Charter Bank of Boonville v. Shelter General Ins., WD

• Decision Date: 17 January 1984
• Docket Number: No. WD,WD
• Parties: CHARTER BANK OF BOONVILLE, Respondent, v. SHELTER GENERAL INSURANCE, Appellant. 34382.
• Court: Missouri Court of Appeals

Page 44

664 S.W.2d 44

CHARTER BANK OF BOONVILLE, Respondent, v. SHELTER GENERAL INSURANCE, Appellant.

No. WD 34382.

Missouri Court of Appeals,

Western District.

Jan. 17, 1984.

David A. Oliver, Columbia, for appellant; Oliver, Walter, Carlton, Atkinson and Wilson, Columbia, of counsel.

J. Michael Conway, Boonville, for respondent; Conway & Blanck, Boonville, of counsel.

Before PRITCHARD, P.J., SHANGLER, J., and TURNAGE, C.J.

PRITCHARD, Presiding Judge.

The issue is whether respondent, Charter Bank of Boonville, the lienholder upon a 1977 Chevrolet truck, had collision coverage, by virtue of a loss payable clause in appellant's policy of insurance issued to one Whitworth and spouse who permitted the policy to lapse for non-payment of a premium, after which they traded in the vehicle designated in the policy.

Charter Bank's predecessor, National Bank of Boonville, was named as loss payee in the Whitworths' policy, covering a 1977 Ford pickup truck, with an inception time of April 23, 1979, and an expiration date of July 23, 1979. The Loss Payable Clause in pertinent parts, is this: "If a loss payee is named in the declarations, such insurance as is afforded under Coverages F [collision], G, and H of the policy shall insure the interest of the loss payee at the time of any loss or damage to the automobile and payment for such loss or damage shall first be made to the loss payee for his interest and the balance, if any, to the named insured. This insurance as to the loss payee shall not be invalidated by any act or negligence of the Insured, nor by any change in the title or ownership of the automobile. Upon cancellation or termination of the policy or the coverages insuring the loss payee's interest, the company agrees to give written notice thereof mailed to the loss payee's address shown in the declarations and such coverages, as respects the loss payee's interest, shall continue for ten days following the mailing of such notice. If termination or cancellation is for non-payment of premium required for continuance or renewal of the policy, the loss payee may elect to pay the premium to keep in effect the coverages insuring its interest. * * * Nothing herein contained shall be held to vary, alter, waive or extend any of the terms, conditions, agreements, limitations or exclusions of the policy other than as herein stated." [Bracket and emphasis supplied.]

The Whitworths did not pay the premium to renew the policy before or after its expiration date, July 23, 1979. Mr. Whitworth could not recall ever having received a premium notice for that date, and had not seen the notice, Defendant's Exhibit A, but appellant's Mr. John Moss testified that it and a lapse notice were sent to him (by computer mailout). There is no dispute that no lapse or renewal notice was sent to respondent before August 20, 1979.

On July 30, 1979, Mr. Whitworth bought another pickup truck, a 1977 Chevrolet, again financing it through respondent, as a replacement for the 1977 Ford. No notice was ever sent to appellant of the acquisition of the replacement vehicle, and no insurance was ever procured on the Chevrolet. On August 18, 1979, Mr. Whitworth caused collision damage to the Chevrolet pickup in total reasonable repair cost of $2,746.29, which was the amount of the judgment entered by the trial court. There is no dispute here as to the amount of the judgment, and appellant does not ask that there be a remittitur of the $250 deductible as provided by the policy if the judgment be affirmed.

Mr. Whitworth notified respondent of the collision on August 21, 1979, but he did not notify appellant of the damage. On August 20, 1979, appellant mailed a notice to respondent that its interest, if any, as loss payee of the policy would be terminated and cancelled ten days thereafter because the premium had not been paid. On August 30, 1979, respondent, through its counsel, and by letter, notified appellant of Whitworth's purchase of the Chevrolet pickup truck, of its wreck on August 18, 1979, and that following the accident, Mrs. Whitworth advised it that they had not paid the premium and that they had received a notice of cancellation. The letter went on: "No notice was given to the bank as required by the lost (sic) payable clause in the policy. Accordingly, the bank is exercising its election to pay the premium to keep coverage in force. Enclosed please find a check from the bank payable to Countryside Casualty Co. [appellant's predecessor] in the sum of $63.60. If there is an additional premium assessment with relation to the change of vehicles, please advise. * * *." This letter was received by appellant on August 31, 1979, and subsequently it denied liability and rejected the tender of the premium.

Appellant's first point is that the trial court erred in holding that the interest of the loss payee was transferred from the vehicle identified in the policy to the vehicle actually damaged in the collision despite the fact that the vehicles were traded after the policy period...