Travelers Indem. Co. v. Woods

• Decision Date: 22 December 1983
• Docket Number: No. 13076,13076
• Citation: 663 S.W.2d 392
• Parties: TRAVELERS INDEMNITY COMPANY, Plaintiff-Appellant, v. Patricia Lee Britt WOODS and Gary W. Woods, Defendants-Respondents.
• Court: Missouri Court of Appeals

Page 392

663 S.W.2d 392

TRAVELERS INDEMNITY COMPANY, Plaintiff-Appellant, v. Patricia Lee Britt WOODS and Gary W. Woods, Defendants-Respondents.

No. 13076.

Missouri Court of Appeals,

Southern District,

Division Three.

Dec. 22, 1983.

Motion for Rehearing Overruled and to

Transfer to Supreme Court Denied

Jan. 11, 1984.

Application to Transfer Denied

Feb. 15, 1984.

Albert C. Lowes, Catherine R. McBride, Thomas A. Ludwig, Buerkle, Lowes, Beeson & Ludwig, Jackson, for plaintiff-appellant.

G. Weber Gilmore, Sr., Rice P. Burns, Jr., Gilmore, Gilmore, Taylor & Burns, Sikeston, for defendants-respondents.

PREWITT, Judge.

Plaintiff issued an insurance policy to defendants insuring them against loss to their residence due to various perils including fire. Plaintiff's lawsuit contended that defendants intentionally burned the residence to defraud plaintiff and that it was damaged because following the fire, in accordance with the terms of the policy, plaintiff paid the amount defendants owed to the holder of a note, whose payment was secured by a deed of trust on the house. Defendants counterclaimed for damages due to the fire and for damages and attorney's fees for vexatious refusal to pay.

A jury verdict denied plaintiff's claim and awarded defendant $82,000 on the insurance policy, $7,380 interest, and $10,000 as attorney's fee. Judgment was entered in accordance with the verdict. Thereafter, following plaintiff's filing of an after-trial motion, the trial court entered an order crediting plaintiff with the $38,772.94 it paid to the note holder and reducing the amount that defendants are entitled to receive from plaintiff to $60,607.06. Plaintiff appeals.

The principal issue tried was whether defendant Gary Wayne Woods intentionally set fire to the house. He was the only person in the house at the time the fire started and plaintiff presented expert testimony that the fire was intentionally set inside the home. Gary Woods denied that he set the fire and defendants presented expert testimony that it was caused by the house's electrical wiring.

Plaintiff has seven points relied on, five of which have subpoints, in total twenty-three contentions. In general plaintiff contends that the trial court erred in giving the jury the submission and damage instructions tendered by defendants; in submitting vexatious damages and attorney's fees or in not remitting the jury's award regarding attorney's fees; in allowing defendants' counsel to make certain comments in closing argument; in not allowing plaintiff to read certain admissions of defendant Gary Wayne Woods and in limiting plaintiff's cross-examination of him; and in allowing defendants and a former neighbor of defendants to testify that the furniture in defendants' home was "nice".

We first consider plaintiff's attack upon defendants' submission instruction. That instruction is set forth below. ¹ Plaintiff contends that this instruction is erroneous because: (a) it submits evidentiary details, and (b) is argumentative, (c) is not a neutral and unbiased statement of the law, and (d) due to improper punctuation the affirmative defense instruction tendered by defendant was "in essence" not submitted. The affirmative defense instruction told the jury that they must find for plaintiff on defendants' counterclaim if they believed that either defendant "intentionally procured the destruction of the dwelling".

The evidentiary detail complained of is the legal description of the property. No prejudice could have resulted from that. How the instruction is argumentative and not a neutral, unbiased statement of the law is not apparent from plaintiff's brief and we do not understand how it was. Although, as defendants admit, a comma would be more appropriate to precede "Unless", the jury would understand that if they determined that defendants had set the fire intentionally defendants should not recover. That was the issue at trial and the submission instruction referred to the affirmative defense instruction. We do not see how the jury could have been misled by this instruction.

We next consider plaintiff's contention that the damage instruction pertaining to defendants' claim was erroneous. That instruction is set out below. ² Plaintiff contends that a damage instruction from MAI should have been used; that this instruction is erroneous because it lists the elements of damage which defendants claim; that it contains argumentative language and is not an unbiased statement of the law; that it was not supported by the evidence; that it directed a verdict for a particular amount when the amount of the loss was in dispute; that it failed to set forth which party had the burden of proof with regard to depreciation; that it inadequately defines "depreciation"; and that it directs the jury to compute interest and misinforms them with respect to computing interest.

