i n t h i s case. Summary judgment under Rule 5 6 ( c ) , M.R.Civ.P., i s proper only i f t h e record d i s c l o s e s no genuine i s s u e of m a t e r i a l f a c t and t h e moving p a r t y is e n t i t l e d t o a judgment as a matter of l a w . Johnson v. Johnson (1977), 172 Mont. 150, 561 P.2d 917; Anderson v. Applebury (1977), 173 Mont. 4 1 1 , 567 P.2d 951. This Court has c o n s i s t e n t l y held t h a t t h e p a r t y moving f o r swnmary judgment has t h e burden of showing t h e complete absence of any genuine i s s u e a s t o a l l t h e f a c t s which are deemed material i n l i g h t of those s u b s t a n t i v e p r i n c i p l e s which e n t i t l e d him t o a judgment as a matter of law. Bahn v. Dormanen (1975), 168 Mont. 408, 543 P.2d 379; Harland v. Anderson (1976), 169 Mont. 447, 548 P.2d 613; Bonawitz v. Bourke (1977), 173 Mont. 179, 567 P.2d 32. To s a t i s f y t h i s burden t h e movant must make a c l e a r showing as t o what t h e t r u t h i s s o as t o exclude any r e a l doubt as t o t h e e x i s t e n c e of any genuine i s s u e of m a t e r i a l f a c t . Kober v. Stewart (1966), 148 Mont. 117, 417 P.2d 476; 6 Moore's Federal P r a c t i c e 1156.15[3]. I t i s c l e a r t h a t t h e p a r t y opposing a motion f o r sum- mary judgment w i l l be afforded t h e b e n e f i t of a l l reasonable inferences which may be drawn from the offered proof. Mally v. Asanovich (19671, 149 Mont. 99, 423 P.2d 294; Harland v. Anderson, supra. The D i s t r i c t Court could properly g r a n t summary judg- ment t o defendant here only by finding t h a t , on t h e sub- mitted record, a v a l i d o r a l c o n t r a c t e x i s t e d between t h e p a r t i e s which provided t h a t p l a i n t i f f would pay defendant, a t a minimum, $900 per month. I n support of a finding t h a t such an o r a l agreement e x i s t e d , defendant submitted t o t h e court: (1) an a f f i d a v i t a l l e g i n g t h a t p l a i n t i f f i n a telephone conversation offered t o pay defendant $900 per month; (2) a letter from p l a i n t i f f t o defendant s t a t i n g t h a t defendant would have h i s $900 guarantee; and ( 3 ) an admission by p l a i n t i f f t h a t "defendant w a s paid $900 per month i n accord with t h e submitted an- nualized commission agreement," when i n f a c t the f i g u r e f o r advances under t h e agreement w a s $1,250 per month. I n response t o defendant's a l l e g a t i o n s , p l a i n t i f f has denied any existence of an o r a l c o n t r a c t between t h e p a r t i e s . H e contends t h a t any conversation o r l e t t e r t h a t d e a l t with money t o be paid defendant r e l a t e d t o t h e amount t o be advanced a g a i n s t f u t u r e commissions by Lincoln Benefit L i f e and not t o any guaranteed s a l a r y t o be paid by p l a i n t i f f . A s t h e record i n d i c a t e s , whether t h e p a r t i e s intend an o r a l c o n t r a c t whereby p l a i n t i f f guaranteed a $900 per month s a l a r y t o defendant is an important f a c t o r i n need of con- s i d e r a t i o n i n t h i s case. When an i s s u e of f a c t a r i s e s a s t o t h e existence of a c o n t r a c t and t h e i n t e n t i o n s of t h e par- ties play an important p a r t i n t h e resolvement of t h a t question, t h i s Court has held t h a t summary judgment i s usually inappropriate. Kober v. Stewart (1966), 148 Mont. 117, 417 P.2d 476; Fulton v. Clark (1975), 167 Mont. 399, 538 P.2d 1371. ~ e f e n d a n t argues t h a t summary judgment i s appropriate i n t h i s instance because t h e D i s t r i c t Court, p r i o r t o i t s decision on defendant's motion, w a s presented with a l l t h e evidence needed t o decide t h e i s s u e of whether an o r a l c o n t r a c t e x i s t e d a s alleged. W e disagree with defendant's contention. It i s t r u e t h a t the purpose of t h e summary judgment procedure i s t o encourage j u d i c i a l economy through t h e elimination of an unnecessary trial. However, it is a l s o t r u e t h a t t h e procedure i s never t o be a s u b s t i t u t e f o r t r i a l i f a f a c t u a l controversy e x i s t s . Engebretson v. Putnam (1977), 174 Mont. 409, 571 P.2d 368; Duncan v. Rock- w e l l Mfg. Co. (1977), 173 Mont. 382, 567 P.2d 936; Bonawitz v. Bourke (1977), 173 Mont. 179, 567 P.2d 32. W e f i n d t h a t defendant, as t h e moving party, has n o t m e t h i s burden of e s t a b l i s h i n g t h e absence of an i s s u e of f a c t a s t o the existence of the o r a l c o n t r a c t as alleged. I n viewing the record i n a l i g h t most favorable t o plain- t i f f , w e conclude t h a t a m a t e r i a l f a c t u a l i s s u e e x i s t s and i s i n need of proper resolvement a t t h e t r i a l l e v e l . W e have n o t attempted t o decide t h e merits of t h i s case nor which p a r t y should ultimately prevail. W e merely hold f o r t h e foregoing reasons t h a t t h e D i s t r i c t Court erred i n granting defendant's motion f o r summary judgment. I n reviewing p l a i n t i f f ' s motion f o r summary judgment, t h e general r u l e s and p r i n c i p l e s s t a t e d above w i l l c o n t r o l , with t h e evidence now being viewed i n a l i g h t most favorable t o defendant. I n support of h i s motion p l a i n t i f f p o i n t s o u t t h a t