Roller v. Am. Modern Home Ins. Co.
| Decision Date | 15 December 2015 |
| Docket Number | WD 77611 |
| Parties | James Roller and Ruth Roller, Appellants, v. American Modern Home Insurance Co., Respondent. |
| Court | Missouri Court of Appeals |
Bruce Brown, Kearney, MO, Counsel for Appellants.
Corey Kraushaar, St. Louis, MO, Counsel for Respondent.
The Rollers appeal the trial court's declaratory judgment denying coverage for property damage to the Rollers' garage incurred by a fire started by Mr. Roller in a suicide attempt.
American Modern Home Insurance Co. (AMHIC) issued a manufactured homeowners policy to Mr. Roller. As a part of the coverage, AMHIC agreed to insure the residence "against risk of direct, sudden and accidental physical loss to covered property, unless the loss is excluded under SECTION I–EXCLUSIONS."
In December 2007, Mr. Roller set fire to the garage of his residence in an attempt to commit suicide. The fire caused damage to the "all metal garage" and various personal property contained within, resulting in a total loss. After starting the fire, Mr. Roller began suffering from the smoke and fumes, causing him to change his mind and exit the garage. Mr. Roller woke up his wife and informed her that the garage was on fire. Mrs. Roller called 911. Members of the KAW and Lake Viking Fire Departments arrived shortly thereafter, but determined the fire was "too strong to fight" and allowed it to burn. When Larry Todd Watson, a deputy of the Daviess County Sheriff's Department, arrived at the scene, Mr. Roller admitted that he set the garage on fire in an attempt to kill himself. Deputy Watson then took Mr. Roller into protective custody and transported him to Daviess/DeKalb County Regional Jail for issuance of a 96–Hour Mental Health Detention Order from the Circuit Court of Daviess County. After the commitment was issued, Mr. Roller was transported to Heartland Hospital in St. Joseph, Missouri.
Two days after the fire, Mrs. Roller notified insurance broker Ocker Insurance, about the fire and property damage. That same day, AMHIC representative, Joe Groh, contacted Mrs. Roller to explain the coverage and claim process. AMHIC then employed Great Southern Adjusting Inc. (Great Southern) to inspect the property, and its representative, Joe Holland, contacted Mrs. Roller to arrange for an inspection of the damaged property. During the investigation, Mr. Holland took pictures of the property; recorded Mrs. Roller's alleged statements; and prepared a report for AMHIC and a "Personal Property Inventory Sheet" identifying the destroyed personal property, stating the estimated replacement cost of $21,240.00. The report also stated that Mr. Holland was unable to get a copy of the fire report from the voluntary fire department; the loss, however, appeared to be direct and sudden and he was unsure if it could be considered accidental. Upon completion, the report was sent to AMHIC where it was directed to Mr. Ted Parrott, an AMHIC claims adjuster.
After receipt of the report, Mr. Parrott contacted Mrs. Roller to advise her that he needed to conduct further investigation, including whether the "Innocent Spouse Doctrine" was applicable. He also informed her "that there was a possibility that [AMHIC] could make payment for the out-building of the adjacent structure in the amount of $10,500.00." A few weeks later, Mr. Parrott again contacted Mrs. Roller explaining that AMHIC attorney, Robert Cockerham, would contact her to secure a formal statement about the loss and that the previously discussed payment would not be mailed out.
In March 2008, AMHIC sent a letter to the Rollers advising them that the investigation of their claim was ongoing and advising them of the conditions agreed upon regarding cooperation with the investigation. In this letter, AMHIC reserved all rights and defenses under the insurance contract and Missouri law.
From June 2008 until February 2009, AMHIC repeatedly requested examinations under oath and various documents. In July 2008, through counsel, the Rollers requested a postponement of the examinations under oath and for equal good faith and cooperation from AMHIC in the investigative process. Later in July 2008, the Rollers objected to some AMHIC investigation requests and requested documents from AMHIC. The Rollers failed to submit to examinations under oath and produce the requested documents. AMHIC failed to produce all documents requested.
In February 2009, the Rollers filed a declaratory judgment action against AMHIC in Clay County, Missouri. AMHIC removed the case to federal court based on diversity jurisdiction, but it was remanded, and the answer and counterclaim were filed in Clay County in May 2009. After a bench trial on March 10, 2014, the trial court entered judgment for AMHIC on all counts. This appeal follows.
