Insurance Specialists Inc. v. Lon ( 1982 )

No. 82-94
I N THE SUPREBE COURT OF THE STATE O F M N A A
OTN
i982
INSURANCE SPECIALISTS, I N C . ,
P l a i n t i f f and Respondent,
VS .
DALE LONGFELLOW,
Defendant and A p p e l l a n t .
Appeal from: District Court of t h e T h i r t e e n t h J u d i c i a l D i s t r i c t ,
I n a n d f o r t h e County o f Y e l l o w s t o n e
H o n o r a b l e Diane G. B a r z , J u d g e p r e s i d i n g .
C o u n s e l o f Record :
For P l a i n t i f f :
Law O f f i c e s o f R u s s e l l K. F i l l n e r ; R u s s e l l R. Fillner,
B i i l i n g s , Montana
For Defendant:
Towe, B a l l , E n r i g h t & Mackey; N e i l D. Enright, Billings,
Montana
Submitted on b r i e f s : J u l y 29, 1982
Decided : OCT 7 1982
Filed: d !Jp[ d 7 '!%i!
L o n g f e l l o w s t i l l owes $ 1 , 7 0 9 . 6 3 on the note. L o n g f e l l o w coun-
t e r c l a i m e d t h a t 762 s e r v i c e c o n t r a c t s s h o u l d h a v e b e e n c r e d i t e d
to h i s account. According to Longfellow, n o t o n l y is t h e p r o -
m i s s o r y n o t e f u l l y p a i d , b u t I S 1 owes him $ 1 , 8 1 0 i n c o m m i s s i o n s .
The District Court found that the evidence did not support
Long f e l l o w ' s c o u n t e r c l a i m .
Longfellow raises two seemingly contradictory issues on
appeal. F i r s t , he claims t h e D i s t r i c t C o u r t e r r e d b y a p p a r e n t l y
n o t c o n s t r u i n g t h e p r o m i s s o r y n o t e and t h e u n d e r l y i n g a g r e e m e n t
( l e t t e r ) as one instrument. T h e n , i n t h e s e c o n d i s s u e , h e claims
the District Court erred by misinterpreting the underlying
agreement.
T h e r e is n o t h i n g i n t h e r e c o r d to s u p p o r t a p p e l l a n t ' s f i r s t
c o n t e n t i o n t h a t the District Court f a i l e d to c o n s t r u e t h e pro-
m i s s o r y n o t e and t h e u n d e r l y i n g a g r e e m e n t t o g e t h e r . Nearly a l l
of the evidence at trial went to the construction of the
u n d e r l y i n g c o n t r a c t , and d e t e r m i n i n g who had r e f e r r e d w h i c h c a r
dealers to ISI. W e need n o t c o n s i d e r t h i s i s s u e s i n c e i t is n o t
based on t h e r e c o r d .
In his second issue, Longfellow b a s i c a l l y claims that the
District Court m i s i n t e r p r e t e d t h e word "referred" as it is used
in the underlying agreement. Long f e l l o w contends that his
uncontroverted t e s t i m o n y showed he r e f e r r e d c e r t a i n c a r d e a l e r s
to ISI, and therefore he should be credited with the service
c o n t r a c t s s o l d by t h o s e d e a l e r s . A c c o r d i n g to Long f e l l o w , e v i -
d e n c e t h a t a n o t h e r a g e n t f o r I S 1 a l s o r e f e r r e d c a r d e a l e r s to I S 1
is irrelevant because the contract does not require that
Longfellow be the sole person making the referrals.
Longfellow's c o n t e n t i o n must f a i l simply because it is n o t
s u p p o r t e d by t h e r e c o r d .
It i s e l e m e n t a r y t h a t e a c h p a r t y m u s t p r o v e h i s own a f f i r -
mative allegations. S e c t i o n 26-1-401, MCA, and sect i o n 26-1-402,
MCA. The claim o f satisfaction on a promissory note is an
a f f i r m a t i v e a l l e g a t i o n and m u s t be p r o v e d by a p r e p o n d e r a n c e of
the evidence. B a k e r N a t i o n a l Bank v . Lestar ( 1 9 6 9 ) , 1 5 3 Mont.
4 5 , 4 5 3 P.2d 7 7 4 ; E . H . Coltharp & C o . v . T a y l o r ( 1 9 7 4 ) , 3 0 Utah2d
448, 5 1 9 P.2d 885. Here, a p p e l l a n t Longfellow simply d i d not
meet t h i s b u r d e n .
A t trial, appellant's case c o n s i s t e d o f h i s own v a g u e t e s t i -
mony and the noncommittal testimony of one car dealer.
