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09/01/95 HARRY SHADDIX v. UNITED INSURANCE COMPANY

September 1, 1995

HARRY SHADDIX
v.
UNITED INSURANCE COMPANY OF AMERICA ET AL.



Appeal from Montgomery Circuit Court. (CV-94-2287).

Beatty, Retired Justice.

The opinion of the court was delivered by: Beatty

BEATTY, Retired Justice

The plaintiff, Harry Shaddix, appeals from the dismissal of his fraud action against the defendants, United Insurance Company of America ("United") and its regional manager. We reverse and remand.

Our supreme court has transferred this case to this court pursuant to § 12-2-7(6), Ala. Code 1975.

In his complaint, Shaddix alleged that while he worked for United, certain company employees "induced [him] into continuing his employment with United by representing to [him] that he would be taken care of as to his job and that he would be given relief as to policy lapses that had been charged to his commission reserves account." (Emphasis added.) Shaddix further alleged that United and its employees suppressed the fact that many or all of the lapsed insurance policies that were charged to his commission reserve account could have been lapsed so that they would not have affected his reserve account. He alleged that the misrepresentations and suppression were intentional, and that because of his reliance upon what he was told "he continued his employment with United and was thereby caused to suffer emotional distress and mental anguish." (Emphasis added.)

The trial court held that because Shaddix was an employee-at-will, he suffered no actionable injury as a result of relying on the alleged false representations or as a result of the suppression of facts. Shaddix argues that the employment-at-will doctrine is not applicable to this case, and, therefore, that the trial court erred in dismissing his lawsuit.

A dismissal governed by Rule 12(b)(6), Ala. R. Civ. P., should be granted sparingly, and is properly granted only when it appears beyond a doubt that the plaintiff cannot prove any set of facts which would entitle him or her to relief. Garrett v. Hadden, 495 So. 2d 616, 617 (Ala. 1986). Upon review of a dismissal, the appellate court must examine the allegations contained in the complaint and construe them so as to resolve all doubts relating to the sufficiency of the complaint in favor of the plaintiff. Fontenot v. Bramlett, 470 So. 2d 669, 671 (Ala. 1985). The court must then determine whether the plaintiff could prove any set of circumstances which would entitle him or her to relief under some cognizable theory of law. Dawson v. Bank Independent, 602 So. 2d 351 (Ala. 1992); Rice v. United Ins. Co. of America, 465 So. 2d 1100 (Ala. 1984). In so doing, the appellate court does not consider whether the plaintiff will ultimately prevail, but only whether he or she has stated a claim under which he or she may possibly prevail. Fontenot, 470 So. 2d at 671.

Shaddix's complaint clearly alleges damages resulting from misrepresentations that, he says, induced him to continue his employment to his detriment. Shaddix claims damages for emotional distress because, he says, he continued to work for United as a result of the alleged misrepresentations and suppression when he otherwise would have left its employ. The employment-at-will doctrine provides "that an employment contract terminable at the will of either the employer or the employee may be terminated by either party at any time with or without cause." Grant v. Butler, 590 So. 2d 254, 256 (Ala. 1991). In Salter v. Alfa Ins. Co., 561 So. 2d 1050 (Ala. 1990), relied upon by United and the trial court, our supreme court affirmed a summary judgment entered against an employee-at-will who sued for wrongful termination and fraud. The court stated:

"[Even if] Alfa had based the termination of [the plaintiff's] contract on her failure to cooperate in the investigation, the fraud claim would still fail.... Alfa had the right under the employee-at-will doctrine to terminate Salter's contract, even if it did so maliciously or for some other improper reason."

561 So. 2d at 1054. In this case, however, Shaddix's employment was not terminated, he does not allege wrongful termination or any damages resulting therefrom, and he does not attempt to state a cause of action for breach of contract. Shaddix complains only that United's alleged misrepresentations and suppressed facts regarding its future conduct were false, i.e., he alleges promissory fraud.

The elements necessary to establish a cause of action for promissory fraud are as follows:

"(1) that the defendant made a false representation of a material fact; (2) that the false representation was relied upon by the plaintiff; (3) that the plaintiff was damaged as a proximate result of the reliance; (4) that the representation was made with a present intent to deceive ; and (5) that when the representation was made the defendant intended not to perform in accordance with it."

Howard v. Wolff Broadcasting Corp., 611 So. 2d 307, 311 (Ala. 1992), cert. denied, ___ U.S. ___, 113 S. Ct. 1849 (1993) (emphasis in Howard). *fn1 After reviewing Shaddix's complaint, we conclude that he conceivably could have proved a set of circumstances that would have entitled ...


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