Pool v. FARM BUREAU TOWN & COUNTRY INS.
| Decision Date | 29 June 2010 |
| Docket Number | No. SD 29823.,SD 29823. |
| Citation | 311 S.W.3d 895 |
| Parties | R. Ross POOL and Tammie Pool, Plaintiffs-Appellants, v. FARM BUREAU TOWN & COUNTRY INSURANCE COMPANY OF MISSOURI, Defendant-Respondent. |
| Court | Missouri Court of Appeals |
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Matthew J. Devoti, St. Louis, MO, for Appellants.
Patrick A. Bousquet, St. Louis, MO, for Respondent.
Ronnie R. Pool ("Ross"1) and Tammie Pool ("Tammie") (collectively, "Plaintiffs"), husband and wife, sued their insurance company, Farm Bureau Town & Country Insurance Company of Missouri ("Farm Bureau"), over its handling of a property damage claim. Plaintiffs asserted claims based on breach of contract (Count I), breach of fiduciary duty (Count II), and fraud (Count III). The trial court entered summary judgment in favor of Farm Bureau on Plaintiffs' breach of fiduciary duty and fraud claims. Plaintiffs' remaining contract claim was tried to a jury. The jury rendered a verdict in favor of Farm Bureau, and the trial court entered judgment in accordance with that verdict. When the trial court denied Plaintiffs' Motion for New Trial, this appeal timely followed.
Plaintiffs allege the trial court committed reversible error by: (1) permitting Tammie to be cross-examined with a facsimile copy of a document entitled Construction Authorization ("the Construction Authorization"); (2) receiving the Construction Authorization into evidence; (3) submitting a jury instruction that did not require the jury to find all of the ultimate facts necessary to establish Farm Bureau's affirmative defense of accord and satisfaction; and (4) granting summary judgment to Farm Bureau on Plaintiffs' breach of fiduciary duty claim.2 Finding merit in Plaintiffs' instructional error claim, we affirm the trial court's judgment in favor of Farm Bureau on Plaintiffs' breach of fiduciary duty claim, reverse the judgment in favor of Farm Bureau on Plaintiffs' contract claim, and remand the matter for a new trial on Plaintiffs' contract claim.
In February of 2003, a water pipe inside Plaintiffs' home burst. The released water traveled through the wall, under the floor, and eventually pooled in the crawlspace beneath the house. That water ultimately warped the center beam supporting the floor joists and caused the roof and the walls in the kitchen and bedroom to settle. At the time of these events, Plaintiffs had in effect a homeowners' insurance policy acquired from Farm Bureau that provided coverage for damage to the home incurred as a result of sudden, accidental and direct loss as well as coverage for any personal property that was thereby physically destroyed or rendered unusable. In the event of such a loss, the policy provided that "at our option, we will pay to you actual cost of the damage or the cost of repairs so that your property is returned to the same condition it was prior to the loss." The term "you" was defined by the policy as "the named insured." Ross was listed in the policy as the named insured.
Ross was deployed in Iraq as an active member of the United States Marine Corps when the pipe burst. When Tammie contacted Farm Bureau to report the water damage, the agent she spoke with on the telephone informed her that only Ross, as the named insured, could initiate a claim. Farm Bureau did not open a property loss claim for Plaintiffs until nearly two months after the pipe burst.
Once Farm Bureau opened the claim, Tammie began searching for a contractor to make the necessary repairs. Mark Fuchs ("Fuchs") was the claims representative Farm Bureau assigned to handle Plaintiffs' claim. Fuchs informed Tammie "that the choice of contractor was hers and hers alone," and that he had no preference as to whom she chose. Fuchs's supervisor, Bruce Bruemmer, also stated that it was the homeowner's decision as to who to hire to fix any damages incurred. Tammie testified that she obtained two estimates, one from Good Construction and another from Commercial Installations. Fuchs rejected the $31,300 Commercial Installations estimate as too high or lacking sufficient detail and testified that he never received an estimate from Good Construction. Fuchs attempted to speak with a representative from Commercial Installations but had been unable to reach him.