There is no MAI instruction on damages appropriate to this case because it involved a total fire loss of both real and personal property and §§ 379.140 and 379.160, RSMo 1978, are applicable. See Duckworth v United States Fidelity and Guaranty Company, 452 S.W.2d 280 (Mo.App.1970). The damages here have to be assessed in accordance with these statutes and require a special instruction to inform the jury how to do so. In contending that an MAI damage instruction should have been given, plaintiff relies upon Jones v. Columbia Mutual Insurance Company, 636 S.W.2d 132 (Mo.App.1982). That case said that MAI 4.02 should be given in a fire loss. However, there was no indication there that the "valued policy" statutes were applicable. They vary the assessment of damages from that provided in MAI 4.02. MAI 4.02 would not be applicable here as "fair market value" is not relevant to recovery for damages to the house and its contents and the other damages claimed do not relate to fair market value. Also, as stated in note 2 under that instruction, it is to be used in cases involving property damage only and this case was not so limited.

This is not similar to a personal injury case. There the various items of damages are not to be listed in a damage instruction as they often were prior to MAI. In view of the various damages provided under the policy it was necessary to list them so the jury would know what was at issue. Argument of counsel would not suffice as the jury would not have to believe what counsel told them as to what damages they were to assess. Here the jury needed direction from the court and this instruction adequately did that and it is not biased or argumentative.

Based upon defendants' testimony there was evidence of the ownership and value of the damaged property sufficient to support the instruction. There was no dispute as to the amount that defendants were entitled to receive for loss of the house and that is the only part of the instruction that directs a verdict for a particular amount if the issues are found in favor of defendants on their claim. The burden of proof was set forth in an instruction correctly patterned after MAI 3.01, and we find no error pertaining to burden of proof. Depreciation appears to be clearly and concisely defined in accordance with the definition given in Riccardi v. United States Fidelity & Guaranty Company, 434 S.W.2d 737, 741 (Mo.App.1968).

The instruction correctly states the rule on interest. Defendants were entitled to interest at 9% from the date that their claim became due and payable under the policy. St. Louis County National Bank v. Maryland Casualty Company, 564 S.W.2d 920, 930 (Mo.App.1978); § 408.020, RSMo Supp.1982. There is no contention here that the date the jury was instructed to figure interest from was erroneous. However, because the jury was instructed to return a verdict for the full recovery under the policy and thereafter the trial court reduced that recovery by the amount plaintiff paid to the note and deed of trust holder, the jury computed interest on the full amount of the recovery on the policy. The full recovery was $82,000 and the credit allowed of $38,772.94 reduced the policy recovery in the judgment to $43,222.06. Interest at 9% on the latter amount for the period stated in the instruction is $4,960.29 and the interest must be reduced to this amount. We find no prejudicial error in the respects contended regarding this damage instruction except as to interest and that can be corrected by modifying the judgment.

We next discuss plaintiff's contention that the trial court erred in submitting to the jury vexatious damages and attorney's fees under § 375.420, RSMo 1978. Plaintiff contends that the evidence did not support such a submission and that the trial court erred in failing to order a remittitur of the attorney's fees awarded by the jury. Plaintiff asserts that it was obvious that the jury did not understand that they were to award attorney's fees only if they found vexatious refusal to pay because no percentage damages were awarded.

Vexatious damages are not allowed if an insurer has reasonable cause to believe and does believe that there is no liability under its policy. Welch v. Western Casualty and Surety Company, 567 S.W.2d 743, 748 (Mo.App.1978). However, refusal to pay based on suspicion that the origin of a fire is incendiary without any substantial facts on which to base that suspicion is vexatious within the meaning of § 375.420. Hounihan v. Farm Bureau Mutual Insurance Company of Missouri, 523 S.W.2d 173, 175 (Mo.App.1975). A trier of fact may find that the refusal to pay was vexatious from the insurer's failure to establish the grounds on which the refusal was based. Id.

Here the insurer had only suspicion that defendant Gary Wayne Woods had set the fire until it employed an expert to investigate the fire. The jury could have found that the expert's investigation was not thorough, that his conclusions were not reasonable and believable, and that it was not reasonable for plaintiff to believe him. Only this witness, if...