REAVES v REINBOLD

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No. 80-139 IN THE SUPREME COURT OF THE STATE OF MONTANA 1980 ROBERT REAVES , Plaintiff and Appellant, -vsJOSEPH REINBOLD, Defendant and Respondent. Appeal from: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone, The Honorable Willian J. Speare, Judge presiding. Counsel of Record: For Appellant: Jerrold L. Nye; Stacey and Nye, Billings, Montana For Respondent : H. Elwood English, Billings, Montana Submitted on Briefs: July 10, 1980 Decided : Filed: -&u&2 5 I Clerk 2 5 1980 Mr. J u s t i c e Gene B. Daly d e l i v e r e d t h e Opinion of t h e C o u r t . P l a i n t i f f a p p e a l s from a n o r d e r o f t h e D i s t r i c t C o u r t , Yellowstone County, t h e Honorable William J . S p e a r e p r e s i d i n g , whereby p l a i n t i f f ' s motion f o r summary judgment was d e n i e d and d e f e n d a n t ' s motion f o r summary judgment was granted. I n November 1975 d e f e n d a n t J o s e p h Reinbold w a s h i r e d by L i n c o l n B e n e f i t L i f e Company t o s e l l l i f e i n s u r a n c e as a d i s t r i c t representative. Reinbold was t o work under t h e s u p e r v i s i o n of p l a i n t i f f R o b e r t Reaves, a g e n e r a l a g e n t f o r Lincoln Benefit Life. Under a "Submitted Annualized Commission Agreement," d a t e d November 21, 1975, R e i n b o l d ' s income w a s t o be based on commissions from s a l e s o f i n s u r a n c e p o l i c i e s . I n addi- t i o n , t h e agreement p r o v i d e d t h a t L i n c o l n B e n e f i t L i f e would advance $1,250 p e r month a g a i n s t f u t u r e e a r n e d f i r s t y e a r commissions. R e i n b o l d , a s d i s t r i c t r e p r e s e n t a t i v e , Reaves, as g e n e r a l a g e n t , and D. L. S a y l e r , a s v i c e p r e s i d e n t of L i n c o l n B e n e f i t L i f e Company, were s i g n a t o r i e s t o t h i s agreement. On November 20, 1975, p r i o r t o s i g n i n g t h e commission agreement, Reinbold r e c e i v e d a l e t t e r from Reaves s t a t i n g i n pertinent part: " J o e , you have your $900 g u r a n t e e [ s i c ] b u t I t h i n k you w i l l f a r exceed t h a t i n e a r n i n g s . J u s t as a l i t t l e h e l p I ' l l throw i n $100.00 e a c h month expense money." Reinbold c l a i m s t h i s l e t t e r e v i d e n c e s a n o r a l agreement between p l a i n t i f f and h i m s e l f whereby p l a i n t i f f gave h i s p e r s o n a l g u a r a n t e e t h a t Reinbold would r e c e i v e $900 a month w i t h o u t r e g a r d t o t h e advance payments from L i n c o l n B e n e f i t Life. dant. Reaves h a s d e n i e d any such o r a l agreement w i t h d e f e n - ~ e i n b o l d u i t h i s employment w i t h L i n c o l n B e n e f i t L i f e q i n March 1976. A t t h a t t i m e i t w a s determined t h a t Lincoln B e n e f i t L i f e had p a i d Reinbold $2,341.65 more i n advance payments t h a n h e had e a r n e d i n commissions. The money owed by Reinbold was c o l l e c t e d by L i n c o l n B e n e f i t L i f e from Reaves under a company agreement t h e y had w i t h him a s a general agent. Reaves, i n t u r n , s u e d Reinbold t o r e c o v e r t h e money Reaves had p a i d t o t h e company. Upon t h e s u i t b e i n g f i l e d , Reinbold moved f o r d i s m i s s a l on t h e b a s i s of l a c k of j u r i s d i c t i o n . and d e n i e d . T h i s motion w a s h e a r d A p r e l i m i n a r y p r e t r i a l c o n f e r e n c e was t h e n h e l d on December 11, 1979, d u r i n g which t h e c o u r t o r d e r e d a l l d i s