Albert Theodore Bolinger and Peggy Louise bolinger v. Clarks Fork Mutual Insurance Company , 2016 Mo. App. LEXIS 352 ( 2016 )

In the
Missouri Court of Appeals
Western District
ALBERT THEODORE BOLINGER )
AND PEGGY LOUISE BOLINGER, )
) WD78832
Respondents, )
) OPINION FILED: April 12, 2016
v. )
)
CLARKS FORK MUTUAL )
INSURANCE COMPANY, )
)
Appellant. )
Appeal from the Circuit Court of Moniteau County, Missouri
The Honorable Donald L. Barnes, Judge
Before Division One: Lisa White Hardwick, Presiding Judge, Victor C. Howard, Judge
and Gary D. Witt, Judge
Appellant Clarks Fork Mutual Insurance Company ("Clarks Fork") appeals from
summary judgment entered in favor of Respondents Albert and Peggy Bolinger
(collectively the "Bolingers") on their petition alleging breach of an insurance contract.
Clarks Fork insured a farm owned by the Bolingers on which three turkey barns were
located. The Bolingers allege that Clarks Fork breached their contract by refusing
payment on that policy when two of the turkey barns collapsed due to weight of snow and
ice. Clarks Fork denied coverage, claiming the policy did not cover damage caused by
weight of snow and ice. We find that material facts are in dispute and thus the Bolingers
were not entitled to judgment as a matter of law. We reverse and remand for further
proceedings.
Factual and Procedural History1
On Friday, February 22, 2013, at approximately 5:00 p.m., Albert Bolinger visited
the office of Ken Wolken ("Wolken") of Wolken Insurance LLC to request a quote for
insuring his property, which included his residence and several farm buildings. Bolinger
was moving his insurance coverage from another carrier. It is uncontroverted that Albert
Bolinger specifically requested that his three turkey barns (collectively "Turkey Barns")
be insured against the peril of weight of ice, snow, or sleet. The Turkey Barns were
approximately 25 years old. At the end of the meeting, Wolken instructed Albert
Bolinger to return on the next business day to get an insurance quote.
On Monday, February 25, 2013, Albert Bolinger returned to Wolken's office and
was told that the premium for the coverage for his home, farm, and Turkey Barns would
be a total of $1,770.22, which he paid before leaving the office.
Clarks Fork alleges that Bolinger, at the same time, was also given an insurance
quote through Clarks Fork ("Quote Proposal"). The Quote Proposal, under each of the
headings "Outbuilding #1," "Outbuilding #2," and "Outbuilding #3," (the Turkey Barns)
stated:
1
"When considering appeals from summary judgments, the Court will review the record in the light most
favorable to the party against whom judgment was entered." ITT Commercial Fin. Corp. v. Mid-Am. Marine Supply
Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). Within this opinion, we have indicated which facts are disputed
between the parties. The facts set forth within the statement of facts are undisputed unless otherwise indicated.
2
Underwriting: FO-323 Weight of Ice, Snow, or Sleet coverage on farm
outbuildings is not in effect until inspected and approved.
The premium amount the Bolingers paid included premium amounts for the FO-323
endorsement for all three Turkey Barns.
Clarks Fork also alleges that Wolken verbally informed Albert Bolinger that
coverage for the peril of weight of ice, snow, or sleet for the Turkey Barns required an
additional specific endorsement, FO-323, that would not be effective until after the
Turkey Barns were inspected by Clarks Fork. The Bolingers deny that they received the
written Quote Proposal or were told by Wolken that the barns were not covered for
damage due to snow, sleet, or ice until after they submitted a claim for the collapse of the
barns. These are therefore disputed facts for purposes of summary judgment.
After Bolinger left the office, Wolken submitted an application for insurance to
Clarks Fork ("Application"). At the time Albert Bolinger paid the insurance premium,
snow had begun to fall from an impending winter snow storm.
