DocketNumber： Nos. 67517, 67032
Citation Numbers： 712 S.W.2d 375
Judges： Billings, Blackmar, Donnelly, Higgins, Len, Rend, Robertson, Welliver
Filed Date： 6/17/1986
Status： Precedential
Modified Date： 10/1/2021
These appeals question applicability of the one-year statute of limitations contained in the former section 380.840, RSMo 1978, (repealed, Laws 1984, p. 665; effective January 1, 1985) to two policies of insurance issued by Columbia Mutual Insurance Company, a farmers’ mutual insurance company. Underlying actions to enforce coverage for property loss caused by fire were dismissed on an application of section 380.480. Because appellants challenge the validity of section 380.840, this Court has jurisdiction. Mo. Const, art. V, § 3. Reversed and remanded.
On May 1, 1981, Paul Warden purchased insurance from Columbia Mutual on his dwelling, personal property and other buildings. On May 23, 1981, fire destroyed the insured premises; Columbia Mutual denied coverage. On October 31, 1984, Mr. Warden filed his action to enforce coverage.
On June 1, 1982, Sam Shipley purchased insurance from Columbia Mutual on his home and personal property. On August 20, 1982, fire destroyed the insured premises; Columbia Mutual denied coverage. On May 10,1984, Mr. Shipley filed his action to enforce coverage.
In response to plaintiffs’ actions, defendant pleaded the one-year limitation of section 380.840, on the ground neither petition was filed within one year of the date of the loss. Section 380.840 (repealed 1984) provides:
No suit or action for any loss shall be commenced until such loss becomes due in accordance with the policy, and in no event until sixty days have elapsed after proof of loss has been given the company. No such suit or action shall be sustainable in any court of law or equity unless all the requirements of the policy shall have been complied with, nor unless commenced within twelve months next after the loss. No defense set up or evidence offered by a company in any suit concerning a loss shall render such company liable for damages.
Appellants contend the trial court erred in its judgments of dismissal because: 1) the one-year statute of limitations contained in section 380.840 is void as a special law applying only to farmers’ mutual insurance companies in violation of Mo. Const, art. Ill, § 40; 2) respondent was not organized under sections 380.481-380.570, RSMo 1969, and therefore could not elect to come under the provisions of section 380.840; 3) section 380.591(2), RSMo Cum. Supp.1984, retroactively lengthened the statute of limitations period for nonassessable premium basis policies; and 4) the insurance contracts were unconscionable because the one-year statute of limitations period was buried among the “fine print” policy provisions.
The question is whether the one-year statute of limitations contained in section 380.840 is available in defense of an action by a policy holder against a farmers’ mutual insurance company when it insures against loss or damage caused by fire on a nonassessable premium basis.
Historically, farmers’ mutual insurance companies have enjoyed a special status under the law. Such companies were
In 1953, the legislature adopted a comprehensive act relating to mutual insurance companies. Laws 1953, p. 252 (recodified as section 380.580-380.840, RSMo 1978). Under this Act, members of farmers’ mutual insurance companies could incorporate for the purpose of mutually insuring its members. Laws 1953, p. 252, § 2 (recodi-fied as § 380.590, RSMo 1978 (repealed, Laws 1984, p. 665; effective January 1, 1985)). Section 10 of the Act provided that each member of a farmers’ mutual insurance company “shall be liable in accordance with the terms of his insurance contract or policy for his pro rata share of the amount necessary to pay all losses and expenses incurred during the time for which his respective policy is in force.... ” Laws 1953, p. 252, § 10 (recodified as § 380.720, RSMo 1978 (repealed Laws 1984, p. 665; effective January 1, 1985)). Section 9 of the 1953 Act provided:
A company operating under [sections 380.580 to 380.840] may at the time the application for insurance is made or thereafter, collect such fee, initial charge and/or advance assessment or premiums as the directors prescribe and shall collect sufficient assessments or premiums annually, or oftener, to enable it to pay losses and expenses, and, in accordance with the articles of incorporation or bylaws, to create and maintain a safety fund....
Laws 1953, p. 252, § 9 (recodified as § 380.710, RSMo 1959).
Thus a farmers’ mutual insurance company operating under the 1953 Act was a company which issued assessable insurance policies to its members; and under the language of section 9, such a farmers’ mutual insurance company was also a company which could issue policies on a nonassessa-ble premium basis as the directors prescribed.
In 1963, the legislature amended section 9 of the 1953 Act, Section 380.710, RSMo 1959, to provide:
(1) A company operating under section 380.580 to 380.840 may collect such fee and/or initial charge as the board of directors shall prescribe and shall collect a sufficient amount of money annually, or oftener to enable it to pay losses and expenses, and, in accordance with the articles of incorporation and bylaws, to create and maintain a safety fund. The amount required shall be collected by assessments, except that a company which is qualified to write “miscellaneous” insurance as set out in section 380.-620 subdivision 4 may charge and receive premiums on such of its policies as the board of directors may prescribe. Members holding policies issued on the premium basis shall pay the stipulated premium at or before the time when the policy is issued and shall not be liable to assessment. Members holding policies not issued on the premium basis may be charged such advance assessment, payable at or before the time when the policy is issued, as the board of directors may prescribe, but such members shall be liable to further assessment, if any shall be required, in accordance with the provisions of sections 380.580 through 380.840.
