Laura Dumontier v. Ray Lower & Associates, Inc.

ARKANSAS COURT OF APPEALS

NOT DESIGNATED FOR PUBLICATION

JOHN B. ROBBINS, JUDGE

DIVISION I

LAURA DUMONTIER

APPELLANT

V.

RAY LOWER & ASSOCIATES, INC.

APPELLEE

CA 00-672

FEBRUARY 21, 2001

APPEAL FROM THE CARROLL

COUNTY CIRCUIT COURT,

WESTERN DISTRICT

[NO. CIV 97-84]

HONORABLE ALAN DAVID EPLEY,

CIRCUIT JUDGE

REVERSED AND REMANDED

Appellant Laura Dumontier brought a negligence action against appellee Ray Lower & Associates, Inc., and the appellee's alleged agent, Mike McLain. Her complaint averred that, due to Mr. McLain's failure to use ordinary care, a cancer insurance policy purchased for her late husband, Michael Dumontier, was canceled, resulting in extensive damages. After a jury trial, the trial court directed a verdict in favor of Ray Lower & Associates, Inc., finding that Mrs. Dumontier failed to make a prima facie case that the appellee exercised any control over Mr. McLain or that Mr. McLain was acting as its agent. Upon the granting of the motion for directed verdict, Mrs. Dumontier voluntary nonsuited her case against Mr. McLain.1 Mrs. Dumontier then timely filed a motion for new trial based on her

contention that the directed verdict was contrary to the law, and the trial court denied her motion. She now appeals, arguing that the trial court erred in granting appellee's directed-verdict motion because there was evidence presented such that the jury could have reasonably concluded that an agency relationship existed. The appellee cross-appeals, arguing that the trial court erred in failing to grant its summary-judgment motion. We reverse and remand on direct appeal, and dismiss appellee's cross-appeal.

The rule for the review of motions for directed verdicts is quite familiar - the evidence is viewed most favorably to the party against whom the verdict is directed, including all inferences favorable to him, and if any substantial evidence exists which tends to establish an issue in favor of that party, it is error for the trial court to take the case from the jury. Dildine v. Clark Equipment, Co., 282 Ark. 130, 666 S.W.2d (1984). A directed verdict for a defendant is proper only where there is no substantial evidence from which the jurors, as reasonable individuals, could find for the plaintiff, and substantial evidence has been defined as that which is of sufficient force and character that it will compel a conclusion one way or the other. Avery v. Ward, 326 Ark. 829, 934 S.W.2d 516 (1996).

The evidence presented at trial revealed that Mrs. Dumontier was an employee of Eureka Springs Hospital, and that as a benefit to their employees the hospital provided a cancer insurance policy. Beginning in 1989, the hospital deducted money fromMrs. Dumontier's paycheck to pay the insurance premiums. Mrs. Dumontier's husband was covered under the insurance policy and was diagnosed with terminal cancer in 1993.2 In 1996, it was discovered that the payment of appellant's premiums had been discontinued and her policy had lapsed as a result. Ray Lower of Ray Lower & Associates attempted, at the request of the hospital administrator, to help reinstate the policy. However, these efforts were unsuccessful and the insurer, Capitol American Insurance, only agreed to reinstate the policy with coverage for pre-existing conditions excluded. Thus, Mr. Dumontier was left without coverage.

At the trial, the appellant introduced the testimony of hospital employees in her attempt to establish that Ray Lower & Associates was responsible for the lapse in coverage. Kim Howerton, clinic manager for the hospital, testified that her employment lasted from 1985 until 1995. She stated that she dealt with Ray Lower & Associates through Mr. McLain, after he and Joel Hagemann came to the hospital to sell insurance through a cafeteria plan. Ms. Howerton indicated that Mr. McLain carried a business card with "Ray Lower Agency" printed on it and that he represented himself to be appellee's employee. In 1994, Washington Regional purchased the hospital, and in January 1995 Mr. McLain was notified that a decision had been made to change administrators and insurance companies. A group meeting was held to notify employees of the change, but Mrs. Dumontier requested to continue her existing policy through payroll deduction. According to Ms. Howerton, Mr.McLain was advised of Mrs. Dumontier's request and responded that it would not be a problem and he would take care of it.

Jodie Smith was appointed personnel director of the hospital in 1994. She testified that, at that time, "I was introduced to Mike McLain with Ray Lower & Associates." Ms. Smith further testified:

He was our representative for our cafeteria Plan. I had McLain's business card. When I wanted to speak with Lower and Associates, I called McLain. I never doubted that McLain was a representative of Lower and Associates when I called and spoke with him.

Ms. Smith confirmed that, when the hospital switched cafeteria administrators, Mr. McLain assured them that he would take care of the details with the insurance company to allow for continued payroll deductions for maintaining Ms. Dumontier's insurance. Ms. Smith further testified that "McLain called me after I sent him a letter in November [1994] and told me he would have to explain to his boss why we had terminated the cafeteria plan through their administration."

