HENRY OWENS, III v. KENTUCKY FARM BUREAU MUTUAL INSURANCE COMPANY
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RENDERED: August 27, 2004; 2:00 p.m.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2003-CA-001830-MR
HENRY OWENS, III
v.
APPELLANT
APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE GEOFFREY P. MORRIS, JUDGE
ACTION NO. 02-CI-005852
KENTUCKY FARM BUREAU
MUTUAL INSURANCE COMPANY
APPELLEE
OPINION
AFFIRMING IN PART - REVERSING IN PART AND REMANDING
** ** ** ** **
BEFORE:
COMBS, CHIEF JUDGE; GUIDUGLI AND KNOPF, JUDGES.
GUIDUGLI, JUDGE:
Henry Owens, III (hereinafter “Owens”) appeals
from an order and judgment granting summary judgment to Kentucky
Farm Bureau Mutual Insurance Company (hereinafter “KFB”).
The
order and judgment entered by the Jefferson Circuit Court on
June 12, 2003, provided that KFB recover $7,831.55 pursuant to
Count I of KFB’s complaint and $9,375 pursuant to Counts II and
III of the complaint.
remand.
We affirm in part, reverse in part, and
Owens had a policy of automobile insurance with KFB
insuring a 1997 Nissan Ultima GLE.
On or about October 26,
2001, the Nissan was reported stolen.
and then contacted his KFB agent.
Owens notified the police
On November 27, 2001, KFB
issued a check to Owens in the sum of $9,375 representing
“partial payment of total loss less $500 policy deductible.”
It
had been determined by KFB that the total loss was $10,375.
KFB
paid Owens $9,375 and told him that once he provided title to
the vehicle he would be paid the additional $1,000 due under the
policy.1
Subsequent to issuing a check to Owens for the loss of
the automobile, KFB became aware that the automobile was subject
to a lien held by Wells Fargo Financial.
Apparently without
further contact with Owens, KFB issued payment on February 28,
2002, to Wells Fargo Financial in the amount of $7,831.55 to
extinguish the lien on the vehicle.2
Thereafter on May 16, 2002,
KFB sent a letter to Owens advising him that pursuant to the
terms and conditions of his automobile policy KFB was exercising
its right to require him to submit to an “Examination Under
Oath” (hereinafter “EUA”).
The letter also notified Owens that
1
Obviously, the figures do not add up. If the loss was $10,375 and Owen had
a $500 deductible, then he was only entitled to $9,875. However, the figures
listed above are taken from the record and KFB’s appellate brief.
2
The check issued by KFB to Wells Fargo Financial was actually written for
$7,842.12. However, Wells Fargo then issued a check to KFB in the sum of
$10.57 for “overpayment of payoff #55421365 Henry Owens.” Thus, the total
paid by KFB to Wells Fargo was $7,831.55.
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KFB had assigned the law firm of Bush Law Office to conduct the
EUA.
Twelve days later on May 28, 2002, the Bush Law Office
sent a letter to Owens advising him that pursuant to a recent
telephone conversation, an EUO was scheduled for May 30, 2002,
beginning at 9:30 A.M.
The letter included the following
paragraph:
Please note that if you fail to appear
for and submit to your Examination Under
Oath, you may be in breach of your contract
of insurance. This could constitute
reasonable grounds for Kentucky Farm Bureau
to deny coverage, with the result that you
would lose your right to collect on this
claim.
Owens failed to appear at the Bush Law Office for the
scheduled EUO.
A follow-up letter was sent to Owens on May 31,
2002, requesting that he contact the law firm immediately and
reschedule the EUO.
On August 5, 2002, KFB filed its complaint
against Owens seeking reimbursement for the $7,831.55 which it
had paid to Wells Fargo and to have the automobile insurance
policy declared void ab initio, thus requiring Owens to repay
the $9,375 he had recovered for the stolen vehicle.
Owens filed
an answer and counterclaim in which he sought damages against
KFB based upon fraud and damage to his reputation.
Following
the taking of Owens’s deposition, KFB filed for summary
judgment.
In an order and judgment entered June 12, 2003, the
court granted summary judgment in favor of KFB in all respects.
-3-
Thereafter, the circuit court denied Owens’s motion to set aside
the order and this appeal followed.
Owens, who has represented himself throughout this
litigation, provides very little legal argument in his appellate
brief to this Court.
For example, his summary of his arguments
set forth in his two-page brief states the following:
In summary: The Appellee should never
have been granted Summary Judgment Because
the
Appellant never receive the extra payment.
It was the Wells Fargo Financial. In this
case there was no misrepresentation by
appellant or lack of awareness By appellee
of the real facts and no action by appellee
in reliance upon representations Of
appellant which changed appellee’s position
to his prejudice.
Therefore the judgment should be
reversed and a new judgement be entered.
However, we have thoroughly reviewed the record3, the arguments
presented by the parties and the cases relied on by KFB relative
to the voiding of the insurance policy and have determined that
the circuit court has erred in granting summary judgment to KFB
on all counts of its complaint.
