NO. 87-501
IN THE SUPREME COURT OF THE STATE OF MONTANA
1988
DEBRA LANE,
Plaintiff and Respondent,
-vs-
LARRY DUNKLE ,
Defendant and Appellant.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and for the County of Yellowstone,
The Honorable Russell K. Fillner, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Lloyd E. Hartford, Billings, Montana
For Respondent:
Jerrold L. Nye, Nye and Meyer, P.C., Billings, Montana
Submitted on Briefs: March 3, 1988
Decided: April 14, 1988
Mr. Justice L. C. Gulbrandson delivered the Opinion of the
Court.
Defendant/appellant Larry Dunkle (Dunkle) appeals from
an order of the Thirteenth Judicial District Court awarding
plaintiff/respondent Debra Lane (Lane) $2,857.42 for
conversion of her commission and expense checks and $25,000
in punitive damages. We affirm.
We are presented with the following issues:
1. Was there sufficient evidence to submit plaintiff's
conversion theory to the jury?
2. Whether the District Court erred in entering
judgment awarding punitive damages?
Debra Lane intially associated with Globe Life and
Accident Insurance Company (Globe) on April 16, 1984 under
the terms and conditions of an Independent Agent's Contract.
Dunkle, who was manager of the Billings' Globe office from
March, 1984, through June, 1985, was Lane's supervisor. Lane
worked as an insurance salesperson for Globe and was paid
according to initial sales and "commissions on renewals"
meaning she was paid after premiums of previous policies were
paid by policy holders.
Globe issued three commission checks payable to
Lane on April 16, May 13, and June 4, of 1985. Globe also
previously issued a fourth check in Lane's name for $100 to
offset her expenses while she was training in Livingston,
Montana. She endorsed this check over to Dunkle upon
assurances by Dunkle that her expenses would be paid on the
trip and any excess would be reimbursed at the following
Monday morning meeting. JJane never received any money at
this juncture and in fact paid Dunkle an additional $86. At
trial, Dunkle testified that he forged Debra Lane's signature
on the three commission checks, cashed them, and never
informed Lane that he had the money.
Dunkle argues Lane's employment at Globe terminated
prior to April of 1985 and therefore she was not entitled to
the commissions. The record shows Lane received formal
written termination from Globe on June 28, 1985. Dunkle was
informed by superiors to formally terminate Lane and he
drafted this letter on June 27, 1985.
Lane originally filed a complaint on July 8, 1985. The
complaint was amended March 31, 1987. In addition to the
claim of conversion, Lane alleged the following: sexual
harassment; threats of physical harm and injury causing
emotional distress; that Dunkle forced her to use illegal and
unethical methods in the sale of insurance; constructive
discharge and intentional and negligent infliction of
emotional distress. A three-day jury trial commenced on June
29, 1987 and the jury returned a verdict in favor of Lane on
the grounds of conversion only on July 1, 1987. The jury
granted damages in the amount of $617.42 plus interest for an
award totalling $2,857 plus $25,000 punitive damages. Dunkle
motioned for a directed verdict at the close of Lane's case
and motioned for judgment notwithstanding the verdict at the
end of trial. The District Court denied the motion for
directed*,
Gerdict at trial and the motion for judgment not
withstanding verdict in an order dated August 19, 1987 and it
is from this order that Dunkle appeals.
Dunkle initially argues Lane failed to prove conversion
because she did not prove she was legally entitled to the
proceeds of the commission checks after April 1, 1985. Lane
testified that she was employed full time as a bookkeeper at
a different business after April 1, 1985 and that she did not
sell a policy after this date. Dunkle claims the terms of
the Independent Agent contract Lane signed control. This
contract, in paragraph 5, specifically provides:
The deferred and renewal commissions set
forth in the Commission Schedule shall be
payable on the 20th of the month
succeeding the month in which the premium
is received by the Company provided that
the Agent is representing the Company on
that date, and it is expressly agreed by
the Agent and the Company that such
deferred and renewal commissions are
non-vested and entitlement thereto by the
Agent automatically terminates with the
termination of this Contract ...
Because Lane admitted she was not an active agent as of
April 20, 1985, and because this clause specifically requires
the agent represent the company, Dunkle argues she had no
"ownership" interest in the commission checks and could not
establish conversion.
Conversion requires ownership of property, a right of
possession, and unauthorized dominion over the property by
another resulting in damages. Farmers State Bank v. Imperial
Cattle Co. (Mont. 1985), 708 P.2d 223, 227, 42 St.Rep. 1419,
1424; Gebhardt v. D.A. Davidson & Co. (1983), 203 Mont. 384,
389, 661 P.2d 855, 858. See also, 18 Am.Jur.2d conversion,
5 2, pp. 146-147 (1985).
The evidence presented in this case shows the jury was
presented with sufficient evidence to determine Dunkle
committed conversion. The three commission checks were
issued by Globe and made payable to Debra Lane. These checks
were regular renewal commission checks that the agent, Lane,
was entitled to upon renewal of policies earlier sold by her.
The jury could therefore find Lane had a property ownership
interest in the checks.
In addition to paragraph 5 set forth above, Globe
Independent Agent contracts included, in paragraph 11, the
following statement in regard to termination:
This contract may be cancelled by either
party upon the written notice to the last
known address of the other party . .
- .
(~mphasis added.)
Lane received Dunkle's written notice on June 28, 1985.
