Opinion ID: 1136255
Heading Depth: 1
Heading Rank: 4

Heading: (a) Misrepresentation

Text: The elements of a misrepresentation claim are 1) a misrepresentation of material fact, 2) made willfully to deceive, recklessly, without knowledge, or mistakenly, 3) which was justifiably relied on by the plaintiff under the circumstances, and 4) which caused damage as a proximate consequence. Ala.Code 1975, § 6-5-101; Harrington v. Johnson-Rast & Hays Co., 577 So.2d 437 (Ala.1991). In Chapter 7 of the Alabama Insurance Code (Property, Casualty and Surety Insurance Representatives), agent is defined in pertinent part in § 27-7-1 as [a] natural person, partnership or corporation appointed by an insurer to solicit and negotiate insurance contracts on its behalf. The trial court instructed the jury as follows: An agent is a person who by agreement with another, called the principal, acts for the principal and is subject to his control. The agreement may be oral or written or implied from the conduct of the parties and may be with or without compensation. Now, when an agent is engaged to perform a certain service, whatever he does to that end or in the furtherance of the employment is deemed to be an act done within the scope of his employment. The jury could have reasonably found from the evidence in the present case that Foremost, through its district manager, Carmichael, was aware that C & C, through its sales representative, Banks, was acting as an unlicensed agent on Foremost's behalf when it solicited applications from the plaintiffs for Foremost insurance policies. The evidence also indicates, and the jury could have reasonably found, that Foremost was aware that Banks had not been properly trained and licensed; that Banks told the plaintiffs that they would not have to pay a premium for their first year's coverage; that that representation was false; and that the representation was motivated by the desire to sell policies and earn commissions. Furthermore, although Foremost argues strenuously that the plaintiffs could not have justifiably relied on Banks's misrepresentation to their detriment, there was evidence to the contrary. The plaintiffs testified that they relied on Banks's statement that they would incur no premium for their first year's coverage and, therefore, that they did not read the documents that they received in connection with their purchase of the mobile homes. Although Foremost ably argues that as a matter of law the plaintiffs could not have justifiably relied on Banks's statement, given the fact that the plaintiffs had in their hands certain documents (many of which they had signed) clearly showing that a premium had been charged, a jury question was nonetheless presented under the majority's holding in Hickox, supra, as to whether the plaintiffs, under the circumstances, justifiably relied on Banks's explanation concerning the first year's premium. Finally, the evidence shows that the plaintiffs incurred premium charges for their first year's coverage and that the premiums were included in the total amount financed. The plaintiffs testified that if they had known that a premium was going to be charged for their first year's coverage, they would have elected to pay cash for the coverage instead of incurring interest charges by having the premium included in the total amount financed. The evidence was sufficient for the jury to find that an intentional fraud was committed on the plaintiffs by a Foremost agent on Foremost's behalf. Based on the foregoing, we conclude that the plaintiffs' misrepresentation claims, seeking both compensatory and punitive damages, see Ala.Code 1975, § 6-11-27(a), were properly submitted to the jury.