Burns Rathole, Inc. v. Inter-Mountain Agency, Inc., INTER-MOUNTAIN

• Decision Date: 17 April 1992
• Docket Number: No. 91-142,INTER-MOUNTAIN,91-142
• Citation: Burns Rathole, Inc. v. Inter-Mountain Agency, Inc., 829 P.2d 823 (Wyo. 1992)
• Parties: BURNS RATHOLE, INC., Appellant (Plaintiff), v.AGENCY, INC., Appellee (Defendant).
• Court: Wyoming Supreme Court

Page 823

829 P.2d 823

BURNS RATHOLE, INC., Appellant (Plaintiff), v.INTER-MOUNTAIN AGENCY, INC., Appellee (Defendant).

No. 91-142.

Supreme Court of Wyoming.

April 17, 1992.

Robert J. Pickett of Pickett and McKinney, Rock Springs, for appellant.

W.W. Reeves of Reeves, Murdock, Lewis & Gifford, Casper, for appellee.

Before URBIGKIT, C.J., and THOMAS, CARDINE, MACY and GOLDEN, JJ.

URBIGKIT, Chief Justice.

AppellantBurns Rathole, Inc., a Wyoming corporation engaged in oil field service work, sued appelleeInter-Mountain Agency, Inc., a Wyoming insurance agency, for failing to provide insurance coverage for which the drilling contractor claims it had paid.The trial court ruled for appellee with a finding that Inter-Mountain Agency had informed Burns Rathole and that Burns Rathole thus knew that it did not have physical damage insurance coverage on a piece of motorized drilling equipment subsequently destroyed by fire.This appeal, within contractual concepts, addresses the claim of an insurance agency obligation to provide multi-peril coverage.¹

We affirm.

Burns Rathole raises the following issues for our review:

ISSUE I.

Did the Trial Court err in not recognizing the legal princip[le] that Appellee is liable for damages where appellee sought and received compensation for services but failed to perform the services compensated for.

ISSUE II.

Did the Trial Court err in not recognizing the legal princip[le] that the appellee agent had the duty to give notice to the appellant of its failure to obtain the applied for insurance coverage?

ISSUE III.

Is the Appellee estopped from denying that Appellant did not have insurance in accordance with its application?

Although Burns Rathole identifies three issues on appeal, our dispositive inquiry is sufficiency of the evidence to support the trial court's determination that Burns Rathole knew it did not have physical damage insurance coverage on its drilling rig prior to the fire.

I.FACTS

In January 1986, Gerald Burns(Burns), owner and operator of Burns Rathole, Inc., contacted Inter-Mountain Agency(Inter-Mountain) to secure physical damage and liability insurance coverage for all Burns Rathole vehicles including the drilling rig in question.A United States Fidelity & Guaranty Company(USF & G) insurance application was completed and signed by Burns and he paid $10,000.00 for desired coverage which included physical damage for drilling vehicles and equipment.Application binder coverage was initially extended by USF & G in February, 1986, to provide both liability and physical damage insurance.Soon thereafter, however, USF & G's investigation of Burns Rathole's employee driving records revealed that several--even including Burns--were unacceptable.Consequently, USF & G notified Inter-Mountain that the Burns Rathole insurance coverage would be terminated on March 12, 1986.Inter-Mountain, in turn, notified Burns Rathole of the cancellation.

On the same day that the USF & G insurance was canceled, Burns completed a new application for "assigned risk plan" insurance through the Western Association of Automobile Insurance Plans.It appears from the record that "assigned risk" insurance was the only type of commercial insurance available due to the high risks of insuring drivers with multiple violations for speeding and driving while under the influence.Although the "assigned risk plan" application form included a statement that physical damage coverage was only available for "private passenger, motorcycles and light commercial vehicles" and despite an Inter-Mountain employee's prediction that physical damage coverage was not available under the plan, Burns' application nonetheless requested such coverage for two drilling rigs and other heavy-duty equipment.Burns Rathole also sought higher liability limits than those set forth on the application form.Burns Rathole made a $4,000.00 payment to Inter-Mountain to accompany the "assigned risk" insurance application and coverage was eventually secured from National Surety Corporation.²However, Burns Rathole's actual coverage under National Surety's "assigned risk plan" reflected a different deductible and lower liability protection than that applied for and did not provide for physical damage to commercial vehicles.National Surety mailed a copy of the policy to Inter-Mountain in June, 1986.An Inter-Mountain- "Mountain employee then hand-delivered the policy to Burns who was also reminded orally that there was no physical damage coverage on the two drilling rigs owned and operated by Burns Rathole.Inter-Mountain was unsuccessful in its continued efforts to secure supplemental physical damage coverage for the drilling rigs from other insurance sources.

On July 13, 1987 a fire destroyed one of Burns Rathole's two drilling units.Upon notification of the fire, Inter-Mountain advised Burns Rathole that the drilling rig was not insured for physical damage under the National Surety policy.Inter-Mountain did, however, file an unsuccessful claim of loss with National Surety on behalf of Burns Rathole.Following claim denial, Burns Rathole filed suit against Inter-Mountain, National Surety, and Fireman's Fund for damages resulting from physical damage to the drilling rig.

Following a court trial in March 1991, against the remaining defendant/appellee Inter-Mountain, the trial court requested written final arguments.The trial court then in decision ruled that prior to the fire, Inter-Mountain had informed and Burns Rathole knew that it did not have physical damage coverage on its drilling rigs.The trial court issued two separate opinion letters which summarized in narrative fashion the trial court's findings and conclusions.Judgment was entered in favor of Inter-Mountain on May 14, 1991 and this timely appeal followed.

II.STANDARD OF REVIEW

Though Burns Rathole phrases the issues on appeal primarily in terms of trial court error, the dispositive question is whether sufficient evidence exists to support the trial court's ruling in favor of Inter-Mountain.Consequently, we examine the record using our standard of review for sufficiency of the evidence:

In considering the sufficiency of the evidence, this court assumes that the evidence in favor of the successful party is true, leaves out of consideration entirely the evidence presented by the unsuccessful party that conflicts with the successful party's evidence and gives the evidence of the successful party every favorable inference that may be reasonably and fairly drawn from it.

Matney v. Webster, 808 P.2d 212, 214(Wyo.1991)(citingGoss v. Goss, 780 P.2d 306, 315(Wyo.1989)).See alsoBarnhart Drilling Co., Inc. v. Petroleum Financing, Inc., 807 P.2d 411(Wyo.1991);Stanbury v. Larsen, 803 P.2d 349(Wyo.1990);andANR Production Co. v. Wyoming Oil and Gas Conservation Com'n, 800 P.2d 492(Wyo.1990).

III.DISCUSSION

In his decision letter of April 23, 1991, the trial judge summarized his impressions of the evidence and his evaluation of the witnesses' credibility:

I am of the opinion that * * * [Burns Rathole] not only knew it was not covered but was so informed by [Inter-Mountain].

The application of 3/12/86, signed by G.A. Burns, shows on its face that physical damage for commercial trucks was not available.Mr. Burns knew from past experience that Burns Rathole had no...