Dunkle also informed the State Insurance Commissioner that
Lane was terminated June 28, 1985. This further supports a
jury finding that Lane had an ownership interest in the
checks if issued prior to the termination letter.
Additionally, Helen Clark, who was the secretary in charge of
disbursing the checks to all the agents testified that
"[flrom when they went to work until I issued the termination
sheet, I always considered that the agent was still with
Globe. I'
Dunkle testified to and admitted in the Agreed
Statement of Facts that he forged Lane's endorsement on the
checks and that he cashed these checks without Lane's
knowledge. Dunkle did not inform Lane that he had the money.
The jury could find by these facts that Dunkle exercised
unauthorized dominion over the money resulting in damages to
Lane.
The standard we use in reviewing denials of motions for
directed verdicts only requires substantial evidence in the
record supporting the finding of the jury. Gunnels v. Hoyt
(Mont. 1981), 633 P.2d 1187, 38 St.Rep. 1492. This is the
same standard used to determine sufficient evidence to
support the jury's verdict on a motion notwithstanding the
verdict. "We review the evidence in a light most favorable
to the prevailing party. We will reverse only where there is
a lack of substantial evidence to support the judgment
... " Funk v. Robbin (Mont. 1984), 689 P.2d 1215, 1218, 41
St.Rep. 1848, 1850; see also, Kleinsasser v. Superior Derrick
Service, Inc. (Mont. 1985), 708 P.2d 568, 569, 42 St.Rep.
1662, 1664. In Kleinsasser, supra, 708 P.2d at 570, we
stated:
The "substantial evidence" test variously
expressed allows reversal only if there
is a complete absence of probative facts
to support the verdict [Griffel v. Faust
(Mont. 1983), 668 P.2d 247, 249, 40
St.Rep. 1370, 1372), .. . or if there is
a complete absence of any credible
evidence in support of the verdict
(Barmeyer v. Montana Power Company (Mont.
1983), 657 P.2d 594, 597, 40 St.Rep. 23,
25).
Reversal on the grounds expressed by Dunkle cannot be
granted due to the substantial, credible evidence presented
upon which the jury could base its verdict in regard to
conversion. The District Court did not err in denying
Dunkle's motion for a directed verdict or motion for
judgment notwithstanding the verdict.
Dunkle next contends the District Court erred in
accepting the jury's award of punitive damages because the
claim should be considered one for breach of contract.
Dunkle contends since Lane "elected to affirm the express
contract by suing for all commissions, monies and earnings
stolen and/or wrongfully withheld and any penalty that may be
allowed by law for breach of contract" that she should not be
entitled to punitive damages. Section 27-1-220, MCA (1987) .
The trial court appropriately instructed the jury on
punitive damages and Dunkle failed to object. It is
uncontroverted that a party cannot raise an issue on appeal
that was not objected to at the trial level as Lane
appropriately points out. Clark v. orris (Mont. 1987), 734
P.2d 182, 188, 44 St.Rep. 444, 450. The jury was instructed
on conversion. The instruction allowed the jury to grant
actual damages.
An additional instruction stated the jury could grant
punitive damages if it found actual damage was suffered and
oppression or malice was present. The jury received
definitions of malice and oppression in the instructions.
Section 27-1-221, MCA (1985), provides for punitive damages
when malice or oppression are found by the jury just as
instructed in this case. Bollinger v. Hollingsworth (Mont.
1987), 739 P.2d 962, 964, 45 St.Rep. 1228, 1231. The
submitted instructions were based on 5 27-1-221, MCA, that
allowed presumed malice. In 1987, the Legislature amended
this statute to allow punitives upon proof, by clear and
convincing evidence, of actual malice or oppression. Section
27-1-221, MCA (1987). However, this change is immaterial in
this case.
The jury was properly instructed as to the awarding of
punitive damages and could infer either malice or oppression
by Dunkle. Dunkle's breach of contract argument on this
appeal is not supported by the evidence nor the jury verdict.
Dunkle was found liable for commission of conversion. It is
hornbook law that conversion is a tort. Prosser and Keeton
on Torts, 5 15, pp. 89-107, (1984).
We have held that punitive damages may be awarded where
the nature of the wrong complained of and injury inflicted
goes beyond merely violating the rights of another and is
found to be willful and malicious. Safeco Ins. Co. v.
Ellinghouse (Mont. 1986), 725 P.2d 217, 227, 43 St.Rep. 1689,
1701. The evidence shows Dunkle exercised a habit of
depriving agents of checks specifically drafted in the
agent's name. The jury could find this was an abuse of
authority. In Dunfee v. Baskins-Robbins, Inc. (Mont. 1986) ,
720 P.2d 1148, 1155, 43 St.Rep. 964, 972, this Court looked
with favor upon an instruction that stated oppression was
defined as "an act of ... excessive use of authorit~r"
stating "an act is oppressively done if done in a way o r
manner which violates the right of another person with
unnecessary harshness or severity as by misuse or abuse of
authority or power." The award of punitive damages, $25,000,
does not appear to be "grossly disproportionate" to his acts
and therefore the result of passion or prejudice. Safeco,
supra, 725 P.2d at 227.
For the foregoing reasons, the District Court did not
err in denving Dunkle's motion f o r a directed verdict and
judgment notwithstanding the ~rerdi-ct.
Affirmed.
We concur:
Justices
4