c o v e r y be completed by F e b r u a r y 6, 1980. On J a n u a r y 2 4 , 1980, Reaves f i l e d a motion f o r summary judgment a l l e g i n g t h e r e w a s no q u e s t i o n of e i t h e r law o r fact. Reinbold responded w i t h h i s own motion f o r summary judgment on F e b r u a r y 7, 1980. Argument on t h e motions w a s h e l d i n chambers a t t h e t i m e s e t f o r f i n a l p r e t r i a l conf e r e n c e on F e b r u a r y 1 4 , 1980. On F e b r u a r y 2 6 , 1980, Loren " P i " Page, r e g i o n a l v i c e p r e s i d e n t f o r Lincoln B e n e f i t L i f e , w a s unexpectedly i n B i l l i n g s , Montana, from h i s o f f i c e i n Denver, Colorado. R e a v e s ' s a t t o r n e y used t h a t o p p o r t u n i t y t o t a k e h i s d e p o s i t i o n t o preserve h i s testimony f o r use a t t r i a l . In the d e p o s i t i o n , Page e x p l a i n e d t h e r e l a t i o n s h i p t h a t g e n e r a l a g e n t s , d i s t r i c t r e p r e s e n t a t i v e s and r e g i o n a l v i c e p r e s i d e n t s have w i t h L i n c o l n B e n e f i t L i f e Co. and e a c h o t h e r . On March 11, 1980, t h e c o u r t e n t e r e d summary judgment f o r defendant. The D i s t r i c t C o u r t , i n g r a n t i n g d e f e n d a n t ' s motion, found t h a t t h e r e w a s an o r a l agreement between Reaves and Reinbold w h e r e i n Reaves p e r s o n a l l y g u a r a n t e e d ~ e i n b o l d$900 a month and t h a t t h e l e t t e r of November 20, 1975, w a s a w r i t t e n memorandum o f t h a t o r a l agreement. P l a i n t i f f ' s a t t o r n e y f i l e d a motion t o a l t e r and amend t h e judgment on March 1 4 , 1980. The D i s t r i c t C o u r t d e n i e d t h i s motion and p l a i n t i f f a p p e a l s . On a p p e a l p l a i n t i f f raises t h r e e i s s u e s : 1. Whether i t w a s e r r o r and a n a b u s e of d i s c r e t i o n f o r t h e D i s t r i c t C o u r t t o g r a n t summary judgment f o r d e f e n d a n t . 2. Whether i t w a s e r r o r f o r t h e D i s t r i c t C o u r t n o t t o e n t e r summary judgment f o r p l a i n t i f f as a matter o f l a w . 3. Whether i t was e r r o r and a n a b u s e of d i s c r e t i o n f o r t h e D i s t r i c t C o u r t n o t t o c o n s i d e r t h e t e s t i m o n y of Loren " P i " Page p r i o r t o any d e c i s i o n i n t h i s case. Summary judgment under Rule 5 6 ( c ) , M.R.Civ.P., is p r o p e r o n l y i f t h e r e c o r d d i s c l o s e s no g e n u i n e i s s u e o f m a t e r i a l f a c t and t h e moving p a r t y i s e n t i t l e d t o a judgment a s a m a t t e r of l a w . Johnson v. Johnson ( 1 9 7 7 ) , 172 Mont. 1 5 0 , 561 P.2d 917; Anderson v . Applebury ( 1 9 7 7 ) , 173 Mont. 411, 567 P.2d 951. T h i s C o u r t h a s c o n s i s t e n t l y h e l d t h a t t h e p a r t y moving f o r swnmary judgment h a s t h e burden o f showing t h e complete a b s e n c e of any g e n u i n e i s s u e a s t o a l l t h e f a c t s which a r e deemed material i n l i g h t o f t h o s e s u b s t a n t i v e p r i n c i p l e s which e n t i t l e d him t o a judgment a s a matter of law. Bahn v. Dormanen ( 1 9 7 5 ) , 168 Mont. 408, 543 P.2d 379; Harland v . Anderson ( 1 9 7 6 ) , 169 Mont. 447, 548 P.2d Bourke ( 1 9 7 7 ) , 1 7 3 Mont. 613; Bonawitz v. 179, 567 P.2d 32. To s a t i s f y t h i s burden t h e movant must make a c l e a r showing a s t o what t h e t r u t h i s s o as t o e x c l u d e any r e a l d o u b t a s t o t h e e x i s t e n c e o f any g e n u i n e i s s u e of m a t e r i a l f a c t . Kober v. S t e w a r t ( 1 9 6 6 ) , 148 Mont. 117, 417 P.2d 476; 6 Moore's F e d e r a l P r a c t i c e 1156.15[3]. I t i s c l e a r t h a t t h e p a r t y opposing a motion f o r sum- mary judgment w i l l b e a f f o r d e d t h e b e n e f i t o f a l l r e a s o n a b l e i n f e r e n c e s which may be drawn from t h e o f f e r e d p r o o f . Mally v . Asanovich (19671, 149 Mont. 99, 423 P.2d 294; Harland v . Anderson, s u p r a . The D i s t r i c t C o u r t c o u l d p r o p e r l y g r a n t summary judgment t o d e f e n d a n t h e r e o n l y by f i n d i n g t h a t , on t h e subm i t t e d r e c o r d , a v a l i d o r a l c o n t r a c t e x i s t e d between t h e p a r t i e s which p r o v i d e d t h a t p l a i n t i f f would pay d e f e n d a n t , a t a minimum, $900 p e r month. I n s u p p o r t o f a f i n d i n g t h a t s u c h a n o r a l agreement e x i s t e d , defendant submitted t o t h e court: (1) a n a f f i d a v i t a l l e g i n g t h a t p l a i n t i f f i n a telephone conversation o f f e r e d t o pay d e f e n d a n t $900 p e r month; ( 2 ) a l e t t e r from p l a i n t i f f t o d e f e n d a n t s t a t i n g t h a t d e f e n d a n t would have h i s $900 g u a r a n t e e ; and ( 3 ) a n a d m i s s i o n by p l a i n t i f f t h a t " d e f e n d a n t w a s p a i d $900 p e r month i n a c c o r d w i t h t h e s u b m i t t e d ann u a l i z e d commission agreement," when i n f a c t t h e f i g u r e f o r advances under t h e agreement w a s $1,250 p e r month. I n response t o defendant's a l l e g a t i o n s , p l a i n t i f f has d e n i e d any e x i s t e n c e of a n o r a l c o n t r a c t between t h e p a r t i e s . H e c o n t e n d s t h a t any c o n v e r s a t i o n o r l e t t e r t h a t d e a l t w i t h money t o b e p a i d d e f e n d a n t r e l a t e d t o t h e amount t o be advanced a g a i n s t f u t u r e commissions by L i n c o l n B e n e f i t L i f e and n o t t o any g u a r a n t e e d s a l a r y t o be p a i d by p l a i n t i f f . A s t h e r e c o r d i n d i c a t e s , whether t h e p a r t i e s i n t e n d a n o r a l c o n t r a c t whereby p l a i n t i f f g u a r a n t e e d a $900 p e r month s a l a r y t o d e f e n d a n t i s a n i m p o r t a n t f a c t o r i n need o f cons i d e r a t i o n i n t h i s case. When a n i s s u e of f a c t a r i s e s a s t o t h e e x i s t e n c e o f a c o n t r a c t and t h e i n t e n t i o n s of t h e p a r - t i e s p l a y a n i m p o r t a n t p a r t i n t h e r e s o l v e m e n t of t h a t q u e s t i o n , t h i s C o u r t h a s h e l d t h a t summary judgment i s usually inappropriate. Kober v. S t e w a r t ( 1 9 6 6 ) , 148 Mont. 1 1 7 , 417 P.2d 476; F u l t o n v . C l a r k ( 1 9 7 5 ) , 167 Mont. 399, 538 P.2d 1371. ~ e f e n d a n t r g u e s t h a t summary judgment i s a p p r o p r i a t e a i n t h i s i n s t a n c e because t h e D i s t r i c t Court, p r i o r t o i t s d e c i s i o n on d e f e n d a n t ' s motion, w a s p r e s e n t e d w i t h a l l t h e e v i d e n c e needed t o d e c i d e t h e i s s u e of whether a n o r a l contract existed a s alleged. W e disagree with defendant's contention. I t i s t r u e t h a t t h e purpose of t h e summary judgment p r o c e d u r e i s t o encourage j u d i c i a l economy t h r o u g h t h e e l i m i n a t i o n of a n u n n e c e s s a r y t r i a l . However, i t i s a l s o t r u e t h a t t h e procedure i s never t o be a s u b s t i t u t e f o r t r i a l i f a f a c t u a l controversy e x i s t s . E n g e b r e t s o n v. Putnam ( 1 9 7 7 ) , 174 Mont. 409, 