Harry G. Shaffer, III, Esq.
David A. Sims, Esq.
Anthony J. Cicconi, Esq. Debra Tedeschi Hall, Esq.
Shaffer & Shaffer Elkins, West Virginia
Charleston, West Virginia Attorneys for Appellee
Attorneys for Appellant
The Opinion of the Court was delivered PER CURIAM.
JUSTICE STARCHER concurs and reserves the right to file a concurring opinion.
This case is before this Court upon appeal of a final order of the Circuit
Court of Kanawha County entered on December 18, 1998. In that order, the circuit court
entered summary judgment in favor of the appellee and defendant below, Farmers Mutual
Insurance Company, in an action filed by the appellant and plaintiff below, the Estate of
Hulda Davis by its Executrix, Jerold A. Casey, alleging breach of contract, fraud, bad
faith, and unfair claims settlement practices related to the adjustment and settlement of a
fire loss claim. In this appeal, the appellant contends that the circuit court improperly
applied this Court's decision in Yeager v. Farmers Mut. Ins. Co., 192 W.Va. 556, 453
S.E.2d 390 (1994), when it granted summary judgment in favor of the appellee.
This Court has before it the petition for appeal, the designated record, and
the briefs and argument of counsel. For the reasons set forth below, we reverse the final
order of the circuit court and remand this case for further proceedings.
In 1988, Farmers Mutual Insurance Company (hereinafter Farmers
Mutual) issued an insurance policy to Hulda Davis on her property located in Mason
County, West Virginia. The insurance policy contained limits of liability for the dwelling
in the amount of $30,000.00. In July 1993, Ms. Davis requested that her policy limits be
increased to $40,000.00. After a new application was completed, Farmers Mutual issued
a new policy with liability limits of $40,000.00.
In March 1995, Ms. Davis' property was appraised for a loan application
with the Twentieth Street Bank.See footnote 1
According to the bank's appraisal, the value of the home
was $43,201.00, less $11,425.00 depreciation, for a net value of $31,776.00. A year after
this appraisal was completed, Ms. Davis passed away. Subsequently, Jerold Casey, the
Executrix of Ms. Davis' estate, informed Farmers Mutual that Ms. Davis' house would
be tenant occupied. Ms. Casey requested that the insurance coverage on the house be
increased. After consideration of the Twentieth Street Bank appraisal, Farmers Mutual
issued a basic fire policy of insurance with limits of $50,000.00 for the dwelling and
$20,000.00 for the contents.
Ten months later, on February 7, 1997, the home was totally destroyed by
fire. After receiving notification of the fire loss, Art Meadows, an adjuster for Farmers
Mutual, visited the home site and took a statement from Ms. Casey. Farmers Mutual also
retained Donald Sturm, an appraiser, to determine the actual cash value of the house
immediately prior to the fire. On February 28, 1997, Mr. Sturm submitted his appraisal
report which valued the property at $28,155.00.
After further investigation, Farmers Mutual made a settlement offer, by letter
dated March 13, 1997, to Ms. Casey. The offer consisted of payment of $30,000.00 for
the dwelling and $3,883.00 for the contents of the home at the time of the fire including
$1,050.00 for debris removal. Ms. Casey accepted this offer on behalf of the estateSee footnote 2
executed a Release of All Claims wherein she released and forever discharged Farmers
Mutual for all claims arising out of the fire that occurred at Ms. Davis' property on
February 7, 1997.
Approximately one year later, Ms. Casey, on behalf of Ms. Davis' estate,
filed suit against Farmers Mutual in the Circuit Court of Kanawha County alleging breach
of contract, fraud, bad faith, and unfair claims settlement practices. She further alleged
that Farmers Mutual exhibited a pattern or practice of deceiving policy holders who had
suffered a total loss by fire and thus, sought to bring the action on behalf of Ms. Davis'
estate and the entire class of persons similarly situated. After discovery was completed,
Farmers Mutual filed a motion for summary judgment. In response, Ms. Casey filed a
motion for leave to amend her complaint as well as a cross motion for summary judgment.
On December 18, 1998, the circuit court granted Farmers Mutual's motion for summary
judgment. This appeal followed.
On numerous occasions, we have stated that [a] circuit court's entry of
summary judgment is reviewed de novo. Syllabus Point 1, Painter v. Peavy, 192 W.Va.
189, 451 S.E.2d 755 (1994). Pursuant to Rule 56 of the West Virginia Rules of Civil
Procedure, summary judgment is required when the record shows that there is no genuine
issue as to any material fact and that the moving party is entitled to a judgment as a matter
of law. In Syllabus Point 3 of Aetna Casualty and Sur. Co. v. Federal Ins. Co. of New
York, 148 W.Va. 160, 133 S.E.2d 770 (1963), this Court held: A motion for summary
judgment should be granted only when it is clear that there is no genuine issue of fact to
be tried and inquiry concerning the facts is not desirable to clarify the application of the
As noted above, Ms. Casey argues that the circuit court misapplied this
Court's decision in Yeager v. Farmers Mut. Ins. Co., 192 W.Va. 556, 453 S.E.2d 390
(1994), and therefore, erred by granting summary judgment in favor of Farmers Mutual.
