Wilson v. State Farm Fire and Cas. Co.

Decision Date30 May 2000
Docket NumberNo. 1999-CA-00552-COA.,1999-CA-00552-COA.
Citation761 So.2d 913
PartiesGerald WILSON and William L. Fennell, Appellants, v. STATE FARM FIRE AND CASUALTY COMPANY, Appellee.
CourtMississippi Court of Appeals

Glenn F. Rishel Jr., Jackson, Attorney for Appellants.

Harry R. Allen, Colette Towles, Gulfport, Attorneys for Appellee.


LEE, J., for the Court:

¶ 1. The appellants, Gerald Wilson and William L. Fennell, instituted this civil action in the Circuit Court of Harrison County, Mississippi after the denial of Wilson's claim for fire damage to his home against his homeowner's insurance policy with State Farm Fire and Casualty Company. After the fire Wilson sold the property to Fennell and assigned all of his rights and claims to him. The circuit court granted State Farm's motion for summary judgment, finding that there was no genuine issue of material fact that Wilson made misrepresentations on his application for the insurance policy, rendering the policy void, and dismissed the claims against State Farm. Finding no error in the lower court's judgment, we affirm.


¶ 2. Gerald and Carol Wilson were the joint owners and named insureds of a house in Long Beach, Mississippi where a fire loss occurred on November 17, 1996. The house had been vacated as the result of their separation and pending divorce which was granted one month later. Pursuant to the property settlement agreement, Carol Wilson quitclaimed her interest in the house to Gerald Wilson and assigned any insurance proceeds to be paid in connection with the fire loss to him. In February 1997, Gerald Wilson assigned all his rights under the policy to Fennell upon payment of $8,000 for the house and the assumption of the outstanding mortgage of $47,500.

¶ 3. The investigation of the fire showed that it was incendiary and that it began in the hallway of the house with a combustible accelerant. The investigation was turned over to the Long Beach Police Department when it failed to disclose an accidental ignition source. State Farm, concluding that the fire was the result of arson, then procured a statement under oath from Gerald Wilson as part of its investigation. Wilson indicated that the house was insured with Allstate when it was purchased in August 1986 and that he changed over to State Farm in August 1990 because the rates were cheaper. He later changed this answer in his statement under oath using an errata sheet which was forwarded with the transcribed testimony of the statement. On the errata sheet he stated that he changed to State Farm because he was "declined because of 2 claims in specified time." After the suit was instituted against State Farm, Gerald Wilson conceded in his deposition that Allstate had sent him a letter "stating that they were not going to cancel me, but they were going to decline to renew the policy when it came up."

¶ 4. In his application to State Farm for insurance coverage dated August 21, 1990, Gerald Wilson, in response to whether he had incurred any losses in the past three years, insured or not, answered that he had. The application required that the applicant complete a section on the back of the form if there were such losses. Gerald Wilson submitted in this section that he had incurred one loss in 1988 for $2,800. In explaining the details of this loss, he stated that an explosion occurred in his garage while he was mixing a dry chemical with water to add to his swimming pool causing damage to the kitchen because the door leading to the kitchen from the garage was left open. In addition, another question on the application asked whether any insurer or agency had canceled or refused to issue or renew similar insurance to the applicant within the last three years. The response on the application was in the negative.

¶ 5. Following Gerald Wilson's statement under oath, State Farm investigated Wilson's reported loss and established that Gerald Wilson had three additional claims filed during 1989 with Allstate Insurance Company which were not reported in his application with State Farm for insurance coverage. This included two claims in excess of $9,660 for jewelry and Christmas presents that were reported stolen from Gerald Wilson's motor home on December 10, 1989, just eight months prior to submitting his application with State Farm. Gerald Wilson also reported a loss to Allstate on December 24, 1989 for a frozen swimming pool pump. Furthermore, Allstate's underwriting representative testified that the amount of the claim paid in connection with the swimming pool chemical explosion was $6,034, as opposed to the $2,800 Gerald Wilson represented in his application for insurance coverage with State Farm. Allstate's representative testified that Allstate notified Gerald Wilson by letter that his homeowner's policy was not being renewed because of excessive claim activity effective August 31, 1990. In addition, Allstate declined to renew an automobile policy for Gerald Wilson on April 29, 1990 because of excessive claim activity.

