Missouri State Contract Cases 2012 (Part 6): Anti-Stacking, Insurable Interest

by Brian Rogers on August 6, 2012

in Missouri Contract Cases

Holmes v. Kansas City Board of Police Commissioners

Former police officer Danny Holmes sued the Kansas City police department under the Missouri Human Rights Act and on breach of contract and whistleblower claims for the termination of his employment by the police department. The Missouri Court of Appeals, Western District reversed the trial court’s judgment for Mr. Holmes on the breach of contract claim. The appellate court held that, while R.S.Mo. § 84.600 gives police officers a property right in continued employment, it does not give them a contractual right to sue for damages for wrongful termination. The court stated, “The general rule is that there is no private right of action to enforce a statute or regulation through an action for damages … and [w]here administrative review of a denied property right is adequate, parties may not” sue for damages instead. Further, R.S.Mo. § 84.600 doesn’t create a contractual term binding the board of police commissioners and a police officer.

American Family Mutual Insurance Co. v. Coke

American Family filed a declaratory judgment action relating to an insurance policy it had issued to Pamela Coke and Ward Ferrell on a motor home that had been damaged when it rolled down a hill into a ravine. Coke and Ferrell counter-claimed for breach of contract, vexatious refusal to pay, and defamation. The trial court granted the insurance company’s motion for directed verdict. The Missouri Court of Appeals, Eastern District reversed the judgment on appeal.

At issue on appeal was whether the trial court erred in granting the motion for directed verdict based on a finding that Ms. Coke’s and Mr. Ferrell’s lack of title alone was sufficient to bar recovery (the RV was titled in the name of Toy Hon USA, a company owned by Ferrell). Quoting Dimmitt v. Progressive Casualty Insurance Co., 92 S.W.3d 789, 792 (Mo. banc 2003), the appellate court noted that “Missouri strongly favors finding an insurable interest and courts should ‘make every effort to find an insurable interest, and to sustain coverage, when there is any substantial possibility that the insured will suffer loss from the destruction of the property’.” The court also stated that title is generally not a prerequisite to the enforcement of an insurance contract, but rather the insured must have an insurable interest in the property. A person has an insurable interest in property if “she will derive pecuniary benefit or advantage from its preservation, or will suffer pecuniary loss or damage from its destruction, termination, or injury by the happening of the event insured against.”

Ms. Coke and Mr. Ferrell had purchased the RV with their own money, maintained the vehicle, modified a building to store the RV on their property, and used the RV for personal enjoyment. This was sufficient to create an insurable interest in the vehicle.

Ries v. Shoemake

Julie Shoemake, the personal representative of the estate of William McCleney, appealed the circuit court’s judgment in favor of David Ries on his suit for breach of a real estate contract and fraudulent representation. The Missouri Court of Appeals, Southern District affirmed the trial court’s award of actual and punitive damages and attorneys’ fees.

McCleney sold Ries real property containing two lakes, knowing that his application for permits to build the lakes — which he had applied for after constructing them — had been denied. An addendum to the sale contract required McCleney “to provide verification of permits for lake development and reveal any conditions, if existing.” In addition, McCleney delivered an affidavit at closing stating that he had received no notice from any public authority requiring any improvement, alteration, or change to be made in the property. The trial court held that McCleney’s actions constituted a breach of his sales contract with Ries and supported punitive damages, and the appellate court agreed.

Taylor v. State Farm Mutual Automobile Insurance Co.

The Missouri Court of Appeals, Western District reversed the trial court’s judgment on cross motions for summary judgment awarding a pedestrian who had been hit by an underinsured motorist coverage amounts under two separate automobile policies under which she was insured. The appellate court held that an anti-stacking provision contained in the policies precluded recovery under both of the policies. Under Missouri law unambiguous anti-stacking provisions in policies for underinsured coverage — in contrast to uninsured coverage — are enforceable.

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{ 2 comments… read them below or add one }

Nelson August 7, 2012 at 9:57 pm

“Ms. Coke and Mr. Ferrell had purchased the RV with their own money, maintained the vehicle, modified a building to store the RV on their property, and used the RV for personal enjoyment.”

But then held the vehicle in a company (a limited liability structure, I presume), which seems to set them up nicely for a pierced corporate veil or a little extra attention from the IRS. Why even bother to hold the RV in a company?

Reply

Brian Rogers August 7, 2012 at 11:56 pm

All good questions, Nelson. It does seem curious. Unfortunately, as is usually the case, the opinion only recites facts that have a bearing on the decision. Personally, I’d like a little more color on the RV rolling off the road into a ravine.

Reply

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