Fred C. Walker Agency, Inc. v. Lucas

• Decision Date: 20 January 1975
• Citation: 211 S.E.2d 88,215 Va. 535
• Court: Virginia Supreme Court
• Parties: FRED C. WALKER AGENCY, INC., and the Aetna Casualty & Surety Company v. Clarence E. LUCAS and Mildred D. Lucas.

Page 88

211 S.E.2d 88

215 Va. 535

FRED C. WALKER AGENCY, INC., and the Aetna Casualty & Surety Company v. Clarence E. LUCAS and Mildred D. Lucas.

Supreme Court of Virginia.

Jan. 20, 1975.

Henry H. Whiting, Winchester, Talmage N. Cooley, Waynesboro (Kuykendall, Whiting & Costello, Winchester, Edmunds, Freed, Cooley & Willetts, Waynesboro, on briefs), for plaintiffs in error.

Robert Scott Janney, Luray (Roby G. Janney, I. Randolph Dovel, Luray, on brief), for defendants in error.

Before I'ANSON, C.J., and CARRICO, HARRISON, COCHRAN, HARMAN, POFF and COMPTON, JJ.

COMPTON, Justice.

The question for decision in this law action, wherein recovery is sought for an alleged breach of an oral contract to renew a fire insurance policy, is whether the plaintiffs' evidence was incredible and so manifestly false that reasonable men ought not to believe it.

On November 18, 1971, a dwelling owned by the plaintiffs, Clarence E. Lucas and Mildred D. Lucas, located in Shenandoah, Virginia, was damaged by fire. Thereafter, the plaintiffs brought this action in contract against the defendants, Fred C. Walker Agency, Inc., and The Aetna Casualty & Surety Company, seeking recovery for their losses resulting from the fire, the insurer having denied their claim. The insurer had previously issued a contract of fire insurance covering the dwelling and its contents, as a part of a 'Homeowners Policy,' its three year term expiring on October 9, 1971. The basis of this action was an oral contract to renew the policy, allegedly made in a telephone conversation on October 6, 1971, between Mrs. Lucas and Deldee Emerson, an employee of the Agency and a licensed agent for the insurer, who was authorized to effect oral contracts of fire insurance.

The defendants appeal from the August 6, 1973, order of the trial court wherein a joint judgment was entered on the jury verdict of $11,390 against the defendants. In his letter opinion overruling the defendants' motion to set aside the verdict, the trial judge stated, Inter alia, '. . . that the issue of whether or not an agreement was made by the Walker Agency to renew the plaintiff's fire insurance policy with Aetna was a factual finding for the jury's determination.' He further wrote that '(w)hile I was not personally persuaded by Mrs. Lucas's testimony, neither can I hold her story completely incredible.' We affirm.

The writ of error was limited to the consideration of the foregoing question dealing with the sufficiency of the plaintiffs' evidence. ¹ The plaintiffs' burden was to prove the contract by clear and convincing evidence. Haskins v. Agricultural Fire Insurance Company, 78 Va. 700, 707 (1884); Couch on Insurance 2d § 14:21.

Precedent dictates that the evidence and all reasonable inferences therefrom be viewed in the light most favorable to the plaintiffs, since they come before us fortified by a jury's verdict which has been approved by the trial court.

This controversy centers around the policy of fire insurance in question and a policy of automobile insurance, both issued by the defendant insurer. In the main, the plaintiffs' oral testimony was pitted against the defendants' documentary evidence.

Mildred Lucas resided in the dwelling in question with her four minor children. Clarence Lucas, her husband, lived in the 'Soldier's Home' in Washington, D.C.

