Am. Family Mut. Ins. v. Coke

• Decision Date: 12 November 2013
• Docket Number: No. ED 98871.,ED 98871.
• Citation: 413 S.W.3d 362
• Parties: AMERICAN FAMILY MUTUAL INSURANCE, Respondent, v. Pamela COKE and Ward Farrell, Appellants.
• Court: Missouri Court of Appeals

413 S.W.3d 362

AMERICAN FAMILY MUTUAL INSURANCE, Respondent,

v.Pamela COKE and Ward Farrell, Appellants.

No. ED 98871.

Missouri Court of Appeals,

Eastern District,

Division Four.

Nov. 12, 2013.

Michael J. Fagras, St. Peters, MO, for appellants.

Robert J. Wulff, Mary Anne Lindsey, St. Louis, MO, for respondent.

GARY M. GAERTNER, JR., Judge.

Introduction

Pamela Coke and Ward Ferrell (Appellants) appeal from the trial court's entry of judgment upon the jury's verdict in favor of American Family Mutual Insurance Company (AmFam) and against Appellants. Appellants assert on appeal that the trial court erred in granting AmFam's motion in limine to strike the testimony of Appellants' expert witness, in allowing the submission of jury instruction No. 7, and in denying Appellants' motion for judgment notwithstanding the verdict (JNOV). We affirm.

Background and Procedure

Appellants purchased a Monaco Beaver Contessa Motor Home (RV) in February of 2008. In November of that same year, the RV was involved in an accident where the unoccupied RV rolled down an embankment and into a ravine, causing a total loss. Appellants filed a Proof of Loss Claim form for the total loss, but AmFam did not pay the claim.

AmFam filed a Petition for Declaratory Judgment–Insurance Policy, requesting the trial court find there was no coverage for the damage to the RV because Appellants voided their policy by concealing and/or misrepresenting material facts and circumstances concerning the damage to the RV with the intent to defraud AmFam. Appellants filed a counterclaim allegingBreach of Contract and Vexatious Refusal to Pay.¹ AmFam asserted Appellants' counterclaims were barred, because Appellants had materially breached the insurance contract by making material misrepresentations regarding the cause of damage to their vehicle.

The claims went to trial in 2011 (2011 trial), and at the close of evidence the trial court granted AmFam's motion for directed verdict, finding in favor of AmFam and against Appellants. Appellants appealed to this Court, which reversed the judgment and remanded the cause for a new trial. Am. Family Mut. Ins. Co. v. Coke, 358 S.W.3d 576 (Mo.App.E.D.2012).

At the second trial (2012 trial) on AmFam's petition and Appellants' counterclaims, the following evidence was adduced, viewed in a light most favorable to the jury verdict. Appellants purchased their RV in February of 2008 for $178,000. Appellants made repairs and upgrades to the RV, including a new $1,100 fuel pump, a GPS system for $5,900, a $6,500 warranty, and new tires for $6,000. In August of 2008, Ward Ferrell contacted AmFam to inquire about raising the value of the RV policy from $178,000 to $210,000. Likewise, in September and again in October of 2008, Pamela Coke (Coke) contacted AmFam to inquire about raising the value of the RV policy from $178,000 to $195,000 and getting a guarantee for $195,000 in coverage. Coke stated another insurance company would give her a guaranteed value in writing, and she wanted the same from AmFam. AmFam responded that they do not offer stated-value policies but pay fair market value. AmFam raised the value of Appellants' policy to $195,000, but informed Appellants that in the event of a total loss, they would only receive fair market value for the RV.

As for Appellants' general finances, Appellants operated Rusty Enterprises LLC, a tool company, until 2011. Between 2004 and 2008, Appellants' tax statements showed that Rusty Enterprises had a net income of $2,518 in 2004, $433 in 2005, and $2,097 in 2006, and net losses of $6,935 in 2007 and $4,658 in 2008. In 2008 sales were down approximately 50%, due to the economic downturn and increased competition. Before 2011, Appellants had resided at 12610 Lusher Road in Florissant, Missouri in a home with a $120,000 mortgage. However, the state took part of their property to widen the road, after which the value of their home decreased to $67,000. After two years on the market, Appellants were unable to sell their home at 12610 Lusher Road and let it go into foreclosure.²

As for the incident itself, Coke testified that while in Arizona, she decided to drive the RV to an RV park in Canyon Lake Park, which was accessed via a winding mountainous road. As she was driving, the brakes felt like there might be something wrong and were making a hissing noise. She pulled into a level turnaround parking area to examine the brakes. She left the RV running because the air-conditioning was on. Before exiting the RV, she testified she put the transmission switch in neutral and “thought” she set the parking brake. The RV gearbox had three settings: drive, neutral, and reverse. If the gear was in drive or reverse, the RV doors would not open from the inside. She exited the RV and was walking towards the brakes when the RV began to move forward, rolling down an embankment and into a ravine. She testified that the incident was an accident and she did not know how it happened.