During this same time period, Fuchs had become acquainted with Anthony "Tony" Breedlove ("Breedlove" or "Tony") of Mastercraft Construction ("Mastercraft") when Breedlove made a cold call on Fuchs to solicit business from Farm Bureau. Fuchs testified that Breedlove had a computer program that would write a detailed estimate, so Fuchs contacted Breedlove to ask him to do an estimate on Plaintiffs' home. Breedlove testified that he had received such a call from Fuchs informing him that Plaintiffs were having a difficult time finding a contractor and asking if he would be "willing to go down there." Breedlove agreed to go to Plaintiffs' home to prepare an estimate.
Breedlove testified that the first time he went to Plaintiffs' home, he had Tammie sign the Construction Authorization before he began working on his estimate. Breedlove testified that the Construction Authorization was a form document that authorized Mastercraft to work with Farm Bureau and to begin the repair work on Plaintiffs' home. It also explained that Mastercraft was not employed by or affiliated with Farm Bureau in any way and authorized Farm Bureau to add Mastercraft as an additional payee on any checks issued by Farm Bureau for repairs made to Plaintiffs' home. This was the standard authorization he had used with all of his clients. Breedlove testified that he then faxed a copy of the Construction Authorization to Farm Bureau "to allow them to put our names on the checks." Fuchs also testified that Mastercraft was placed on the checks Farm Bureau issued at "Tammie's request." Tammie testified that the signature on the Construction Authorization appeared to be hers.
Farm Bureau approved the estimate given by Mastercraft and eventually issued three checks to pay for the repairs made to Plaintiffs' home. Each of those checks was made payable to "Ronnie R. Pool and Mastercraft Construction, Tony." Tammie testified that she had asked Fuchs to make the checks payable solely to her 4 Tammie testified that she did not want Mastercraft's name on the checks but that Fuchs told her it was "company policy" to put the name of the policyholder and the contractor on the checks.
Tammie allowed Mastercraft to begin working on her home after she received a claim check with both names on it. As to the first joint check issued by Farm Bureau to Ross and Mastercraft, Tammie and Breedlove both signed it, and Tammie took it to the bank and had it converted to a cashier's check. Tammie put $2,000 of the check's proceeds in her bank account, giving the rest to Breedlove/Mastercraft. When Breedlove received the next two joint checks from Fuchs, he picked up Tammie, whose car was not operable, and they went to the bank together to cash them. Tammie endorsed the second check (in the amount of $15,688.70) and gave it to Breedlove. Breedlove then had Tammie keep the third check (in the amount of $4,584.80), telling her it was "insurance" that he would finish the job. At no time during this process did Tammie indicate that she did not wish to hire Mastercraft as the contractor. Tammie testified, however, that she believed she had no choice but to permit Breedlove/Mastercraft to work on her home because "he was on the check."
Plaintiffs' contract claim against Farm Bureau included an allegation that Farm Bureau's failure to pay their claim was vexatious, not because Farm Bureau failed to pay an agreed-upon amount to repair the damages to Plaintiffs' home, but because Farm Bureau failed to comply with its policy language that indicated payment would be made to the insured alone, not to the insured and the contractor. In defending that portion of Plaintiffs' claim, Farm Bureau questioned Tammie about the Construction Authorization she had apparently signed. After Tammie admitted that the signature on the Construction Authorization appeared to be hers, the trial court also received the document into evidence over Plaintiffs' "best evidence" objection. The Construction Authorization received into evidence was the document Farm Bureau had received via facsimile transmission from Breedlove. Breedlove testified that the original Construction Authorization signed by Tammie was no longer available, as his file relating to the work he did for Plaintiffs had been destroyed.
In total, Mastercraft received more than $22,000 of the $27,092.27 paid by Farm Bureau on Plaintiffs' claim. Within one month of Breedlove receiving the second check, Mastercraft stopped work on Plaintiffs' home, which is no longer habitable. Tammie testified that she did not use any of the money she had retained from the checks issued by Farm Bureau to prevent any further deterioration to the home. Tammie also did not alert anyone at Farm Bureau that Breedlove had walked off the job until at least five months after he had done so.
Plaintiffs' first point alleges the trial court abused its discretion by allowing Farm Bureau to cross-examine Tammie with the Construction Authorization and then receiving it into evidence because "Farm Bureau failed to establish an adequate foundation for admission of the Construction Authorization, in that the Construction Authorization is a copy of a facsimile which Farm Bureau failed to demonstrate was trustworthy and Farm Bureau failed to demonstrate was a true copy of a writing that once existed." P...
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