Joe Hammond, the hospital administrator, began his administration in November 1994. He testified that the previous administration had contracted through Ray Lower & Associates to provide a cafeteria plan to employees of the hospital. Mr. Hammond stated that, in January 1996, he discovered that Mrs. Dumontier's policy was no longer in effect. It was Mr. Hammond's understanding that Mr. McLain was handling the cafeteria plan, and he stated that a meeting was scheduled in an attempt to resolve the problem. Mr. Hammond testified:

I am very sure that Ray Lower & Associates, Inc. were the administrators of the hospital's cafeteria plan. However, in our meeting on March 4, 1996, I was left with the impression that McLain and Lower were no longer working together because Lower was critical of McLain's work.... During my meeting with Ray Lower, I was left with the impression that Mike McLain basically dropped the ball[.]

Mrs. Dumontier testified on her own behalf, and she acknowledged receiving two notices from Capitol American Insurance stating that her premiums had not been paid. These notices were received in March 1995 and warned of cancellation if her premiums were not made current within a month. Mrs. Dumontier took these notices to the hospital in an attempt to rectify the delinquency, and was given the impression that the problem would be taken care of. However, the premium payments were never reinstated and the coverage lapsed.3

The deposition testimony of Mr. McLain was read into evidence. He acknowledged that he carried business cards reflecting that he is a representative of "Ray Lower Agency," and that he gave these cards to employees of the hospital.

For reversal, Mrs. Dumontier now argues that there was evidence from which the jury could have concluded that Mr. McLain had an agency relationship with Ray Lower & Associates. In Evans v. White, 284 Ark. 376, 682 S.W.2d 733 (1985), our supreme court announced:

We have adopted the definition of agency contained in the SecondRestatement of the Law of Agency, § 1, comment a, which provides that the relation of agency is created as the result of conduct by two parties manifesting that one of them is willing for the other to act for him subject to his control, and that the other consents so to act. The principal must in some manner indicate that the agent is to act for him, and the agent must act or agree to act on the principal's behalf and subject to his control. Crouch v. Twin City Transit, 245 Ark. 778, 434 S.W.2d 816 (1968). The two essential elements of the definition are authorization and right to control.

Id. at 378, 682 S.W.2d at 378. Mrs. Dumontier contends that the facts were disputed as to whether Mr. McLain was acting as appellee's agent. She points out that three hospital employees testified that Mr. McLain was appellee's representative, and submits that this was further evidenced by the business cards distributed by Mr. McLain. Based on the facts presented, Mrs. Dumontier argues that it was reasonable to conclude that Mr. McLain was authorized to act on appellee's behalf and was subject to appellee's control.

We agree that the trial court erred in granting appellee's motion for directed verdict, and thereby taking the agency issue from the jury. Ordinally, agency is a question of fact to be determined by the trier of fact, but where the facts are undisputed, and only one inference can be reasonably drawn from them, it becomes a question of law. Evans v. White, supra. In the instant case there was evidence to dispute the proposition that Mr. McLain was not appellee's agent.

We have held that agency can be proved by circumstantial evidence, if the facts and circumstances introduced in evidence are sufficient to induce in the minds of the jury the belief that the relation did exist and that the agent was acting for the principal in the transactions involved. E.P. Dobson, Inc. v. Richard, 17 Ark. App. 155, 705 S.W.2d 893(1986). In the case at bar, there was circumstantial evidence of an agency relationship. The hospital employees who testified on appellant's behalf indicated that Ray Lower & Associates were the administrators of the hospital's cafeteria plan, and that Mr. McLain was their representative. Indeed, his business card reflected that he was their agent, and the hospital's dealings with the appellee were apparently exclusively through Mr. McLain. After the policy was canceled, Mr. Hammond met with Ray Lower and got the impression that Mr. McLain had been terminated from the appellee's employment, and Ray Lower tried unsuccessfully to reinstate the policy. However, there was substantial evidence that, during the relevant time frame, Mr. McLain was under the appellee's control and was acting on its behalf. We hold that the issue of agency was a disputed fact question that should have been resolved by the jury.

Finally, we address the cross-appeal filed by Ray Lower & Associates. It argues that the trial court erred in denying its motion for summary judgment, contending that the undisputed facts showed that it owed no duty to Ms. Dumontier. However, the denial of a motion for summary judgment is not an appealable order even after there has been a trial on the merits. Cater v. Cater, 311 Ark. 627, 846 S.W.2d 173 (1993). Thus, the appellee cannot appeal from the trial court's denial of its summary judgment order, and its cross-appeal is dismissed.

Reversed and remanded on direct appeal; cross-appeal dismissed.

Griffen and Neal, JJ., agree.

1 Although no issue concerning the finality of the order has been raised by the parties, we note that the order being appealed from is final and appealable. While a voluntarynonsuit of a claim by a party prevents an order which decided the remaining claims from being final for purposes of appeal, the taking of a voluntary nonsuit with respect to an opposing party does not adversely affect the finality of an order regarding the remaining parties. See Renfro v. Adkins, 323 Ark. 288, 914 S.W.2d 306 (1996).

2 Mr. Dumontier died July 16, 1998.

3 Mrs. Dumontier also sued Washington Regional, and a $175,000.00 settlement was reached. However, this settlement was not sufficient to cover all of the unpaid medical expenses.