Although the Application was submitted and the premium paid, Clarks Fork did
not issue Preferred Mutual Package Policy Number PM2616 ("Policy") to the Bolingers
until March 4, 2013. The Policy's effective dates were backdated to 12:01 A.M. on
February 25, 2013 (the date the premium was paid), until February 25, 2014. The Policy
did not contain the FO-323 endorsement for any of the Turkey Barns. The Policy did
specify that a premium was charged for each individual Turkey Barn; Turkey Barn #1,
size 50 * 320, $100,000 limit, premium $640.00, Turkey Barn #2, size 50 * 320,
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$100,000 limit, premium $640.00, Turkey Barn #3, size 50 *360, $100,000 limit,
premium $704.00.
On February 26, 2013, the day after the Policy became effective, Turkey Barn One
and Turkey Barn Two collapsed under the weight of snow and ice.2 Albert Bolinger
timely reported this loss to Wolken. The Turkey Barns had not been inspected prior to
their collapse. There is no dispute that the barns were a total loss. Bolinger did not
receive the written Policy until after the barns had collapsed and he had reported the loss
to Wolken.
Clarks Fork denied coverage for the collapse of Turkey Barn One and Turkey
Barn Two because loss due to weight of snow and ice was not a covered peril under the
Policy in effect at the time of the peril. Clarks Fork returned the portion of the premium
which it alleges is attributable to the FO-323 endorsement for all three Turkey Barns to
the Bolingers, approximately $181. Although Turkey Barn Three had not collapsed,
Clarks Fork returned the premium it alleges was for the FO-323 endorsement for that
barn and never conducted an inspection. The total premium charged for coverage for all
three Turkey Barns was $1,984. The Policy does not specify which portion of that
premium was coverage for weight of snow and ice verses coverage for other perils.
The Bolingers filed their Petition for Damages against Clark Fork ("Petition")
alleging one count for breach of contract. The Petition alleges that the two barns were
2
There is no allegation or argument that Bolinger was aware that the Turkey Barns were in danger of
collapsing at the time he purchased the Policy or that he was in any way acting in bad faith in purchasing this Policy.
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covered by the Policy and Clarks Fork should have paid full coverage for both destroyed
barns.
On May 5, 2015, the circuit court heard argument from both parties on cross-
motions for summary judgment.3 The court denied Clarks Fork's request for summary
judgment and granted summary judgment in favor of the Bolingers in the amount of
$200,000--the Policy limit for the two barns.4
This appeal followed.
Standard of Review
This Court's review of summary judgment "is essentially de novo." ITT
Commercial Fin. Corp. v. Mid-America Marine Supply Corp., 854 S.W.2d 371, 376 (Mo.
banc 1993). Facts are viewed "in the light most favorable to the party against whom
judgment was entered." Id. "The criteria on appeal for testing the propriety of summary
judgment are no different from those which should be employed by the trial court to
determine the propriety of sustaining the motion initially." Id.
Discussion
I.
Clarks Fork alleges five points of error on appeal. The first point contends that the
circuit court erred in finding that the Policy contained coverage for the Turkey Barns in
the event they were damaged as a result of the weight of ice, snow, or sleet.
3
The transcript of this hearing is not part of the record on appeal.
4
This amount failed to consider the amount of the deductable under the terms of the policy. However,
neither party addresses this issue in the claims before this court.
5
The parties agree that Bolinger specifically requested coverage on the Turkey
Barns for the peril of weight of snow and ice. They further agree the Policy was in effect
at the time the Turkey Barns collapsed, that Bolinger had paid the entire premium
requested by Clarks Fork for the Policy, and that Bolinger had not received the written
Policy from Clarks Fork until after the collapse had occurred and a claim for coverage
under the policy for the collapse had been made. They also agree that the Turkey Barns
were covered by the Policy under "Coverage E." The sole issue to be decided by the
circuit court was whether the Turkey Barns were covered against damage caused by the
peril of weight of snow, sleet, or ice at the time of their collapse.
The declaration's page of the policy states that there is "COVERAGE E FARM
BARNS AND OUTBUILDINGS" and specifically lists a machine shed and the three
Turkey Barns and separate premiums for each. The declarations page also states that
there is a "WINDSTORM OR HAIL DEDUCTIBLE ENDORSEMENT." The farm
coverage listed in the Policy states:
PERILS SECTION -- COVERAGES E, F, AND G
"We" insure against direct physical loss to property covered under
Coverages E, F, and G caused by the following perils, unless the loss is
excluded under the General Exclusions:
The Perils Section then goes on to list certain perils covered by the Policy: "1. Fire or
Lightening" and "2. Explosion." The Perils Section goes on to list additional "extended
coverage," which is available if listed on the declarations page, for the perils of: "3.