¶ 6. State Farm advised Gerald Wilson by letter dated June 6, 1997 that his claim for benefits for the fire damage to his house under the policy were denied. The letter stated that the denial was based on State Farm's opinion that "the fire was intentionally set and there exists evidence of opportunity and motive regarding the fire." The letter also stated that the claim was being denied because of certain misrepresentation of material facts made to State Farm. The relevant portions of the State Farm policy cited as applicable to this fire loss were: (1) the declarations section which stated that the insureds' loss and insurance history during the three years preceding the time of the application for insurance must be indicated in the application, (2) the conditions section under coverages which stated that intentional acts by the insured causing a loss covered by the policy for the purpose of obtaining insurance benefits would render the policy void and payment would not be made for the loss, and (3) the concealment and fraud section under the conditions which stated that the policy was void if the insured had intentionally concealed or misrepresented any material fact or circumstance relating to the insurance, whether before or after a loss.

¶ 7. The agent who took the application and the underwriting operations supervisor who reviewed the application stated that based on State Farm's underwriting guidelines, the homeowner's policy would not have been issued to Gerald Wilson had he truthfully and accurately revealed his loss and claims history and the fact of non-renewal because of excessive claims with Allstate.

¶ 8. State Farm renewed the policy every year through 1996 and was without knowledge of the misrepresentations made by Wilson in his application until its investigation following the subject fire loss. In 1995 State Farm paid Wilson for a loss for lightening damage.


¶ 9. When we are asked to review a lower court's grant of summary judgment, we employ a de novo standard of review. Seymour v. Brunswick Corp., 655 So.2d 892, 894 (Miss.1995) (citing Short v. Columbus Rubber & Gasket Co., 535 So.2d 61, 63 (Miss.1988)). Therefore, the Court considers facts without any deference to the trial court and applies its own interpretation of the law. Daniels v. GNB, Inc., 629 So.2d 595, 599 (Miss.1993). In applying a standard, we review all evidentiary matters before us in the record: affidavits, depositions, admissions, interrogatories, etc. Seymour v. Brunswick, 655 So.2d at 894. The evidence is viewed in the light most favorable to the non-moving parties, and they are given the benefit of every reasonable doubt. Mississippi Ins. Guar. Ass'n v. Harkins & Co., 652 So.2d 732, 735 (Miss.1995). Summary judgment lies only when there is no genuine issue of material fact, and the moving party is entitled to a judgment as a matter of law. Id. To determine which factual issues are material, we must examine the substantive law that governs the case, and to determine if an issue of material fact is genuine, we must decide whether the evidence is such that a reasonable jury could return a verdict for the non-moving party. Page v. Wiggins, 595 So.2d 1291, 1295 (Miss.1992). If any triable issues of fact exist, the lower court's decision to grant summary judgment will be reversed. Otherwise, the decision is affirmed. Travis v. Stewart, 680 So.2d 214, 216 (Miss.1996). The comment to M.R.C.P. 56 on summary judgment states that summary judgment is not a substitute for the trial of disputed fact issues, rather, the motion may only determine whether there are issues of fact to be tried. Because summary judgment is a powerful instrument that affects the substantive rights of a party, the party against whom summary judgment is sought should be given the benefit of every reasonable doubt. Daniels v. GNB Inc., 629 So.2d 595, 599 (Miss.1993).


¶ 10. We recognize that Gerald Wilson entered into an agreement with William L. Fennell and assigned all his rights under the policy to him upon payment of $8,000 for the house which was yet to be repaired and the assumption of the outstanding mortgage of $47,500 in February, 1997. As a result of this assignment, Wilson is no longer a proper party plaintiff to this action. However, Fennell, as his assignee, stands in Wilson's shoes taking the assignment subject to any and all of the defenses State Farm could have asserted against Wilson. Maryland Cas. Co. v. Grace, 70 So. 577, 110 Miss. 488 (1916).


¶ 11. Our cases in this state are numerous holding that an insurer of right may...

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