On April 5, 1971, Mrs. Lucas obtained through the Agency, which had its principal office in Luray, Virginia, renewal of a 'Family Automobile Policy' covering a Pontiac automobile, wherein she was the named insured. The face of the renewal policy showed the premium to be due in installments of $48.40, $36.30 and $36.30 on April 5, July 5, and October 5, 1971, respectively. Mrs. Lucas testified that she paid the first installment of $48.40 'towards the last of March' 1971, in cash. The records of the Agency failed to show receipt of this payment, and in June the Agency sent Mrs. Lucas a bill showing that the first and second installments were due as of April 15 and July 15 respectively. In July of 1971, the Pontiac became inoperative and Mrs. Lucas admitted that the July installment was not paid when due.

The Agency, in a letter dated September 24, 1971, notified Mrs. Lucas that '(w)e will be unable to renew your homeowners policy, which expires October 9, 1971 due to the past due account. It must be paid in full.' She did not recall receiving this letter but testified that on October 6, upon receipt on that day of a second, similar letter from the Agency, she called from her home and spoke by telephone with Mrs. Emerson 'with reference to the insurance policies.' Mrs. Lucas testified:

'Well I called and told her that I had been sick and I was unable to send the full amount, but if I sent $48.40 to let the $33.00 which was the fire insurance on the home renew my policy on my fire insurance on my home, with the remaining to go over on my car insurance and which I would catch up later. If that was agreeable. And she said that would be fine. I said otherwise I'll just cancel the car insurance. She's says no, if you can arrange it like that, that'll be just fine. And I repeated several times that I was concerned about the fire insurance on my home, not the car, because it was in the garage and had been there since July.' ²

Mrs. Lucas' daughter, 17 years of age, who was in the same room with her mother during the telephone conversation, testified concerning her mother's statements as follows:

'Well I remember her saying that she didn't--she wasn't concerned about the car insurance, because the car had been in the garage. And that she was not concerned about that, what she was concerned about was her fire insurance and she wanted to make sure she, you know, had all that straight. And I couldn't say what Mrs. Emerson said, but it had to do with so much money that mama had to send. And so that's what--talked on the phone.'

On that day and shortly after the telephone conversation, and because her mother 'had been sick,' the daughter purchased and mailed a postal money order in the amount of $48.40 payable to the Agency, with funds Mrs. Lucas had given her. Mrs. Lucas testified that of this amount, $33.00 was the premium for renewal of the fire policy and $15.40 was to be applied to the automobile insurance premium, all in accordance with her oral agreement with the agent.

The Agency received the sum the following day and considered the full amount to be payment of the balance it claimed to be then due on the first installment of the automobile insurance premium, and credited it accordingly.

The expiration date of the 1968 fire policy, as stated, was October 9, 1971. By virtue of the foregoing payment and the agreement with the agent, the plaintiffs claim the policy was renewed. The defendants claim the fire policy expired on that date and that it was not renewed. Mrs. Lucas never received written confirmation that her fire policy had been renewed.

The next communication among the parties occurred the day before the fire when the Agency received another money order from Mrs. Lucas in the amount of $36.30, sent by her as a third payment on her automobile insurance ($48.40, $15.40, and $36.30), but credited by the Agency as payment of the second installment thereon, according to the payment schedule shown on the face of the policy.

On November 18, Mrs. Lucas was notified of the fire while at work at 'Luray Textile' about 9:00 p.m. On November 19 about 9:45 a.m., she notified Mrs. Emerson by telephone of the fire. Mrs. Lucas related the conversation as follows:

'I told her that my house had burnt. She says, on good. And I said I beg your pardon. She said I said oh good. And I said well what's good about it. She said well Mr. Walker or she mentioned another gentleman there at the office wasn't in but as soon as they came in they would send one of them up to my house.'

Mrs. Emerson testified that she received the call and admitted that she told Mrs. Lucas she was 'sending someone up there.'

Because no representative of the Agency came to the scene of the fire, Mrs. Lucas, at about noon on that day, went to the Agency office in Luray seeking Mrs. Emerson or Fred C. Walker, the Agency's chief executive officer.

Neither Walker nor Mrs. Emerson was available in the office when Mrs. Lucas first arrived. While waiting to see them, she inquired to Barbara Ramey, another...