Jewell v. United Fire & Cas. Co.

• Decision Date: 24 November 1964
• Citation: 131 N.W.2d 276,25 Wis.2d 509
• Parties: Gordon JEWELL et al., Respondents, v. UNITED FIRE AND CASUALTY CO., a foreign corp., Appellant.
• Court: Wisconsin Supreme Court

Page 276

131 N.W.2d 276

25 Wis.2d 509

Gordon JEWELL et al., Respondents, v. UNITED FIRE AND CASUALTY CO., a foreign corp., Appellant.

Supreme Court of Wisconsin.

Nov. 24, 1964.

Allan & Storck, Mayville, for appellant.

Dorothy Walker, Portage, for respondents.

GORDON, Justice.

'Names were made to matter,' said Thomas Reed Powell, 60 Harvard Law Review (1947), 501, 503.

This case revolves upon an incorrect name used in an insurance policy. The trial court found that there was a mutual mistake which required that the policy be reformed by changing the name of the insured from Gordon Jewell to Audrey Jewell.

The appellant has undertaken to establish that this determination on the part of the trial court was against the great weight and clear preponderance of the evidence. It contends that there was not clear and convincing evidence to warrant the reformation and that Mr. and Mrs. Jewell undertook a fraudulent scheme which should foreclose them from equitable relief.

The filling station was primarily owned and operated by Gordon Jewell. On the other hand, Audrey Jewell had a minor financial investment in the filling station and, therefore, an insurable interest under the policy.

The appellant urges that there was fraud in the manner in which the title to a 1959 Buick was transferred from the joint ownership of Gordon and Audrey Jewell to Audrey Jewell alone. An uncashed check passed from the insurance agent, Mr. Hillestad, to Mr. Jewell, and another passed from Mrs. Jewell to Mr. Hillestad; this is relied upon as demonstrating that both Gordon and Audrey Jewell were in league with Mr. Hillestad in accomplishing a collusive transfer.

In addition, the appellant points out that no protest was voiced concerning the name placed upon the policy at the time it was received; it was not until after an accident had occurred and it had become advantageous to have the coverage in the name of Mrs. Jewell that a demand for reformation was made.

The trial judge analyzed the factors mentioned above and explained why he declined to give them conclusive effect. There is persuasive evidence in the record to demonstrate that the transfer of the garage liability insurance from Fidelity to United was actually intended to continue the coverage in the name of Audrey Jewell. It is undisputed that Mr. Hillestad is the one who initiated the transfer of the insurance from the one company to the other; he was terminating his agency relationship with Fidelity, and it was he who proposed that the policies be reissued by United. The respondents sought no apparent gain by changing companies; they did so only to accommodate their insurance agent, Mr. Hillestad.

There is nothing in the record to suggest that in changing companies the respondents intended to change the coverage. Indeed, the evidence is forcefully to the contrary. At the time that the transfer between the two companies was made, there were in existence riders to each of the Fidelity policies which had changed the name of the assured from Gordon Jewell to Audrey Jewell. When discussions were held between Mr. Hillestad and Mr. Helms, the former specifically informed the latter that the ownership of the automobiles was in Mrs. Jewell's name. This fact was never disputed by the appellant; no contrary evidence was introduced, even though it appears that Mr. Helms was in attendance at the trial.

While there is some dispute on the point, it would appear that when Mr. Hillestad sent the so-called 'dailies' to United he included the riders which showed that the policies were in the name of Audrey Jewell. Exhibit 13, which was taken from the underwriting file at the home office of United, includes the written name of Audrey Jewell; the record contains no explanation as to how her name could have found its way into the appellant's file unless it had in fact appeared in the riders which accompanied the 'dailies.'

The trial court found that it was intended that the United policy be the same as the previous coverage and, therefore, that Mrs. Jewell was to continue as the named insured. This result is irresistible from Mr. Hillestad's uncontradicted testimony. In addition, Mr. Fattig, representing United's home office, also made it clear that he intended to issue the policy identically with the 'dailies.' Thus, we believe that the trial court was correct in concluding that there was a mutual mistake of fact which justified the reformation of the insurance contract.

The fact that Gordon Jewell was the owner and operator of the filling station and also the fact that he had transferred the title to the automobiles do not bar reformation of the policy. The appellant has referred us to Noorthoek v. Automobile Ins. Co. (1940), 292 Mich. 561, 291 N.W. 6. In that case, reformation was denied because the title to the automobile was changed so that advantage could be taken of lower insurance rates; in the instant case, the change in title was not designed to gain any advantage from the appellant insurer.

A court will not reform a document to abet a fraudulent scheme. Moore v. Michaelson (1913), 152 Wis. 352, 358, 140 N.W. 28. However, the previous title transfer between Gordon and Audrey Jewell falls far short of being fraud with regard to the policy in issue, even if it could be found to constitute a violation of sec. 341.60, Stats. 'Fraud is infinite in variety,' said Lord MacNaughten; ...