In Yeager, this Court found that W.Va. Code § 33-17-9 (1957),See footnote 3
known as the valued
policy law, does not apply to farmers' mutual fire insurance companies. As we explained
in Syllabus Point 1 of Yeager,
W.Va.Code, 33-17-9 (1957), referred to as the valued policy law, does not apply to farmers' mutual fire insurance companies. The legislature clearly indicated such companies are exempt by its enactment of W.Va. Code, 33-22-7(c) (1957).See footnote 4 4
Ms. Casey acknowledges that the valued policy law does not apply to her fire loss claim. However, she asserts that Farmers' Mutual intentionally misrepresented the method by which actual cash value is to be determined in total loss claims. In Syllabus Point 2 of Yeager, this Court stated that:
If a farmers' mutual fire insurance company and its insured cannot agree on the actual cash value for a total loss of the insured property, the burden of proof rests on the party who seeks to show an amount different than the value stated on the policy. This decision does not prevent a farmers' mutual fire insurance company from placing a limit on the amount paid under the policy.
In this case, after the fire loss was reported, Farmers' Mutual retained an
appraiser to determine the value of the house just prior to the fire. The appraiser reported
that the house had a value of $28,155.00, which was similar to the appraisal that was
performed two years earlier when Ms. Davis sought a bank loan. Thereafter, Farmers
Mutual offered approximately $33,000.00 to settle the claim.
Ms. Casey essentially argues that Farmers Mutual could not rely on these
appraisals but instead, had the burden of establishing that the actual cash value of the
property had been diminished by physical depreciation between the date the policy was
issued and the date of the fire loss. In this regard, Ms. Casey relies upon the following
language from Yeager:
Upon review, we affirm this statement with regard to who bears the burden of proof if a party seeks to establish a different value than what is stated on the policy. See generally 21 John A. Appleman and Jean Appleman, Insurance Law and Practice § 12233 at 261 (1980) ("[t]he insurer has the burden of establishing that the estimated value of the property insured had been diminished by physical depreciation between the date of the policy and the date of the fire loss." (Footnote omitted)). We find our adoption of this burden of proof will help prevent the overvaluation of property.
192 W.Va. at 560, 453 S.E.2d at 394. Ms. Casey asserts that Farmers Mutual intentionally misrepresented the method by which actual cash value is to be determined in total losses and that this act constitutes bad faith. Ms. Casey further argues that Farmers Mutual's statement that we have a right to settle claim for the house and contents on an actual cash value basis was false and fraudulent in light of Yeager and such statement influenced her decision to settle the case.
In response, Farmers Mutual asserts that it followed this Court's decision in Yeager in adjusting this claim by hiring an independent appraiser to assess the value of the home prior to the fire. It also considered the appraisal previously performed in connection with an application for a bank loan by Ms. Davis. In considering these appraisals, Farmers Mutual maintains that it followed the law set forth in Yeager relating to the actual cash value of the home and therefore, met its burden of proof. Farmers Mutual claims that Ms. Casey offered no proof of the value of the home. In addition, she testified that she understood the settlement and release and that she settled the case because she thought that her brother might have been involved in setting the fire.See footnote 5 5 Farmers Mutual notes that the settlement offer was made after a full investigation of the claim and just five weeks after the fire occurred.
After a thorough review of the record, we find that the circuit court erred by
granting summary judgment in this case. In Yeager, which incidently involved the same
insurance company that is the appellee and defendant below in this case, we noted that:
[A]n agreement as to value as of the date of the policy is not, strictly speaking, evidence of the amount of loss weeks or months later; but it is an agreement with respect to the value of the property insured which will carry through the life of the contract, unless a change in value is shown; and the burden of showing such change is on him who would profit thereby.
192 W.Va. at 560, 453 S.E.2d at 394, quoting Davis v. Safe Ins. Co., 120 W.Va. 505, 510, 199 S.E. 364, 366 (1938). Clearly, there are genuine issues of material fact in this case that need to be resolved by a jury. In particular, there are questions of fact relating to the circumstances surrounding the settlement offer and whether there was an agreement between the parties as to the actual cash value of the insured property. Accordingly, the final order of the Circuit Court of Kanawha County entered on December 18, 1998, is reversed, and this case is remanded for further proceedings.
Reversed and remanded.
All insurers issuing policies providing fire insurance on real property situate in West Virginia, shall be liable, in case of total loss by fire or otherwise, as stated in the policy, for the whole amount of insurance stated in the policy, upon such real property; and in case of partial loss by fire or otherwise, as aforesaid, of the real property insured, the liability shall be for the total amount of such partial loss, not to exceed the whole amount of insurance upon such real property as stated in the policy. This section shall not apply where such insurance has been procured from two or more insurers covering the same interest in such real property.
393. In fact, the applicable statutory provisions have remained unchanged since 1929.
Davis v. Safe Ins. Co., 120 W.Va. 505, 512, 199 S.E. 364, 367 (1938).
provision which is clear and unambiguous and plainly expresses the legislative intent will
not be interpreted by the courts but will be given full force and effect.' Syl. Pt. 2, State
v. Epperly, 135 W.Va. 877, 65 S.E.2d 488 (1951). Syllabus Point 1, State v. Jarvis, 199
W.Va. 635, 487 S.E.2d 293 (1997).