Ryann Spencer Gp. v. Assurance Co., America

• Decision Date: 23 September 2008
• Docket Number: No. ED 90545.,ED 90545.
• Citation: 275 S.W.3d 284
• Parties: RYANN SPENCER GROUP, INC., Plaintiff/Appellant, v. ASSURANCE COMPANY OF AMERICA, et al., Defendants/Respondents.
• Court: Missouri Court of Appeals

275 S.W.3d 284

RYANN SPENCER GROUP, INC., Plaintiff/Appellant, v.ASSURANCE COMPANY OF AMERICA, et al., Defendants/Respondents.

No. ED 90545.

Missouri Court of Appeals, Eastern District, Division Three.

September 23, 2008.

Motion for Rehearing and/or Transfer to Supreme Court Denied November 13, 2008.

Application for Transfer Denied February 24, 2009.

Arthur G. Muegler, Jr., Saint Louis, MO, for Plaintiff/Appellant.

David Patrick Bub, Saint Louis, MO, Douglas James McCarty, Edwardsville, IL, for Defendants/Respondents.

SHERRI B. SULLIVAN, J.

Introduction

Ryann Spencer Group, Inc.(Appellant) appeals from the trial court's October 9, 2007 Judgment making final its August 22, 2007 Order dismissing with prejudice Counts III and IV of Appellant's petition against Assurance Company of America (Assurance) and Charles L. Crane Agency Company(Crane)(collectively Respondents).We affirm.

Factual and Procedural Background

Appellant solicited Crane, an insurance broker, to procure a policy of insurance for Appellant's property located at 4211-4217 Beck in the City of St. Louis(property), to provide coverage for risk of loss by fire and other perils in an amount equal to the "full fair market value" of said property.Crane procured a "Builders Risk" policy of insurance from Assurance, an insurance company, providing coverage for risk of loss by fire and other perils to the property.Assurance issued the policy of insurance (Policy) to Appellant, providing $500,000 coverage limits for 4211 Beck and $500,000 coverage limits for 4217 Beck, for a total of $1,000,000 in coverage for the total property.The Policy became effective December 29, 2004, and remained in effect for one year.Appellant renewed the Policy under the same terms and for the same coverage in December 2005, for coverage effective from December 29, 2005, until December 29, 2006.On July 13, 2006, a fire damaged the property.Appellant notified Assurance of its claim on July 14, 2006.

On August 15, 2006, Appellant filed its Petition against Respondents, alleging in Count I, breach of contract against Assurance by not paying Appellant's claim for damages resulting from a sudden fire casualty loss; Count II, vexatious refusal to pay under Section 375.420¹ against Assurance; Count III, intentional misrepresentation (fraud) against Assurance and Crane; Count IV, negligent misrepresentation against Assurance and Crane; and Count V, negligence against Crane.On August 22, 2007, the trial court dismissed with prejudice Counts III and IV of the Petition.On October 9, 2007, Appellant voluntarily dismissed the remaining Counts I, II and V.On October 10, 2007, the trial court entered its Judgment in favor of Respondents, making final and incorporating by reference its August 22, 2007 Order dismissing Counts III and IV.This appeal follows.

Points Relied On

In its first point, Appellant maintains that the trial court erred in dismissing Counts III and IV of its Petition, against Assurance, because they sufficiently stated the elements of fraud and negligent misrepresentation against Assurance.Appellant also claims that Section 375.420 does not preempt its negligent misrepresentation claim against Assurance under Overcast v. Billings Mutual Ins. Co.,11 S.W.3d 62(Mo.banc 2000), because that claim is not dependent upon the elements of its breach of contract claim.

In its second point, Appellant assets that the trial court erred in dismissing Counts III and IV of its Petition, against Crane, because they sufficiently stated the elements of fraud and negligent misrepresentation against Crane.

Standard of Review

Appellate review of a trial court's order granting a motion to dismiss is de novo.Summer Chase Second Addition Subdivision Homeowners Ass'n v. Taylor-Morley, Inc.,146 S.W.3d 411, 415(Mo. App. E.D.2004).We will affirm the dismissal if any ground supports the motion to dismiss, regardless of whether or not the trial court relied on that ground.Id.When reviewing the dismissal, we examine the pleadings, allowing the broadest intendment, treating all alleged facts as true, and construing the allegations in favor of the pleader, to determine whether they involve principles of substantive law.Id.In making our determination, we may not address the merits of the case or consider evidence outside the pleadings.Weems v. Montgomery,126 S.W.3d 479, 484(Mo. App. W.D.2004).

