71 The Alabama Lawyer 68 (2010). Reliance, the Bachelor: Will Experience Answer the Open Questions of Reasonable Reliance.

• Author: By Wilson F. Green

Alabama Lawyer

2010.

71 The Alabama Lawyer 68 (2010).

Reliance, the Bachelor: Will Experience Answer the Open Questions of Reasonable Reliance

Reliance, the Bachelor: Will Experience Answer the Open Questions of Reasonable Reliance?By Wilson F. Green "That is no excuse," replied Mr. Brownlow. "You were present on the occasion of the destruction of these trinkets, and indeed are the more guilty of the two, in the eye of the law; for the law supposes that your wife acts under your direction."

"If the law supposes that," said Mr. Bumble, squeezing his hat emphatically in both hands, "the law is a ass-a idiot. If that's the eye of the law, the law is a bachelor; and the worst I wish the law is, that his eye may be opened by experience-by experience."

Charles Dickens, Oliver Twist, Ch. 51

Brownlow, ever the punctilious prosecutor, gave sound interpretation to the facts under the controlling law. Although Mr. Bumble had pleaded the "Adam Defense" (it was all Mrs. Bumble's idea to pawn that jewelry, so he claimed), Brownlow rejoined that the law supposes-one might say conclusively presumes-that a wife acts under her husband's direction. Mr. Bumble, at once outraged and confounded, then uttered his unforgettable line-"the law is a[n] ass."

Non-lawyers (some lawyers, too) often quote this mantra about the-er-darker side of the law when speaking of a legal result which defies the perceived equities of a case. What we all usually forget is the rest of Mr. Bumble's statement, and no doubt his most significant words. For Mr. Bumble, the law is an ignorant bachelor who, having never been married, does not understand the otherworldly idiocy of the controlling legal principle. Regardless of what the "rule" is, a wife does not, in any semblance of reality, act under a husband's direction. The rule of law belies the teaching of experience.

I thought about poor Mr. Bumble a few months ago. I was buying a new cell phone for my wife, and renewing my contract, at a wireless provider's retail store. After an hour's wait, my number was called, and the representative led me to a kiosk containing a computer terminal (for him) and a credit card scanner and signature pad (for me). I hurriedly explained what I wanted (I was already late for a meeting). The representative handed me the new phone and then made the changes to my account on his computer. He explained the terms of the new service agreement generally-how many lines I would have, how many package minutes and the like-and then instructed me to sign the signature pad with the magnetic pen. I looked down, and the blank computer signature pad had a box for my signature, indicating my agreement to the "Terms of Service." The only problem, of course, was that I had no "Terms of Service." I was signing my new contract, though I had been provided no contract at all. Eager to leave, I signed, grabbed the goods and rushed to my car.

As I fractured a few traffic laws dashing down Highway 82, I began to think about what I had done. I entered into a contract without knowing all-for that matter, any-of its terms. I began asking myself questions: * Did I sign an arbitration agreement? (Wait, that's not a question.) * Did the representative get the service package that I requested? * Am I obligated to pay an activation fee on the new phone? * What about termination fees? * What terms don't I know about? I asked more questions of myself than in the Talking Heads' song "Once in a Lifetime"-but it included the last question from that song: "WHAT HAVE I DONE?"

This, of course, brings us to reasonable reliance. The fraud law in Alabama would say that I acted irresponsibly, even heedlessly, in signing a contract without reading its terms. Perhaps that's so (though I would protest that I should not be held to a document that I never even received). Mr. Bumble would defend me, however, arguing that the law has never experienced waiting in a cell phone store for an hour, or being late for a meeting. Indeed, one could argue that no one with experience would adopt such a rule of law. Have you actually read your cell phone contract? How about your home or car insurance policy? How about your credit card terms and conditions? (If you answered all of these "yes," you're lying.) And it doesn't stop with everyday contracts, either. How many of you have counseled corporate clients-sophisticated businesspeople-concerning their rights under a contract which they tell you they have never read? I have, and many times.

Although experience would suggest a different rule, my point is neither to revisit nor to question the "duty to read" principle under-girding reasonable reliance law. Since Foremost Ins. Co. v. Parham, 693 So. 2d 409 (Ala. 1997), Alabama law has revived the duty imposed upon fraud plaintiffs to read their contracts. Foremost was designed to "provide a mechanism whereby the trial court c[ould] enter a judgment as a matter of law in a fraud case where the undisputed evidence indicates that the party or parties claiming fraud in a particular transaction were fully capable of reading and understanding their documents but nonetheless made a deliberate decision to ignore written contract terms." Foremost, 693 So. 2d at 421.

To my point, then, which is to examine some (though not all)(fn1) of the unanswered questions of "reasonable reliance" law remaining after almost 13 years of Foremost-and in the process, to attempt to synthesize most of the cases dealing with reasonable reliance issues. With Mr. Bumble, we hope that experience-experience which largely comes from developed fact patterns in future cases-can teach some valuable lessons in reaching sound resolutions to those still-unanswered questions, which are more plentiful that one might suppose.

Four Unanswered Questions

Foremost and its progeny establish that a fraud plaintiff cannot reasonably rely on an oral statement which is contradicted by a conspicuous, understandable, unambiguous, contractual writing. Thus, in virtually all of the post-Foremost cases, including the most recent decisions in AmerUS Life Ins. Co. v. Smith, 5 So. 3d 1200 (Ala. 2008) and Cook's Pest Control, Inc. v. Rebar, 2009 WL 418074 (Ala. Feb. 20, 2009), all four features of the contradictory writing-conspicuous, understandable, unambiguous and con-tractual-were either present or, at least, not seriously contested. Our supreme court has not definitively answered whether judgment as a matter of law is appropriate as to reasonable reliance when one (or more) of those four conditions is not present: * What if the portion of the writing which contradicts the alleged oral misrepresentation is not conspicuous or readily apparent? * What if the plaintiff testifies that she actually read, but could not...