defendant's s o l e defense t o the present a c t i o n is t h e a l - leged o r a l agreement i n which p l a i n t i f f guaranteed a $900 p e r month s a l a r y f o r defendant. P l a i n t i f f argues t h a t even should it be found t h a t such an agreement w a s entered i n t o , it cannot be given e f f e c t i n t h i s instance. P l a i n t i f f ' s argument is based on the a l l e g a t i o n t h a t t h e w r i t t e n agreements entered i n t o on November 2 1 , 1975, which included t h e "Submitted Annualized Commission Agree- ment," superseded any p r i o r o r a l negotiations o r agreement between t h e p a r t i e s . I n support of t h i s argument, p l a i n t i f f cites s e c t i o n s 28-2-904 and 28-3-203, MCA. A s s t a t e d i n p l a i n t i f f ' s b r i e f , t h e r e i s abundant case l a w i n Montana which holds t h a t p r i o r o r a l agreements o r conditions are n o t admissible t o a l t e r o r vary t h e terms of a l a t e r w r i t t e n contract. Davidson v. Casebolt (1969), 154 Mont. 125, 461 P.2d 2; Heckman and S h e l l v. Wilson (1971), 158 Mont. 47, 487 P.2d 1 1 4 1 ; Kingerski v. Lamey (1979), - Mont. - , 604 P.2d 782, 36 St.Rep. 2316. I t should be noted, however, t h a t such case l a w has only d e a l t with an a p p l i c a t i o n of t h e r u l e as t o p r i o r o r a l agreements and subsequent c o n t r a c t s between the same p a r t i e s i n regard t o t h e same matter. It should a l s o be noted t h a t d i s t i n c t c o l l a t e r a l agreements, even a s between t h e same p a r t i e s , w i l l not merge so as t o preclude a p r i o r o r a l agreement. - l ; - & . See L d v. Montforton (19411, 112 Mont. 24, 113 P.2d 507; 17 C.J.S. Contracts 8381 a t 451. Upon examining t h e alleged o r a l agreement and subse- quent w r i t t e n commission agreement, w e note t h a t t h e w r i t t e n agreement s p e c i f i c a l l y d e a l s with t h e r i g h t s and d u t i e s of defendant and Lincoln Benefit L i f e Company. The agreement provides that defendant will be advanced up to $1,250 per month against future earned commissions and that all ad- vances made are considered a debt to the insurance company. The alleged oral agreement, on the other hand, deals with a personal guarantee by plaintiff that defendant would re- ceive, at a minimum, $900 per month with no obligation of repayment. In reviewing the relationship of the two agreements in a light most favorable to defendant, we note that the al- leged oral agreement is collateral as opposed to ancillary. Both agreements were entered into at approximately the same time and deal with an arrangement whereby defendant is to receive monies for selling insurance. One agreement, however, is with Lincoln Benefit Life Company and provides for a repayment of advances made. The other separate agreement is with plaintiff and allegedly provides that he personally will guarantee a set salary no matter how much defendant is required to repay the insurance company. Each agreement is distinct, separate, involves a different party and is able to stand independent of the other. With this being the case, we cannot find as a matter of law that the written agreement would supersede the alleged oral agreement. Plaintiff points out that he also has signed the writ- ten commission agreement and thus argues he was a party to both the oral and written agreement. We agree that plain- tiff was a signatory on the written agreement but only in his capacity as general agent for Lincoln Benefit Life Company. As alleged, the separate oral agreement with defendant was entered into by plaintiff in a personal capa- city; thus, the fact he may have signed the written agree- ment will not affect a finding that the agreements are d i s t i n c t and c o l l a t e r a l o r t h a t they w e r e entered i n t o by d i f f e r e n t p a r t i e s , A s s t a t e d e a r l i e r w e do not attempt t o decide t h e merits of t h i s case o r t o resolve t h e i s s u e of f a c t a s t o whether t h e r e was an o r a l agreement a s alleged. W e merely f i n d f o r t h e foregoing reasons t h a t t h e D i s t r i c t Court d i d n o t err i n refusing t o g r a n t p l a i n t i f f ' s motion. A s t o the deposition of Loren "Pi" Page, w e note t h a t the D i s t r i c t Court established February 6, 1980, a s t h e cut- o f f d a t e f o r discovery. Loren Page's deposition w a s taken on February 26, 1980, and f i l e d on March 20, 1980. The findings of fact, conclusions of law and order denying p l a i n t i f f ' s motion f o r summary judgment and granting defen- d a n t ' s motion f o r summary judgment w a s entered on March 11, 1980. The deposition of Page w a s n o t taken p r i o r t o t h e cut-off d a t e f o r p r e t r i a l discovery, nor was it before the D i s t r i c t Court a t t h e t i m e it ruled on summary judgment. The D i s t r i c t Court cannot be held i n e r r o r on the b a s i s of documents n o t properly before it a t t h e t i m e it made its r u l i n g . See Baylor v. Jacobson (1976), 170 Mont. 234, 552 P.2d 55. The order denying p l a i n t i f f ' s motion f o r summary judg- ment is affirmed. Summary judgment f o r defendant i s vacated. The cause is remanded t o t h e D i s t r i c t Court f o r t r i a l . J %6p. * , ' > /* 4 - M J u s t i c e 1 W e concur: Chief J u s t i c e 4