See § 380.710(1), RSMo 1978 (repealed Laws 1984, p. 665; effective January 1, 1985).
Respondent contends that, under this section, once a company is qualified to write “miscellaneous” insurance as set out in section 380.620, RSMo 1978, (repealed Laws 1984, p. 665; effective January 1, 1985) then such company may issue nonas-sessable premium basis policies on any insurable risk as the board of directors may prescribe and still receive the benefits of section 380.840. Appellants counterargue that when a farmers’ mutual insurance
Because farmers’ mutual insurance companies have enjoyed special status under the law, statutes regulating such companies historically have been more specialized than insurance companies operating under general insurance laws. Traders Mut. Fire Ins. Co., 284 S.W.2d at 589. In apparent recognition of the possible broad effect of section 9 of the 1953 Act, the legislature amended section 380.710 to be more limiting. Prior to the amendment, farmers’ mutual insurance companies could collect either premiums or assessments thereby permitting such companies to issue nonassessable premium basis policies without restriction. By its 1963 amendment the legislature narrowed the scope of section 380.710 to collection by assessment with limited exception.
Recognizing the need for a prompt determination and assessment of the losses of members of farmers’ mutual insurance companies, the legislature established the one-year statute of limitations for the benefit of such companies operating under section 380.580-380.860. To hold that certain farmers’ mutual insurance companies could issue nonassessable policies on any insurable risk, including those risks which would otherwise be covered by assessable policies, would be contrary to the precise rationale for which the shorter statute of limitations was enacted. Such a holding would also serve impermissibly to circumvent the longer statute of limitations applicable to a similar cause of action. The legislature has also authorized farmers’ mutual insurance companies to issue certain premium basis policies for the convenience of its members. Such legislation is not intended to be unlimited authority for qualified companies to issue nonassessable policies insuring against risks that were intended to be covered on an assessment basis.
Respondent argues that once a company qualifies to write “miscellaneous” insurance then such company may receive premiums on any of its policies as the board of directors may prescribe. This would, in effect, convert traditional assessable policies to nonassessable policies. Respondent’s position relies on the second sentence of the amended section 380.710; however, “[t]he cardinal rule of statutory construction is that the intention of the legislature in enacting [the amendment] must be ascertained ..., and the statute, as a whole, should be looked to in construing any part of it.” Whitehead v. Farmers’ Fire and Lightning Mut. Ins. Co., 227 Mo.App. 891, 60 S.W.2d 65, 69 (1933).
Considering the philosophy of farmers’ mutual insurance companies and the legislative history relating to such companies, when the exception language of section 380.710(1) is read in the context of the entire statute and chapter, it necessarily implies that section 380.710(1) envisioned nonassessable premium basis policies for “miscellaneous” insurance only. This Court holds, therefore, that qualified farmers’ mutual insurance companies are limited to issuing nonassessable premium basis policies for “miscellaneous” insurance alone in order to benefit from the one-year statute of limitation.
The issue becomes whether the insurance purchased by plaintiffs is “miscellaneous” insurance as set out in section 380.620(4), thereby permitting respondent to plead section 380.840, the one-year statute of limitations.
Section 380.620 (repealed 1984) provides:
A company operating under this law may make any one or more of the following kinds of insurance subject to the provisions of this law:
(1) Fire: ...
(2) Windstorm: ...
(3) Crops: ...
(4) Miscellaneous: Insurance against any other insurance risk specified in the articles of incorporation which fire insurance companies doing business under the general insurance laws of this state are not prohibited by law from making and*379 for which specific provision is not made in this law.
To constitute “miscellaneous” insurance, the insurance must insure against a risk for which specific provision is not made in section 380.620. The nonassessable premium basis policies issued to plaintiffs insured against the risk of fire; their losses were, in fact, caused by fire. Section 380.-620(1) contains a specific provision for insurance against loss or damage caused by fire. Therefore, the insurance policy issued by defendant insuring against fire loss or damage is not “miscellaneous” insurance as that term is defined in section 380.620(4).
The benefits of the one-year statute of limitations and exemption from general insurance laws are conferred only upon those farmers’ mutual insurance companies operating under the provisions of sections 380.-580-840. To the extent that defendant issues nonassessable premium basis policies against risks for which specific provisions are made in section 380.620, it is neither exempt from general law, nor operating under the provisions of sections 380.580-840. This Court holds, therefore, that the one-year statute of limitations is not available as a defense to claims arising from the issuance of nonassessable premium basis policies against fire risks.
Respondent argues that section 380.840 provided a one-year statute of limitation as to all claims under all policies issued by farmers’ mutual insurance companies; and that there would have been no reason for the legislature to enact section 380.591, RSMo Cum.Supp.1984, which provides a different statute of limitations for nonas-sessable premium basis policies, had that been the law prior to enactment of section 380.591. This argument fails because section 380.840 has always applied to “miscellaneous” insurance policies issued on the nonassessable premium basis. By enacting section 380.591, the legislature enlarged the statute of limitations for the benefit of members holding “miscellaneous” insurance on a nonassessable premium basis.
The judgments dismissing plaintiffs’ petitions are reversed, and the causes are remanded to the respective trial courts for further proceedings consistent with this opinion.