Stone v. FARM BUREAU TOWN & COUNTRY INS.
| Citation | 203 S.W.3d 736 |
| Decision Date | 11 October 2006 |
| Docket Number | No. 26979., No. 26965 |
| Court | Court of Appeal of Missouri (US) |
| Parties | Albert J. STONE, and Tammy Stone, in their capacity as assignees of Arlene M. Bateman, Plaintiffs-Appellants/Cross-Respondents, v. FARM BUREAU TOWN & COUNTRY INSURANCE COMPANY OF MISSOURI a Missouri Corporation, Defendant-Respondent/Cross-Appellant. |
Thomas W. Millington, Springfield, MO, for appellant.
Michael J. Patton, Joseph P. Winget, Springfield, MO, for respondent.
On December 30, 2005, this Court issued an opinion in this cause. On February 28, 2006, the Supreme Court of Missouri sustained an application for transfer to that court. On September 26, 2006, the Supreme Court entered an order retransferring the cause to this Court. The original opinion of this Court, which follows, is now readopted and reissued.
Albert and Tammy Stone (collectively, "the Stones"), in their capacities as the assignees of Arlene Bateman ("Arlene"), sued Farm Bureau Town & Country Insurance Company of Missouri ("Farm Bureau") to recover damages allegedly caused by Farm Bureau's failure to defend and/or settle personal injury and wrongful death claims asserted against Arlene. These claims arose out of a December 2002 automobile collision involving a vehicle driven by Arlene. The Stones' petition asserted the following theories of recovery against Farm Bureau: (1) breach of contract; (2) breach of fiduciary duty to defend; (3) breach of fiduciary duty to settle; (4) bad faith refusal to defend; (5) bad faith refusal to settle; and (6) punitive damages. Farm Bureau contended, inter alia, that the policy of automobile liability insurance it issued to Gary and Arlene Bateman (collectively, "the Batemans") did not provide Arlene with any coverage because the policy had been canceled before the collision.
The Stones and Farm Bureau filed opposing motions for summary judgment on the cancellation issue. The trial court determined that Farm Bureau did provide coverage to Arlene because the insurer's attempt to cancel the Batemans' policy was ineffective. Based on this determination, the court then decided Farm Bureau's actions in declining to defend Arlene or settle the claims asserted against her constituted a breach of contract. Accordingly, the court entered a $1,004,295 judgment in favor of the Stones based on their count for breach of contract. The court entered summary judgment for Farm Bureau on all other theories of recovery asserted in the Stones' petition. The Stones and Farm Bureau both appealed from the judgment.
For the reasons stated below, we conclude that the trial court erred in deciding the policy had not been canceled. Accordingly, the judgment in favor of the Stones for breach of contract must be reversed. Since none of the Stones' other theories of recovery can succeed unless there was coverage for Arlene at the time of the collision, we remand the case with directions for the trial court to enter judgment in favor of Farm Bureau pursuant to Rule 84.14.1
As of January 2000, Farm Bureau insured a home ("policy 050"), a 1988 Toyota truck ("policy 911") and a 1995 GMC truck ("policy 995") owned by the Batemans. The premiums for these policies were to be paid in monthly installments. Farm Bureau sent the Batemans an invoice each month showing the installment due on each policy for the upcoming month. The Batemans had considerable difficulty paying their premium installments in a timely fashion.
On May 26, 2000, Farm Bureau mailed the Batemans an invoice listing the installment amounts due on each policy. The payment due date was June 10, 2000. The Batemans did not pay these premium installments. On June 20th, Farm Bureau mailed the Batemans a document that we will denominate a "reminder" notice. This reminder notice listed the payment due date (6/10), the total amount due ($144.18), the numbers of the three policies for which no payment had been received and the date in July when each policy would expire. After setting out this information, the notice stated:
Just a friendly reminder that we have not received your monthly payment. We want to keep you from losing the benefits of your valuable insurance protection and/or membership. If you wish to keep your policies and/or membership from cancelling, we must receive your payment for the amount due prior to the expiration date shown above at our Home Office or local Farm Bureau Service Center. If your payment was mailed before you received this notice, thank you for your continued business. However, we suggest you contact your Farm Bureau Agent or Service Center to make sure your coverages are in force. Your agent will be glad to assist you if you need further information, wish to change to another payment plan or simply have any questions about this notice.
Finally, the reminder notice listed the name and telephone number for the Batemans' Farm Bureau agent. The Batemans paid the overdue premiums before the listed expiration dates.
In July 2000, the Batemans were sent an invoice listing the amounts due in August. When no payment was received, Farm Bureau sent the Batemans another reminder notice on all three policies in August 2000. Thereafter, the overdue premiums were paid before the September expiration dates listed in the notice.
From August 2000 until March 2001, the Batemans made their premium installment payments on time. They did not pay the April installments that were due on the 10th of the month. On April 20, 2001, Farm Bureau mailed the Batemans a reminder notice concerning all three policies. The Batemans paid the overdue April premiums before the listed May expiration dates.
The Batemans did not pay the May installments that were due on the 10th of the month. On May 21, 2001, Farm Bureau sent the Batemans a reminder notice listing the following expiration dates for the policies: (1) policy 050-6/9/01; (2) policy 911-6/14/01; and (3) policy 995-7/03/01. The Batemans did not pay the past-due premiums due for policy 050 or policy 911. On June 12, 2001, Farm Bureau mailed the Batemans a different type of notice that we will denominate a "cancellation" notice. This cancellation notice listed the policy number, the property insured and the "Date of Cancellation" as 6/9/01. It then stated:
You recently received a notice reminding you of the expiration date of your policy(ies). As no payment of premium has been received, this is your final notice that your policy(ies) was/were cancelled on the date listed above at 12:01 A.M. Central Standard Time. If there is any premium due for the coverage we have provided, it is listed above and is due upon receipt. Please contact your agent for further information or if you have questions about this notice.
The cancellation notice provided the name and telephone number of the Batemans' Farm Bureau agent. On June 15, 2001, Farm Bureau mailed the Batemans the same type of notice informing them that policy 911 had been cancelled as of June 14, 2001.
The only installment payment listed on the June 29, 2001 invoice was for policy 995. The Batemans did not pay this premium. On August 7, 2001, Farm Bureau sent the Batemans a cancellation notice informing them that policy 995 had been cancelled for nonpayment of premium as of August 4, 2001.2 It does not appear that the Batemans insured the 1995 GMC truck again until February 2002.
Sometime in July 2001, the Batemans apparently reinstated policy 050 and policy 911. Thereafter, the following events occurred:
This pattern repeated itself in 2002. It appears that policy 911 was reinstated in January 2002 because the January 26th invoice lists an installment payment due on that policy. The installment was not paid on time, and Farm Bureau sent the Batemans a reminder notice on February 20, 2002. The Batemans paid the installment before a cancellation notice was sent. In February 2002, the Batemans again procured insurance on their house and the 1995 GMC truck from Farm Bureau. The house policy continued to bear policy number 050, but the 1995 GMC truck policy was issued under a new policy number ("policy 977"). Thereafter, the following events occurred:
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