571 P.2d 368; Duncan v. Rock- w e l l Mfg. Co. ( 1 9 7 7 ) , 173 Mont. 382, 567 P.2d 936; Bonawitz v. Bourke ( 1 9 7 7 ) , 173 Mont. 179, 567 P.2d 32. W e f i n d t h a t d e f e n d a n t , as t h e moving p a r t y , h a s n o t m e t h i s burden of e s t a b l i s h i n g t h e a b s e n c e of a n i s s u e of f a c t a s t o t h e e x i s t e n c e o f t h e o r a l c o n t r a c t as a l l e g e d . I n viewing t h e r e c o r d i n a l i g h t most f a v o r a b l e t o p l a i n t i f f , w e c o n c l u d e t h a t a m a t e r i a l f a c t u a l i s s u e e x i s t s and i s i n need of p r o p e r r e s o l v e m e n t a t t h e t r i a l l e v e l . W e have n o t a t t e m p t e d t o d e c i d e t h e merits of t h i s c a s e n o r which p a r t y s h o u l d u l t i m a t e l y p r e v a i l . W e merely h o l d f o r t h e foregoing reasons t h a t t h e D i s t r i c t Court e r r e d i n g r a n t i n g d e f e n d a n t ' s motion f o r summary judgment. I n r e v i e w i n g p l a i n t i f f ' s motion f o r summary judgment, t h e g e n e r a l r u l e s and p r i n c i p l e s s t a t e d above w i l l c o n t r o l , w i t h t h e e v i d e n c e now b e i n g viewed i n a l i g h t most f a v o r a b l e t o defendant. I n s u p p o r t of h i s motion p l a i n t i f f p o i n t s o u t t h a t defendant's s o l e defense t o the present a c t i o n is t h e a l l e g e d o r a l agreement i n which p l a i n t i f f g u a r a n t e e d a $900 p e r month s a l a r y f o r d e f e n d a n t . P l a i n t i f f a r g u e s t h a t even s h o u l d i t b e found t h a t s u c h a n agreement w a s e n t e r e d i n t o , i t c a n n o t be g i v e n e f f e c t i n t h i s i n s t a n c e . P l a i n t i f f ' s argument i s based on t h e a l l e g a t i o n t h a t t h e w r i t t e n agreements e n t e r e d i n t o on November 2 1 , 1975, which i n c l u d e d t h e "Submitted Annualized Commission Agreement," s u p e r s e d e d any p r i o r o r a l n e g o t i a t i o n s o r agreement between t h e p a r t i e s . I n s u p p o r t of t h i s argument, p l a i n t i f f c i t e s s e c t i o n s 28-2-904 and 28-3-203, MCA. A s s t a t e d i n p l a i n t i f f ' s b r i e f , t h e r e i s abundant c a s e l a w i n Montana which h o l d s t h a t p r i o r o r a l agreements o r c o n d i t i o n s are n o t a d m i s s i b l e t o a l t e r o r v a r y t h e terms of a l a t e r written contract. Davidson v. C a s e b o l t ( 1 9 6 9 ) , 154 Mont. 125, 461 P.2d 2; Heckman and S h e l l v. Wilson ( 1 9 7 1 ) , 158 Mont. 47, 487 P.2d 1 1 4 1 ; K i n g e r s k i v. Lamey ( 1 9 7 9 ) , Mont. - 604 , P.2d 782, 36 St.Rep. 2316. I t s h o u l d be n o t e d , however, t h a t s u c h c a s e l a w h a s o n l y d e a l t w i t h a n a p p l i c a t i o n of t h e r u l e a s t o p r i o r o r a l a g r e e m e n t s and s u b s e q u e n t c o n t r a c t s between t h e same p a r t i e s i n r e g a r d t o t h e same matter. It should a l s o be noted t h a t d i s t i n c t c o l l a t e r a l a g r e e m e n t s , even a s between t h e same p a r t i e s , w i l l n o t merge s o a s t o p r e c l u d e a p r i o r o r a l agreement. - l& ;. See v . Montforton (19411, 112 Mont. 24, 113 P.2d 507; L d 1 7 C.J.S. C o n t r a c t s 8381 a t 451. Upon examining t h e a l l e g e d o r a l agreement and subseq u e n t w r i t t e n commission agreement, w e n o t e t h a t t h e w r i t t e n agreement s p e c i f i c a l l y d e a l s w i t h t h e r i g h t s and d u t i e s of d e f e n d a n t and L i n c o l n B e n e f i t L i f e Company. The agreement