Mills v. Cameron Mut. Ins. Co.

• Decision Date: 12 July 1984
• Docket Number: No. 13431,13431
• Citation: 674 S.W.2d 244
• Parties: Michael MILLS and Charlotte S. Mills, Respondents, v. CAMERON MUTUAL INSURANCE COMPANY, Appellant.
• Court: Missouri Court of Appeals

Page 244

674 S.W.2d 244

Michael MILLS and Charlotte S. Mills, Respondents, v.CAMERON MUTUAL INSURANCE COMPANY, Appellant.

No. 13431.

Missouri Court of Appeals,

Southern District,

Division Three.

July 12, 1984.

James E. Spain, Hyde, Purcell, Wilhoit, Spain, Edmundson & Merrell, Poplar Bluff for appellant.

Dennis P. Wilson, Parsons & Wilson, P.C., Dexter for respondents.

CROW, Presiding Judge.

Michael Mills and Charlotte S. Mills("plaintiffs") sought recovery under an insurance policy issued by Cameron Mutual Insurance Company("defendant") for damage to milo stored on one of plaintiffs' farms.In a two-count petition, plaintiffs prayed that the policy be reformed (Count I), and that they be awarded $20,000 damages (Count II).

Count I was tried without a jury, the court entering judgment reforming the policy as prayed.Defendant's appeal from that judgment was ordered dismissed as premature because Count II remained untried.Mills v. Cameron Mutual Insurance Co., 650 S.W.2d 716(Mo.App.1983).

Thereafter, Count II was tried without a jury.Plaintiffs were awarded damages of $11,577.02 and interest of $3,994.09.

Defendant appeals anew, insisting that the trial court erred in ordering reformation, inasmuch as plaintiffs' evidence failed to show that the parties intended the milo to be covered by the policy.According to defendant, plaintiffs failed to establish by clear and convincing evidence that the policy, as written, resulted from mutual mistake.Defendant does not dispute the amount of plaintiffs' damage, or the award of interest, if reformation is upheld.

In determining the sufficiency of the evidence, we are mindful that in a court-tried case the trial judge determines the credibility of the witnesses, and may accept or reject all, part or none of the testimony.Cusumano v. Outdoors Today, Inc., 608 S.W.2d 136, 139(Mo.App.1980).We are obliged to accept as true the evidence and permissible inferences which may be drawn favorable to the prevailing party, and to disregard the contradictory testimony.Id. at 139.

Examined in this light, the evidence reveals that in the summer of 1977, plaintiffMichael Mills("Mike") talked with Tom Houchins, defendant's agent in Bernie, Missouri, about obtaining insurance on a granary and several items of farm equipment.An application dated August 29, 1977, signed by Mike and Houchins, was sent by Houchins to defendant's home office, and a policy was issued to plaintiffs for the coverages requested.The inception date was September 2, 1977, and the term was one year.

At that time, plaintiffs had no grain in storage.Consequently, no coverage for grain was requested in the application, and none was provided in the policy.

That autumn, Mike harvested a crop of milo on plaintiffs' farm, storing it in a "bin" there.Afterward, he obtained a loan on the milo from the Commodity Credit Corporation through the Stoddard County office of the Agricultural Stabilization and Conservation Service.Ed Pulliam, the "head official" of the A.S.C.S. office, told plaintiffs that they should take out insurance on the grain for their own protection.

After receiving this advice, Mike went to see Houchins.Mike testified, "I told Tom that I had been to Bloomfield and taken a loan out on the grain and that Ed had advised us to insure the grain ourselves, and I told him what I had, and he wrote a policy on it."

Later in his testimony, Mike was questioned by the trial court about the conversation with Houchins:

"Q.As best you can remember, what were the words you used when you talked to the agent regarding covering that grain?

A.I told Mr. Houchins that Mr. Pulliam had suggested that we get insurance to cover the grain, and so that was the reason why I was there, to insure the grain.

Q.Did you say anything else?

A.Well, I told him it was under the government loan program, and that was all."

Houchins sent a memorandum, dated October 20, 1977, to defendant's home office.The memorandum stated: "Please add $10,000 of Milo in storage in Metal grain bins--11 23N 9E."¹

Defendant issued an endorsement to be attached to plaintiffs' policy.The endorsement, for which defendant charged an additional premium, amended the policy effective October 20, 1977, by adding coverage for "10,000 milo in grain bins."Mike received the endorsement some time after it was issued.

In August, 1978, plaintiffs purchased a farm near Dexter, on which a dwelling house was situated.Mike went to see Houchins to obtain insurance on it.Mike testified he told Houchins, "That everything was the same, just include the house and the farm on the policy."Plaintiffs still had the grain "under government loan" at that time, but Mike did not discuss that with Houchins.

