Title: United Companies Fin. Corp. v. Brown
Citation: 584 So. 2d 470
Docket Number: N/A
State: Alabama
Issuer: Alabama Supreme Court
Date: June 21, 1991

584 So. 2d 470 (1991)
UNITED COMPANIES FINANCIAL CORPORATION, INC., and Joe Seale
v.
Abram BROWN, Jr., and Rosie Nell Holcombe.
89-1451.

Supreme Court of Alabama.
June 21, 1991.
*471 Warren B. Lightfoot, M. Christian King and Madeline H. Haikala of Lightfoot, Franklin, White &amp; Lucas, Birmingham, for appellants.
John A. Taber of Hardin, Taber &amp; Tucker, Birmingham, and Earl L. Dansby, Montgomery, for appellees.
ALMON, Justice.
This appeal is from a judgment on a jury verdict awarding the plaintiffs $250,000 in compensatory damages and $250,000 in punitive damages in an action alleging breach of contract and fraud. Abram Brown, Jr., and Rosie Nell Holcombe brought this action against United Companies Financial Corporation, Inc. ("United Companies"), and Joe Seale, alleging that the defendants had breached a contract to have the plaintiffs' home renovated and had fraudulently misrepresented "that they would assume the responsibility of having said renovation and repairs completed in a satisfactory and acceptable manner." The defendants argue[1] that the trial court erred in denying their motion for a directed verdict on the contract count based on the Statute of Frauds and on the fraud count based on the absence of proof of intent not to perform the alleged promise; in allowing punitive damages to be assessed against United Companies; in sustaining an objection to a question posed to Seale; and in overruling their motion for new trial based on improper closing argument.
Brown and Holcombe are apparently common law husband and wife. They own a house in Hayneville, Alabama, where they live with their two daughters and *472 three other family members. In the summer of 1987 they hired a contractor to add a kitchen, a den, a bedroom, a bathroom, and a carport to the house. They bought the materials and the contractor began work, but he left the job unfinished. They negotiated with another contractor, who agreed to finish the work for $12,000. Brown and Holcombe went to the Montgomery office of United Companies and talked to Seale, the manager of that office, about financing the remaining improvements. Seale told them that United Companies would not finance the work if it was done by the contractor Brown and Holcombe proposed, but that it would finance the work if they would hire Ed Holcomb, another contractor. After Holcomb agreed to perform the work for $12,000, Brown and Holcombe executed a note and mortgage to obtain the financing from United Companies.
United Companies placed the funds in escrow, with $4,000 to be paid to Ed Holcomb at the beginning of the work, $4,000 to be paid when it was half completed, and $4,000 to be paid after the work had been satisfactorily completed. Holcomb performed the work to the point where he received the second $4,000. He then approached Seale about obtaining the final $4,000 without first completing the work. Seale asked his supervisor if the final check could be issued and the supervisor agreed.
Ed Holcomb drove to the house with Seale, and the two men went inside and looked at the work in progress. They went outside, and Holcomb came back in to ask Mrs. Holcombe to endorse the check and a certificate of completion that Seale had prepared. She refused, stating that the work was not yet complete. Holcomb left the house and gave the documents to Seale, who returned with them. Mrs. Holcombe again refused to sign the documents because the work was not complete. She testified that Seale then promised that he would not give the check to Holcomb until the work was finished and that he would come from Montgomery and inspect the house before he gave the check to Holcomb. She testified that, based on that promise, she signed the check and the certificate of completion. Later in her testimony she said that Seale, in inducing her to sign the documents, promised that "he would make sure my house would be complete, would be fixed."
Seale and Holcomb then went to Brown's place of employment and obtained his signature on the documents. Brown testified that, when he objected to signing the check because the work was not complete, Seale told him that "he would see to it Mr. Holcomb would come back, you know, complete and finish the house." Holcomb negotiated the check that day.
Mrs. Holcombe testified that, after she signed the check, neither Holcomb nor any of his employees returned to continue the work. The first payment on the note was due November 5, 1987. Mrs. Holcombe testified that she made that payment and continued to make the monthly payments until July 1988. During that period, she said, she frequently telephoned Seale to ask him to get Holcomb back on the job, and Seale assured her that he would do so. She also testified that she went to Seale's office, that he told her, "Rosie, I know I'm giving you nothing but static," that he telephoned Holcomb, and that Holcomb promised to come finish the job, but did not. When Mrs. Holcombe did not make the July 1988 payment, Seale and Holcomb came to the house and promised to come finish the work if she would make the payment. She paid the July payment, a late charge, and the August payment. Seale and Holcomb left with the money and she never saw Holcomb again.
Mrs. Holcombe continued to ask Seale to send Holcomb to finish the work, and he continued to assure her that he would. She did not make any more payments and, in November 1988, United Companies sent Mrs. Holcombe notice that it was instituting foreclosure proceedings on the mortgage and it published in the Lowndes County newspaper a similar notice. The record does not disclose whether such proceedings were instituted, but Brown and Holcombe were still in the house at the time of trial.
*473 The first argument made by United Companies and Seale is that the alleged promise does not support a contract action because it is at most a "special promise to answer for the debt, default or miscarriage of another," Ala.Code 1975, § 8-9-2(3). They cite Danley v. Marshall Lumber &amp; Mill Co., 277 Ala. 551, 173 So. 2d 94 (1965), for their argument that a contract such as that alleged here is a "collateral contract" and therefore governed by the provision of the Statute of Frauds just quoted. They also cite Herrington v. Central Soya Co., 420 So. 2d 1 (Ala.1982).