provides that defendant will be advanced up to $1,250 per month against future earned commissions and that all advances made are considered a debt to the insurance company. The alleged oral agreement, on the other hand, deals with a personal guarantee by plaintiff that defendant would receive, at a minimum, $900 per month with no obligation of repayment. In reviewing the relationship of the two agreements in a light most favorable to defendant, we note that the alleged oral agreement is collateral as opposed to ancillary. Both agreements were entered into at approximately the same time and deal with an arrangement whereby defendant is to receive monies for selling insurance. One agreement, however, is with Lincoln Benefit Life Company and provides for a repayment of advances made. The other separate agreement is with plaintiff and allegedly provides that he personally will guarantee a set salary no matter how much defendant is required to repay the insurance company. Each agreement is distinct, separate, involves a different party and is able to stand independent of the other. With this being the case, we cannot find as a matter of law that the written agreement would supersede the alleged oral agreement. Plaintiff points out that he also has signed the written commission agreement and thus argues he was a party to both the oral and written agreement. We agree that plain- tiff was a signatory on the written agreement but only in his capacity as general agent for Lincoln Benefit Life Company. As alleged, the separate oral agreement with defendant was entered into by plaintiff in a personal capacity; thus, the fact he may have signed the written agreement will not affect a finding that the agreements are d i s t i n c t and c o l l a t e r a l o r t h a t t h e y w e r e e n t e r e d i n t o by different parties, A s s t a t e d e a r l i e r w e do n o t a t t e m p t t o d e c i d e t h e merits o f t h i s c a s e o r t o r e s o l v e t h e i s s u e of f a c t a s t o W e merely whether t h e r e was a n o r a l agreement a s a l l e g e d . f i n d f o r t h e foregoing reasons t h a t t h e D i s t r i c t Court d i d n o t e r r i n r e f u s i n g t o g r a n t p l a i n t i f f ' s motion. A s t o t h e d e p o s i t i o n o f Loren " P i " Page, w e n o t e t h a t t h e D i s t r i c t C o u r t e s t a b l i s h e d F e b r u a r y 6 , 1980, a s t h e c u t o f f d a t e f o r discovery. Loren P a g e ' s d e p o s i t i o n w a s t a k e n on F e b r u a r y 26, 1980, and f i l e d on March 20, 1980. The f i n d i n g s of f a c t , c o n c l u s i o n s of law and o r d e r denying p l a i n t i f f ' s motion f o r summary judgment and g r a n t i n g d e f e n d a n t ' s motion f o r summary judgment w a s e n t e r e d on March 11, The d e p o s i t i o n o f Page w a s n o t t a k e n p r i o r t o t h e 1980. c u t - o f f d a t e f o r p r e t r i a l d i s c o v e r y , n o r was i t b e f o r e t h e D i s t r i c t C o u r t a t t h e t i m e i t r u l e d on summary judgment. The D i s t r i c t C o u r t c a n n o t be h e l d i n e r r o r on t h e b a s i s of documents n o t p r o p e r l y b e f o r e it a t t h e t i m e i t made i t s ruling. See B a y l o r v. Jacobson ( 1 9 7 6 ) , 170 Mont. 234, 552 P.2d 55. The o r d e r denying p l a i n t i f f ' s motion f o r summary judgment i s a f f i r m e d . Summary judgment f o r d e f e n d a n t i s v a c a t e d . The c a u s e i s remanded t o t h e D i s t r i c t C o u r t f o r t r i a l . J * >', /* 4M - Justice %6p. 1 W e concur: Chief J u s t i c e 4

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