No. 13470
I N THE SUPREME COURT O THE STATE O MONTANA
F F
1977
STANDARD INSURANCE COMPANY,
a corporation,
P l a i n t i f f and Respondent,
H R L L.
AOD STURDEVANT,
Defendant and A p p e l l a n t .
Appeal from: D i s t r i c t Court of t h e Fourth J u d i c i a l D i s t r i c t ,
H o n o r a b l e Edward D u s s a u l t , 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 A p p e l l a n t :
T i p p and Hoven, M i s s o u l a , Montana
Raymond T i p p a r g u e d , M i s s o u l a , Montana
F o r Respondent :
Raymond J. Fox a r g u e d , M i s s o u l a , Montana
Submitted: A p r i l 1 9 , 1977
Decided : j u ~ 1 19n
2
Filed:
X r . Zus'iice 3auiel 2. Shea d e l i v e r e d t h e d p i n i o n o f the Court.
T h i s i s an a p p e a l from a nonjury judgment o f t h e d i s t r i c t
c o u r t , Missoula County, i n a n a c t i o n t o r e c o v e r on a promissory
note.
Harold L. S t u r d e v a n t , a p p e l l a n t , e n t e r e d i n t o a n agency-
manager employment c o n t r a c t w i t h Standard I n s u r a n c e Company,
r e s p o n d e n t , i n 1962. Under t h e terms of t h e c o n t r a c t , S t u r d e v a n t
w d s appointed manager of S t a n d a r d ' s agency i n Missoula, Montana.
5e agreed t o m a i n t a i n t h e agency and r e c r u i t and t r a i n s u b - a g e n t s ,
AS w e l l a s p e r s o n a l l y procure i n s u r a n c e a p p l i c a t i o n s . The p a r t i e s
diltered i n t o s i m i l a r c o n t r a c t s i n 1963 and 1968 a s t o new b u s i n e s s
dZter t h o s e d a t e s . Sturdevant a l s o executed a promissory n o t e i n
1968 t o repay l o a n s made t o him by Standard. Income d e r i v e d from
~ t u r d e v a n t ' sc o n t r a c t s was t o be a p p l i e d t o t h e n o t e .
Standard sued t o c o l l e c t t h e b a l a n c e due on t h e n o t e and
S t u r d e v a n t counterclaimed seeking v e s t e d renewals under t h e con-
E r a c t s , which he a l l e g e d were s t i l l i n e f f e c t . In i t s reply
TV he c o u n t e r c l a i m Standard a l l e g e d t e r m i n a t i o n of t h e c o n t r a c t s .
The p a r t i e s agreed t o determine a f t e r t r i a l t h e amount due
each ~ t h e r
based upon t h e t e r m i n a t i o n d a t e found by t h e d i s t r i c t
court. Judgment was e n t e r e d i n f a v o r of Standard e s t a b l i s h i n g
3eptember 15, 1969 a s t h e t e r m i n a t i o n d a t e o f t h e c o n t r a c t s and
provided f o r f u r t h e r h e a r i n g , i f t h e parties could n o t a g r e e on t h e
dinounts due.
The o n l y i s s u e p r e s e n t e d f o r review by Sturdevant i s whether
the d i s t r i c t c o u r t e r r e d i n determining t h e agency-manager con-
tracts were terminated on September 1 5 , 1969. Sturdevant contends
Lhe c o n t r a c t s extended through 1971.
On August 14, 1969, Frank Burger, Sturdevant ' s supervisor
with Standard, wrote this letter to Sturdevant:
"Dear Harold:
"This is to confirm our conversation of
August 12, at which time you tendered verbal
notice of intent to resign effective September
15. It is the purpose of this letter to acknow-
ledge your intent.
"Once we have determined who the replacement will
be, I will advise. I will appreciate very much your
effort to make the transition a orderly and trouble-
free one from a service standpoint.
"We ' 11 be in touch.' * * *"
Burger testified that on August 12, 1969, Sturdevant told him he
to resign and was "throwing in the and Burger
accepted the resignation.
Sturdevant, on the other hand, testified Burger and he had
disagreements during the conversation, but when Burger asked if
he intended to resign, Sturdevant merely replied it might come to
that. Sturdevant testified he did not intend to resign and he
did not think his contracts and position as manager were terminated.
Therefore, he ignored the letter.
Sturdevant's testimony was supported at trial by several
agents in the Missoula office. Agent Swenson testified Sturdevant
told him he would not resign; and agent Moffett testified Sturde-
vant showed him Burger's letter and said he did not resign.
Sturdevant, however, did leave the office in September 1969 and
according to Moffett, he never again worked/as manager.
After Sturdevant left Standard's office, Burger testified
he had no knowledge of any work performed by Sturdevant for Standard.
Although Sturdevant took only personal family pictures when he
left the office, Burger collected the rest of Sturdevant's property
and later delivered it to him.