Windstorm or Hail," "4. Riot or Civil Commotion," "5. Aircraft," "6. Vehicles," "7.
Smoke," "8. Theft," "9. Collison," and "10. Electrocution of Livestock." The Policy's
6
declarations page states that the Bolingers had an additional endorsement for extended
coverage for the peril of "windstorm or hail."
Damage due to the weight of snow or ice is not mentioned in any fashion in any of
the covered perils except under "Windstorm or Hail." The Policy states that loss "caused
directly or indirectly by . . . ice (other than hail), snow, or sleet, all whether driven by
wind or not" is not covered.
The next section of the Policy lists "General Exclusions" from coverage stating:
GENDERAL EXCLUSIONS -- COVERAGES E, F, and G
"We" do not pay for loss if one or more of the following exclusions apply
to the loss, regardless of other causes or events that contribute to or
aggravate the loss, whether such causes or events act to produce the loss
before, at the same time as, or after the excluded causes or events.
The General Exclusions then list a number of events: Business Interruption, Civil
Authority, Earth Movement, Intentional Acts, Neglect, Nuclear Hazard, Ordinance or
Law, Power Disruption, War, Water Damage, Wear and Tear, Weather Conditions, and
Errors, Omissions, and Defects. Each General Exclusion states specific situations for
which there is no coverage. Under "Weather Conditions" the exclusion states that the
company will "not pay for loss which results from weather conditions that initiate, set in
motion, or in any way contribute to losses excluded under the preceding General
Exclusions." However, in the very next paragraph, the Policy provides that "We do pay
for an ensuing loss unless the ensuing loss itself is excluded." (emphasis added)
We interpret the policy according to the plain and ordinary meaning of its
language. Mo. Emp'rs Mut. Ins. Co. v. Nichols, 149 S.W.3d 617, 625 (Mo. App. W.D.
7
2004). "If, giving the language used its plain and ordinary meaning, the intent of the
parties is clear and unambiguous, we cannot resort to rules of construction to interpret the
contract." Mo. Pub. Entity Risk Mgmt. Funds v. S.M., 473 S.W.3d 161, 163 (Mo. App.
W.D. 2015) quoting Thiemann v. Columbia Pub. Sch. Dist., 338 S.W.3d 835, 840 (Mo.
App. W.D. 2011). "Disagreement over the interpretation of the terms of a contract does
not create an ambiguity." Id.
The Bolingers's argument, that the peril must be covered because it is not
expressly excluded, is premised on the Policy being an "all-risk" policy. "Under an all-
risk insurance policy, recovery will be allowed for all fortuitous loss, unless the policy
contains a specific provision expressly excluding the loss from coverage." Pakmark
Corp. v. Liberty Mut. Ins. Co., 943 S.W.2d 256, 259 (Mo. App. E.D. 1997). The Policy
purchased by the Bolingers was a "named peril" policy. To recover on a named peril
policy, the insured must prove the loss for which the insured seeks damages was caused
by a peril insured against by the policy. Franklin v. Farmers Mut. Ins. Co., 627 S.W.2d
110, 113-14 (Mo. App. W.D. 1982).
The Policy language states that it only covers loss due to specific perils--"Fire or
Lightening" or "Explosions"--plus an additional endorsement to add the peril of
"Windstorm or Hail." Under the terms of the "Perils Section" of the Policy, the Policy
does not provide coverage for loss due to the weight of snow and ice because it is not
listed as a covered peril. Normally, in a "named peril" policy, a non-covered peril does
not need to be specifically listed as an exclusion because there is nothing that brings the
peril under the terms of coverage of the Policy to begin with. See generally, Stufflebean
8
v. Fireman's Fund Ins. Co., 710 S.W.2d 931 (Mo. App. W.D. 1986) (flood due to
rainwater was not a covered peril).
