Parry v. State Farm Mut. Auto. Ins. Co., 39269

• Decision Date: 11 April 1974
• Docket Number: No. 39269,39269
• Parties: Donald PARRY and Virginia Parry, Appellees, Cross-Appellants, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, a Corporation, and Fay Smith, Appellants, Cross-Appellees.
• Court: Nebraska Supreme Court

Page 875

216 N.W.2d 875

191 Neb. 628

Donald PARRY and Virginia Parry, Appellees, Cross-Appellants, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, a Corporation, and Fay Smith, Appellants, Cross-Appellees.

No. 39269.

Supreme Court of Nebraska.

April 11, 1974.

Syllabus by the Court

1. In appeals from the District Court to the Supreme Court in suits in equity, it is the duty of this court to retry the issues of fact involved upon the evidence in the record and upon such trial de novo reach an independent conclusion.

2. When a soliciting agent of an insurance company and the insured mutually agree upon the terms and conditions of the insurance contract, and the policy, later issued by the company, omits one of the essential elements of the contract, which is not discovered by the insured until after a loss occurs, he may then have the policy reformed so as to express the real agreement of the parties.

3. In an action for reformation of a written instrument, the burden rests upon the moving party of overcoming the strong presumption arising from the terms of the written instrument. To sustain that burden of proof, evidence that is plain and convincing beyond reasonable controversy is required. A mere preponderance of the evidence is not sufficient.

Ray C. Simmons, Fremont, for appellants.

Winkle & Allphin, Columbus, for appellees.

Heard before WHITE, C.J., SPENCER, BOSLAUGH, McCOWN, NEWTON, and CLINTON, JJ., and BUCKLEY, District Judge.

McCOWN, Justice.

This is an action for reformation of an automobile insurance policy by the addition of a provision for $5,000 death indemnity coverage and the removal of a limitation of $1,000 for funeral expenses under the medical coverage provisions. The trial court found generally for the plaintiffs on the death indemnity coverage issue and against them on the funeral expense limitation issue, and entered judgment for $5,000, plus interest and attorney's fees. The defendants have appealed and plaintiffs have cross-appealed.

The plaintiffs, Donald and Virginia Parry, lived on a farm near Newman Grove, Nebraska. They were the parents of three daughters, all of whom were single at the time relevant here. On February 26, 1972, the plaintiffs had five motor vehicles, all of which were insured by the defendant, State Farm Mutual Automobile Insurance Company, under five separate policies of insurance, each with a different renewal date and on each of which the premiums were payable semiannually. The plaintiffs had carried all their motor vehicle insurance with the defendant insurance company for a period of approximately 10 years and relied upon the agent to provide coverage. There were three passenger cars, one pickup, and one truck insured under the five policies.

The plaintiffs, Donald and Virginia Parry, were the named insureds in a policy covering a 1968 Dodge automobile, and were also named as the persons insured for $5,000 each under coverage S (Accidental death benefit coverage). Only the plaintiffs' names appeared on that policy.

The insurance policy on a 1967 Cougar automobile named the plaintiff, Donald Parry, and the two older daughters, Ann and Nancy, as the three named insureds. Ann and Nancy were also named as the two persons insured for $5,000 each under coverage S on that policy.

The insurance policy covering a 1966 Dodge Charger designated the plaintiff, Donald Parry, and his oldest daughter, Ann, as the named insureds and did not name any individual as insured under coverage S.

The insurance policy covering a Ford truck designated the plaintiffs, Donald Parry and Virginia Parry, as the named insureds and did not name any persons as insured under coverage S. The insurance policy on the pickup truck was not introduced into evidence but is assumed to carry the same coverage as the truck.

The coverage for accidental death benefits (coverage S) is supplementary coverage which must be specifically requested. Persons insured under that coverage are only those specifically named, and only for the amounts specified for each person. A separate additional premium is paid for each person named under the coverage. Persons insured under coverage S and the amount of insurance for each is shown separately on the first page of the policy.

The plaintiff, Donald Parry, was a named insured on all five of the policies. The plaintiff, Virginia Parry, was a named insured under three of them. The plaintiffs' daughter, Ann was a named insured on two policies and the plaintiffs' daughter, Nancy, was a named insured on one policy. The plaintiffs, Donald and Virginia Parry, were named as persons insured under coverage S on one policy. Ann and Nancy, the two older daughters, were named as persons insured under coverage S on another policy. The remaining three policies did not include any S coverage for anyone.

Plaintiffs had notified the defendants at the time their daughter, Ann, became 16 and began to drive in 1966, and again when Nancy became 16 and began to drive in 1967. They were not named in any policy however until May 8, 1969. On that date, both were designated as named insureds, and both named as persons insured under coverage S in the policy covering the 1967 Cougar.

The plaintiffs' youngest daughter, Connie, became 16 years old on March 12 1971. About 6 months before that date when Connie obtained her learner's permit, her mother, Virginia Parry, testified that she called the insurance agent and told him that Connie would be driving 'our car.' Plaintiffs' evidence is that at about the time of Connie's birthday in the spring of 1971, her father, the plaintiff, Donald Parry, called the defendant insurance agent by telephone and 'just told him I wanted her put on the policy like the rest of us, added on like the rest of us.' He testified that the accidental death benefit 'was not even mentioned. I just told him I wanted her added on like the rest of us.' Plaintiff, Donald Parry, testified that he did not specify which car or cars he wanted Connie added on, nor which car she would be driving. According to plaintiffs' testimony, the defendant insurance agent came to their home a few days thereafter and...