Baker v. St. Paul Fire & Marine Ins. Co.

• Decision Date: 21 February 1992
• Docket Number: No. S-89-835,S-89-835
• Citation: 480 N.W.2d 192,240 Neb. 14
• Court: Nebraska Supreme Court
• Parties: Victoria L. BAKER, Appellee, v. ST. PAUL FIRE & MARINE INSURANCE COMPANY, Appellant.

Page 192

480 N.W.2d 192

240 Neb. 14

Victoria L. BAKER, Appellee, v. ST. PAUL FIRE & MARINE INSURANCE COMPANY, Appellant.

No. S-89-835.

Supreme Court of Nebraska.

Feb. 21, 1992.

Syllabus by the Court

1. Directed Verdict: Waiver: Appeal and Error. A defendant who moves for a directed verdict at the close of evidence in the plaintiff's case in chief and who, when the court overrules the directed verdict motion, proceeds with trial and introduces evidence waives the appellate right to challenge correctness in the trial court's overruling the motion for directed verdict.

2. Directed Verdict: Evidence. In order to sustain a motion for directed verdict, the court resolves the controversy as a matter of law and may do so only when the facts are such that reasonable minds can draw but one conclusion. In considering the evidence for the purpose of a motion for directed verdict, the party against whom a motion is made is entitled to have the benefit of every inference which can reasonably be drawn from the evidence. If there is any evidence in favor of the party against whom the motion is made, the case may not be decided as a matter of law.

3. Directed Verdict: Evidence. On a motion for directed verdict, the moving party is deemed to have admitted as true all the material and relevant evidence admitted which is favorable to the party against whom the motion is directed, and, further, the party against whom the motion is directed is entitled to the benefit of all proper inferences which can reasonably be deduced therefrom.

4. Presumptions: Proof. The presumption of receipt of mail by the addressee does not arise unless it is shown that the letter was properly addressed, stamped, and mailed.

5. Trial: Notice: Proof. Absent direct proof of actual deposit with an authorized U.S. Postal Service official or in an authorized depository, proof of a course of individual or office practice that letters which are properly addressed and stamped are placed in a certain receptacle from which an authorized individual invariably collects and places all outgoing mail in a regular U.S. mail depository and that such procedure was actually followed on the date of the alleged mailing creates an inference that a letter properly addressed with sufficient postage attached and deposited in such receptacle was regularly transmitted and presents a question for the trier of fact to decide.

6. Insurance: Contracts. The continuance of the insurer's obligation is conditional upon the payment of premiums, so that no recovery can be had upon a lapsed policy, the contractual relation between the parties having ceased.

7. Insurance: Contracts. The burden is on an insured to keep a policy in force by the payment of premiums, rather than on the insurer to exert every effort to prevent the insured from allowing a policy to lapse through a failure to make premium payments.

8. Insurance: Contracts: Notice. The burden of establishing an effective cancellation before a loss is on the insurer, and notice of cancellation must be in accord, and in substantial compliance, with the provisions of the policy relating thereto, and peremptorily explicit and unconditional.

9. Insurance: Contracts: Liability: Public Policy. The parties to an insurance contract may contract for any lawful coverage, and the insurer may limit its liability and impose restrictions and conditions upon its obligation under the contract not inconsistent with public policy or statute.

10. Contracts. As a general rule, the proper construction of a written contract is a question of law.

11. Judgments: Appeal and Error. Regarding a question of law, an appellate court has an obligation to reach a conclusion independent of that of the trial court in a judgment under review.

William H. Selde, of Sodoro, Daly & Sodoro, Omaha, for appellant.

Barbara Thielen, of Taylor, Fabian, Thielen & Thielen, Omaha, for appellee.

HASTINGS, C.J., and BOSLAUGH, WHITE, CAPORALE, SHANAHAN, GRANT, and FAHRNBRUCH, JJ.

FAHRNBRUCH, Justice.

St. Paul Fire & Marine Insurance Company (St. Paul) appeals a Douglas County jury verdict awarding Victoria L. Baker $24,850 under a homeowner's insurance policy issued by St. Paul. The insurer claims that the policy had lapsed before fire damaged Baker's home, because Baker failed to pay the final installment on the policy premium.

As a matter of law and based on facts upon which reasonable minds can reach only one conclusion, Baker's homeowner's policy had lapsed before the fire damaged her home. We, therefore, reverse the jury award and direct that Baker's case be dismissed.

In November 1984, Victoria L. Kardell (now Victoria L. Baker) purchased a homeowner's insurance policy on her residence in Omaha, for the period of November 15, 1984, to November 15, 1985. The premium for the policy was to be paid in four equal installments. The first three premium installments were timely paid by Baker.

The record reflects that the fourth installment was due July 28, 1985. Baker testified that she mailed her check in the amount of $128.25 to St. Paul on July 15, 1985. She said she would typically mail her quarterly payment and the installment statement to St. Paul in the insurer's preaddressed envelope which accompanied the premium statement. Baker testified that she placed a stamp on the envelope containing her check and a portion of the statement and dropped the envelope into a mail chute in the hallway of the Livestock Exchange Building, where she worked. She stated that the mail chutes "run down to the basement where the mailroom is."

On September 26, 1985, Baker's residence was extensively damaged by fire. When Baker's mother contacted the office of Baker's insurance agent, she was told that there was no coverage for the fire. Baker was subsequently informed that there was no coverage because the policy had lapsed due to nonpayment of premium.

Thereafter, Baker filed this lawsuit in the district court for Douglas County, alleging she had not received notice from St. Paul that the insurer had not received the premium installment, nor had she received notice of St. Paul's intention to cancel her homeowner's policy. St. Paul filed a motion for summary judgment, which was denied, and the case proceeded to trial. After Baker adduced evidence and rested her case, each of the parties moved for a directed verdict. Both motions were overruled.

Because St. Paul produced evidence following the court's overruling of its motion for directed verdict at the close of Baker's case in chief, any error in regard to that ruling was waived. A defendant who moves for a directed verdict at the close of evidence in the plaintiff's case in chief and who, when the court overrules the directed verdict motion, proceeds with trial and introduces evidence waives the appellate right to challenge correctness in the trial court's overruling the motion for directed verdict. Sikyta v. Arrow Stage Lines, 238 Neb. 289, 470 N.W.2d 724 (1991).

After both parties rested, Baker and St. Paul renewed their respective motions for directed verdict. Both renewed motions were overruled. The jury found for Baker in the amount of $24,850, which represented $25,000 damage less $150 deductible under the policy. St. Paul's motion for judgment notwithstanding the verdict and its motion for a new trial were overruled.

On appeal, St. Paul complains that the trial court erred by (1) overruling its motions for (a) summary judgment, (b) directed verdict, (c) judgment notwithstanding the jury's verdict, and (d) new trial and (2) awarding Baker an attorney fee.

Because we find that the trial court erred in failing to sustain St. Paul's motion for a directed verdict at the close of all the evidence, it is necessary to discuss only that assignment of error and the award of attorney fees to Baker.

In order to sustain a motion for directed verdict, the court resolves the controversy as a matter of law and may do so only when the facts are such that reasonable minds can draw but one conclusion.... In considering the evidence for the purpose of a motion for directed verdict, the party against whom a motion is made is entitled to have the benefit of every inference which can reasonably be drawn from the evidence. If there is any evidence in favor of the party against whom the motion is made, the case may not be decided as a matter of law....

On a motion for directed verdict ... " 'the moving party is deemed to have admitted as true all the material and relevant evidence admitted which is favorable to the...