Arcuri v. Great American Ins. Co.

Decision Date20 March 1986
Docket NumberNo. 16536,16536
Citation176 W.Va. 211,342 S.E.2d 177
CourtWest Virginia Supreme Court
PartiesVictor P. ARCURI and Phyllis P. Arcuri v. The GREAT AMERICAN INSURANCE COMPANY, United States Fidelity & Guaranty Company, Potomac Insurance Company, Henry & Hardesty, Inc., and Bertha Ann Mundy.

Syllabus by the Court

1. "Dismissal or directed verdict at the conclusion of an opening statement should be granted only where the party making the statement, if given the opportunity to amend or explain, cannot recover [or defend] under any circumstances." Syl. pt. 12, Carper v. Kanawha Banking & Trust Co., 157 W.Va. 477, 207 S.E.2d 897 (1974).

2. " 'Upon a motion for a directed verdict, all reasonable doubts and inferences should be resolved in favor of the party against whom the verdict is asked to be directed.' " Syl. pt. 1, Rowan v. Barker, 175 W.Va. 492, 334 S.E.2d 630 (1985), quoting syl. pt. 5, Wager v. Sine, 157 W.Va. 391, 201 S.E.2d 260 (1973).

3. W.Va.Code, 33-17-12 [1965], by providing that payment of the proceeds under a fire insurance policy to the person or persons designated in the policy fully discharges the insurer from all claims under the policy, makes it inappropriate for an insurer, which has wrongfully added an insured person to a fire insurance policy, to merely tender the proceeds to the clerk of the court in a pending action in which the parties are the joint payees of the proceeds, namely, the only person properly designated in the policy as an insured and another person, not properly designated in the policy as an insured but who claims an interest in the proceeds. The delay in payment to the person properly designated as an insured would, in such a case, be attributable to the insurer's wrongful designation of the additional insured person and the insurer's failure to follow the statute on payment to the person designated in the policy as the insured.

4. W.Va.R.Civ.P. 67 contemplates that a deposit or payment into court be with leave of court and that the money ordered deposited be subject to the exclusive control of the court. The party making the deposit must surrender all control over the money to the court, not to other persons claiming an interest in the money.

LaVerne Sweeney, Grafton, for appellants.

Alfred J. Lemley, Fairmont, for Great American Ins. Co.

Herbert G. Underwood and Gary W. Nickerson, Steptoe & Johnson, Clarksburg, for USF & G and Potomac Ins. Co.

Frank Sansalone, Fairmont, for Henry & Hardesty, Inc.

Harry Cronin, Fairmont, Mary Lou Hill, Furbee, Amos, Webb & Critchfield, Morgantown, for Bertha Ann Mundy.

McHUGH, Justice:

This case is before this Court upon appeal from the final order entered by the Circuit Court of Taylor County, West Virginia. The plaintiffs below, Victor P. Arcuri and Phyllis P. Arcuri, husband and wife, are the appellants. The defendants below, The Great American Insurance Company, United States Fidelity & Guaranty Company and Potomac Insurance Company (the insurers) as well as Henry & Hardesty, Inc. (the insurance agency) and Bertha Ann Mundy, are the appellees. 1 After opening statements by all parties, the trial court granted the respective motions of the insurers and of the insurance agency for a directed verdict in favor of the appellees. After reviewing the record and the briefs filed in this appeal, we reverse the final order of the trial court and remand for a new trial.

I

According to the second amended complaint and the opening statement of counsel for the appellants, the facts are as follows. The appellants owned certain real estate near the Town of Grafton, in Taylor County, West Virginia, including improvements thereon in the form of a tavern building (a restaurant and bar), a dance hall building and a dwelling. The appellants purchased fire (and other hazard) insurance on the tavern and on the dance hall from the three insurers through the insurance agency. The coverage limits on the tavern totalled $11,900.00. The coverage limits on the dance hall totalled $6,000.00.

On August 5, 1976, the appellants entered into a land sales contract wherein the appellee Mundy agreed to buy the appellants' property for $169,000.00, with a $25,000.00 down payment and the balance to be paid in monthly installments of $1,638.78, including interest. Upon payment of the balance in full, the appellants would convey the title to the property to the appellee Mundy.