An application dated August 14, 1978, signed by Mike and Houchins, was filled out and sent by Houchins to defendant's home office.Items listed on the application under "COVERAGE D--FARM PERSONAL PROPERTY--SCHEDULED COVERAGE" included the following:

                   "PROPERTY                         LIMIT OF LIABILITY
                     Grain (Specify) milo                                 $10,000"
                  Defendant issued a new policy ("the 1978       made part of, the 1978
                policy") replacing the earlier policy.  The       policy was one captioned
                1978 policy had an inception date of August      "SECTION 1--COVERAGE
                14,1978, and was for a period of one year.       D--SCHEDULED FARM PERSONAL
                Among the endorsements attached to, and          PROPERTY."  It provided, in
                                pertinent part
                    "Item       Limit of
                     No.        Liability        Premium                  Schedule
                      1.        $10,000            47.00         on Grain Milo
                      2.        $______          _______         on Grain under Government
                                                                 Loan (Type) ______________
                                                                 located in _______________"
                

In September or October, 1978, anticipating the harvest of another milo crop, Mike bought two additional grain bins.After harvest, he put the milo in those bins and obtained a loan on it from the Commodity Credit Corporation.Thereafter, Mike went to see Houchins, telling him to write a policy covering this grain just as he had the other grain.On cross-examination, Mike admitted he did not tell Houchins that the newly harvested milo was "in a government loan."Later, however, upon questioning by the trial court, Mike testified:

"Q.But you did say in '78, 'I want to add the milo I have harvested to the policy just the same as the other milo covered', is that correct?

A.Yes, sir.

Q.Now, would you give me as near as you can recall the exact words you used?

A.In '78?

Q.Yes, sir.

A.I just told Tom I had been up to the A.S.C.S. and had them measured, and I wanted coverage to protect the grain that I had, I wanted them written the same way as we had written the policy in 1977.

* * *

Q.And when you talked to the agent for the insurance company, do I understand you to say that you told him a representative from the A.S.C.S. had been out and measured the grain?

A.Yes, sir."

Defendant, acting on a memorandum from Houchins' office, issued an endorsement to the 1978 policy, effective October 31, 1978, providing, in pertinent part: "Increase: $30,000 coverage on Grain--Milo or to a new total of $40,000."An additional premium was charged by defendant, and paid by plaintiffs.

On or about May 26, 1979, the milo was damaged by one of the perils insured against.Defendant refused to indemnify plaintiffs for the loss, asserting that the 1978 policy (including the endorsement of October 31, 1978) did not insure "grain under government loan."This suit followed.

Defendant, in explanation of its denial of plaintiffs' claim, presented the testimony of one of its underwriters, Paul William Watson.According to Watson, when defendant's home office received the various documents sent by Houchins regarding plaintiffs' insurance during 1977 and 1978, they were routed to him for examination.Watson, relying on the information in those documents, approved the policies and endorsements issued by defendant.Watson testified that nothing Houchins sent revealed that plaintiffs' milo was subject to a government loan.Watson added that defendant, as a matter of underwriting policy, had never accepted coverage on grain in a federal government loan program during his seven years in defendant's employ.

However, in response to a question by the trial court, Watson conceded that so far as he knew, Houchins, prior to the loss of plaintiffs' milo, had never been notified that he should not accept applications for insurance on grain under a government loan.

Houchins confirmed this, admitting that when he accepted plaintiffs' applications for insurance in 1977 and 1978, he was under the impression that defendant would insure grain under a government loan.Houchins testified he had never been told otherwise by any representative of defendant.

The trial court, in adjudicating Count I, decreed that the 1978 policy be reformed as follows:

" 'Coverage D--Scheduled Farm Personal Property' is reformed to show coverage under ItemNo. 2 for $40,000 on Grain under government loan, milo, located in Stoddard County, Missouri; rather than showing coverage under ItemNo. 1 of said Coverage D."

As noted at the outset, it is that segment of the judgment about which defendant complains on this appeal.

The trial court made no findings of fact or conclusions of law, none being requested.In such circumstances, all fact issues are considered as having been found in accordance with the result reached.Rule 73.01(a)(2),Missouri Rules of Civil Procedure(14th ed.1983);Hazlett v. Clark, 652 S.W.2d 135, 136(Mo.App.1983).The scope of our review is established by Murphy v. Carron, 536 S.W.2d 30, 32(Mo. banc 1976).The judgment of the trial court will be sustained unless there is no substantial evidence to support it,...