David Sonne (Sonne) testified to the following. AmFam hired Sonne, the owner of Vehicle Mechanical and Accident Reconstruction, to investigate the accident and inspect the braking system on the RV. His field investigator, who was a master automobile technician, examined the RV and determined the brakes were functioning properly. Thus, Sonne determined that the parking brake must not have been engaged; otherwise, the RV would not have been able to roll into the ravine. The field investigator also determined that the transmission was functioning and that the transmission fluid was normal. Sonne checked for recalls of the transmission system, of which there were none. Sonne could not determine whether the RV had been in neutral when it rolled into the ravine. Sonne's report concluded there was no evidence that “a mechanical malfunction, mechanical defect, or improper service/repair work could have caused or contributed to the accident in this case.”

On cross-examination, Sonne agreed that he had not physically inspected the RV himself and he did not know if his investigator had visually inspected the RV's brake hoses and tubes. Sonne admitted that while he referred to the RV's owner manual, he had not read the manual for the transmission system published by Allison (the manufacturer of the RV's transmission), which warned that if the RV motor was left running it could move unexpectedly. He stated that although Allison published a general warning that a problem could exist with the transmission, that did not mean there was a problem here. Because they did not find evidence of a transmission problem, they did not investigate further.

AmFam read the deposition testimony of Jeff Juetten (Juetten) and Tim Dietz (Dietz) to the jury. Jeutten testified he was a traffic accident consultant and had been hired by Appellants to inspect the RV and the scene of the incident. He testified he found that the braking system had no apparent defects and that nothing had failed mechanically. Jeutten further testified the slope of the terrain where the RV had been stopped was insufficient for the RV to roll forward on its own. He concluded that to have rolled into the ravine, the RV must have been in drive without the parking brake on. Last, Dietz testified he was the tow truck driver who had towed the RV out of the ravine. He testified the parking brake was not engaged when his company arrived. He further stated the road on which Coke was driving was hazardous and difficult to drive, especially for large vehicles, such as RVs.

After the parties rested, the trial court denied both parties' motions for directed verdict and a jury entered a verdict in favor of AmFam and against Appellants. Appellants filed a motion for JNOV or a new trial, which the trial court denied. This appeal follows.

Discussion

Appellants argue three points on appeal. They contend the trial court erred: (1) in excluding the testimony of their expert witness both regarding his opinion as to the cause of the RV driving into the ravine and as a rebuttal witness to impeach the sufficiency of Sonne's investigative report; (2) in allowing the submission of jury instruction No. 7; and (3) in denying Appellants' motion for JNOV, asserting AmFam failed to produce sufficient evidence to meet its burden to prove Appellants misrepresented or concealed material facts with the intent to defraud AmFam. For clarity, we address Appellants' third point first.

Point III

In their third point on appeal, Appellants argue the trial court erred in denying their motion for a directed verdict or JNOV, because AmFam failed to make a submissible case, in that it failed to present evidence, other than conjecture and speculation, that Appellants concealed or misrepresented any material facts with the intent to defraud AmFam. We disagree.

1. Standard of Review

We review the denial of a motion for JNOV under the same standard as the denial of a motion for directed verdict; i.e., we review to determine whether substantial evidence supports each and every fact essential to liability. Sanders v. Ahmed, 364 S.W.3d 195, 208 (Mo. banc 2012). We view the evidence in a light most favorable to the verdict reached by the jury, and we will reverse only when there is a complete absence of probative evidence supporting the jury's verdict. Id. We will reverse a jury's verdict for insufficient evidence only when there are no probative facts to support the jury's conclusion. Merseal v. Farm Bureau Town & Country Ins. Co. of Mo., 396 S.W.3d 467, 470 (Mo.App.E.D.2013).

2. Burden of Proof

In actions for declaratory judgment, the burden of proof “rests where it would have been placed had a different type of suit been brought.” Universal Reinsurance Corp. v. Greenleaf, 824 S.W.2d 80, 83 (Mo.App.E.D.1992). In general, the burden to prove coverage under an insurance policy fails upon the party seeking to recover under the policy. Citizens Ins. Co. of Am. v. Leiendecker, 962 S.W.2d 446, 451 (Mo.App.E.D.1998). However, the...