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Special Insurance Services, Inc. v. Adamson
Citations: 20 Ark. App. 8; 722 S.W.2d 875; 1987 Ark. App. LEXIS 2071Docket: CA 86-43
Court: Court of Appeals of Arkansas; February 4, 1987; Arkansas; State Appellate Court
James R. Cooper, Judge, presided over a case involving appellee Dixie Adamson, a self-employed insurance agent, who faced a lawsuit from client James Barnett for a refund of insurance premiums on a canceled policy. Adamson filed a third-party action against appellants Special Insurance Services, Inc. and Arkansas General Agency, Inc., claiming that Special owed the refund and that General was liable as Special's principal. The trial court ruled in favor of Adamson, finding both appellants liable for the refund amount and denying Special a set-off against Adamson. Evidence revealed that Adamson obtained Barnett's insurance through Special, which acted as a multi-line broker. After Barnett's policy was canceled for nonpayment, Adamson attempted to reinstate it but was informed it could not be reinstated. When she sought a refund, Special redirected her to General, which indicated the refund had been applied to Adamson's account, although she was unaware of having an account with General. Barnett eventually withdrew his lawsuit after Adamson refunded him from her own funds. The appellants appealed, arguing insufficient evidence supported the trial court's findings regarding General's indebtedness to Adamson and Special's agency status. The appellate court upheld the trial court's findings, emphasizing that trial judges' fact-finding is not disturbed unless clearly erroneous. The evidence suggested a close working relationship between Special and General, including shared office space and interoffice communication, implying that Special acted as General's agent in the transaction, thus lacking authority to issue the refund directly to Adamson. A person may act as both an independent contractor and an agent in different contexts for the same party, as established in Arkansas Independent Oil Marketers Ass’n v. Monsanto Chemical Co. The trial court's findings regarding the specific transactions in this case were upheld, and the appellants' claim regarding the dismissal of Special’s cross-complaint against Adamson was rejected. The cross-complaint stemmed from Adamson procuring a liability and physical damage policy for Handyman, Inc., and later seeking an endorsement for unlimited radius coverage. Adamson, acting as an agent, typically received payment from the insured, but was instructed by Special's president to wait for the endorsement before collecting any premiums. The endorsement was effective from July 30, 1984, to November 17, 1984, and was prepared on August 29, 1984. Adamson did not receive the invoice until October 3, 1984, after which Handyman refused to pay the premium. There was no communication from Special regarding the premium during the two-month period. The trial court's dismissal of the cross-complaint was not contested on sufficient legal grounds by the appellants, who failed to provide authority supporting their argument. As a result, the court affirmed the trial court's decision.