Ronnie R. Pool (“Ross” 1 ) and Tammie Pool (“Tammie”) (collectively, “Plaintiffs”), husband and wife, sued their insurance company, Farm Bureau Town & Country Insurance Company of Missouri (“Farm Bureau”), over its handling of a property damage claim. Plaintiffs asserted claims based on breach of contract (Count I), breach of fiduciary duty (Count II), and fraud (Count III). The trial court entered summary judgment in favor of Farm Bureau on Plaintiffs’ breach of fiduciary duty and fraud claims. Plaintiffs’ remaining contract claim was tried to a jury. The jury rendered a verdict in favor of Farm Bureau, and the trial court entered judgment in accordance with that verdict. When the trial court denied Plaintiffs’ Motion for New Trial, this appeal timely followed.
Plaintiffs allege the trial court committed reversible error by: (1) permitting Tammie to be cross-examined with a facsimile copy of a document entitled Construction Authorization (“the Construction Authorization”); (2) receiving the Construction Authorization into evidence; (3) submitting a jury instruction that did not require the jury to find all of the ultimate facts necessary to establish Farm Bureau’s affirmative defense of accord and satisfaction; and (4) granting summary judgment to Farm Bureau on Plaintiffs’ breach of fiduciary duty claim. 2 Finding merit in Plaintiffs’ instructional error claim, we affirm the trial court’s judgment in favor of Farm Bureau on Plaintiffs’ breach of fiduciary duty claim, reverse the judgment in favor of Farm Bureau on Plaintiffs’ contract claim, and remand the matter for a new trial on Plaintiffs’ contract claim.
Facts 3
In February of 2003, a water pipe inside Plaintiffs’ home burst. The released water traveled through the wall, under the floor, and eventually pooled in the crawlspace beneath the house. That water ultimately warped the center beam supporting the floor joists and caused the roof and the walls in the kitchen and bedroom to settle. At the time of these events, Plaintiffs had in effect a homeowners’ insurance policy acquired from Farm Bureau that provided coverage for damage to the home incurred as a result of sudden, accidental and direct loss as well as coverage for any personal property that was thereby physically destroyed or rendered unusable. In the event of such a loss, the policy provided that “[a]t our option, we "will pay to you actual cost of the damage or the cost of
Ross was deployed in Iraq as an active member of the United States Marine Corps when the pipe burst. When Tammie contacted Farm Bureau to report the water damage, the agent she spoke with on the telephone informed her that only Ross, as the named insured, could initiate a claim. Farm Bureau did not open a property loss claim for Plaintiffs until nearly two months after the pipe burst.
Once Farm Bureau opened the claim, Tammie began searching for a contractor to make the necessary repairs. Mark Fuchs (“Fuchs”) was the claims representative Farm Bureau assigned to handle Plaintiffs’ claim. Fuchs informed Tammie “that the choice of contractor was hers and hers alone,” and that he had no preference as to whom she chose. Fuchs’s supervisor, Bruce Bruemmer, also stated that it was the homeowner’s decision as to who to hire to fix any damages incurred. Tammie testified that she obtained two estimates, one from Good Construction and another from Commercial Installations. Fuchs rejected the $81,300 Commercial Installations estimate as too high or lacking sufficient detail and testified that he never received an estimate from Good Construction. Fuchs attempted to speak with a representative from Commercial Installations but had been unable to reach him.
During this same time period, Fuchs had become acquainted with Anthony “Tony” Breedlove (“Breedlove” or “Tony”) of Mastercraft Construction (“Master-craft”) when Breedlove made a cold call on Fuchs to solicit business from Farm Bureau. Fuchs testified that Breedlove had a computer program that would write a detailed estimate, so Fuchs contacted Breedlove to ask him to do an estimate on Plaintiffs’ home. Breedlove testified that he had received such a call from Fuchs informing him that Plaintiffs were having a difficult time finding a contractor and asking if he would be “willing to go down there.” Breedlove agreed to go to Plaintiffs’ home to prepare an estimate.
