Annett Holdings, Inc. v. Kum & Go, L.C.

801 N.W. 2d 499 (2011)

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Nature of the Case

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Facts

P is an Iowa holding company. One of its subsidiaries is TMC, a trucking company employed Michael Vititoe. P and Comdata had a written agreement. Comdata provided cards that could be used by authorized P employees to purchase fuel and obtain cash advances at any Comdata authorized service center locations. P agreed to accept full responsibility for all purchases made with those cards and also to be 'fully responsible for the unauthorized or fraudulent use thereof until such time as Comdata has received such notification from [P] provided that each fraud or misuse is not attributed to Comdata.' P also agreed to 'hold Comdata harmless from any and all liability resulting from the acts of any employees or agents of P which acts shall include but are not limited to negligent acts of such persons.' Comdata had a written contract with D for D to handle Comdata transactions. The agreement contained detailed procedures that D promised to follow in processing Comdata transactions. Vititoe went to D in Oskaloosa on an almost daily basis. Store personnel allowed D to operate the Comdata terminal himself. Vititoe managed to steal money by entering fuel purchases on the Comdata machine and submitting cash advance slips printed out by the machine to the store clerks-who then paid Vititoe in cash. No one at TMC ever noticed but, a new fuel manager took over and almost immediately, he noticed Vititoe's pattern of 'buying' fuel every day, even on weekends when he was supposedly not working and despite the fact Vititoe was only a local shag driver. Vititoe admitted he had stolen money by misusing the gas card. Vititoe was arrested and charged with first-degree theft. He was subsequently convicted of theft, sentenced to one-month incarceration, and ordered to pay restitution of $298,524.79. D moved for summary judgment in that it could not be liable in negligence due to the 'economic loss rule' and because it owed no duty to P. D also denied P was a third-party beneficiary of its contract with Comdata. The district court granted summary judgment to D and P appealed.