Farmers' and Merchants' Bank v. Balboa Ins. Co.

• Citation: 171 W.Va. 390,299 S.E.2d 1
• Decision Date: 07 December 1982
• Docket Number: No. 15514,15514
• Court: Supreme Court of West Virginia
• Parties: FARMERS' AND MERCHANTS' BANK, a Corp. and Jeffrey D. Dawson and Mary W. Dawson v. BALBOA INSURANCE COMPANY.

Page 1

299 S.E.2d 1

171 W.Va. 390

FARMERS' AND MERCHANTS' BANK, a Corp. and Jeffrey D. Dawson and Mary W. Dawson v. BALBOA INSURANCE COMPANY.

No. 15514.

Supreme Court of Appeals of

West Virginia.

Dec. 7, 1982.

Syllabus by the Court

"Where provisions in an insurance policy are plain and unambiguous and where such provisions are not contrary to a statute, regulation, or public policy, the provisions will be applied and not construed." Tynes v. Supreme Life Insurance Company of America, 158 W.Va. 188, 209 S.E.2d 567 (1974).

Reeder & Shuman and Stephen K. Shuman, Tomasky & Friend and L. Edward Friend, II, Morgantown, for appellants.

Baker & Armistead and George B. Armistead, Morgantown, for appellee.

PER CURIAM:

This is an appeal by the Farmers' and Merchants' Bank and Jeffrey D. and Mary W. Dawson from an order of the Circuit Court of Monongalia County dismissing their action against the Balboa Insurance Company. The bank and the Dawsons sued to recover on an insurance policy for the loss of a mobile home which the Dawsons owned and against which the bank had a lien. Although by its terms the policy issued by the insurance company had expired before the occurrence of the fire which destroyed the mobile home, the bank and the Dawsons alleged that the insurance company had failed to notify the bank of the pending expiration of the policy and had failed to provide the bank with an opportunity to renew it. Because of the insurance company's inaction, the bank and the Dawsons claimed that it should bear the loss. The circuit court disagreed and ruled in favor of the insurance company. On appeal the appellants assert that the trial court erred in failing to hold that the insurance company was required to give the lienholder bank notice of the expiration of the policy. We disagree; we find that the insurance company had no legal duty to give the lienholder notice; and we affirm the judgment of the circuit court.

The facts of this case are undisputed and have been stipulated between the parties. On November 2, 1978, the Dawsons borrowed $8,422.20 from the Farmers' and Merchants' Bank to purchase a mobile home. As a condition of the loan the Dawsons were required to purchase a $7000.00 insurance policy on the mobile home, and they were further required to list the Farmers' and Merchants' Bank as lienholder on the policy. The Dawsons purchased the required policy from the Balboa Insurance Company and listed the bank as required. The policy ran from 12:01 a.m., November 1, 1978 until 12:01 a.m., November 1, 1979. The policy language as applicable to the questions in this case, according to the parties, provided:

"If a Lienholder is named in the Declarations of this policy, any loss under Parts I and II of the policy shall be payable to that Lienholder as its interests may appear at the time of loss.... The insurance shall not, as to the interest of the Lienholder, be invalidated by any act or neglect of the Named Insured nor by any change in the title or ownership of the mobile home to which it has not consented, provided that:

1. If the Named Insured shall neglect to pay any premium due under the policy, the Lienholder shall, on demand, pay the same; and

2. The Lienholder shall notify the Company of any change of ownership or increase of hazard which shall come to the knowledge of the Lienholder and shall, on demand, pay any additional premium attributable to the increased hazard."

Prior to the expiration of the policy the annual renewal notice was sent by the insurance company through its local agent to Jeffrey D. Dawson, at his last known address at 421 Morris Avenue, Westover, West Virginia. The notice indicated that if renewal was desired $167.00 would have to be forwarded to the agent prior to expiration of the policy. No notice was sent to the Farmers' and Merchants' Bank.

The renewal notice was not received by the Dawsons, and the required premium was not forwarded to the insurance company, and as a result the policy lapsed on November 1, 1979. Subsequently, on or about December 7, 1979, the mobile home was destroyed by fire.

After the destruction of the mobile home the Farmers' and Merchants' Bank sued the Balboa Insurance Company and the Dawsons. The Dawsons cross-claimed against the insurance company, their position being that if the insurance company had sent the bank notice, the bank would have renewed the policy and it would have been in effect at the time of the fire.

After the filing of several motions the trial court dismissed the claims against the insurance company.

The sole question presented on appeal is whether the Balboa Insurance Company...