In response, Brown and Holcombe cite Brindley Construction Co. v. Byco Plastics, Inc., 456 So. 2d 269 (Ala.1984), for the proposition that, if credit is extended to both the promisor and the debtor, the agreement is an original undertaking, not a collateral one, and therefore not within the Statute of Frauds. They also cite Riteway Machine &amp; Mfg. Co. v. First Nat'l Bank of Tuscumbia, 374 So. 2d 1361 (Ala.1979); and Landers v. Ramey, 245 Ala. 283, 16 So. 2d 785 (1944).
The jury could have found from the evidence that Seale promised that United Companies would undertake to complete the addition if Brown and Holcombe would accelerate their payment to Holcomb. Such an agreement would be an original undertaking and not within the Statute of Frauds. The cases cited above uniformly hold that it ordinarily is a question for the jury whether an agreement is an original undertaking by the promisor or a collateral promise to answer for the debt, default, or miscarriage of another. The trial court did not err in denying the motion for directed verdict on this ground.
United Companies and Seale next argue that there was no proof that Seale intended not to perform his promise at the time he made it. If a fraud action is based on a promise to perform an act in the future, the proof of the falsity of the representation requires proof that, at the time the promise was made, "the promisor had no intention of carrying out the promise[], but rather had a present intent to deceive." Purcell Co. v. Spriggs Enterprises, Inc., 431 So. 2d 515, 519 (Ala.1983), appeal after remand, 451 So. 2d 801 (Ala.1984).
As our summary of the evidence shows, Mrs. Holcombe testified that Seale promised that he would not deliver the endorsed check to Holcomb until he personally ascertained that the work had been completed satisfactorily. Brown and Holcomb argue that the intent not to perform this promise is shown by the fact that, shortly after Seale obtained Brown's endorsement, Holcomb negotiated the check. We agree that the sequence of events is so clearly one transaction as to establish intent not to honor the promise at the time it was made. United Companies and Seale counter with the argument that the complaint's allegation of fraud did not include the aspect testified to by Mrs. Holcombe. However, no objection was made to Mrs. Holcombe's testimony, so the complaint may be deemed amended by consent, Rule 15(b), Ala.R.Civ.P., and trial court did not err in submitting the fraud claim to the jury.
Furthermore, Seale's intent not to perform the promise to ensure that the work would be completed may be inferred from the evidence that, while assuring Mrs. Holcombe that he would have the work completed, he never took any effective steps to do so, and that when Mrs. Holcombe fell behind on the mortgage payment he promptly arrived at the house with Holcomb to collect the payment but still did not take effective steps to have the repairs completed.
United Companies next argues that, pursuant to Ala.Code 1975, § 6-11-27, the trial court should not have submitted to the jury the claim for punitive damages against United Companies. Without addressing the question of whether Seale's authority as manager of the Montgomery office was sufficient to bind the company in this respect, we hold that the requirement of this Code section was satisfied by Seale's testimony that his supervisor approved the issuance of the check before the work had been completed. Therefore, this issue presents no ground for reversal.
*474 United Companies and Seale argue that the court erred in sustaining an objection to a question posed to Seale. After testifying that this was the first loan on which he had worked with Holcomb and that he had called United Companies' Birmingham office to find out about Holcomb, Seale was asked what the Birmingham office had told him. The trial court sustained the plaintiffs' objection over the defendants' argument that they were merely trying to prove Seale's intent, not the truth of anything said by the employee in the Birmingham office. Seale and United Companies renew that argument here. Because the question was at most only remotely related to Seale's intent at the time he induced Brown and Holcombe to endorse the check and the completion certificate prematurely, the trial court did not abuse its discretion in sustaining the objection. Questions of materiality, relevancy, and remoteness of evidence are within the trial court's discretion, and the court's rulings will not be disturbed unless that discretion is grossly abused. Ryan v. Acuff, 435 So. 2d 1244, 1250 (Ala.1983).
Finally, United Companies and Seale argue that the trial court erroneously allowed testimony regarding, and that the plaintiffs' attorney made improper reference in closing argument to, the wealth of United Companies. They cite Otis Elevator Co. v. Stallworth, 474 So. 2d 82 (Ala. 1985). The record discloses, however, that the question asked of Seale was merely how many offices United Companies had, and that the objection did not state any grounds. During closing argument, the plaintiffs' attorney made reference to Seale's answer that United Companies had 120 offices, and the defendant's attorney made a general objection that the argument was improper. The trial court overruled the objection. United Companies and Seale also point to two other statements made during the plaintiffs' closing argument, but no objection at all was made to those statements.
After reviewing the record, we cannot hold that the trial court erred in overruling the general objection to the question posed to Seale. See All American Life &amp; Cas. Co. v. Dillard, 287 Ala. 673, 681, 255 So. 2d 17, 23 (1971). Also, the trial court has broad discretion in ruling on matters in argument of counsel. Ott v. Fox, 362 So. 2d 836 (Ala.1978). Given the generality of the objections that were made and the absence of objections at other points in the argument, we cannot say that the trial court erred in overruling the defendants' motion for new trial on this ground.
Although United Companies and Seale do not argue that the verdict was excessive, we note that the trial court issued a seven-page order, pursuant to Hammond v. City of Gadsden, 493 So. 2d 1374 (Ala.1986), and Green Oil Co. v. Hornsby, 539 So. 2d 218 (Ala.1989), that reads as follows:
For the reasons stated, the judgment is affirmed.
AFFIRMED.
HORNSBY, C.J., and ADAMS, STEAGALL and INGRAM, JJ., concur.
[1]  The defendants' counsel on appeal were not their counsel at trial.