Gay v. Hartford Underwriters Ins. Co., No. 82930

• Court: Supreme Court of Oklahoma
• Writing for the Court: KAUGER; ALMA WILSON; OPALA
• Citation: 904 P.2d 83,1995 OK 97
• Decision Date: 03 October 1995
• Docket Number: No. 82930
• Parties: Robert E. GAY and Mary R. Gay, Appellants, v. HARTFORD UNDERWRITERS INSURANCE COMPANY, successor in interest to New York Underwriters Insurance Company, Appellees.

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904 P.2d 83 1995 OK 97 Robert E. GAY and Mary R. Gay, Appellants,
v.
HARTFORD UNDERWRITERS INSURANCE COMPANY, successor in
interest to New York Underwriters Insurance
Company, Appellees. No. 82930. Supreme Court of Oklahoma. Oct. 3, 1995.

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Certiorari to the Court of Appeals, Division I; James Blevins, Trial Judge.

R. Thomas Beadles, Oklahoma City, for Appellants.

Kent Fleming, Brently C. Olsson, Paul B. Middleton, Oklahoma City, for Appellee.

KAUGER, Vice Chief Justice.

The dispositive issue is whether this appeal is governed by Gay I which held that the evidence introduced at trial demonstrated a mutual mistake warranting contract reformation. We find that it is. ¹

FACTS

On January 19, 1988, the appellant, Robert E. Gay (Gay/insured) telephoned Hartford Underwriters Insurance Company (Harford/insurer), and requested information regarding insurance coverage for three cars. ² Hartford sent Gay an application form which listed several types and amounts of coverage available for the cars, and the premium charged for each type and amount.

Gay completed the application on February 13, 1988. He requested bodily injury

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liability coverage for the three cars with limits of $100,000 per person/$300,000 per accident (hereinafter $100,000/$300,000). Gay alleged that based on his past experience with insurance coverage and his understanding of Oklahoma law, he believed that the minimum amount of uninsured/underinsured motorist coverage (hereinafter uninsured) available was an amount equal to the liability limits of the policy. Consequently, he accepted Hartford's offer of uninsured motorist coverage by checking a box identified as the "minimum amount available." However, the minimum amount available was only $10,000 per person/$20,000 per accident (hereinafter $10,000/$20,000). ³

After returning the application to Hartford, Gay received his insurance policy which became effective April 30, 1988. The insurance policy, consistent with Gay's application form, provided liability limits of $100,000/$300,000 and $10,000/$20,000 uninsured motorist coverage. Other than checking to see that all three vehicles were listed on the policy, the insured did not read the policy.

On April 11, 1988, Gay called Hartford to ask about obtaining a separate insurance policy for his motor home. He requested a quotation for the premium charged on the motor home for liability limits of $100,000/$300,000 and uninsured motorist coverage in the same amount. ⁴ Gay alleges that: 1) during his conversation with Hartford's agent, he learned that his uninsured motorist coverage on the April 30, 1988, insurance policy was only $10,000/$20,000; 2) he told the agent that he had intended to purchase uninsured motorist coverage in an amount equal to his liability coverage which was $100,000/$300,000; 3) he requested that the policy be changed; and 4) the agent told him that she would have it changed for him. The agent gave the insured the phone number of another department to call if he decided to add the motor home to his present policy.

After Gay received the quote from Hartford for $100,000/$300,000 limits for liability and uninsured motorist coverage, he called Hartford on April 29, 1988, to purchase insurance coverage for the motor home. Gay asserts that: 1) the Hartford agent informed him that he had only $10,000/$20,000 uninsured motorist coverage on the April 30, 1988, policy, and that he could not secure $100,000/$300,000 uninsured motorist coverage on the motor home because Hartford did not issue a policy with split coverages for multiple vehicles; 2) he told the agent that he wanted uninsured motorist limits of $100,000/$300,000 on all of his vehicles; and 3) the agent told him that she would take care of it and make the change.

Hartford issued the insured an amended policy effective June 1, 1988, which insured the motor home and the three vehicles which were originally covered in the April 30, 1988, policy. Gay did not read the policy, except to check to see if all of the vehicles were listed on it. The liability coverage for this amended policy was $100,000/$300,000; however, the uninsured motorist limits were still only $10,000/$20,000. On July 15, 1988, after Gay was seriously injured in an automobile accident, he discovered that his amended insurance policy with Hartford provided for uninsured

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motorist limits of $10,000/$20,000. ⁵

The insured filed a claim with Hartford seeking uninsured motorist coverage of $100,000/$300,000, but Hartford insisted that Gay's policy provided only $10,000/$20,000 uninsured motorist coverage limits. Thereafter, Gay brought suit, alleging mutual mistake and seeking to reform the insurance policy to provide uninsured motorist coverage limits of $100,000/$300,000. ⁶ At the close of Gay's evidence, Hartford demurred to the evidence. The trial court granted the demurrer to Hartford, finding that: 1) Gay's evidence of a mutual mistake was not clear and convincing; and 2) the insured was barred from seeking reformation because he neglected to review his final policy. ⁷ The insured appealed.

The Court of Appeals, Division 4, in an unpublished opinion, reversed and remanded in Gay I. ⁸ It found that: 1) the trial court acted against the clear weight of the evidence; and 2) the evidence was sufficient to demonstrate a mutual mistake warranting reformation of the uninsured motorist limits from $10,000/$20,000 to $100,000/$300,000. ⁹ Because the appeal was from an order sustaining Hartford's demurrer to the evidence, the Court of Appeals remanded to the trial court to allow Hartford to present evidence. Hartford petitioned for certiorari and it was denied. The decision of the Court of Appeals became final.

In December of 1993, at the close of Hartford's evidence on re-trial, the trial court held in favor of Hartford and against the insured. It found that: 1) Gay's policy provided the amount of uninsured motorist coverage which he requested on his insurance application; and 2) the insured had ample time, prior to the July 15, 1988, accident to contact Hartford, to inform them that he intended to obtain uninsured motorist coverage of $100,000/$300,000, and to pay the premium for higher coverage--but that he did not. Again, the insured appealed. On April 4, 1995, the Court of Appeals, Division I (Gay II ) affirmed the trial court. We granted certiorari on July 11, 1995.

THIS APPEAL IS GOVERNED BY THE SETTLED LAW OF GAY I WHICH DETERMINED THAT THE EVIDENCE WARRANTED CONTRACT REFORMATION.

The insured argues that the trial court and the Court of Appeals in Gay II acted outside the settled-law-of-the-case of Gay I holding that the evidence introduced at trial demonstrated a mutual mistake warranting contract reformation. Hartford counters that: 1) the law-of-the-case doctrine does not apply; and 2) the trial court's decision to deny reformation is not against the clear weight of the evidence.

In law actions, the test of a demurrer to the plaintiff's evidence requires the trial court to accept as true all of the plaintiff's evidence and its reasonable inferences,

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and to disregard conflicting evidence favorable to the defendant. ¹⁰ However, when a trial court considers a demurrer to the evidence in an equity action, the trial court treats the demurrer as a motion for judgment and...