After his departure from Standard, Sturdevant opened another
insurance office, hired new agents and had contracts with and
was licensed to sell for other companies. He testified however,
that he kept Standard's insurance in force and serviced Standard
policies at his new office. There is no evidence he sold more
insurance for Standard, after opening his new office.
In urging a different termination date than September 1969,
Sturdevant makes three arguments:
(1) The letter from Burger to Sturdevant did not comply
with contract provisions allowing termination upon thirty days
written notice since it did not specifically mention termination
of the contracts, but only referred to intent to resign.
(2) Since Standard obtained an agent's license for
Sturdevant until 1971, the agency-manager contract could not
have been terminated before 1971 when the license was not renewed.
(3) The evidence was not sufficient to show the contracts
were terminated by mutual consent.
Concerning the first argument it is true that Burger's letter
does not explicitly refer to "termination of the contracts1',but
its meaning is clear and unambiguous, and constitutes adequate
notice under the contracts. Clearly, Sturdevant understood its
meaning enough to remove himself from Standard's offices and to
open up another insurance business as an agent for other com-
panies .
In his second argument, Sturdevant misconstrues the appli-
cation of Title 40, Chapter 33, R.C.M. 1947, concerning the
licensing of insurance agents. This chapter provides, for
purposes here, that an insurance license cannot be issued unless
the recipient is appointed an agent by an authorized insurer.
Since Standard somehow licensed Sturdevant until 1971, Sturdevant
3rgues h i s agency-manager contracts with Standard could not be
~erminatedbefore 1971. But this licensing requirement is pri-
marily for the protection of the public and is not meant to
ereate private rights between the agent and insurance company
as contended in this case. 16 AppLlemanInsurance Law and Prac-
While innocent third parties would be protected against any
attempt by Standard or Sturdevant to repudiate its agency rela-
tionship between 1969 and 1971, this does not by itself entitle
Sturdevant to assert a contractual right of agency-manager with
Standard between the years 1969 and 1971. It is certainly a
factor to be considered, but only in light of all the circumstances,
and here there was evidence that Standard renewed the license
because of a clerical oversight.
Sturdevant is clearly wrong in his last argument that the
evidence was not sufficient to establish a mutual rescission.
Termination of a contract by mutual consent is a question of
fact for the district court. Cruse v. Clawson, 137 Mont. 439,
35.2 P.2d 989. In West River Equipment Co. v. Holzworth, 134
Yont. 582, 587, 335 P.2d 298, we held that a written contract
may be cancelled by mutual consent and the cancellation may be
oral. The Court stated:
It
However, mutual cancellation must be clearly
expressed and shown, and acts and conduct of
the parties to be sufficient must be clear,
convincing and inconsistent with the existence
of the contract. [Citing cases] ."
In support of his contention there was no mutual agreement
to terminate the contracts, Sturdevant relies on evidence that
he did not submit a written resignation; his license was ,.
renewed until 1971; he ignored Burger's letter; he took only
p i c t u r e s from t h e o f f i c e ; he continued t o keep t h e i n s u r a n c e i n
f o r c e and s e r v i c e p o l i c i e s ; and, he t o l d h i s a g e n t s h e d i d n o t
resign. While t h i s evidence c l e a r l y p u t t h e i s s u e i n d i s p u t e ,
t h e r e was s u b s t a n t i a l evidence t o t h e c o n t r a r y s u f f i c i e n t t o
support t h e d i s t r i c t c o u r t ' s determination t h e c o n t r a c t s t e r -
minated on September 1 5 , 1969. The d i s t r i c t c o u r t was j u s t i f i e d
i n concluding t h a t S t u r d e v a n t ' s d e p a r t u r e from S t a n d a r d ' s o f f i c e
a l s o r e s u l t e d i n h i s d e p a r t u r e from t h e agency-manager c o n t r a c t
he had w i t h Standard.
W n o t e t h a t d e t e r m i n a t i o n of t h e amount of money due was
e
d e f e r r e d u n t i l a f t e r t r i a l and a p p e a l , a p p a r e n t l y p u r s u a n t t o
Rule 4 2 ( b ) , M.R.Civ.P. M u l t i p l e t r i a l s and a p p e a l s a r i s i n g
from a s i n g l e d i s p u t e may c r e a t e a s e v e r e burden i n terms of
i n c r e a s e d c o s t t o t h e l i t i g a n t s , d e l a y i n r e s o l u t i o n of t h e
c o n t r o v e r s y , and c o u r t congestion. Where t h e r e i s no danger
of p r e j u d i c e and t h e i s s u e s a r e n o t complex t h e n e c e s s i t y of
s e p a r a t e t r i a l s should be c a r e f u l l y weighed by t h e d i s t r i c t c o u r t
t o e n s u r e t h e r u l e i s n o t abused.
W a f f i r m t h e judgment and remand t h i s c a u s e f o r f u r t h e r
e
proceedings c o n s i s t e n t w i t h t h i s o p i n i o n .
W Concur:
e