Opinion ID: 1799721
Heading Depth: 2
Heading Rank: 2

Heading: Stone's Actions

Text: The Bookers argue that even if United American is not liable for Butcher's misdeeds, it is liable for its agent Stone's misrepresentations and suppressions. [9] The Bookers, fail, however, to present substantial evidence of either misrepresentations or suppressions on the part of Stone. In order to succeed on a fraud claim, the plaintiff must show: (1) that the defendant misrepresented a material fact; (2) that the defendant made the misrepresentation willfully to deceive, or recklessly without knowledge; (3) that the plaintiff relied upon the misrepresentation; and (4) that the plaintiff incurred damage as a proximate consequence of the reliance. Ala.Code 1975, § 6-5-101; Harris v. M & S Toyota, Inc., 575 So.2d 74, 76 (Ala.1991). The plaintiff may show that the defendant's failure to disclose, or suppression of, a material fact, rather than an affirmative misrepresentation, induced the reliance and proximately caused the damage. Ala.Code 1975, § 6-5-102; Crigler v. Salac, 438 So.2d 1375, 1381 (Ala.1983). To succeed on their allegation of misrepresentation, the Bookers must present substantial evidence indicating that Stone's involvement with Butcher went beyond allowing Butcher to act as the manager of Stone's insurance business, to Stone's actual participation in the alleged fraudulent acts of Butcher. See generally Sandlin, 470 So.2d 657, 664-65 (upholding a jury verdict against an insurance company where its officers and employees knew of and discussed the substantial difference in the initial $24,000 premium and the initial $12,000 cash surrender value that ultimately served as the basis of the fraud action). The facts presented in opposition to the summary judgment motion showed that Stone hired Butcher and that Stone signed the Bookers' application as if he had taken it himself. Stone's hiring of Butcher, however, knowing (1) that United American had not authorized him to sell its product, (2) that United American had fired Butcher, and (3) that United American had placed Butcher on its No Rehire List, indicates that Stone made misrepresentations to United American, not to the Bookers. Similarly, Stone's signing of the Bookers' application shows an intent to deceive United American, not the Bookers. The Bookers argue that Stone's providing Butcher with an office, with the United American insurance applications, and with the Bookers' names indicates that Stone directly participated in Butcher's fraud. While these facts support the assertion that Stone hired Butcher as a district manager/field manager for Stone's insurance business, they do not support the key contention that Stone instructed Butcher to make misrepresentations to the Bookers. The Bookers further contend that Stone signed several applications that Butcher and another unknown man had taken after making what are characterized as similar misrepresentations, and that this indicates Stone had a practice of instructing his agents to make misrepresentations. That Butcher and some other unknown man made similar misrepresentations to other customers does not constitute substantial evidence that Stone, not Butcher, was responsible for, or was even aware, of the misrepresentation. As the Bookers admit, Stone stopped selling insurance himself and hired Butcher as a district manager/field manager to solicit insurance and to hire and train agents. Thus, the limited evidence offered in opposition to United American's motion for summary judgment indicates that it was Butcher, not Stone, who trained the unknown agent who allegedly made a misrepresentation. While there is evidence that Butcher committed a fraud, there is a stark absence of evidence that Stone participated in the acts of which the Bookers complain. There is no evidence that Stone's authority with United American or license with the state insurance authorities had been revoked. There was no evidence that Stone made misrepresentations to customers before 1989, when he was selling insurance himself, or at any time thereafter. Thus, the trial court properly held that the Bookers failed to present substantial evidence that Stone actively participated in Butcher's misrepresentation. See Wilma Corp. v. Fleming Foods of Alabama, 613 So.2d 359, 361 (Ala.1993). With respect to the suppression claim, [10] the Bookers assert that when Stone telephoned Mrs. Booker and asked if the Bookers wanted the health insurance, he suppressed material facts about the policy. Even assuming arguendo that Stone did suppress facts during the telephone conversation, such suppression did not induce the Bookers to act. The Bookers had signed the application and had written the check for the first three months' premiums before Stone telephoned. The reliance and the injury complete, Stone's post-hoc telephone call did not proximately cause the injury of which the Bookers complain. See Crigler, 438 So.2d at 1381 (stating that to be actionable the suppression of a material fact must induce action on the part of the complaining party) (citing Cooper v. Rowe, 208 Ala. 494, 94 So. 725 (1922)). Thus, the Bookers did not present substantial evidence indicating that Stone, as United American's agent, made misrepresentations or suppressed material facts. [11]