Fischer v. First American Title Insurance Co.
388 S.W.3d 181
Mo. Ct. App.2012Background
- Fischer bought Lot 8 and insured title from First American; Rivera claimed ownership rights to the adjacent Disputed Parcel via adverse possession or boundary by acquiescence.
- Rivera filed the Rivera lawsuit asserting possession-based claims not shown by the public record; First American declined to defend citing the parties in possession exception.
- Fischer defended the Rivera suit at his expense; First American again rejected defense efforts under the same exception.
- Fischer incurred over $46,000 in defense fees; he sued First American for breach of the Title Policy and vexatious refusal to pay.
- Jury ruled in Fischer’s favor on breach and vexatious claim; the trial court granted JNOV in favor of First American.
- Court of appeals affirmed the trial court’s JNOV, holding the parties in possession exception barred coverage and no duty to defend.”],
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether JNOV on Title Policy breach was proper given the parties in possession exception | Fischer argues prima facie breach; jury should weigh exception | First American argues exception bars coverage as a matter of law | Yes; no duty to defend under unambiguous exception |
| Whether vexatious refusal to pay survives when insurer had no duty to defend or indemnify | Fischer asserts vexatious refusal based on denial of coverage | Without duty to defend/indemnify, vexatious claim cannot proceed | Denied; judgment supported by no duty to defend/indemnify |
Key Cases Cited
- Truck Ins. Exch. v. Prairie Framing, LLC, 162 S.W.3d 64 (Mo.App. W.D.2005) (insurer's defense duty hinges on potential coverage)
- Penn-Star Ins. Co. v. Griffey, 306 S.W.3d 591 (Mo.App. W.D.2010) (duty to indemnify depends on facts and coverage)
- Trainwreck W. Inc. v. Burlington Ins. Co., 235 S.W.3d 33 (Mo.App. E.D.2007) (duty to defend if potentially covered claims exist)
- Am. States Ins. Co. v. Kempker Constr. Co., 71 S.W.3d 232 (Mo.App. W.D.2002) (duty to defend analyzed with petition allegations and known facts)
- D.R. Sherry Constr., Ltd. v. Am. Fam. Mut. Ins. Co., 316 S.W.3d 899 (Mo. banc 2010) (interpretation of policy terms as insurance contract law)