396 S.W.3d 467
Mo. Ct. App.2013Background
- Farm Bureau issued a homeowner’s policy to the Merseals, insuring their home and personal property.
- The Merseals’ home and most personal property were destroyed by fire; they claimed $150,000 for personal property.
- Farm Bureau denied coverage, alleging the Merseals intentionally misrepresented the value of personal property in bankruptcy versus the insurance claim.
- The bankruptcy filing six months prior valued personal property at $600, creating the discrepancy used to deny coverage.
- The Merseals sued for breach of contract and vexatious refusal to pay; a jury awarded damages including policy amount, vexatious damages, and attorney’s fees.
- On appeal, Farm Bureau challenges JNOV on misrepresentation, vexatious refusal, remittitur, and a request for appellate attorney’s fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Submissible case on misrepresentation | Merseals did not intend to deceive; misrepresentation present but not deliberate. | Merseals intentionally misrepresented property values to defeat coverage. | Denied; there was a submissible issue on intent to deceive. |
| Vexatious refusal to pay | Farm Bureau refused without reasonable cause after learning of valuation discrepancy and offering no further investigation. | Open questions of law/fact may limit vexatious liability; denial could be justified by reasonable grounds. | Denied; evidence supported willful, unreasonable denial. |
| Remittitur of personal property award | Award of $103,125 excessive given valuation evidence. | CERA valuation supported the verdict; $103K not shockingly excessive. | Denied; no abuse of discretion by trial court. |
| Attorney’s fees on appeal | Entitled to appellate fees under Section 375.420. | Fees not warranted on appeal beyond trial. | Granted; remanded to determine reasonableness of appellate fees. |
Key Cases Cited
- Young v. Allstate Insurance Co., 685 F.3d 782 (8th Cir.2012) (intent to deceive required for misrepresentation to void coverage)
- Liberty Mutual Fire Insurance Co. v. Scott, 486 F.3d 418 (8th Cir.2007) (discrepancy in valuation may be material and void coverage when intentional)
- Marquis Fin. Services of Ind. Inc. v. Peet, 365 S.W.3d 256 (Mo.App. E.D.2012) (preservation of error requires precise directed verdict grounds)
- Sanders v. Ahmed, 364 S.W.3d 195 (Mo. banc 2012) (de novo review; submissibility; when to grant JNOV)
- D.R. Sherry Constr., Ltd. v. American Family Mut. Ins. Co., 316 S.W.3d 899 (Mo. banc 2010) (standard for whether plaintiff established a case; appellate review)
- Watters v. Travel Guard Int’l, 136 S.W.3d 100 (Mo.App. E.D.2004) (open questions of fact; vexatious denial may still be found)
- Epstein v. Columbia Mut. Ins. Co., 239 S.W.3d 667 (Mo.App. E.D.2007) (evidence of insurer’s investigation relevant to vexatiousness)
- Allen v. State Farm Mut. Auto. Ins. Co., 753 S.W.2d 616 (Mo.App. E.D.1988) (adequacy of insurer’s investigation as evidence of vexatiousness)
- Stark Liquidation Co. v. Florists’ Mut. Ins. Co., 243 S.W.3d 385 (Mo.App. E.D.2007) (vexatiousness, survey of testimony and circumstances admissible)
- Johnson v. Allstate Indem. Co., 278 S.W.3d 228 (Mo.App. E.D.2009) (remittitur standard and deference to trial court)