L o n g f e l l o w t e s t i f i e d t h a t p r i o r t o May 1 9 7 8 h e had worked f o r
Gamut Insurance Company and most of the car dealers in the
Billings area were his customers. Specifically, Long f e l l o w
t e s t i f i e d t h a t p r i o r t o May 1 9 7 8 h e r e f e r r e d A r n l u n d A u t o P l a z a ,
Ryan O l d s m o b i l e , M i d l a n d Dodge, D - J V o l k s w a g e n , Town and C o u n t r y
GMC, and C a p i t a l F o r d i n H e l e n a , to Gamut I n s u r a n c e . A f t e r May
1978, when Longfellow made the loan agreement with ISI,
L o n g f e l l o w b e g a n t o make r e f e r r a l s f o r I S 1 t h r o u g h t h e l o c a l c a r
dealers. He testified that he had nearly daily contact with
e v e r y car d e a l e r i n B i l l i n g s and had r e p e a t e d l y r e f e r r e d them t o
ISI. He g a v e no s p e c i f i c s c o n c e r n i n g when the referrals took
place and introduced no evidence showing how many service
contracts resulted from t h e s e referrals. Long f e l l o w j u s t made
t h e broad s t a t e m e n t t h a t he r e f e r r e d a l l of h i s p r e v i o u s Gamut
c u s t o m e r s t o I S 1 , i n c l u d i n g A r n l u n d A u t o P l a z a , Ryan O l d s m o b i l e ,
Bob S m i t h A u t o s and M i d l a n d Dodge.
The only other evidence submitted by Longfellow was the
testimony of David P i e r c e , m a n a g e r of A r n l u n d Auto P l a z a . The
following testimony by Mr. pierce is very telling:
"Q. Did Mr. Longfellow refer Plaintiff,
I n s u r a n c e S p e c i a l i s t s I n c o r p o r a t e d , and AWC t o
you? A. C l i f f Tophem -- W e had b e e n d e a l i n g
b a c k and f o r t h w i t h Dale and C l i f f , and a t t h e
t i m e I would s a y were c o m p e t i t o r s . And i n
d e a l i n g w i t h Dale, w e had s i g n e d w i t h some o f
h i s c o m p a n i e s . And h e had t h e Ming C e n t e r and
Dale worked w i t h cars t h e r e . And i t was a
convenient l o c a t i o n f o r us. And w e d i d d o
b u s i n e s s w i t h him a t t h e Ming C e n t e r , a l s o .
C l i f f c a l l e d o n u s numerous t i m e s . H e w a s w i t h
o n e and t h e n s w i t c h e d t o a n o t h e r . And Dale
w a s w o r k i n g a t t h e Ming C e n t e r . And I d i d
t a l k t o him. I c a l l e d him and a s k e d him a b o u t
C l i f f , b e c a u s e w e were t h i n k i n g o f d r o p p i n g
t h e o t h e r t w o companies e n t i r e l y . And he d i d
s a y t h a t C l i f f would s e r v i c e t h e a c c o u n t and
d o a good j o b f o r u s . And I k i n d o f f e l t t h a t
Mr. J u s t i c e Gene B. D a l y d e l i v e r e d t h e O p i n i o n of t h e C o u r t .
Dale Longfellow, t h e maker o f a $2,000 promissory n o t e in
f a v o r of Insurance Specialists, Inc., appeals from a judgment
i s s u e d by t h e D i s t r i c t Court of t h e T h i r t e e n t h J u d i c i a l D i s t r i c t ,
Yellowstone County. The D i s t r i c t C o u r t f o u n d t h a t Long f e l l o w ' s
c o u n t e r c l a i m o f s a t i s f a c t i o n on t h e n o t e was n o t s u p p o r t e d by t h e
e v i d e n c e and g r a n t e d judgment f o r Insurance Specialists, Inc. in
t h e amount o f $ 2 , 2 6 2 . 8 4 .
Appellant Longfellow is an insurance agent. One type of
i n s u r a n c e c o n t r a c t h e h e l p s t o s e l l is t h e e x t e n d e d w a r r a n t y ser-
vice contract issued by Insurance Specialists, Inc. (ISI)
through automobile d e a l e r s . Insurance S p e c i a l i s t s issues these
c o n t r a c t s u n d e r t h e name, A u t o m o b i l e W a r r a n t y C o r p o r a t i o n (AWC) .
Longfellow participates in the selling of these contracts by
"referring" the car d e a l e r to t h e i n s u r a n c e company h e repre-
s e n t s , i n t h i s case, I S I .
On May 1, 1 9 7 8 , IS1 lent L o n g f e l l o w $ 2 , 0 0 0 f o r a p r o m i s s o r y
n o t e d u e on May 1, 1 9 8 0 . Both p a r t i e s admit t h a t a l e t t e r s e n t
to Longfellow .by the president of IS1 is part of the loan
agreement. The letter contains the following relevant provi-
si o n s :
"1. I t i s a g r e e d t h a t w e w i l l c r e d i t y o u r
promissory note a t t h e rate of $5 p e r
Automobile Warranty Corporation service
contract issued and paid to Automobile
W a r r a n t y C o r p o r a t i o n from y o u r Montana d e a l e r s
t h a t are r e f e r r e d to u s by y o u r s e l f d u r i n g t h e
p e r i o d of 5/1/78 t h r o u g h 5/1/80.
"2. I f t h e t o t a l s e r v i c e c o n t r a c t s a r e 400 o r
rnore, t h e n t h e n o t e is p a i d o f f i n f u l l .
