Venable v. Import Volkswagen, Inc., 47048

• Decision Date: 02 March 1974
• Docket Number: No. 47048,47048
• Citation: 214 Kan. 43,519 P.2d 667
• Parties: , 68 A.L.R.3d 1184 Jesse S. VENABLE, Appellee, v. IMPORT VOLKSWAGEN, INC., Appellee, and Farmers Insurance Exchange, Appellant.
• Court: Kansas Supreme Court

Page 667

519 P.2d 667

214 Kan. 43, 68 A.L.R.3d 1184

Jesse S. VENABLE, Appellee, v. IMPORT VOLKSWAGEN, INC., Appellee, and Farmers Insurance Exchange, Appellant.

No. 47048.

Supreme Court of Kansas.

March 2, 1974.

Rehearing Denied April 10, 1974.

Syllabus by the Court

1. The liability of a property insurer is based upon its contract.

2. In an action for damages brought upon a contract of insurance the provisions of the contract generally govern the measure of recovery rather than the rules relating to damages in tort cases.

3. When an insurer makes an election to repair or rebuild under a 'repair, restore or replace clause' in its policy the insurer is then obligated to put the vehicle in substantially the same condition as it was prior to the collision so as to render it as valuable and as serviceable as before. In addition the insurer, in exercising its option to repair under the policy, must complete such repairs within a reasonable time.

4. If the repairs or workmanship are defective or the insurer has unreasonably delayed or not acted in good faith additional damages may be recovered.

5. When an insurer elects to repair the vehicle it is bound by its election and any resulting damages are based on the agreement to repair, so that the damages recoverable may in such case be more or less than the amount of the loss suffered under the policy.

6. As a measure of damages where repair fails to restore the property, the value of the vehicle immediately before the damage less the value immediately after repairs are made, plus the reasonable cost of the repairs may be applied.

7. When an insurer exercises its option to repair under the contract of insurance it assumes the duty and responsibility to restore the property to its former condition and value. It is immaterial how it attempts to fulfill that duty, whether by agent or independent contractor.

8. In order for the evidence to be sufficient to warrant recovery of damages there must be some reasonable basis for computation which will enable the jury to arrive at an approximate estimate thereof.

9. In an action brought on a collision insurance policy covering a Volkswagen camper to recover for repairs and damages the record on appeal is examined and it is held: (1) The judgment for repairs to the vehicle is affirmed; (2) The judgment for the difference in value of the vehicle immediately before the collision and immediately after the repairs were completed is affirmed; (3) Attorney fees were properly allowed under K.S.A. 40-256; (4) The amount of the judgment awarded for loss of use of plaintiff's vehicle is reversed and set aside because of insufficiency of evidence to support the same; and (5) Upon the whole record in order that substantial justice be carried out as directed in K.S.A. 60-2105 the judgment is affirmed as modified.

Otto J. Koerner, Koerner & Carnahan, Wichita, argued the cause and was on the brief for appellant.

John Prather, Meade, argued the cause and was on the brief for Jesse S. Venable, appellee.

Jack N. Turner, Wichita, argued the cause and was on the brief for Import Volkswagen, Inc., appellee.

FROMME, Justice:

This is an appeal by the Farmers Insurance Exchange from judgments entered on jury verdicts in favor of Jesse S. Venable and Import Volkswagen, Inc. In the interest of conservation we will refer to the parties as Farmers, Venable and Import VW, respectively. Suit was brought by Venable against Farmers for loss under a collision insurance policy and against Farmers and Import VW for failure to properly repair a Volkswagen camper.

The 220 page record of the proceedings in the ktrial court indicates the matter was in the trial court indicates the matter was A great number of issues were presented by the pleadings, and a trial was undertaken without the benefit of a per-trial conference. The case was submitted to the jury on 12 special questions along with 10 possible verdict forms. It is surprising that the jury was able to answer the questions intellignetly and fill in the proper verdict forms. We will return to this feature of the appeal later.