The Bolingers argue that this clear understanding becomes muddled when read in
conjunction with the "General Exclusions" section, which immediately follows the
"Perils Section." "Weather Conditions" are excluded from the policy by language stating:
12. Weather Conditions -- "We" do not pay for loss which results from
weather conditions that initiate, set in motion, or in any way contribute to
losses excluded under the preceding General Exclusions (Numbers 1
through 11).
"We" do pay for an ensuing loss unless the ensuing loss itself is excluded.
We are to read the section as would an "ordinary person of average
understanding." Manner v. Schiermeier, 393 S.W.3d 58, 65 (Mo. banc 2013). The
Bolingers argue that the phrase: "'We' do pay for an ensuing loss unless the ensuing loss
itself is excluded," may be fairly read by a person of average understanding to mean that
Clarks Fork will pay for loss due to all weather conditions unless loss due to a particular
weather condition is expressly excluded. To interpret the phrase in this manner renders it
inconsistent with the terms of the "Perils Section." Most clearly, why purchase an
additional wind and hail endorsement when it is already covered by this exception to the
weather condition exception? Clarks Fork, however, offers no alternative interpretation
of the phrase except to note that an exclusion provision of an insurance policy "has no
function to endow coverage but rather limits the obligation of indemnity." Transp.
Indem. Co. v. Teter, 575 S.W.2d 780, 784 (Mo. App. 1978); Maritz Holdings, Inc. v. Fed.
Ins. Co., 298 S.W.3d 92, 99 n.6 (Mo. App. E.D. 2009).
9
Although not a defined term in the Policy, "ensuing loss" is a technical term of art.
Insurance policies may include "ensuing loss clauses" which "permit coverage for certain
losses that flow from an excluded peril." Dave Snell, Lisa Simon, XL Re, Ensuing Loss
Clauses Provide Exception to Exclusion, in 11 ANDREWS INS. COVERAGE LITIG. REP. 875
(2001). A broad ensuing loss clause "covers any loss occurring subsequent to an
excluded loss as long as the subsequent loss is not excluded by the policy." Id. In this
case, the phrase "'We' do pay for an ensuing loss unless the ensuing loss itself is
excluded" may reasonably be read as a broad ensuing loss clause. If a weather condition
causes a loss that, in turn, causes an additional, subsequent loss that would otherwise be
covered under the Policy, the secondary loss remains covered.
"The words of a policy must be given their plain and ordinary meaning consistent
with the reasonable expectation and objectives of the parties, unless it is obvious that a
technical meaning was intended." Drury Co. v. Mo. United Sch. Ins. Counsel, 455
S.W.3d 30, 36 (Mo. App. E.D. 2014). "We must endeavor to give each provision a
reasonable meaning and to avoid an interpretation that renders some provisions useless or
redundant." Id.
Although interpreting the phrase as an "ensuing loss clause" may be a usual and
ordinary interpretation of the Policy, Drury makes clear that we are to interpret insurance
contracts "consistent with the reasonable expectations and objectives of the parties"
unless it is "obvious" that a technical meaning was intended. 455 S.W.3d at 36; Doe Run
Res. Corp. v. Certain Underwriters at Lloyd's London, 400 S.W.3d 463, 474 (Mo. App.
E.D. 2013). "If a conflict arises between a technical definition of a term and the meaning
10
of the term which would reasonably be understood by the average lay person, the lay
person's definition will be applied unless it is obvious the technical meaning was
intended." Cowin v. Shelter Mut. Ins. Co., 460 S.W.3d 76, 79 (Mo. App. W.D. 2015)
(insured contested the policy definition of contractual term because it differed from its
ordinary meaning).
Understanding that the term "ensuing loss" is a technical term of art within
insurance contracts, we must then determine whether its technical meaning is inconsistent
with the ordinary meaning and reasonable expectations of the parties. We find that the
contested facts of this case preclude this Court from making such a determination. The
Bolingers's interpretation of this phrase is colored by their belief that they purchased an
insurance policy covering loss due to weight of snow and ice. Whether such an
expectation was reasonable is dependent upon contested facts. While it is uncontested
that the Bolingers requested and paid for such coverage, the Bolingers dispute Wolken's
testimony that he informed Albert Bolinger that an inspection was needed prior to
coverage. The Bolingers also dispute that they were given the Quote Proposal that stated
the FO-323 endorsement was subject to inspection. The effect of the phrase: "'We' do
pay for an ensuing loss unless the ensuing loss itself is excluded" cannot be determined
until these material facts are decided by a fact finder.
