Smith v. Peninsular Ins. Co.

• Decision Date: 30 November 1965
• Docket Number: No. G-217,G-217
• Citation: 181 So.2d 212,19 A.L.R.3d 1326
• Parties: Viola Gikas SMITH, Appellant, v. PENINSULAR INSURANCE COMPANY, Appellee.
• Court: Florida District Court of Appeals

Page 212

181 So.2d 212

19 A.L.R.3d 1326

Viola Gikas SMITH, Appellant, v. PENINSULAR INSURANCE COMPANY, Appellee.

No. G-217.

District Court of Appeal of Florida, First District.

Nov. 30, 1965.

Rehearing Denied Jan. 14, 1966.

Coe & Coe, Pensacola, for appellant.

Beggs, Lane, Daniel, Gains & Davis, Pensacola, for appellee.

CARROLL, DONALD K., Judge.

The plaintiff in an action on a fire insurance policy has appealed from a judgment non obstante veredicto entered by the Circuit Court for Escambia County in favor of the defendant insurer.

The basic question presented for our determination in this appeal is whether there was sufficient substantial evidence adduced at the trial from which the jury could have lawfully concluded that the plaintiff had not materially increased the fire hazard between the date on which the policy was issued and the time of the fire which burned the plaintiff's house that was covered by the fire insurance policy issued by the defendant-appellee.

This question arose out of the following facts established by the evidence before the jury:

On June 14, 1963, the defendant issued a policy insuring against loss by fire to the amount of $10,000 the plaintiff's one-story family frame and concrete block building occupied as a dwelling and a day nursery, situated in West Pensacola in the said county. This policy was in full force and effect on July 5, 1964, when the said property was damaged and partly destroyed by fire.

The pivotal provision of the policy involved in this case provides that the defendant, the insurer, shall not be liable for loss occurring 'while the hazard is increased by any means within the control or knowledge of the insured. * * *' The only issue submitted to the jury at the trial was whether there had been a 'material and substantial change' in the occupancy of the building resulting in a 'material or substantial increase in hazard' so that the insurer would not be liable on account of the above-quoted provision of the policy. This issue was raised in an affirmative defense in the defendant's answer to the plaintiff's complaint, the defendant alleging therein that 'between the time of the issuance of its policy and the fire involved herein there was a change in the character of the occupancy of the premises from a dwelling and day nursery to a used furniture and clothing store; that such change materially increased the hazard from fire; that plaintiff failed to notify defendant of such change and that the policy therefore was not in effect at the time of the fire involved herein.'

On the issue of the change of occupancy between the time of the issuance of the policy (June 14, 1963) and the time of the fire (July 5, 1964) the undisputed evidence at the trial established the following facts:

When the said policy was issued, the front part of the plaintiff's building was occupied as a dwelling and the back part as a day nursery. The property covered by the said policy is described therein as 'the one story one family frame and concrete block building occupied as dwelling and a Day Nursery' situated at a certain address in the City of Pensacola, in Escambia County. The back part of the plaintiff's building continued to be occupied as a day nursery or kindergarten until June 18, 1964 (17 days before the fire), when the husband of the tenant of that part died and the tenant turned in her key to the plaintiff and moved out. The plaintiff testified that at that time, when the tenant turned in her key and moved out, she did not intend to do anything with the back part of her building, but then an idea struck her that perhaps in a few months hence she would 'go into the procedure' of disposing of some furniture she has accumulated as well as some clothing she had to store. The plaintiff then moved three or four roomsful of furniture and a lot of clothing into what was formerly the day nursery, but without removing the kindergarten equipment therefrom. When the said fire occurred on July 5, 1964, however, the plaintiff has not opened 'the place for business' and had not obtained a license to do business there. The fire in question originated in the front or dwelling part of the plaintiff's house and burned that part, but only slightly damaged the rear part formerly occupied as a day nursery.