A n y t h i n g less t h a n 400 w i l l l e a v e a b a l a n c e
d u e and p a y a b l e as of 5/1/80. I f the total
number of s e r v i c e c o n t r a c t s e x c e e d s 4 0 0 , y o u r
p r o m i s s o r y n o t e w i l l be p a i d o f f and you w i l l
r e c e i v e a n a d d i t i o n a l $5 f o r e v e r y c o n t r a c t
o v e r t h a t amount d u r i n g t h e p e r i o d o f t i m e
indicated " .
The c o n t r o v e r s y h e r e c e n t e r s upon how many s e r v i c e w a r r a n t y
c o n t r a c t s should have been c r e d i t e d to t h e d e b t L o n g f e l l o w owed
on the promissory note. IS1 c l a i m s , and the District Court
found, that after deducting all possible commissions,
C l i f f would. H e would h a v e b e e n v e r y p e r -
s i s t e n t i n t r y i n g to o b t a i n o u r b u s i n e s s upon
t h a t r e c o m m e n d a t i o n and t a l k i n g w i t h B u r t w e
d i d go w i t h AWC."
On r e b u t t a l , I S 1 p r e s e n t e d t h e k e y t e s t i m o n y of C l i f f Tophem.
Tophem t e s t i f i e d t h a t h e t o o b e g a n w o r k i n g f o r I S 1 i n May or J u n e
1978, af t e r having represented a different insurance company.
Tophem c o u n t e r e d Longfellow's claims by stating that he, not
L o n g f e l l o w , had s o l i c i t e d t h e c a r d e a l e r s i n B i l l i n g s . Tophem's
t e s t i m o n y was b u t t r e s s e d by t h e i n t r o d u c t i o n i n t o e v i d e n c e of s i x
" D e a l e r Agreement" c o n t r a c t s .
In these dealer agreements, a car dealer is a u t h o r i z e d to
i s s u e I S 1 ( a / k / a AWC) s e r v i c e c o n t r a c t s and r e c e i v e a c o m m i s s i o n .
Tophem stated that he had negotiated the agreements, writing
i n the s p e c i f i c terms. F o u r of t h e a g r e e m e n t s were s i g n e d by
Tophem as a n a p p r o v e d s p e c i a l r e p r e s e n t a t i v e for ISI. In a l l ,
Tophem had n e g o t i a t e d d e a l e r a g r e e m e n t s w i t h Arnlund A u t o P l a z a ,
Ryan O l d s m o b i l e , Town and C o u n t r y GMC, C a r M a r k e t , Giv-Way Auto
S a l e s , and Bob S m i t h L i n c o l n Mercury.
Tophem's s p e c i f i c t e s t i m o n y , Dave P i e r c e ' s t e s t i m o n y and t h e
documentation introduced a t trial support the District Court's
finding t h a t Longfellowqs counterclaim is w i t h o u t m e r i t . This
e v i d e n c e a l s o s u p p o r t s t h e c o n c l u s i o n t h a t t h e c a r d e a l e r s used
I S 1 c o n t r a c t s m a i n l y b e c a u s e of T o p h e m q s e f f o r t s . Lastly, this
evidence implicitly supports the conclusion that Tophem and
Long f e l l o w were competing for the commissions on the service
contracts, and that the commissions properly went to Tophem.
I n c o n t r a s t , L o n g f e l l o w ' s c a s e was s u p p o r t e d o n l y by h i s own
vague testimony. No e v i d e n c e was introduced a t trial showing
when Long f e l l o w made h i s r e f e r r a l s and which service contracts
r e s u l t e d from t h e s e r e f e r r a l s .
The District Court had no evidence at trial to d e t e r m i n e
s p e c i f i c a l l y how much Long f e l l o w s h o u l d r e c e i v e i n c o m m i s s i o n s .
No specific documentation in the trial records supports
a p p e l l a n t ' s c o u n t e r c l a i m t h a t 7 6 2 s e r v i c e c o n t r a c t s m u s t be cre-
d i t e d a g a i n s t the promissory note.
A s s t a t e d previously, t h e burden w a s on L o n g f e l l o w t o p r o v e
h i s c o u n t e r c l a i m by a p r e p o n d e r a n c e o f t h e e v i d e n c e , a n d h e h a s
n o t done s o . Therefore, t h e District Court properly denied h i s
c o u n t e r c l a i m and p r o p e r l y g r a n t e d judgment t o I S I .
I S 1 a d m i t s t h a t t h e D i s t r i c t C o u r t imposed a n i m p r o p e r a n n u a l
i n t e r e s t r a t e o f 10 p e r c e n t , s i n c e t h e p r o m i s s o r y n o t e r e q u i r e s
a n 8 p e r c e n t p e r annum i n t e r e s t r a t e .
The D i s t r i c t C o u r t i s d i r e c t e d t o amend i t s judgment t o con-
form t o t h i s O p i n i o n .
W e concur:
3 4 &i4e *f %J & s t i c e
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