Jacomo Insurance Service, Inc. v. Billups

787 S.W.2d 304, 1990 Mo. App. LEXIS 271, 1990 WL 14877
CourtMissouri Court of Appeals
DecidedFebruary 20, 1990
DocketNo. WD 41811
StatusPublished
Cited by2 cases

This text of 787 S.W.2d 304 (Jacomo Insurance Service, Inc. v. Billups) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jacomo Insurance Service, Inc. v. Billups, 787 S.W.2d 304, 1990 Mo. App. LEXIS 271, 1990 WL 14877 (Mo. Ct. App. 1990).

Opinion

TURNAGE, Judge.

Jacomo Insurance Service, Inc. brought suit against Kenneth W. Billups for fraud, breach of contract, and tortious interference with a contract.1 The jury returned a verdict in favor of Jacomo on the fraud claim in the amount of $90,000, for $88,000 on the breach of contract claim, and $35,-000 in actual damages, and $35,000 in punitive damages on the tortious interference claim. The court entered judgment on the verdicts but thereafter sustained the motion for judgment notwithstanding the verdict on the breach of contract claim. The court entered judgment for $90,000 on the [305]*305fraud claim and $70,000 on the tortious interference claim.

Billups contends the court should have sustained his motion for judgment notwithstanding the verdict on all claims. Jacomo appeals the action of the court setting aside the verdict on the breach of contract claim. Judgment reversed as to the fraud and tortious interference claims and affirmed as to the breach of contract claim.

Billups started an insurance agency in Blue Springs. He later met Tom Alfrey who was also in the insurance business. Alfrey was employed by a large agency as an underwriter and Billups was interested in selling insurance. The two decided that their talents would mesh, with Billups handling the sales of property and liability insurance and Alfrey handling the underwriting.

After deciding that they would go into business together, Billups sold Alfrey one-half of the stock in Jacomo which Billups had previously incorporated.2 Thereafter, Billups and Alfrey operated Jacomo, with Alfrey in charge of the inside operations and Billups working outside. In 1985 Bill-ups decided that he wanted to leave Jacomo and offered to sell his half of the stock to Alfrey. Alfrey testified that Billups stated that he was leaving the area and was moving to the Virgin Islands. Alfrey and Bill-ups agreed that Alfrey would pay Billups $90,000 for his half of the stock of Jacomo. In addition Alfrey paid Billups for his interest in the furnishings. The agreement to sell was drafted by the attorney who had represented Jacomo. The agreement did not contain any agreement on the part of Billups to refrain from engaging in the insurance business in the future.

After the sale from Billups to Alfrey of half of the stock of Jacomo, Billups and Alfrey agreed that Billups would remain at Jacomo as an employee to continue servicing policies that Billups had sold. One of the biggest customers of Jacomo was Dan-guard, a security agency, owned by Dan Bunch who had been a close friend of Bill-ups for years.

In August, 1986 Billups announced that he was leaving Jacomo. At that time, during a visit with Dan Bunch, Billups told Bunch that he was leaving Jacomo and going into the insurance business on his own. Bunch stated that if Billups was leaving Jacomo that he was leaving also. Thereafter, Danguard placed a major policy with Billups in his new insurance business and placed other policies with other agencies.

Alfrey testified that he purchased Bill-ups’ half of Jacomo because of the statement that Billups had made that he was leaving the area and moving to the Virgin Islands. Alfrey stated that had he known that Billups would remain in the area and go into the insurance business himself after he sold out to Alfrey, that Alfrey would not have purchased Billups’ stock in Jaco-mo.

Alfrey testified that there is an unwritten rule in the insurance business that an agent who sells his “book of business” will not compete with the purchaser for those customers included in the “book of business.” 3 Alfrey stated that by purchasing one-half of the stock of Jacomo from Bill-ups that he had purchased the “book of business” of Billups and that Billups was thereby precluded from competing with Ja-como in the insurance business. Alfrey also testified that Jacomo had a business relationship with Danguard and that when Billups left Jacomo he tortiously interfered with the expectancy which Jacomo had to continue as the agency writing policies for Danguard.

Jacomo submitted its case to the jury on a theory of fraud, breach of contract, and tortious interference with contract.

[306]*306From the testimony of Alfrey it is clear that the fraud count was based on the' fact that Billups went into the insurance business in competition with Jacomo and not on the fact that Billups failed to leave Blue Springs and move to the Virgin Islands. The only damage Alfrey attributed to Bill-ups’ failure to leave Blue Springs was that Billups went into competition with Jacomo. No damage resulted from the failure of Billups to leave the area because if Billups had remained in Blue Springs, but stayed out of the insurance business, Jacomo would not have been damaged. The damage Alfrey testified about resulted solely from Billups starting an insurance agency. Thus, the alleged misrepresentation that Billups was leaving did not result in damage to Jacomo.

The breach of contract theory was based on the entry of Billups into the insurance business in competition with Jacomo. Al-frey testified at trial about the unwritten rule in the insurance business that the seller may not sell his “book of business” and later compete with the buyer. Jacomo in this appeal disclaims relying on any such unwritten rule. At the same time Jacomo advances no legal theory on which it bases its breach of contract claim, which in reality is a claim based solely on the competition Billups gave Jacomo when he entered into the insurance business.

It is apparent that the fraud claim and the breach of contract claim are both based on the fact that Billups went into business in competition with Jacomo after selling his share of the stock to Alfrey. The court was correct in concluding that the damages for fraud and breach of contract were duplicative and was correct in entering judgment notwithstanding the verdict on the breach of contract claim.

The question remains as to whether the court should have granted Billups’ motion for judgment notwithstanding the verdict on the fraud claim. That question depends upon whether Jacomo, when it simply proved that an agreement was entered into for the sale of stock from Billups to Alfrey without any non-compete language and that Billups later opened an insurance business in competition with Ja-como, proved facts entitling it to relief. Jacomo fails to identify any legal theory which would entitle it to relief based upon the fact that Billups started an insurance business in competition with Jacomo. The failure to identify the legal theory supporting such claim is not surprising in view of the holding in Dutcher v. Harker, 377 S.W.2d 140, 144[6] (Mo.App.1964). There, Dutcher had sold a paint business and later went into the paint business again and solicited business in the area where his former business was operating. The court stated:

He solicited business in the Springfield area including old customers who were then customers of the defendants. This he had a right to do, so long as no deception or other unfairness was practiced, because the sale contract did not contain any restriction against his re-entering into business.

In addition, it is stated in 38 C.J.S. Goodwill § 12 p 957 (1943), “... in the absence of agreement respecting the right to compete, one who sells a business is not precluded from setting up, or engaging in, a similar business in the vicinity.”

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Bluebook (online)
787 S.W.2d 304, 1990 Mo. App. LEXIS 271, 1990 WL 14877, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jacomo-insurance-service-inc-v-billups-moctapp-1990.