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09/01/95 PHILIP A. PATTEN v. ALFA MUTUAL INSURANCE

September 1, 1995

PHILIP A. PATTEN
v.
ALFA MUTUAL INSURANCE COMPANY AND JERRY WHITESIDE



Appeal from Tallapoosa Circuit Court. (CV-93-21). Dale Segrest, TRIAL JUDGE.

This Opinion Substituted by the Court for Withdrawn Opinion of July 14, 1995, Previously .

Cook, Shores, Ingram, and Butts, JJ., concur. Hornsby, C.j. and Maddox, J., recused.

The opinion of the court was delivered by: Cook

On Application for Rehearing

COOK, JUSTICE.

The opinion of July 14, 1995, is withdrawn and the following opinion is substituted therefor.

Philip A. Patten appeals from a summary judgment in favor of Alfa Mutual Insurance Company and Jerry Whiteside on his claims alleging fraud, breach of contract, and negligence and/or wantonness. We affirm in part; reverse in part; and remand.

In March 1992, Patten enrolled in a pre-employment program with Alfa Mutual Insurance Company, after learning of an opening with Alfa in Dadeville, Alabama. Patten contends that at the completion of the program, he was contacted by Jerry Whiteside, a district manager for Alfa, and was informed by Whiteside that the Dadeville position was being offered to another person. He contends that Whiteside represented to him that Alfa had a position available in Alexander City, where the territory for sales would be Tallapoosa County. He further claims that Whiteside represented to him that he would be provided with a $325,000 "book of business" in Tallapoosa County, as well as personal training, if he took the position. A "book of business" consists of policies already in place with an insurance company that are serviced by the insurance representative. "The amount of the book of business is the annual premium represented in dollars. As part of the compensation arrangement with Alfa agents, [the agents with the book of business] receive anywhere from 2% up to 4% renewal commissions on a book of business which has been assigned to them." Appellant's brief at 7.

In April 1992, Patten accepted employment with Alfa in its Alexander City office. Thereafter, he was sent to Alfa's Montgomery office for a training period. He then began his work in Alexander City. Patten contends that although he was promised a "book of business" in Tallapoosa County valued at $325,000, his first "book of business" had a value of only $191,000. He says that when he complained to Whiteside, he received another "book of business" with a value of $141,000. This "book of business," however, required Patten to travel to Rockford, in Coosa County. Patten remained an Alfa agent until December 1992, when he resigned.

Patten then sued Alfa and Jerry Whiteside, contending that the job in Alexander City was misrepresented to him and that he had been fraudulently induced into accepting employment with Alfa. He also alleged breach of contract and negligence and/or wantonness. The trial court granted Alfa and Whiteside's motions for summary judgment on all counts. Patten appeals.

With regard to the fraud claim, Patten contends that he was told he would have a $325,000 "book of business" in Tallapoosa County, where he lived and had many friends and business contacts. Although Whiteside told him his book of business would be in Tallapoosa County, Patten claims Whiteside knew during the employment negotiations that Patten would be expected to spend a portion of his time working in Coosa County, where he had no business contacts. The record indicates that Whiteside admitted that, when he offered the job to Patten, he contemplated "in his mind" that Patten would have to work out of both Coosa County and Tallapoosa County. That fact, according to Patten, was never communicated to him before he accepted the job with Alfa. Patten claims that the misrepresentations made by Alfa and Whiteside about where he would be working induced him to take a position he would not otherwise have considered.

"The essential elements of a fraud claim are: (1) misrepresentation of a material fact; (2) made willfully to deceive, or recklessly without knowledge; (3) which was justifiably relied upon by the plaintiff under the circumstances; and (4) which caused damage as a proximate consequence. Bowman v. McElrath Poultry Co., 468 So. 2d 879 (Ala. 1985)."

Ramsay Health Care, Inc. v. Follmer, 560 So. 2d 746, 749 (Ala. 1990).

Whiteside and Alfa filed motions for summary judgment and in support thereof presented evidence tending to show that although some of the business given to Patten was not located in Tallapoosa County, he was, in fact, provided with two "books of business" totaling in excess of $325,000. Thus, the amount of the business is not at issue, merely the location of the business. In support of their motion, the ...


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