By way of background the following facts were developed at the trial. Venable purchased a 1969 Volkswagen camper on September 5, 1969, for $4,320.00. It had been driven 6,000 miles before it was purchased. Farmers insured the vehicle against collision with a $100.00 deductible provision in the policy. Three weeks later a collision occurred with another vehicle and Venable was hospitalized for a short period of time. Farmers was notified of the damage to the camper and was asked to evaluate the loss under the policy. Import VW was notified to make an estimate of the damages and thereafter Venable authorized Farmers to take the vehicle to Import VW. An estimate of the cost of repairs was prepared by Import VW. The estimate came to $1,607.00 plus the cost of any reparirs to the air conditioning and the motor, which items were left open. There was conflicting evidence as to whether Venable agreed to have his vehicle repaired. It took Import VW approximately three months to repair the camper and Venable took possession of the repaired vehicle around the first of January, 1970. He gave a check to cover the $100.00 deductible in his policy but later stopped payment on his check.

The evidence indicates that the repairs and workmanship were not satisfactory and both Farmers and Import VW were so notified by Venable. It appears that even after the repairs were completed there was difficulty in steering, in shifting gears, in loose body assembly, in front-end alignment and in the electrical wiring. Venable lived in Manhattan and Import VW was located in Wichita. Further repair of the vehicle in Manhattan was authorized by Farmers and three repair shops in that neighborhood worked on the camper at separate times. Venable continued to drive the camper in between repair jobs, and in September, 1970, the vehicle was returned to Import VW because of a burned out motor. The motor had been ruined from lack of air circulation caused by rags and paper left in the engine compartment, presumably by Import VW. The vehicle had been driven over 17,500 miles. The new engine was installed and Venable returned to pick up his camper in November, 1970. Farmers had not been notified of the installation of the new motor. There were no charges made by Import VW on this installation since it was covered by the original factory warranty.

Farmers had previously issued a draft to both Import VW and Venable for $2,097.43 to cover the original repairs, less the $100.00 deductible due from Venable under his policy. Before releasing the camper to Venable Import VW demanded that Venable endorse the $2,097.43 draft. Venable refused to do so because the signature endorsement contained a release to Farmers on all damages arising from the collision of September 28, 1969. Venable left the repair shop without his camper, and the present suit was filed.

The case was tried, and when the verdicts were returned Import VW had a judgment against Farmers for the cost of the original repairs of $2,097.43 less $171.83 for inadequate repairs and workmanship which had been corrected in other repair shops and paid by Farmers. This left a net sum to be paid by Farmers to Import VW of $1,925.60, for which judgment was entered.

There were additional verdicts returned in favor of Venable and against Farmers for $6,000.00 for loss of use of the camper and for $820.00 as additional damage arising from a decrease in the value of the vehicle as finally repaired, making a total of $6,820.00 due from Farmers to Venable. By argeement of the parties Venable had previously been given possession of his camper after the action was filed, so when the trial ended Venable had possession of the repaired vehicle (worth approximately $4,230.00 at the time of the collision) plus a judgment for $6,820.00.

After judgments were entered Farmers filed various motions including one requesting the court to order a remittitur of all sums in excess of $2,097.43. Farmers contended in the court below as on appeal that any damages in excess of $2,097.43 could not be supported by either the law or the evidence. Venable then filed a motion asking the court to determine and assess attorney fees against Farmers as authorized by K.S.A. 40-256. The statute provides for payment of attorney fees if it appears the insurance company refused without just cause or excuse to pay the full amount of the loss due under its policy.

These motions were heard by the trial court. A remittitur on damages for loss of use was ordered by the court in the amount of $2,700.00, apparently this was based upon lack of evidence. However, the court found that the insurance company had refused without just cause or excuse to pay the full amount of the loss and assessed attorney fees of $2,700.00 against Farmers and in favor of Venable. Final judgments were entered reflecting these final changes.

Farmers appeals from the judgments and attempts to present 23 separate points of error for our consideration and research. In order to adequately consider appellant's primary points of concern and place the case in proper perspective it will be necessary to review several established principles of law on which there was no unanimity among the parties in the court below and none on appeal.

The liability of a property insurer is based upon its contract, subject to conditions imposed on the contracting parties by regulation and statute. From the fact that the insurer's liability is contractual it follows that in an action for damages brought upon a contract of insurance the provisions of the contract generally govern the measure of recovery rather than the rules relating to damages in tort cases. (Saul v. Saint Paul-Mercury Indemnity Co., 173 Kan. 679, 250 P.2d 819; 8 Blashfield Automobile Law and Practice, § 333.2, p. 180; see also Anno. 43 A.L.R.2d 329, § 1, (b).)

Generally in tort...