Kithcart v. Metropolitan Life Ins. Co.

• Decision Date: 31 July 1945
• Docket Number: No. 13008.,13008.
• Citation: 150 F.2d 997
• Parties: KITHCART v. METROPOLITAN LIFE INS. CO.
• Court: U.S. Court of Appeals — Eighth Circuit

150 F.2d 997 (1945)

KITHCART v. METROPOLITAN LIFE INS. CO.

No. 13008.

Circuit Court of Appeals, Eighth Circuit.

July 31, 1945.

Martin J. O'Donnell, of Kansas City, Mo. (Paul E. Bindley, of Kansas City, Mo., on the brief), for appellant.

Henry I. Eager, of Kansas City, Mo. (Harry Cole Bates, of New York City, and Michaels, Blackmar, Newkirk, Eager & Swanson, of Kansas City, Mo., on the brief), for appellee.

Before GARDNER, THOMAS and JOHNSEN, Circuit Judges.

JOHNSEN, Circuit Judge.

The action is one to reform and recover on an accident insurance policy. The trial court, on motion of the insurer, entered an order of dismissal, equivalently as a summary judgment, and the insured has appealed.

The insured had brought suit in 1931 on the policy as it stood, to recover benefits for disability alleged to be due to accident. The insurer removed the action to federal court and defended on the ground, among others, that the alleged disability was not one resulting from "bodily injuries * * * caused directly and independently of all other causes by violent and accidental means", within the coverage clause, but that on the contrary it was the result, wholly or in part, of dementia praecox, and so was under the exclusion clause that "This insurance shall not cover * * * accident, injury, disability, death or any other loss caused wholly or partly, directly or indirectly, by disease or bodily or mental infirmity". On a trial in 1933 to a jury, there was a general verdict for the insurer, and the insured took no appeal from the judgment.

Through the years that have since passed, the insured has filed four additional suits against the insurer, not including the present action, some at law and some in equity. Two of these he dismissed voluntarily along the way, and the other two have been the subject of proceedings in the district court and of appeals by the insured to this court, where the judgments have been affirmed. See 88 F.2d 407 and 119 F.2d 497. The general history of all this litigation has been related in our previous opinions and need not here be repeated.

The purpose of the present action, in substance, is to have inserted in the policy, through reformation, a provision to the effect that it was agreed at the time the insurance was written (1) that the insured was then "of sound mind, sound body, and good health"; (2) that the insurer had investigated and "determined conclusively" that such was the fact; (3) that the insurer bound itself not to "use any prior evidence to the contrary thereof in any legal proceedings"; (4) that the insurer was "hereby estopped from all objection that any prior mental or bodily diseases or infirmity contributes to any future disability of the insured after said date"; and (5) that the fact that such a special provision was intended to be and had been made a part of the insurance contract should be "sufficiently evidenced" by the mere delivery of the policy. The petition alleges that the provision had been drawn up between the insured and the insurer's agent and had been forwarded to the insurer's home office with the insured's application and that by the insurer's acceptance of the application and the issuance of the policy the provision had become a part of the actual contract even though it had been omitted from the language of the policy.

The reason given for the present attempted reformation is that the insured has been denied the right in his previous litigation to make proof of this special provision as part of his contract, in view of the clause in the policy that "No change in this policy shall be valid unless approved by an executive officer of the Company and such approval be endorsed hereon." The petition shows on its face, however, that that denial had been made as far back as 1933, by the insurer's objection and the trial court's ruling in the action initially brought on the policy, from which the insured took no appeal. It is recited in the petition that on that trial the insurer as part of its defense introduced evidence to show that the insured was then, and had been even prior to the time that the policy was issued, suffering from dementia praecox, and that the disability for which he was seeking to recover was caused wholly or in part by this ailment, and that he, to meet this issue, "then and there offered to prove all the terms of said entire contract of insurance as mutually expressed and intended by said parties * * but that said evidence was ruled out by the court as inadmissible in said action at law."

The insured thus was advised in 1933 by a specific legal ruling against him, which he did not attempt to make the subject of an appeal, that it was impossible for him to claim the existence of any such extraneous provision to the policy in an action at law to recover benefits under it. In spite of this ruling, he has waited almost 11 years before bringing this suit for reformation.

Under Missouri law, statutes of limitations apply alike to legal and equitable actions. Ludwig v. Scott, Mo.Sup., 65 S.W.2d 1034; Burrus v. Cook, 215 Mo. 496, 114 S.W. 1065; Rogers v. Brown, 61 Mo. 187; Kelly v. Hurt, 61 Mo. 463. This state rule is binding on the federal courts, where jurisdiction rests on diversity of citizenship, in equity as well as at law. Guaranty Trust Co. of New York v. York, 65 S.Ct. 1464.

The general limitation on suits for reformation in Missouri is 10 years. Mo.R.S.A. § 1013; Hoester v. Sammelmann, 101 Mo. 619, 14 S.W. 728. The statute runs from "the date the right accrued." Stark v. Zehnder, 204 Mo. 442, 102 S.W. 992, 994. In cases of mistake or of omissions not due to fraud, the reformation right ordinarily is deemed to have accrued at the time the mistake or omission occurred. Hoester v. Sammelmann, supra; Stark v. Zehnder, supra. But even if the situation is one where the statute may not previously have commenced to run, the denial of a known right or status upon an assertion of it clearly will put the statute in operation. Cf. Carlin v. Bacon, 322 Mo. 435, 16 S.W.2d 46, 48, 69 A.L.R. 1.

On the face of the insured's petition, his present attempt, made in 1944, to insert the alleged additional provision in the policy by reformation was barred as a matter of general limitation under the Missouri statute. The fact that, on the trial of the insured's original action in 1933, he "then and there offered to prove all the terms of said entire contract of insurance as mutually expressed and intended by said parties", and that the insurer objected to the offering of any such proof, and that "said evidence was ruled out by the court as inadmissible in said action at law" constituted a clear denial by the insurer of any right in the insured to claim the existence or benefit of the asserted provision, whose alleged terms he at that time declared that he knew. Indeed, the petition further recites that the insurer and its agents at that time expressly denied and have at all times since denied that they had any recollection or knowledge of such a provision ever having been included with or made a part of the application.

The petition attempts to escape the general statute of limitations and to bring itself within the special statute, Mo.R.S.A. § 1014, which allows an action for relief on the ground of fraud to be instituted within 5 years after the accrual of the right, "the cause of action in such case to be deemed not to have accrued until the discovery by the aggrieved party, at any time within ten years, of the facts constituting the fraud."...