Breedlove testified that the first time he went to Plaintiffs’ home, he had Tammie sign the Construction Authorization before he began working on his estimate. Breed-love testified that the Construction Authorization was a form document that authorized Mastercraft to work with Farm Bureau and to begin the repair work on Plaintiffs’ home. It also explained that Mastercraft was not employed by or affiliated with Farm Bureau in any way and authorized Farm Bureau to add Master-craft as an additional payee on any checks issued by Farm Bureau for repairs made to Plaintiffs’ home. This was the standard authorization he had used with all of his clients. Breedlove testified that he then faxed a copy of the Construction Authorization to Farm Bureau “to allow them to put our names on the checks.” Fuchs also testified that Mastercraft was placed on the checks Farm Bureau issued at “[Tam-miej’s request.” Tammie testified that the signature on the Construction Authorization appeared to be hers.
Farm Bureau approved the estimate given by Mastercraft and eventually issued three checks to pay for the repairs made to Plaintiffs’ home. Each of those checks was made payable to “Ronnie R. Pool and Mastercraft Construction, Tony.” Tammie testified that she had asked Fuchs to make the checks payable solely to her “[bjecause then I would have a choice of the estimates that I had, and then I could handle it
Tammie allowed Mastercraft to begin working on her home after she received a claim check with both names on it. As to the first joint check issued by Farm Bureau to Ross and Mastercraft, Tammie and Breedlove both signed it, and Tammie took it to the bank and had it converted to a cashier’s check. Tammie put $2,000 of the check’s proceeds in her bank account, giving the rest to Breedlove/Mastercraft. When Breedlove received the next two joint checks from Fuchs, he picked up Tammie, whose car was not operable, and they went to the bank together to cash them. Tammie endorsed the second check (in the amount of $15,688.70) and gave it to Breedlove. Breedlove then had Tammie keep the third check (in the amount of $4,584.80), telling her it was “insurance” that he would finish the job. At no time during this process did Tammie indicate that she did not wish to hire Mastercraft as the contractor. Tammie testified, however, that she believed she had no choice but to permit Breedlove/Mastercraft to work on her home because “he was on the check.”
Plaintiffs’ contract claim against Farm Bureau included an allegation that Farm Bureau’s failure to pay their claim was vexatious, not because Farm Bureau failed to pay an agreed-upon amount to repair the damages to Plaintiffs’ home, but because Farm Bureau failed to comply with its policy language that indicated payment would be made to the insured alone, not to the insured and the contractor. In defending that portion of Plaintiffs’ claim, Farm Bureau questioned Tammie about the Construction Authorization she had apparently signed. After Tammie admitted that the signature on the Construction Authorization appeared to be hers, the trial court also received the document into evidence over Plaintiffs’ “best evidence” objection. The Construction Authorization received into evidence was the document Farm Bureau had received via facsimile transmission from Breedlove. Breedlove testified that the original Construction Authorization signed by Tammie was no longer available, as his file relating to the work he did for Plaintiffs had been destroyed.
In total, Mastercraft received more than $22,000 of the $27,092.27 paid by Farm Bureau on Plaintiffs’ claim. Within one month of Breedlove receiving the second check, Mastercraft stopped work on Plaintiffs’ home, which is no longer habitable. Tammie testified that she did not use any of the money she had retained from the checks issued by Farm Bureau to prevent any further deterioration to the home. Tammie also did not alert anyone at Farm Bureau that Breedlove had walked off the job until at least five months after he had done so.
Analysis
Point I: Admission of the Construction Authorization
Plaintiffs’ first point alleges the trial court abused its discretion by allowing Farm Bureau to cross-examine Tammie with the Construction Authorization and then receiving it into evidence because “[Farm Bureau] failed to establish an adequate foundation for admission of [the Construction Authorization], in that [the Construction Authorization] is a copy of a facsimile which [Farm Bureau] failed to
A. Standard of Review
“The admission or exclusion of evidence is a matter of trial court discretion.”
Intertel, Inc. v. Sedgwick Claims Mgmt. Sens. Inc.,
We first note that Plaintiffs’ point is multifarious in violation of Rule 84.04
5
in that it attempts to challenge two separate rulings in a single point relied on.