After learning from the appellee Mundy of the land sales contract, the insurance agency, in August, 1976, issued a purported endorsement to each of the fire insurance policies, whereby the named insured under each of the policies was changed from Victor P. Arcuri to "Victor P. Arcuri and Bertha Ann Mundy, under contract of sale as their interest may appear." According to the appellants, these endorsements were issued without the knowledge or consent of the appellants. The appellants had paid all of the premiums on the policies.

Upon learning of the purported endorsements the appellants, in August, 1976, complained on two occasions to the insurance agency about the addition of the appellee Mundy as a named insured, but their complaints were essentially ignored on the basis that state law purportedly required the addition of Ms. Mundy as a named insured.

On September 1, 1976, the appellee Mundy took possession of the property 2 and immediately opened the tavern for business. The land sales contract required her to purchase and maintain fire insurance on the property, with the appellants as the named insureds. She did not, however, purchase such insurance. On October 31 1976, the tavern was gutted by a fire. The estimated cost of repair to the tavern and its contents was about $24,000.00 shortly after the fire. 3

The insurers, within 60 days after receiving proof of loss from the appellants, submitted, to the Clerk of the trial court, checks dated December 30, 1976, totalling $11,900.00 (the policies' limits), made payable to Victor P. Arcuri and Bertha Ann Mundy. Ms. Mundy refused to endorse these checks pending the litigation brought by her concerning her failure to purchase fire insurance. See n. 3, supra.

On February 26, 1977, a motor vehicle was negligently driven by an unknown person into the dance hall building, causing damage to that structure in the amount of $1,851.30. The insurers tendered full payment to "Victor P. Arcuri and Bertha Ann Mundy under contract of sale as their interests may appear." Again, Ms. Mundy refused to endorse the checks pending the litigation brought by her. These checks were written in April, 1977, and like the checks for the damage to the tavern, were tendered to the Clerk of the trial court.

On November 29, 1978, while the litigation concerning Ms. Mundy's failure to purchase fire insurance was pending, the appellants brought this action for the delay in payment of the fire insurance proceeds to the appellants under their policies. Their second amended complaint sounds in tort and contract. The allegation is that the insurance agency acted with bad faith when it issued the purported endorsements adding Ms. Mundy as an insured without the consent of the appellants, thereby causing "contractual damages" until the date of payment to the appellants. The theory of recovery against the insurers is that they allegedly breached their contractual duty to pay the appellants without delay and that such breaches of contract were "willful, wanton and intentional," resulting in consequential damages (the cost to repair the tavern had risen substantially) and mental anguish. Thus, the appellants seek not only compensatory damages beyond the limits of the policies but also punitive damages. 4 After this Court, on June 17, 1980, issued the opinion in Mundy v. Arcuri, 165 W.Va. 128, 267 S.E.2d 454 (1980), see n. 3, supra, the insurers, in July, 1980, reissued checks to Victor P. Arcuri and Bertha Ann Mundy, and the trial court entered an order on November 25, 1980, requiring Ms. Mundy to endorse the reissued checks. 5 On December 26, 1980, she endorsed the checks, and the appellants, after about four years, finally received the insurance proceeds for the previously proven damages to the tavern and to the dance hall (totalling $13,751.30, that is, $11,900.00 for the tavern and $1,851.30 for the dance hall).

The trial court in this action denied the appellees' motions for dismissal based upon the alleged running of the statute of limitations for tort actions. The record indicates that the trial court would have, upon motion, addressed this point after the presentation of evidence. The trial court also denied the appellees' motions for summary judgment because there was a genuine issue as to a material fact, specifically, whether the appellants consented or acquiesced to the purported endorsement to the policies adding Ms. Mundy as a named insured. 6

After all of the parties made opening statements at trial, the trial court granted the motions of the insurers and of the insurance agency for a directed verdict. The trial court ruled that, even assuming all of the appellants' factual allegations to be true, the appellants had no case against the appellees because the delay in payment to the appellants was due to the resolution of other litigation (Mundy v. Arcuri), and not due to any conduct of or omissions by the appellees.

II

The narrow question presented on this appeal is whether the trial court committed reversible error in directing a verdict against the appellants after all of the parties had made opening statements and before the presentation of any evidence.

While a trial court has the power, in a proper civil case, to grant an adverse party's motion for a directed verdict after a party's opening statement, it is an exceptional case in which such a ruling is proper. The leading case in this jurisdiction on point is Alexander v. Jennings, 150 W.Va. 629, 149 S.E.2d 213 (1966). Syllabus points 1 and 2 thereof summarize the law as...

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