Johnson v. Allstate Indem. Co.

• Decision Date: 17 March 2009
• Docket Number: No. ED 90476.,ED 90476.
• Citation: 278 S.W.3d 228
• Parties: John JOHNSON, Respondent, v. ALLSTATE INDEMNITY COMPANY, Appellant.
• Court: Missouri Court of Appeals

278 S.W.3d 228

John JOHNSON, Respondent, v. ALLSTATE INDEMNITY COMPANY, Appellant.

No. ED 90476.

Missouri Court of Appeals, Eastern District, Division Two.

March 17, 2009.

Chris Lange, Michael S. Hamlin, St. Louis, Curtis E. Woods, Kansas City, MO, for Appellant.

Michael T. Pivac, Thomas H. Hearne, Springfield, David L. Steelman, Rolla, MO, for Respondent.

OPINION

GEORGE W. DRAPER III, Judge.

Allstate Indemnity Company (hereinafter, "Allstate") appeals from the trial court's judgment after a jury returned a verdict in favor of John Johnson (hereinafter, "Johnson") on his claim of defamation for statements Allstate made in its letter denying Johnson's claim for a loss after his home was destroyed by a fire. Allstate raises five points on appeal challenging the sufficiency of the evidence to support: (1) the jury's verdict; (2) the jury's award of actual damages in the amount of $900,000; and (3) the jury's award of $100,000 in punitive damages. Allstate also claims the trial court abused its discretion in denying its motion for remittitur and leave to amend its answer to include additional affirmative defenses. We affirm.

Johnson purchased his grandfather's home in Salem, Missouri, (hereinafter, "the property") in 1999. Johnson contacted Allstate to obtain insurance on the property. An Allstate agent took Johnson's application over the phone, and Allstate issued Johnson a homeowner's insurance policy. The property was destroyed by fire on July 9, 2002. Johnson filed a claim with Allstate under the terms of the insurance policy. After receiving Johnson's claim, Allstate conducted an investigation under the supervision of Michael Peterson (hereinafter, "Peterson"), a claims service adjuster who worked in Allstate's special investigations unit.

At the conclusion of Allstate's investigation, Peterson prepared and sent Johnson a denial letter on February 18, 2003. Peterson and Allstate approved all of the language and statements made in the letter. Allstate included several reasons for its denial, two of which are pertinent to this appeal:

2. The investigation into the facts and circumstances surrounding your claim has led to a reasonable belief and conclusion that you intentionally concealed and/or misrepresented material facts or circumstances concerning your residence, your activities on the date of the loss, the cause of the loss, and the amount, type and value of the property allegedly damaged or destroyed.

3. The investigation into the facts and circumstances surrounding your claim has led to a reasonable belief and conclusion that you engaged in fraudulent conduct and/or made false statements in this investigation, at your examination under oath and otherwise, concerning this insurance, your property and your claim.

After receiving this letter, Johnson filed a breach of contract claim and vexatious refusal to pay claim against Allstate on April 23, 2003. The case was removed to federal court based upon diversity jurisdiction.¹

While the federal case was pending, Johnson filed a one count petition for defamation against Allstate and Peterson on February 23, 2004, in the Circuit Court of the City of St. Louis. Johnson alleged Allstate and Peterson wrote and delivered the denial letter which contained defamatory statements, and listed the two statements set forth supra. Johnson claimed he published and disclosed the matters contained in the denial letter to insurance agents in the process of attempting to obtain insurance. Johnson stated he suffered actual damages in that "he has not been able to obtain insurance and has been deprived of insurance associations and business relationships; further, as a direct result of said statements he has been and will in the future be caused to suffer humiliation, embarrassment, hurt, mental anguish, pain and suffering and has and will in the future be deprived of insurance business associations." Johnson also requested punitive damages.

Following extensive discovery, amended pleadings, a motion for summary judgment, and Peterson's voluntary dismissal as a party prior to trial, the case went to trial on July 30, 2007. The jury rendered its verdict in Johnson's favor on his defamation claim and awarded him $900,000 in actual damages and $100,000 in punitive damages. Allstate filed a motion for judgment notwithstanding the verdict (hereinafter, "JNOV") which was denied. Allstate now appeals. The specific evidence adduced at trial will be set forth in our analysis as needed to avoid repetition.

In Allstate's first point, it argues the trial court erred in denying its JNOV motion because Johnson failed to present sufficient evidence Allstate was negligent in making the defamatory statements against him in the denial letter. Allstate argues it made the statements after a fair and thorough investigation, and therefore, Johnson failed to make a submissible case for defamation.