See State ex rel. Roster v. Allen,
Although we may choose to review a defective point as long as the deficiency does not impede a disposition on the merits,
Bolz v. Hatfield,
B. The Best Evidence Rule
The remaining portion of Plaintiffs’ first point challenges the admission of the Construction Authorization under the “best evidence rule.” “The ‘best evidence rule applies only when the evidence is offered to prove the terms or contents of a writing or recording.’ ”
Boroughf v. Bank of Am., N.A.,
In the instant case, Farm Bureau did not seek admission of the Construction Authorization to prove its exact terms or even to prove that it had actually been executed by Tammie. Instead, Farm Bureau introduced the document as evidence that the Construction Authorization faxed to Farm Bureau provided Farm Bureau with a good-faith basis to believe that Tammie had authorized Farm Bureau to include Mastercraft as a joint payee on the checks it issued; it was relevant as a defense to Plaintiffs’ claim that Farm Bureau’s decision to make the claim checks jointly payable to its named insured and Mastercraft was willful and without reasonable cause or excuse.
See Shirkey v. Guarantee Trust & Life Ins. Co.,
Point II: Jury Instruction No. 7
Plaintiffs’ second point alleges the trial court erred in submitting Instruction No. 7 to the jury because the instruction did not require the jury to find all of the ultimate facts necessary to establish Farm Bureau’s affirmative defense of accord and satisfaction. Specifically, Plaintiffs allege the instruction did not ask the jury to determine whether Plaintiffs had agreed to allow Farm Bureau to issue claim checks that included Mastercraft as a joint payee.
A. Standard of Review
“This Court reviews
de novo,
as a question of law, whether a jury was properly instructed.”
Morgan v. State,
B. Non-MAI Instructions
Rule 70.02 governs the provision of instructions to juries.
McBryde v. Ritenour Sch. Dist.,
C. Accord and Satisfaction
“An accord is an agreement for the settlement of a previously existing claim by a substituted performance.”
Hiblovic v. Cinco-T.C., Inc.,
D. Contents of Instruction No. 7
Instruction No. 7 stated: “Your verdict must be for Defendant if you believe: First, Plaintiffs and Defendant agreed that Plaintiffs [sic] insurance claim would be settled for $27,092.27, and Second, Defendant provided Plaintiffs with settlement checks totaling $27,092.27.” The problem with this instruction is that none of the facts it submitted to the jury were in dispute. Plaintiffs admitted that they had agreed to settle their claim for $27,092.27 and that Tammie had received and accepted all three settlement checks without disputing their amounts. What Plaintiffs disputed was whether they had agreed to allow Farm Bureau to make Mastercraft/Breedlove a joint payee on those checks.
The insurance contract drafted by Farm Bureau provided that, “[a]t our option, we will pay to you [Ross, the named insured] actual cost of the damage or the cost of repairs so that your property is returned to the same condition it was prior to the loss.” Farm Bureau admitted that it made its checks payable not to “Ronnie R. Pool,” but to “Ronnie R. Pool and Mastercraft Construction, Tony[.]” Because the payment of the cost of repairs to both the named insured and the contractor was in contravention of the parties’ original written agreement, the disputed matter of fact to be resolved by the jury was whether Plaintiffs had agreed to a modification (an accord) of the payment provision set forth in the insurance policy.
Tammie testified that she did not agree to have the checks made jointly payable to Ross and Mastercraft. Farm Bureau had received a document that indicated otherwise — that Plaintiffs had agreed to have Mastercraft added as a joint payee on the claim checks. As argued by Plaintiffs, this critical disputed question of fact should have been submitted to the jury for its resolution, and Instruction No. 7 contained no such submission. In short, Instruction No. 7 asked the jury to make findings on matters that were not actually in dispute and omitted the only ultimate fact question the jury should have been directed to resolve. Because Instruction No. 7 imper-
Having found the instruction to be erroneous, we must next determine whether Plaintiffs were prejudiced by the error. “For prejudice to be found sufficient to reverse for instructional error, the error must have materially affected the merits and outcome of the case.”
Rice v. Bol,
Here, even if the jury believed by a preponderance of the evidence that Farm Bureau had breached the terms of its written agreement (the insurance policy) regarding to whom claims checks would be made payable, Instruction No. 7 allowed it to enter a judgment in favor of Farm Bureau without having to find that Plaintiffs had subsequently agreed to accept payment in a different form. In other words, if the jury had been required to determine whether Plaintiffs had agreed to have Mastercraft/Breedlove included as a joint payee on the claim checks, and found that they had not done so, then the jury could not have found in favor of Farm Bureau on its affirmative defense of accord and satisfaction and might have entered a verdict in favor of Plaintiffs.