Discussion

The elements of a claim for fraud are: (1) a representation, (2) its falsity at the time made, (3) its materiality, (4) the speaker's knowledge of the falsity, (5) the speaker's intent that the statements should be acted upon by the other party in the manner contemplated, (6) the other party's ignorance of the falsity, (7) the other party's reliance on the perceived truthfulness of the representation, (8) the right to rely upon the statement, and (9) damages.Hyatt v. Trans World Airlines,943 S.W.2d 292, 295-296(Mo.App. E.D.1997).In Count III (fraud) of its Petition, Appellant alleged the following:

33.Crane and [Assurance], jointly and severally, each intentionally made the following representations to [Appellant] in The City of St. Louis, Missouri, and elsewhere, at various times between circa December 1, 2004 through circa December 29, 2005, to wit:

(a) Crane would cause [Assurance] to insure [property] against the risk of loss by fire and other perils in an amount equal to the full fair market value of [property] at the time Insurance Policy issued and at all times thereafter during the term of Insurance Policy;

(b) The Insurance Policy issued by [Assurance] would insure [property] against the risk of loss by fire and other perils in an amount equal to the full fair market value of [property] at the time Insurance Policy issued and at all times thereafter during the term of Insurance Policy;

(c) In the event of the happening of a covered [property] loss during the Insurance Policy term, [Assurance] would timely pay [Appellant] as contracted in Insurance Policy and as required under Missouri statutes.

The foregoing Petitionparagraphs 33(a), 33(b) and 33(c) are hereinafter jointly and severally referred to as "Representation # 1".

34.Crane and [Assurance], jointly and severally, each intentionally made Representation # 1 with the present state of mind and intention not to perform as represented, or, recklessly made Representation # 1 with a state of mind not knowing whether Representation # 1 was either true or false or whether Representation # 1 would be performed as represented.

35.Representation #1(a) was false, (b) was known by the maker to be false when made or was made recklessly by the maker not knowing whether it was true of false, (c) was material, (d) was made by the maker with the intent that [Appellant] act and rely upon the apparent truthfulness of the same, (e) was not known by [Appellant] to be false, (f) was reasonably relied upon by [Appellant] to be true and (g) directly and proximately caused [Appellant] to suffer damage as hereinafter alleged.

36.Reasonably relying upon the truthfulness of Representation # 1, [Appellant] paid the indicated Insurance Policy premiums to purchase Insurance Policy.

37.As a result of such fraudulent misrepresentations, as alleged herein, [Appellant] has been directly and proximately caused to suffer actual foreseeable damages in excess of $1,000,000.00, including, but not limited to, (a) the difference in the fair market value of [property] immediately before and after Loss Event, (b) public insurance adjuster, appraiser and engineering fees, (c) prejudgment interest at the rate of 9% per annum on such sums until date of judgment under Section408.020 R.S.Mo. and (d) other substantial economic and recoverable non-economic losses.

38.The conduct of Crane and [Assurance], as alleged herein and as shown at trial, each was intentional, malicious, wanton, evil, outrageous and showed a conscious disregard for, and a complete indifference to, the life, safety and property of [Appellant].

39.[Appellant] is entitled to recover herein, and it seeks, punitive damages against Crane and [Assurance].

The elements of a claim for negligent misrepresentation are: (1) the speaker supplied information in the course of his business; (2) because of a failure by the speaker to exercise reasonable care, the information was false; (3) the information was intentionally provided by the speaker for the guidance of a limited group of persons in a particular business transaction; (4) the listener justifiably relied on the information; and (5) due to the listener's justified reliance on the information, the listener suffered a pecuniary loss.Colgan v. Washington Realty Co.,879 S.W.2d 686, 689(Mo.App. E.D.1994).In Count IV (negligent representation) of its Petition, Appellant alleged the following:

40.Each and every allegation contained in Petition General Allegations¶ 1 through ¶ 8, Petition Count I¶ 10 through ¶ 25andPetition Count II¶ 28 through ¶ 30 are each hereby incorporated by reference into this Petition Count IV as if fully set out word for word.

41.At various times from circa December 1, 2004 through circa December 29, 2005, Crane and [Assurance] supplied [Appellant] in the City of St. Louis, Missouri (and elsewhere) with information and made the express representation to [Appellant] that if [Appellant] would purchase [property] casualty insurance from [Assurance] that [Assurance] would issue an insurance policy (Sic: Insurance Policy) and would timely pay [Appellant] all sums due under the terms of such insurance policy and Missouri statutes within a reasonable time after a covered loss event as contracted and as provided under Missouri Law("Representation # 2").

42.At various times from circa December 1, 2004 through circa December 29, 2005, Crane and [Assurance] supplied [Appellant] in the City of St. Louis, Missouri (and elsewhere) with information and made the express representations to [Ap...