We begin first by setting forth the standard of review
by quoting from the recent case of Waddle v. Galen of Kentucky,
Inc., Ky.App., 131 S.W.3d 361 (2004), as follows:
3
We should note that there is no record provided as to any hearings that may
have taken place before the circuit court.
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The standard of review governing an appeal
of a summary judgment is well-settled. The
appellate court must determine whether the
trial court erred by concluding that there
was no genuine issue as to any material fact
and that the moving party was entitled to a
judgment as a matter of law [Scifres v.
Kraft, Ky.App., 916 S.W.2d 779, 781 (1996)].
Summary judgment is appropriate “if the
pleadings, depositions, answers to
interrogatories, stipulations, and
admissions on file, together with the
affidavits, if any, show 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.” [CR 56.03].
In Paintsville Hospital Co. v. Rose, [Ky.,
683 S.W.2D 255, 256 (1985)], our Supreme
Court held that for summary judgment to be
proper the movant must demonstrate that the
adverse party cannot prevail under any
circumstances. The Court has also stated
that “the proper function of summary
judgment is to terminate litigation when, as
a matter of law, it appears that it would be
impossible for the respondent to produce
evidence at the trial warranting a judgment
in his favor.” [Steelvest v. Scansteel
Service Center, Inc., Ky., 807 S.W.2d 476,
480 (1991)]. The appellate court need not
defer to the trial court since factual
findings are not at issue. [Goldsmith v.
Allied Building Components, Inc., Ky., 833
S.W.2d 378, 381 (1992)]. “The record must
be viewed in a light most favorable to the
party opposing the motion for summary
judgment and all doubts are to be resolve
din his favor.” [Steelvest, 807 S.W.2d at
480]. Furthermore, “a party opposing a
properly supported summary judgment motion
cannot defeat it without presenting at least
some affirmative evidence showing that there
is a genuine issue of material fact for
trial.” [Id. at 482. See also, Kentucky
Practice, CR 56.03, cmt. 4]
Waddle, 131 S.W.2d at 364.
-5-
With this standard in mind, we believe the circuit
court properly granted summary judgment to KFB as to Count I of
its complaint.
Court I alleges that KFB was required to pay the
lien holder of the stolen automobile, Wells Fargo Financial, for
the loss incurred.
There can be no dispute that since Owens
received the benefit of receiving payment from KFB ($9,375) and
then receiving clear title to the vehicle, he must reimburse KFB
for the double payment KFB made.
See Riverside Ins. Co. v.
McDowell, Ky.App., 576 S.W.2d 268 (1979).
There is no genuine
issue as to any material fact and KFB is entitled to a judgment
as a matter of law.
However, the same cannot be said as to the granting of
summary judgment pursuant to Counts II and III of KFB’s
complaint against Owens.
In relevant paragraphs of Count II of
the complaint, KFB makes the following statements:
14. The policy of insurance issued to the
Defendant by KFB provides in PART F –
GENERAL PROVISIONS as follows:
“We do not provide coverage for
any insured who has made
fraudulent statements or engaged
in fraudulent conduct in
connection with any accident or
loss for which coverage is sought
under this policy.”
15.
During conversations regarding the
settlement of his claim, the Defendant
was specifically asked by
representatives of KFB if there was a
lien on his vehicle on the Date of
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Loss. The Defendant advised KFB that
there was no lien on the vehicle and
that the Defendant would promptly
deliver the vehicle’s title to KFB.
16.
When the Defendant stated that there
was no lien on the vehicle, he knew or
reasonably should have know (sic) that
his statement was false.
17.
The Defendant made this statement
knowing and intending that KFB would
rely on it.
18.
KFB did rely on the Defendant’s
statement, and consequently issued
payment to the Defendant in an amount
greater than the Defendant would have
received had the truth been known to
KFB.
19.
The Defendant’s action constitute (sic)
a breach of the provisions of the
insurance contract between the
Defendant and KFB.
20.
As a consequence, KFB is entitled to a
Declaration of Rights voiding the
policy ab initio and a Judgment
requiring the Defendant to refund to
KFB all amounts paid under the policy.
There is nothing in the record before this Court that would
support KFB’s allegations that Owens made fraudulent statements
or engaged in fraudulent conduct in connection with the stolen
vehicle.
Furthermore, there is nothing in the record, other
than KFB’s self-serving statements contained in its pleadings,
which supports KFB’s allegations that Owens stated to anyone
that there was no lien on the vehicle.
Also it should be noted
that Owens’s automobile policy declaration page attached to the
-7-
complaint clearly states that Wells Fargo Financial held a lien
on the 1997 Nissan Ultima automobile.4
Finally, the record is
replete with statements made by Owens that he never made any
statements concerning the lien after the theft to anyone
connected with KFB.
In fact, he states he never was asked about
any lien but simply reported the theft and was given the check.
In that the declaration page clearly shows Wells Fargo Financial
was a named lien holder and that Owens’s statements concerning
not being asked about the lien have not been refuted, we believe
the circuit court erred in granting KFB summary judgment as to
Count II of its complaint.
Viewing the record most favorable to
Owens and resolving all doubts in his favor, we find adequate
support for his contention that he did not mislead or engage in
any fraudulent act and thus, summary judgment against him was
inappropriate.
