Miller v. Plains Ins. Co.
| Decision Date | 21 November 1966 |
| Docket Number | No. 8582,8582 |
| Citation | 409 S.W.2d 770 |
| Parties | Hester M. MILLER, Administratrix of the Estate of C. E. Miller, Deceased, Plaintiff-Respondent, v. PLAINS INSURANCE COMPANY, a corporation, Defendant-Appellant. |
| Court | Missouri Court of Appeals |
Veryl L. Riddle, Riddle, O'Herin & Newberry, Malden, for defendant-appellant.
Dalton, Treasure & Bullard, Kennett, for plaintiff-respondent.
Daizy Corrine Miller, wife of C. E. Miller, was killed in an accident on January 14, 1965, while she was riding in a Chevrolet owned and driven by Hazel Gales. The Chevrolet figured in a collision with an uninsured 1957 Pontiac owned and operated by Leon Hopper. Mrs. Gales, who also perished in the crash, was the named insured in a Special Package Automobile Policy defendant Plains Insurance Company had issued effective January 1, 1965, to July 1, 1965, and which was in force on the date of the casualty. The policy provided, among other things, $500 medical expense coverage (which included expenses for funeral service) and Protection Against Uninsured Motorists coverage with a limit of $10,000. After Mr. Miller's demand for payment under these two coverages was denied, he instituted the present action on March 30, 1965. The case was tried to the Circuit Court of Pemiscot County, Missouri, with jury waived, and Mr. Miller was awarded judgment of $10,000 on his claim under the uninsured motorists provision and $500 on count two of his petition relative to the medical expense coverage. After the appeal of the insurance company to this Court was perfected Mr. Miller died, and a stipulation in the nature of a motion to substitute Hester M. Miller, administratrix of the estate of C. E. Miller, deceased, as plaintiff-respondent was filed. We refer in this opinion to the parties as they were known in the trial court.
Affirmatively defendant asserted in its answer the policy 'was void ab initio' because Hazel Gales made untrue representations in her application which 'was a part of the policy of insurance,' that the 'representations contained in said application were material to the risk * * * and that this Defendant would not have undertaken said risk had it known that the said Hazel Gales had been involved in an accident and had been arrested for moving traffic violations, namely, hazardous driving.' No reply was filed to the answer.
In its 'Declaration of Law' the trial court found 'there was not sufficient material misrepresentation to Defendant Company to void its policy.'
The policy recites that 'in reliance upon the statements in the declarations made a part hereof,' the insurer agreed to insure Mrs. Gales, and 'by acceptance of this policy, the insured * * * agrees that the statements in the declarations and in any subsequent application accepted by the company which are offered as an inducement to the company to issue or continue this policy, are his agreements and representations, that this policy is issued and continued in reliance upon the truth of such representations and that this policy embodies all agreements existing between himself and the company or any of its agents relating to this insurance.' The application, admittedly signed by Hazel Gales on December 30, 1964, contained negative answers to inquiries if she had been involved in an accident in the past five years or had any moving traffic violations or any arrest of any kind during the past three years. Item 10 of the declarations contained in the policy asked if Mrs. Gales had 'been involved in an automobile accident while operating any private passenger type automobile, resulting in damage to any property including (her) own, or in bodily injury or death during the preceding 36 months? If 'Yes' complete the following.' The question was answered 'No.'
Except for the exhibits, the evidence in this case consisted of offers and stipulations ore tenus. The parties and the trial court proceeded on the theory the application for insurance was a part of the policy (as pleaded in the answer), which is a hypothesis not inconsistent with the contract provisions above noted. It was not until respondent's brief was filed that any reference was made to physical separation of the policy and the application. As subsequently noted and because of insured's policy agreements, this is of no consequence in this cause. The exhibit shows, and plaintiff's brief admitted, defendant actually received the application. No suggestion has ever been made as to the applicability of any statute to the matters in issue. Appellate courts are not prone to paddle beyond the perimeter of the puddle plied by the parties in the trial court and our review will be made on the same theories and assumptions heard by the trial judge. 1 What we say should not be construed as determining the effect of any statutory law which has been wholly disregarded by the litigants. Trantham v. Home Insurance Co. of New York, Mo.App., 137 S.W.2d 690, 693.
