Reynolds v. Crown Pontiac, Inc.

753 So. 2d 522, 1999 Ala. Civ. App. LEXIS 837, 1999 WL 1046448
CourtCourt of Civil Appeals of Alabama
DecidedNovember 19, 1999
Docket2980462
StatusPublished
Cited by2 cases

This text of 753 So. 2d 522 (Reynolds v. Crown Pontiac, Inc.) is published on Counsel Stack Legal Research, covering Court of Civil Appeals of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Reynolds v. Crown Pontiac, Inc., 753 So. 2d 522, 1999 Ala. Civ. App. LEXIS 837, 1999 WL 1046448 (Ala. Ct. App. 1999).

Opinion

ROBERTSON, Presiding Judge.

At various times during the period between March and May 1996, Felicia Reynolds, Treva Clifton, Wilma Latham, Darryl Chapman Jr., Felicia Brown, Eric Studa-mire, and Sonya Peake (“the customers”) visited Crown Pontiac, Inc. (“Crown”), an automobile dealership in Birmingham, Alabama. Each of the customers was referred to Charles Fountain, a Crown salesperson, for assistance. Knowing that each had a poor credit history, Fountain told each of the customers (1) that he could help them finance the purchase of an automobile; (2) that Crown had a special program to handle customers with credit problems; (3) that a payment of $500 would be necessary to process their credit applications; and (4) that the payment would be applied as a down payment towards the purchase of an automobile. Each of the customers paid Fountain between $300 and $500 and Fountain gave [524]*524each of them a “receipt” in the form of his Crown business card bearing a handwritten endorsement that he had received the money. Fountain’s taking of money directly from the customers violated a Crown policy that salespersons were not to receive payments directly from customers; Crown required that all payments be made through its finance office and that that office issue a formal receipt for such payments.

After not hearing from Fountain and Crown for several weeks, Reynolds and Clifton contacted Joe Zegarelli, one of Crown’s sales managers, on June 3, 1996, and informed him about Fountain's conduct. That same day, Fountain telephoned Reynolds and Clifton and told them that he had been directed to “straighten things out.” Reynolds again contacted Zegarelli on June 9 and requested a refund of her money, and Fountain again called Reynolds and told her that he had been directed to try to “work things out.” Of the customers who paid Fountain $500, only Studamire and Peake purchased automobiles from Crown, although Latham was eventually told that her credit application had been approved.

On July 5, 1996, a Crown customer showed Zegarelli a business card “receipt” that Fountain had prepared after receiving a payment from the customer. Zegarelli notified Robert Roper, Crown’s general manager, of Fountain’s conduct, and the two managers telephoned Fountain and confronted him with their findings; Fountain then confessed that he had taken the customers’ $500 payments and had used them to pay for medical treatment for his wife. Roper also reported Fountain to the police department of the City of Hoover. Crown terminated Fountain’s employment on July 9, 1996, and refunded $500 to each of the customers except for Chapman (who was reimbursed by Fountain directly) and Clifton (who presented Crown a “receipt” for only $200).

The customers sued Crown, alleging (1) that Fountain had defrauded them and had breached oral contracts with them, and that Crown was vicariously liable for Fountain’s conduct; (2) that Crown had acted negligently or wantonly toward them; and (3) that Crown had negligently hired and/or trained Fountain. The claims of Studamire and Peake were dismissed because of their non-compliance with a binding arbitration clause in their Crown purchase contracts, and the remaining customers will be referred to hereinafter simply as “the plaintiffs.”

Crown filed a motion for a summary judgment on all of the plaintiffs’ claims, contending that it was not vicariously liable for Fountain’s conduct. The plaintiffs filed a response in opposition. After a hearing, the trial court entered a summary judgment in favor of Crown on all claims.

The plaintiffs appealed to the Alabama Supreme Court. That court transferred the appeal to this court, pursuant to § 12-2-7(6), Ala.Code 1975.

The sole issue raised by the plaintiffs is whether the trial court erred in entering the summary judgment on their fraud claim against Crown. In support of their contention, the plaintiffs assert (1) that Fountain’s conduct was within the line and scope of his employment with Crown; and (2) that Crown had ratified Fountain’s conduct because of the delay between their initial notification to Zegarelli on June 3, 1996, and Fountain’s termination on July 8, 1996. We review the propriety of the summary judgment under the following standard:

“A motion for summary judgment tests the sufficiency of the evidence. Such a motion is to be granted when the trial court determines that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. The moving party bears the burden of negating the existence of a genuine issue of material fact. Furthermore, when a motion for summary judgment is made and supported as provided in Rule 56, [Ala. [525]*525R.Civ.P.,] the nonmovant may not rest upon mere allegations or denials of his pleadings, but must set forth specific facts showing that there is a genuine issue for trial. Proof by substantial evidence is required.”

Sizemore v. Owner-Operator Indep. Drivers Ass’n, Inc., 671 So.2d 674, 675 (Ala.Civ.App.1995) (citations omitted). Moreover, we view the evidence in a light most favorable to the nonmovant, without presuming that the summary judgment is correct. See Long v. Jefferson County, 623 So.2d 1130, 1132 (Ala.1993); Hipps v. Lauderdale County Bd. of Educ., 631 So.2d 1023, 1025 (Ala.Civ.App.1993) (citing Gossett v. Twin County Cable T.V., Inc., 594 So.2d 635 (Ala.1992)).

Under Alabama law:

“A corporation or employer will be liable for the torts of its employee committed while acting in the line and scope of his employment even though the corporation or employer did not authorize or ratify such acts and even if it expressly forbade them. Old Southern Life Ins. Co. v. McConnell, 52 Ala.App. 589, 296 So.2d 183 (Ala.Civ.App.1974). If there is any evidence in the record tending to show directly, or by reasonable inference, that the tortious conduct of the employee was committed while performing duties assigned to him, then it becomes a question for the jury to determine whether he was acting from personal motives having no relationship to the business of the employer. Plaisance v. Yelder, 408 So.2d 136 (Ala.Civ.App.1981); United States Steel Co. v. Butler, 260 Ala. 190, 69 So.2d 685 (1953).”

Lawler Mobile Homes, Inc. v. Tarver, 492 So.2d 297, 305 (Ala.1986). Moreover, where fraud is committed within the actual or apparent scope of employment, the employer is liable even where the fraud is to the employee’s own benefit and to the employer’s detriment. Pacific Mut. Life Ins. Co. v. Haslip, 553 So.2d 537, 541 (Ala.1989), aff'd, 499 U.S. 1, 111 S.Ct. 1032, 113 L.Ed.2d 1 (1991); see also Southern Life & Health Ins. Co. v. Turner, 571 So.2d 1015, 1017-18 (Ala.1990) (noting that theory of respondeat superior extends to cases where fraud benefits only the agent), vacated on other grounds, 500 U.S. 901, 111 S.Ct. 1678, 114 L.Ed.2d 73 (1991).

In Lawler Mobile Homes, a mobile home salesperson (Wilkes) asked a prospective mobile home purchaser (Tarver) to leave a cash deposit with him while he submitted a credit application on Tarver’s behalf. In exchange for a $100 payment from Tarver, Wilkes gave Tarver a document describing the make and serial number of a used mobile home and indicating that the $100 had been received.

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Bluebook (online)
753 So. 2d 522, 1999 Ala. Civ. App. LEXIS 837, 1999 WL 1046448, Counsel Stack Legal Research, https://law.counselstack.com/opinion/reynolds-v-crown-pontiac-inc-alacivapp-1999.