Count III of KFB’s complaint alleges the following:
22.
The policy issued by KFB to the
Defendant provides in PART E – DUTIES
AFTER AN ACCIDENT OR LOSS as follows in
pertinent part:
“B.
A person seeking any coverage
must:
1. Cooperate with us in the
investigation, settlement or
defense of any claim or suit. …
4
Although the insurance declaration page attached to the complaint clearly
shows the named lien holder, it should be noted that KFB’s appendix number
two which sets forth the complaint omits the lien holder from the exhibit to
this Court.
-8-
3. Submit as often as we reasonably
require:
b. To Examination Under Oath and
to subscribe same.”
23.
As part of its investigation of this
claim, KFB requested on several
occasions that the Defendant submit to
an Examination Under Oath regarding the
subject loss.
24.
The Defendant has refused to submit to
an Examination Under Oath, in breach of
the requirements of the insurance
contract.
25.
As a consequence, KFB is entitled to a
Declaration of Rights voiding the
policy ab initio and a Judgement
requiring the Defendant to refund to
KFB all amounts paid under the policy.
KFB cites the case of Temple v. State Farm Mutual Ins.
Co., Ky., 548 S.W.2d 838 (1977), to support its argument that
Kentucky requires an insured to submit to EUO’s in connection
with a claim filed by the insured for uninsured motorist
benefits.
On the EUO issue, the Temple Court held:
The basis of the Temples’ rights
against State Farm is contractual. The
terms and provisions of the policy require,
as a condition precedent to any action or
right of recovery against State Farm, that
the Temples provide sworn statements to
State Farm as often as may be reasonably
required. Although the Temples notified
State Farm of the accident and provided an
accident report to State Farm’s agent, such
information was insufficient for State Farm
to evaluate the claim for settlement
purposes. State Farm was entitled not only
-9-
to an explanation of the circumstances of
the accident contained in a police report,
but was entitled also to the sworn
statements of its insureds as to the details
of its occurrence and, further, the “nature
and extent of injuries, treatment, and other
details entering the determination of the
amounts payable.” Such information,
exclusively within the control of the
Temples, was essential for State Farm to
fulfill its responsibilities under the terms
of the policy; and, provisions of the policy
reasonably designed to secure a truthful
disclosure of such information are valid and
reasonable conditions precedent to an
insuror’s liability.
The ill-considered refusal of the
Temples’ attorney to allow their statements
to be taken, imposed upon State Farm
considerable expense and expenditure of time
to obtain the information which it had the
right to receive without any expense. The
information received nearly a year later
through depositions did not so remedy the
Temples’ breach nor the prejudice to State
Farm as to enable the Temples to avoid State
Farm’s denial of coverage.
. . .
By denying State Farm such information
reasonably necessary to its performance
under the contract, the Temples did not
breach the cooperation clause of the policy,
but did breach a valid condition precedent
to their coverage.
Id. at 840.
We believe there are significant differences
between the case before us and the Temple case and other cases
cited by KFB.
First, the terms in the two insurance policies
are different.
Second, KFB relies upon breach of contract as
opposed to breach of a valid condition precedent.
-10-
Third, Owens
had missed only one scheduled EUO and no other exams had been
scheduled.
And finally, in this case, KFB had already settled
the case by issuing a check to Owens on his claim while in the
other cases cited the claims were still pending.
The KFB personal automobile policy at Part E – DUTIES
AFTER AN ACCIDENT OR LOSS lists the various duties which an
insured must comply with or risk the possibility that KFB will
assert the defense of no duty to provide coverage.
Owens
complied with the duties set forth except that of attending the
EUO conference.
We believe failure to attend one EUO hearing
would be an issue of fact for a jury to decide as to whether or
not that act in and of itself would void the insurance policy.
Additionally, in that KFB voluntarily issued payment to Owens on
his claim with prior knowledge of the lien held by Wells Fargo
(it was prominently listed on the declaration page), we question
whether or not Owens had a continuing duty to submit to EUO’s as
often as KFB reasonably requested.
While that issue is not
before this Court, the language of the policy could reasonably
be interpreted to require an EUO only during “the investigation,
settlement or defense of any claim or suit.”
(See Part E
section B subsection 1 of the policy).
In any case, we believe there are genuine issues of
material facts regarding Counts II and III of KFB’s complaint so
as to preclude summary judgment on those issues.
-11-
In that the
matter is being reversed in part and remanded for additional
proceedings, we strongly recommend, as did the trial judge, that
Owens seek competent legal representation.
Finally, it should be noted that no ruling was made as
to Owens’s counterclaim against KFB.
While one might presume
that by granting summary judgment to KFB “in all respects” that
terminated the litigation, the better practice would be to
specifically rule on the counterclaim so that all pending claims
are fully resolved.
For the foregoing reasons, the order and judgment of
the Jefferson Circuit Court granting summary judgment to KFB is
affirmed in part, reversed in part and remanded for further
proceedings consistent with this opinion.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
Henry Owens, III, PRO SE
Louisville, KY
Perry Adanick
Louisville, KY
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