Before reaching the merits of Allstate's argument, we must determine whether this issue is preserved for appellate review. Johnson argues this point is not preserved for appeal because Allstate's oral motion for directed verdict did not challenge this evidence, and any discussion in Allstate's subsequent JNOV motion did not cure this defect. Allstate contends it has properly preserved all of its points for appeal.

We find Pope v. Pope, 179 S.W.3d 442 (Mo.App. W.D.2005) instructive on this issue. In Pope, the Western District succinctly set forth the steps a party must take to preserve issues for appellate review:

To preserve the question of submissibility for appellate review in a jury-tried case, a motion for directed verdict must be filed at the close of all the evidence and, in the event of an adverse verdict, an after-trial motion for a new trial or to set aside a verdict must assign as error the trial court's failure to have directed such a verdict. Failure to move for a directed verdict at the close of all the evidence waives any contention that plaintiff failed to prove a submissible case. Similarly, a motion for directed verdict that does not comply with the requirements of Rule 72.01(a) neither presents a basis for relief in the trial court nor preserves the issue in the appellate court.

Pope, 179 S.W.3d at 451 (quoting Letz v. Turbomeca Engine Corp., 975 S.W.2d 155, 163 (Mo.App. W.D. banc 1997)(internal citations omitted)). Rule 72.01 governs motions for directed verdict and judgment not withstanding the verdict. Rule 72.01(a) mandates a motion for directed verdict "shall state the specific grounds" it relies upon.

Allstate relies on Muchisky v. Kornegay, 741 S.W.2d 43 (Mo.App. E.D.1987) and Frisella v. Reserve Life Ins. Co. of Dallas, Tx., 583 S.W.2d 728 (Mo.App. E.D. 1979), among others, to support its contention that its oral motion for directed verdict was sufficient. Allstate alleges its motion for directed verdict should be construed liberally because its basis was apparent and the trial court was aware of its position at trial.

The Pope court explicitly rejected this liberal construction argument, and more importantly, rejected the holdings in Muchisky and Frisella because they relied upon Gillenwaters Building Co. v. Lipscomb, 482 S.W.2d 409 (Mo.1972). In the Gillenwaters decision, the Missouri Supreme Court did not discuss or mention Rule 72.01, which was worded differently when that case was decided than it is today. The Pope court reasoned that "at the time Gillenwaters was decided, Rule 72.01 did not provide, as it does now (and has since January 1, 1975), that: A motion for directed verdict shall state the specific grounds therefore." Pope, 179 S.W.3d at 455. The Pope court went on to explain:

Therefore, Gillenwaters is no longer good law on the requirements of Rule 72.01, and has not been good law on that subject since the amended Rule 72.01 took effect on January 1, 1975. Likewise, Gillenwaters' progeny, three cases all decided by the Eastern District of this court, is also bad law when it comes to Rule 72.01(a), because in each of those cases, the court relied on Gillenwaters without properly taking into account the subsequent changes in Rule 72.01, which effectively eliminated whatever liberality might previously have been applied to after-trial motions for judgment. See Frisella, 583 S.W.2d at 731-32; Muchisky, 741 S.W.2d at 45 n. 2; Baldridge [v. Lacks], 883 S.W.2d [947] 953 [(Mo.App. E.D.1994)]. Moreover, in deciding those cases, the Eastern District did not mention its previous decision in Quality Dairy Co. v. Openlander, 456 S.W.2d 608 (Mo.App. E.D. 1970), where the defendant's motion for directed verdict "stated only generally that `plaintiffs have failed to make a submissible case.'" Id. at 609. The court held that the motion gave "neither the trial court, opposing counsel, nor this court the specific grounds necessary to preserve this point for review." Id.

Pope, 179 S.W.3d at 455-56.

The entirety of Allstate's oral motion for directed verdict at the close of Johnson's evidence was as follows:

The motion for a directed verdict at the close of [Johnson's] evidence and the close of all evidence is the same in that they haven't — there's no substantial or competent evidence to prove [Johnson] has been damaged, and that means actual damages. The damages they're alleging that he suffered have been presented to the jury based on pure speculation and conjecture and not supported by the evidence. There's no evidence of actual damages to [Johnson's] reputation. And, additionally, [Johnson] admitted that his statement in the examination under oath was not true, which means they did not make a submissible case. At least that's to paragraph 3 of the [denial letter]. And for those reasons I request a verdict be directed in favor of [Allstate] against [Johnson] at the close of [Johnson's] evidence and all evidence.

The court overruled Allstate's oral motion, finding Johnson made a submissible case. When reviewing Allstate's oral motion for directed verdict,...