"This Court reviews a declaratory judgment action ‘the same as in any other court-tried case.’ " Arbors at Sugar Creek Homeowners Ass'n v. Jefferson Bank & Trust Co., 464 S.W.3d 177, 183 (Mo. banc 2015)
. "The circuit court's judgment will be affirmed ‘unless there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law.’ " Id."We defer to the trial court's determinations of credibility and view the evidence and the inferences that may be drawn therefrom in the light most favorable to the judgment." Schubert v. Schubert, 366 S.W.3d 55, 62 (Mo.App. E.D.2012). "[W]here the findings of fact are derived from the pleadings, stipulations, exhibits and depositions, or where the evidence is not controverted, no deference is due the trial court's judgment." Shelter Mut. Ins. Co. v. Crunk, 102 S.W.3d 560, 561–62 (Mo.App. S.D.2003). "We review questions of law de novo. " Clark v. Francis , 422 S.W.3d 369, 377 (Mo.App. W.D.2013).
In their first point, Mr. and Mrs. Roller argue that the trial court erred in ruling that AMHIC did not forfeit its right to deny coverage of their claim because AMHIC agreed to pay the policy limits of $10,500.00 without validly voiding the agreement by pleading or proving fraud, misrepresentation, mistake, or other unfair dealing. The Rollers assert that by stating that it "would be making a payment of the claim as to the garage," AMHIC accepted coverage on this claim and agreed to make a payment of $10,500.00, resulting in a binding contract. They further assert that AMHIC revoked or rescinded this agreement and "has never made any payment of the claim as to the garage." We disagree.
To require the pleading or proving of fraud, misrepresentation, mistake, or other unfair dealing to validly void an agreement, a valid agreement must exist. Under Missouri law, "[t]he essential elements of a contract are ‘ "offer, acceptance, and bargained for consideration." ’ " Clemmons v. Kansas City Chiefs Football Club, Inc. , 397 S.W.3d 503, 506 (Mo.App. W.D.2013)
, (quoting Johnson v. McDonnell Douglas Corp., 745 S.W.2d 661, 662 (Mo. banc 1988) ). Consideration "consists either of a promise (to do or refrain from doing something) or the transfer or giving up of something of value to the other party." Morrow v. Hallmark Cards, Inc., 273 S.W.3d 15, 25 (Mo.App. W.D.2008).
Mr. Parrott's unilateral statement over the phone to Mrs. Roller does not create a valid contract because the payment would not be given in consideration for anything. See Pierson v. Kirkpatrick, 357 S.W.3d 293, 299 (Mo.App. S.D.2012)
(). The Rollers refer the court to Stahly Cartage Co. v. State Farm Mutual Automobile Insurance Co., 475 S.W.2d 438 (Mo.App.1971)
, to support their argument that Mr. Parrott's statement constituted a valid agreement. In Stahly, however, the promise of payment was made in exchange for a signed release. Id. at 440. Nothing similar occurred here. Instead, Mr. Parrott's statement advising Mrs. Roller of the possibility of payment was not made in exchange for a completed action or a promise of one. Therefore, the communication between Mr. Parrott and Mrs. Roller does not constitute a valid contract comprising all essential elements under Missouri law, and that AMHIC did not plead fraud, misrepresentation, or other unfair dealing is irrelevant in resolving this issue.
In addition, the trial court was entitled to find that Mr. Parrott's statement was not sufficiently definite to support creation of an oral contract. Mr. Parrott testified that he told Mrs. Roller that, because of the existence of the "innocent spouse doctrine" in Missouri, "there was a possibility that we could make payment for the out-building." Mr. Parrott specifically denied that he told Mrs. Roller that AMHIC "was accepting this claim and making a payment"; he testified that "[i]f I'm guaranteeing that I'm going to make a payment, typically I'm writing the check right then." Mr. Parrott's statement that "there was a possibility" that AMHIC would pay the claim for damage to the garage is not sufficiently definite to support an oral contract. " ‘ "An offer must be so definite in its terms, or require such definite terms in the acceptance, that the promises and performances to be rendered by each party are reasonably certain." ’ " Brown v. Donham, 900 S.W.2d 630, 633 (Mo. banc 1995)
; see also, e.g., State v. Nationwide Life Ins. Co., 340 S.W.3d 161, 189 (Mo.App. W.D.2011) ().
Furthermore, AMHIC did not, as asserted by the Rollers, forfeit its right to deny liability on their claim under the insurance policy....
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