The evidence at the trial showed, we think, that there had been a 'change in occupancy' of the insured premises between the time when the policy was issued and the date of the fire. It was also clear from the evidence that the plaintiff failed to notify the defendant concerning this change prior to the fire. Nevertheless, the defendant was not absolved of its liability under the terms of the above-quoted provision of its policy unless the evidence further established that the fire hazard was increased by such change of occupancy.

The trial court properly charged the jury that the sole issue for it to determine was 'whether or not there has been a material and substantial change in occupancy of the premises, or of the building. * * * You are concerned only with the determination of whether or not there has been such material or substantial increase in hazard as a result of the change in occupancy of the premises, if, in fact, you find that there has been a change of occupancy. In this case, then, the burden is upon the defendant insurance company to prove by a proponderance or the greater weight of the evidence its claim of increase in hazard, due to the change in occupancy.' With regard to the materiality of such increase in hazard, the court correctly charged the jury as follows:

'The Court charges you that not every trivial increase of risk by some act upon the part of the owner, avoids an insurance policy, but such increase or hazard must be substantial, one which the insurance company could not reasonably be presumed to have contracted to assume at the time the policy was issued. You will find from the evidence whether or not such increase of hazard occurred.'

As we view the evidence adduced at the trial, we think that the court was eminently correct in thus submitting to the jury the issue whether the change of occupancy effected a material and substantial increase in hazard, for the evidence before the jury was conflicting as to that issue (if not overwhelmingly against such increase) and hence it was a question of fact for the jury's determination.

As to this issue of the increase in hazard, the defendant produced two witnesses at the trial, one being an employee of the Florida Inspection and Rating Bureau, which is maintained by insurance companies, and the other witness being the home office manager of the defendant. These two witnesses testified that the rate for day nurseries was much less than the rate for second hand clothing or furniture stores, and that this greater rate reflected the greater hazard statistically arrived at. On cross-examination, however, the first witness conceded that, if the owner had two vacant rooms in his house and moved in there his extra furniture and some old clothing, that would not increase the rate 'because you don't have it for sale' and would not change the hazard. The second witness made a similar concession that under such circumstances the rate would not increase. It is true, however, that these two witnesses on later examination and cross-examination gave testimony both consistent and inconsistent with their foregoing testimony concerning the increase in hazard, so the question of such increase was peculiarly a question of fact for the determination of the jury as to whether the evidence established that a material and substantial increase in hazard had taken place before the fire within the contemplation of the above-quoted provision of the fire insurance policy.

Since the fact was undisputed in the evidence at the trial that at the time of the fire the plaintiff had not opened a furniture or clothing store or otherwise opened a place of business in her house, the jury could have reasonably concluded from the testimony of the defendant's said two witnesses that the plaintiff's act of moving her said furniture and clothing into the day nursery rooms had not materially or substantially increased the hazard insured against, as contemplated by the above-quoted provision of the defendant's fire insurance policy. Evidently the jurors so concluded, for they brought in a verdict for the plaintiff and assessed her damages at $3,908.62, with interest from date of suit.

At the trial, after the presentation of their evidence by both parties, the defendant moved for a directed verdict in its favor on the ground that 'the evidence shows that the change in occupancy which occurred prior to and continued until the time of the fire increased the hazard, and that it was by means within the control or knowledge of the insured, and therefore the insurance was suspended at the time of the fire.' After the argument of counsel on this motion in the absence of the jury, the trial court announced that it 'will withhold ruling on the motion for the time being.' The court made no ruling upon the said motion until a month after the trial, when it entered the judgment non obstante veredicto, appealed from herein.

After the jury brought in the verdict for the plaintiff and the trial ended, the defendant timely filed a motion for a new trial and a motion for a judgment notwithstanding the verdict to set aside the jury verdict and any judgment entered thereon. In the latter motion the defendant moved the court to enter a judgment in its favor 'in accordance with the defendant's motion for directed...