Poteete v. MFA Mut. Ins. Co.
| Decision Date | 17 September 1974 |
| Docket Number | No. 46804,46804 |
| Citation | 1974 OK 110,527 P.2d 18 |
| Parties | Herb POTEETE and LaDema Poteete, Appellees, v. MFA MUTUAL INSURANCE COMPANY, and Warren D. Poteete, Appellants. |
| Court | Oklahoma Supreme Court |
Kenneth W. Lackey and Fred P. Wendel, Eufaula, for appellees.
Bonds, Matthews, Bonds & Cartwright by Faye Bancroft, Muskogee, for appellants.
This action was brought by appellees, Herb and LaDema Poteete, (Poteetes) against appellants, MFA Mutual Insurance Company and Warren D. Poteete, in which the Poteetes claimed a right to recover under a purported homeowner's insurance contract.
The damages sustained were destruction of the Poteete's home as a result of an explosion and fire. The case was tried before a jury and a verdict was returned in their favor. Appellants appeal the jury verdict, and from the decision of the Trial Court in overruling their motion for a new trial.
On December 20, 1969, Warren D. Poteete, a general agent of MFA Insurance Company (agent), and an Uncle of the plaintiff, Herb Poteete, took an application from the plaintiffs for a policy of fire insurance. After this insurance policy was issued, Poteetes made improvements on their property and were advised by the agent, that it was possible that the property would now qualify for a homeowner's policy. On February 28, 1970, the agent, took an application from the plaintiffs for a homeowner's insurance policy. He made an inspection of the insured premises, and solicited from the Poteetes a contract whereby MFA would issue a homeowner's policy in the amount of $8,000.00 for the dwelling and $4,000.00 for the contents.
MFA admits liability on the first insurance policy, but denies liability on the second. The application for the homeowner's policy which was signed by the agent and the Poteetes contained the following binder:
MFA contends the above binder is ineffective because there was no meeting of the minds on the essential terms to effect a binding contract as set out in the case of Glens Falls Insurance v. Johnson, 403 P.2d 229, 233 (Okl.1965).
In the Glens Falls case we held at page 233, that before there can be a valid contract of insurance there must be an actual application or offer to purchase insurance and an actual acceptance of the offer, including therein the following elements:
MFA argues that most of these essential elements were not proven and that the evidence shows the application for insurance and the binder thereon was subject to their approval upon review of the application. They point out their agent testified that he did not bind the policy; and that this testimony was corroborated by a company rule which prohibited their agents from issuing binders on policies for themselves or relatives unless the agent secures binder permission from some authorized person of the company. While this may have been a company policy, a violation of it by an agent does not invalidate the binder.
The Poteetes testified they were advised by the agent that they had a homeowners policy in effect on February 28, 1970. The only contradiction to this testimony was from the agent when he said he did not intend to bind the policy. If so, it is evident this intent was not conveyed to the Poteetes. The agent even acknowledged that they might not have understood his intention to submit the application on approval. In fact, all of his outward expression to the Poteetes indicated the binder was effective on February 28, 1970. Herb Poteetes' brother testified the agent told LaDema Poteete when she returned home on February 28, 1970, 'Well, we got you fixed up here with a homeowners policy.'
MFA further complains that the Poteetes did not introduce into evidence the policy and the application and binder did not specify the risks, coverage or terms of the policy, so there was no meeting of the minds, nor was there any evidence presented so the jury could determine the extent of the coverage in order to assess damages.
We find no merit in this contention as the amount of the coverage was definitely understood by both parties to be $8,000.00 for the house and $4,000.00 for the contents. Also, the company's policy form number was specified in the application. In this instance since the Poteetes never did receive a copy of their policy, it was not incumbent upon them to obtain the policy by subpoena duces tecum or by some other discovery procedure as suggested by MFA. If the allegations of the Poteetes were not covered uner the terms of this policy, then MFA could have introduced the policy in evidence for a complete defense.
MFA further argues that the binder itself expressly specifies that it is only effective when signed by an authorized agent and if the effective date and time of the binder is inserted. They argue the absence of an effective date makes the binder ineffective and unenforceable. The fact the agent omitted the effective date does not invalidate the binder if the intent of the parties was otherwise.
There was no dispute that Warren Poteete was the general agent of MFA with authority to issue the binder orally or in writing. Title 36 O.S.1971 § 3622(A) provides:
'Binders or other contracts for temporary insurance may be made orally or in writing, and shall be deemed to include all the usual terms of the policy as to which the binder was given together with such applicable endorsements as are designated in the binder, except as superseded by the clear and express terms of the binder.'
Inherent in the jury verdict is the finding that the Poteetes and the agent of MFA consummated a contract for a homeowner's policy effective February 28, 1970. By their verdict, they must have concluded that the agent inadvertently omitted the effective date from the binder or that the parties had orally agreed the effective date would begin February 28, 1970. In either event, it was a binding contract.
MFA had originally denied the claim of the Poteetes for the reason that no premium accompanied the application. The Poteetes...
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