Baugher v. Hartford Fire Ins. Co.
| Decision Date | 11 May 1974 |
| Docket Number | No. 47357,47357 |
| Parties | Martin BAUGHER and H. R. Krokstrom, partners, d. b. a. Chanute Livestock Auction, Appellees, v. HARTFORD FIRE INSURANCE COMPANY, a corporation, Appellant. |
| Court | Kansas Supreme Court |
Syllabus by the Court
1. The pre-trial conference contemplated in K.S.A. 60-216 has become an important part of our procedural process designed, among other things, to acquaint each party in advance of trial with respect to the factual contentions of the parties upon matters in dispute, thus reducing the opportunity for maneuver and surprise at the trial, and enabling all parties to prepare in advance for trial. Orders entered at the pre-trial conference have the full force of other orders of the court and they control the subsequent course of the action, unless modified at the trial to prevent manifest injustice.
2. Under K.S.A. 60-251(b) no party may assign as error the giving or failure to give an instruction unless he objects thereto before the jury retires to consider its verdict, stating distinctly the matter to which he objects and the grounds of his objection, unless the instruction is clearly erroneous.
3. Exceptions, limitations and exclusions to insuring agreements require a narrow construction on the theory that the insurer, having affirmatively expressed coverage through broad promises, assumes a duty to define any limitations on that coverage in clear and explicit terms.
4. When an insurer seeks to avoid liability on the ground that the accident or injury for which compensation is demanded is covered by some specific exception to the general terms of the policy, the burden of proof rests upon the insurer to prove the facts which bring the case within such specified exception.
5. The distinction between 'coverage' provisions and exculpating or 'exclusionary' clauses in an insurance contract is the decisive factor in determining which party has the burden of proof on an issue, where coverage under the insurance contract is disputed. The assured has the burden of proving the loss was of a type included in the general coverage provisions of the insurance contract.
6. A party cannot on appeal be permitted to change its theory of the case or raise new issues not previously presented to the trial court, or inconsistent with the position taken before the trial court.
7. Affirmative proof of theft, or the elements necessary to prove the claim, may be made by circumstantial evidence.
8. The record is examined in an action on an insurance policy to recover for loss of cattle due to theft, and it is held: Under the theory upon which the case was submitted in the trial court, the circumstantial evidence submitted by the plaintiffs was sufficient to support the jury's findings that the loss of the plaintiffs' cattle, on the two occasions alleged in the petition, was the result of theft within the meaning of the policy of insurance covering loss by theft as construed by the trial court in its instructions to the jury.
Charles F. Forsyth, Erie, argued the cause, and Richard L. Ashley, Chanute, and Clark M. Fleming, Erie, were with him on the brief for appellant.
Robert Pennington, Chanute, argued the cause, and Charles E. Henshall, Chanute, was with him on the brief for appellees.
This is an action on an insurance policy to recover for loss of cattle due to theft. The action was tried to a jury in the district court of Neosho County and resulted in a verdict for the plaintiffs. Appeal has been duly perfected by the defendant.
The underlying issue in the case concerns the construction of the provisions of the insurance policy covering theft, the appellant contending the plaintiffs' evidence established only a mysterious disappearance of the cattle for which there was no coverage under the policy.
Martin Baugher and H. R. Krokstrom, Sr., are partners, d/b/a Chanute Livestock Auction (plaintiffs-appellees), and operate a livestock auction business east of the city limits of Chanute, Neosho County, Kansas. In connection with the operation of their business livestock is delivered to their place and kept until sold on a subsequent sale date in the regular course of business.
The Hartford Fire Insurance Company, a corporation, (defendant-appellant) on the 17th day of February, 1966, issued a policy of insurance to the appellees which was designated: 'Livestock Auction Market Form-Yard Cover-Combined Coverages'. The policy was continued in force by the payment of premiums therefore on the part of the appellees and was in full force and effect at all times herein material.
