Many v. Hartford Acc. & Indem. Co.
| Decision Date | 01 April 1987 |
| Docket Number | HUMPHRIES-ANDERSON,18615-CA,Nos. 18614-C,s. 18614-C |
| Citation | 505 So.2d 929 |
| Parties | Norman F. MANY, Jr., Plaintiff-Appellant, v. HARTFORD ACCIDENT & INDEMNITY CO., Defendant-Appellee. Norman F. MANY, Jr., Plaintiff-Appellant, v.AGENCY, INC., Defendant-Appellee. |
| Court | Court of Appeal of Louisiana — District of US |
Burscato, Loomis & Street by Anthony J. Bruscato, Monroe, for plaintiff-appellant.
Hudson, Potts & Bernstein by Robert M. Baldwin, Monroe, for defendant-appellee Hartford Acc. & Indem. Co.
Theus, Grisham, Davis & Leigh by Ronald L. Davis, Jr., Monroe, for defendant-appellee Humphries-Anderson Agency, Inc.
Before FRED W. JONES, Jr., SEXTON and LINDSAY, JJ.
The owner of fire-damaged property allegedly insured under a fire insurance policy issued by defendant insurer appealed a judgment denying recovery after the trial judge concluded that the renewal policy in force at the time of the fire restricted both building and inventory coverage to one building which was not damaged by fire, and plaintiff, not the agent, was negligent in failing to have proper insurance coverage. For the following reasons, we affirm.
Norman F. Many, Jr. owned and operated a business known as "The Great Exchange" located at 1700 Cypress Street, West Monroe, Louisiana. The business was housed in two separate structures: a block building containing merchandise for retail sale, and an adjoining building used as a warehouse. On September 12, 1983, a fire which originated on the adjoining property, destroyed the warehouse and its contents.
Paul Anderson, owner of Humphries-Anderson Agency, Inc., had previously solicited Many's insurance business and secured for him a spectrum insurance policy from Hartford Fire Insurance Company. For reasons not relevant to this suit, Hartford Fire cancelled this policy. Many was then issued a fire insurance policy, and Hartford Accident and Indemnity Company ("Hartford"), a subsidiary of Hartford Fire, was substituted as the insurer.
After the fire, Many submitted proof of loss to Hartford, but the insurer refused to pay the claim asserting that the fire insurance policy only covered the large retail building on the premises and not the separate warehouse containing inventory.
Although the ensuing litigation involved numerous parties and corresponding pleadings, we refer only to those parties and pleadings pertinent to this appeal. Many filed separate suits, later consolidated for trial, against Hartford, seeking reformation of the fire insurance policy to provide coverage on the adjoining warehouse and inventory plus penalties and attorney's fees for Hartford's alleged failure to pay the loss, and against Humphries-Anderson, for Anderson's alleged negligence and breach of contract.
Hartford filed a cross-claim against Humphries-Anderson alleging that, if required to reform the fire insurance policy to provide coverage for the damage to Many's business, it was entitled to indemnification from Humphries-Anderson due to several negligent acts and omissions by Anderson. National Union Fire Insurance Company of Pittsburg, Pennsylvania, Humphries-Anderson's errors and omissions insurer, was later added as a defendant.
The trial court denied recovery, stating that the renewal policy in force at the time of the fire restricted both building and inventory coverage to the main building which was not damaged by fire, and Many, not Humphries-Anderson, was negligent in failing to have proper insurance on his premises.
Many appealed this judgment, alleging four specifications of error. Hartford answered the appeal re-urging its cross-claim against Humphries-Anderson. Many's four specifications of error present two issues on appeal, which we shall consider.
A chronology of events is necessary for a complete understanding of the facts in this case:
DATE EVENT
1976 Many opened The Great
Exchange (one building)
May 3, 1979 Many moved wooden
building on premises
(used as a plant shop)
November 11, 1980 Hartford Fire issued
Many the spectrum policy
1980-1981 Many ceased using wooden
building as a plant
shop and began using it
to store excess inventory
1981 Many added additional
storage space to front of
wooden building
August 21, 1981 Spectrum policy cancelled
and Hartford issued
Many a fire policy on the
main building only
August 21, 1982 Many renewed fire policy
1982-1983 Many added additional
storage space to back of
wooden building
August 21, 1983 Many renewed fire policy
September 12, 1983 Fire destroyed storage
building and its contents
REFORMATION
It is not disputed that the fire insurance policy does not provide coverage for the warehouse or its contents. Many contends that the spectrum policy initially issued by Hartford Fire provided coverage on the main building, the warehouse (before the two additions), and all inventory (in either building). Many argues that when Hartford subsequently cancelled this policy and issued the fire insurance policy, it impermissibly restricted the coverage to the one building and its inventory without his knowledge or consent, and therefore the policy should be reformed to provide coverage on the warehouse and its inventory.
Reformation of an insurance policy is permitted when, because of mutual error or mistake, the policy fails to reflect the intent of the parties. Earl Williams Construction Company, Inc. v. Thornton & Brooks, Inc., 501 So.2d 1037 (La.App. 2d Cir.1987). The burden is on the one seeking reformation to prove error by strong, clear and convincing evidence. Clarke v. Progressive American Insurance Company, 469 So.2d 319 (La.App. 2d Cir.1985); Staten v. Security Industrial Insurance Company, 414 So.2d 1328 (La.App. 2d Cir.1982).
The instant case is factually indistinguishable from Halpern v. Lexington Insurance Company, 558 F.Supp. 1280 (E.D.La.1983), affirmed 715 F.2d 191 (5th Cir.1983). In Halpern, Lexington issued a policy of insurance on certain property including 1519-21 Prytania Street, New Orleans, Louisiana, with Mrs. Halpern named one of the insureds. This policy was procured by Schlesinger, an...
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