We note that some of the facts upon which the Bolingers rely in order to argue the
Policy covers loss due to weight of snow and ice are extra contractual and controverted.
We further note that the petition in this case is not a model of clarity. Despite statements
that the Bolingers are only relying on the four corners of the Policy, the Bolingers
11
repeatedly and emphatically insist that that the Policy must contain coverage for loss due
to weight of snow and ice because the Bolingers specifically requested this coverage,
paid for the coverage, and were never informed that this coverage required a prior
inspection. They argue the Policy must be read to contain coverage for loss due to
weight of snow and ice because that was the peril against which coverage was
specifically requested and the coverage that they were informed they were purchasing.
They also note that they were not provided a copy of the written policy until after the
damage occurred and a claim was made for coverage. These are extra contractual
theories involving material facts that are controverted.5 Where there are controverted
issues of material fact, summary judgment is precluded.
The circuit court erred in entering summary judgment in favor of the Bolingers
because, at best, the coverage requested by the Bolingers is dependent on controverted
material issues of fact that remain unresolved and preclude summary judgment.
II.
Clark's Fork final point on appeal alleges that, in granting summary judgment to
the Bolingers, the circuit court failed to address Clarks Fork's affirmative defenses of
coverage exclusion under General Exclusions eleven, twelve, and thirteen of the Policy
and estoppel and waiver defenses. We agree that these affirmative defenses were not
properly addressed and, further, raise issues of controverted material fact that preclude
summary judgment.
5
We recognize that these are not theories that were clearly pled in the Petition. They are, however, the
arguments upon which the Bolingers continually base their arguments as made clear in their motion for summary
judgment and arguments on appeal. What, right, if any, the Bolingers have to amend their Petition to more clearly
delineate these claims is an issue to be determined by the circuit court as "justice so requires." Rule 55.33.
12
A complete discussion of the affirmative defenses raised is not necessary except to
note that the Bolingers had the burden of establishing "that the non-moving defending
party's affirmative defense[s] fail as a matter of law." Chouteau Auto Mart, Inc. v. First
Bank of Mo., 91 S.W.3d 655, 658-659 (Mo. App. W.D. 2002). The Bolingers fail to
argue the propriety of the affirmative defenses. Their only challenge to the affirmative
defenses is that it is uncontroverted that the loss was caused by the weight of ice and
snow and, therefore, there is coverage regardless of any other exclusions. This ignores
the plain language upon which they rely that there is coverage "unless the ensuing loss
itself is excluded." Although it is uncontroverted that the loss was caused by the weight
of ice and snow, the degree to which the loss was caused by wear and tear of the building
is controverted and loss caused by wear and tear is specifically excluded as a General
Exclusion. Thus, the Bolingers own interpretation of the Policy necessitates that the
degree to which "wear and tear" played a role in the collapse must be determined prior to
judgment.
The Bolingers failed to refute Clark's Forks affirmative defenses prior to the grant
of summary judgment, and it is unclear that the circuit court actually properly considered
such defenses in entering its judgment. Further, the Bolingers present no additional
arguments regarding the affirmative defenses on appeal. Therefore, we find it
unnecessary to address them further on this appeal. Instead, we merely note that they
must be addressed in some fashion on remand of this case.
13
III.
Clark's Fork's second and third points on appeal allege that summary judgment
was not proper based on any extra contractual theories or oral contract theories because
such theories were not properly pled. The Bolingers agree with these points and request
that we limit our review to only the written terms of the contract. Thus, we need not
address points two and three.
We also need not address Clark Fork's fourth point on appeal given our holding
regarding point one.
Conclusion
We find that there exist material controverted facts that preclude summary
judgment. We further find that the Bolingers failed to properly refute Clarks Fork's
affirmative defenses prior to the circuit court's grant of summary judgment. As such, we
remand this case for further proceedings by the circuit court consistent with this opinion.
__________________________________
Gary D. Witt, Judge
All concur
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