The provisions of the policy material to this action read:
'This policy shall also cover loss due to the death of live stock insured hereunder directly resulting from hail, and direct loss or damage to live stock insured hereunder caused by electrocution, including loss by electrocution resulting from electrical currents which are artifically generated, explosion, riot, riot attending strike, civil commotion, falling aircraft and objects falling therefrom, and theft; it being specifically understood that the word 'theft' shall mean an act of stealing and shall not include mysterious disappearance, shortage, nor any occurrence where there has been a voluntary surrender of the live stock, with the specific understanding and agreement that this Company shall not be liable for any theft loss or damage except where the theft occurs while the live stock is on the premises described herein, nor where there is involved either as principal or an accessory to the theft any owner of the premises from which the animals are stolen or any partner, member or employee of such owner; nor where there is involved either as principal or accessory and person having custody or control of the animals at the time of the theft or any partner, member, employee or bailee of such person or organization having custody or control of the animals.' (Emphasis added.)
The petition alleged that on or about the 29th day of January, 1970, at the auction premises described the appellees suffered the loss, through theft, under the terms of the policy described, of two black steers, two black heifers and one white-face heifer of the aggregate value of $707.29.
The petition also alleged that on or about the 7th day of July, 1970, at the auction premises the appellees suffered the loss, through theft, under the terms of the policy, of nineteen head of cattle of the aggregate value of $3,162.10.
The petition further alleged in each instance that the notice of such loss and theft was promptly given to the appellant and written claim for such loss was made under the terms of the policy, but the appellant failed, neglected and refused to pay the claim.
The appellant answered alleging among other things that the petition fails to state any actionable cause against the appellant, and,
'That Plaintiffs at no time in support of their claims have provided this Defendant with any reasonably conclusive evidence that any loss they may have sustained was the result of a theft rather than of a mysterious disappearance, shortage, or other cause.'
The appellees' claims for attorney fees and for punitive damages were disposed of by the trial court and are not the subject of appeal to this court.
At the pre-trial conference a copy of the insurance policy was admitted as an exhibit. It was agreed the interpretation of the policy was for the court, and that the policy would not be submitted to the jury as a trial exhibit. Counsel also stated that the loss of the cattle and the value of such cattle could be stipulated. The appellant however, did not agree that the nineteen head of cattle lost on or about the 7th day of July, 1970, were delivered to Chanute or that they were stolen. There was no agreement concerning the five head of cattle alleged to have been lost on or about the 29th day of January, 1970.
Hillis Krokstrom, Sr., testified that he was one of the partners in the Chanute Livestock Auction. He testified concerning the manner in which the premises were built and the procedure in getting the cattle in and out of the pens. He identified plats and photographs of the various pens and alleys in the sales barn area. According to his testimony, on Thursday, January 29, 1970, they had a large sale and it was necessary to use some of the hog pens in the eastern portion of the yard for cattle. Normally cattle are penned in the western portion of the yard. He explained the process by which the cattle were identified after being brought to the yards for sale, by tagging them with a number on a piece of light cardboard which is pasted on the right or left hip of the animal. The identity of the animal is thereby followed through the auction ring to the highest bidder, weighed and penned in accordance with the identity of the bidder to keep the bidder's cattle together for simplification in loading out after the sale. After the sale that day a large semi-trailer truck was backed up to one of the hog docks loading hogs, obscuring his vision from the office to the hog dock on the other side of the truck. An employee, Don Buster, was on duty at the hog dock but reported to Mr. Krokstrom that he had left the area to go to the west side of the yard to assist in loading cattle for a period of about fifteen minutes. Five head of cattle, identified by number and weight, were discovered shortly thereafter to be missing from the hog pen area where they had been penned with other calves. He testified that the missing five head of cattle could have been loaded out from the hog dock in five minutes time. All other pens were checked and the five head were never located or found. The sheriff, State Brand Inspector, and the Kansas Bureau of Investigation were notified. These agencies made an investigation but to his knowledge they were never able to locate the five head.
The employee, Don Buster, who was at work at the time the five cattle...
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