Farm Bureau argues that the provision requiring payment to “you” under the contract does not mean payment to “only you.” We do not find this argument persuasive for two reasons. First, Farm Bureau sought to strictly enforce “you” as “only you” to the point of excluding Tammie as á payee on the checks or as a person with authority to open an insurance claim. Farm Bureau’s actions in dealing with Plaintiffs show that it interpreted “you” to mean “the named insured” (Ross) to the exclusion of all others. Secondly, “[i]n construing the terms of an insurance policy, this Court applies the meaning which would be attached by an ordinary person of average understanding if purchasing insurance, and resolves ambiguities in favor of the insured.”
Seeck v. Geico Gen. Ins. Co.,
Point III: Summary Judgment for Farm Bureau on Breach of Fiduciary Duty Claim
Plaintiffs’ third point alleges the trial court erred in granting summary judgment in favor of Farm Bureau on Plaintiffs’ breach of fiduciary duty claim. Although Plaintiffs acknowledge that an insurer generally does not owe fiduciary
A. Standard of Review
We review
de novo
the trial court’s grant of summary judgment.
Conway v. St. Louis County,
B. Summary Judgment
“Pursuant to Missouri Supreme Court Rule 74.04(c)(6), the trial court shall grant summary judgment if ‘the motion, the response, the reply and the sur-reply show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law[.]”
Conway,
The trial court granted Farm Bureau’s motion for summary judgment regarding Plaintiffs’ breach of fiduciary duty claim without issuing a statement of its reasons for doing so. As such, we must determine whether any theory in the record supports it.
C.The Existence of a Fiduciary Relationship
Farm Bureau’s motions for summary judgment argued that Plaintiffs failed to aver facts showing the existence of a fiduciary relationship between Plaintiffs and Farm Bureau. To make a sub-missible case for breach of fiduciary duty, Plaintiffs “had to present facts showing:
“Fiduciary duty is not created by a unilateral decision to repose trust and confidence; it derives from the conduct or undertaking of the purported fiduciary which is recognized by the law as justifying such reliance.”
Farmers Ins. Co., Inc. v. McCarthy,
The postulate for this fiduciary relationship is notably absent in claims by an insured against an insurer under policies of property and related types of insurance. Such claims are not controlled by the insurer to the exclusion of the insured nor is the specter of a judgment against an insured in excess of coverage a present danger if an insurer fails to exercise good faith. In first party claims by insureds against insurers under policies affording coverage for loss or damage to property and related types of insurance, the parties occupy a contractually adversary or creditor-debt- or status as opposed to standing in a fiduciary relationship.
Duncan v. Andrew County Mut. Ins. Co.,
Decision
Because Instruction No. 7 erroneously failed to direct the jury to determine all of the ultimate facts necessary to support Farm Bureau’s affirmative defense of accord and satisfaction to Plaintiffs’ contract claim and Plaintiffs were prejudiced thereby, the judgment as to Count I is reversed and the cause is remanded for a new trial on that claim in a manner consistent with this opinion. In all other regards, the judgment of the trial court is affirmed.
Notes
. Ronnie R. Pool was referred to in the transcript by his middle name, Ross. Because Ross and Tammie Pool share the same last name, we use their first or middle names in this opinion solely for ease of identification.
. Plaintiffs do not challenge the trial court’s summary judgment in favor of Farm Bureau on Plaintiffs’ fraud count.
.As more fully explained hereafter, we make reference in this opinion to evidence both favorable and unfavorable to the judgment entered by the trial court because Plaintiffs’ points are governed by different standards of review.
. Tammie had a Power of Attorney that authorized her to act on Ross’s behalf.
. Unless otherwise noted, all rule references are to Missouri Court Rules (2009).
. See Duncan v. Andrew County Mut. Ins. Co., 665 S.W.2d 13, 19 (Mo.App. W.D.1983) ("In first party claims by insureds against insurers under policies affording coverage for loss or damage to property and related types of insurance, the parties occupy a contractually adversary or creditor-debtor status as opposed to standing in a fiduciary relationship”).