The parties stipulated that if defendant's agent was to testify he would state the questions on the application were not read to Hazel Gales and she did not read the form before signing it. There was no claim or suggestion of any fraud, mistake, or concealment by the agent. The exhibit indicates Mrs. Gales was thirty-eight years of age when she signed the application and was then gainfully employed as a supervisor. Her signature indicates some skill in penmanship, and no doubt has been cast upon her ability to read and comprehend the printed questions and the sometimes printed and sometimes written, but always legible, answers appearing on the application. In such circumstances Mrs. Gales was legally bound to know the contents of the application she signed, whether she read it or not (Minich v. M.F.A. Mutual Insurance Co., Mo.App., 325 S.W.2d 56, 58(3) and (5); Gooch v. Motors Insurance Co., Mo.App., 312 S.W.2d 605, 609 (2)), and this is not affected by the fact she relied upon or trusted the agent to prepare the application for the policy. Bearden v. Countryside Casualty Co., Mo.App., 352 S.W.2d 701, 706(4).
Contrary to both the application and the policy declarations, Mrs. Gales had an accident in Clay County, Arkansas, on December 13, 1962, when the automobile she was driving came into collision with an uninsured truck. She then was insured by Zurich Insurance Company and on January 24, 1964, sued Zurich in an Arkansas state court under the Family Protection Against Uninsured Motorist provision of the policy claiming $10,000 damages. The case was removed to the federal court and subsequently returned to the state tribunal where, on November 21, 1964, a judgment was entered dismissing the case without prejudice to Mrs. Gales. In some fashion unknown to us the matter was reinstated in the Arkansas court, for on February 18, 1965 (a month and four days after the death of Mrs. Gales), an order was made dismissing the case with prejudice. The order recites Mrs. Gales and Zurich had compromised and settled their differences. Zurich had paid Mrs. Gales $5,200 in settlement of her claim.
The evidence additionally reveals that following the Arkansas accident a summons was issued charging Mrs. Gales with hazardous driving. However, because Mrs. Gales was confined to a Piggott, Arkansas, hospital in a serious condition subsequent to the accident, the Arkansas state trooper failed to serve the summons before Mrs. Gales left the hospital and returned to Missouri. The justice of the peace at Piggott would have said his records revealed a plea of guilty had been entered to the charge of hazardous driving filed against Mrs. Gales, and although the justice had no personal recollection of the matter, a guilty plea would be recorded only if Mrs. Gales had personally pleaded guilty, if her attorney had appeared and entered such a plea, or if her bond had been forfeited.
The proposed testimony of the various witnesses was all subject to various objections. Suppositions of defendant's agent as to what 'he could have asked' Mrs. Gales when the application was prepared and signed and what he would have done had he known the truth were also offered by the plaintiff. Defendant likewise objected to tendered conclusions made by an unidentified agent for Zurich as to who he surmised was at fault in the Arkansas accident.
Without objection the parties stipulated defendant's underwriting manager would testify that at the time Mrs. Gales' application for insurance was received, it was the custom and business practice of the company to decline any risk where a person applying for coverage had been involved in an accident within the previous five years or had within three years prior to the application been arrested for any moving violation.
Plaintiff's arguments pointing to the fact defendant's agent had authority to and did, in fact, bind the coverage does not appear to reach any issue in this case. No claim is made to the contrary and the fact defendant seeks to avoid the contract on the grounds stated presupposes the agent had bound the coverage and effected a contract. The issue concerned, according to defendant's pleadings and the theory on which the case was tried, was whether or not defendant can now avoid the contract because of the alleged material misrepresentations made by Hazel Gales. We likewise summarily note and rule, contrary to plaintiff's contention, that defendant was not limited to ordinary cancellation of the policy to avoid liability where the claim is made it was void or voidable because of a material misrepresentation.
A material misrepresentation renders a transaction voidable as to the person making it and all who stand in no better position. Minich v. M.F.A. Mutual Insurance Co., Mo.App., 325 S.W.2d 56, 57(1); Restatement of Contracts § 476(1), p. 908; State Farm Mutual Auto. Insurance Co. v. West (DCMd.), 149 F.Supp....
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