University of Vermont AAHS

Clevenger v. Oliver Insurance Agency

Missouri Court of Appeals, Western District

2006 WL 3770769


Dec. 26, 2006


Summary of Opinion

This case results from a suit by an insured against the insurance agency that brokered the policy to cover plaintiffs in the event of a suit for polluting.  The original policy carried a pollution exclusion, however, plaintiffs claimed that they were assured upon renewal by their agent that they would be covered for suits resulting from disputes over pollution.  They renewed the policy with the exclusion clause still intact.  A neighbor sued and the insurance company denied coverage.  This suit is based on the question of the existence of an oral agreement entered into by the agent.  The jury awarded damages to the plaintiff.  This court reverses saying that plaintiffs failure to prove that that only the enforcement of the agent’s promise would cure the injustice.


Text of Opinion


Oliver Insurance Agency, Inc. ("Oliver") appeals from a judgment based on claims of negligence and promissory estoppel brought by its customers Neal and Mitsue Clevenger ("the Clevengers") after the insurance company that Oliver secured denied coverage under the policy's pollution coverage clause. The jury returned verdicts in favor of the Clevengers on both theories and assessed the damages at $78.223.82. The jury found that the Clevengers were 98.6% at fault on the negligence claim. Because the comparative fault claim did not apply to the promissory estoppel theory, the court entered judgment against Oliver for the full amount of the verdict. In their dispositive point on appeal, Oliver claims that the trial court erred in denying its motion for judgment notwithstanding the verdict on the claim for promissory estoppel. Because the Clevengers failed to prove that only enforcement of the promise could cure the resulting injustice, a necessary element of promissory estoppel, we reverse.



 The Missouri Supreme Court recently reiterated the applicable standard of review as follows: 

The standard of review of denial of a JNOV is essentially the same as for review of denial of a motion for directed verdict. A case may not be submitted unless each and every fact essential to liability is predicated upon legal and substantial evidence. In determining whether the evidence was sufficient to support the jury's verdict, the evidence is viewed in the light most favorable to the result reached by the jury, giving the plaintiff the benefit of all reasonable inferences and disregarding evidence and inferences that conflict with that verdict. This Court will reverse the jury's verdict for insufficient evidence only where there is a complete absence of probative fact to support the jury's conclusion.

  Dhyne v. State Farm Fire & Cas. Co., 188 S.W.3d 454, 456-57 (Mo. banc 2006) (citing Giddens v. Kansas City S. Ry. Co., 29 S.W.3d 813, 818 (Mo. banc 2000)). Accordingly, a motion for JNOV is properly granted when the motion "identifies one or more elements of the plaintiff's case which are not supported by the evidence." Breckenridge v. Meierhoffer-Fleeman Funeral Home, Inc., 941 S.W .2d 609, 611 (Mo.App.W.D.1997).



 Viewing the evidence in the light most favorable to the verdict, the facts were as follows: the Clevengers owned an equestrian park and received a letter from their neighbor in August 2000 claiming that run-off was flowing from the Clevengers' horse stable and contaminating the neighbor's lake. Thereafter, the Clevengers sought to buy a pollution liability insurance policy through Oliver. Apparently for this type of coverage Oliver does not deal directly with an insurance carrier to obtain coverage but, instead, through a broker who then secures coverage with a particular company. Eventually, the Clevengers disclosed the neighbor's claim and Select Insurance, a subsidiary of Gulf Insurance, issued a pollution liability policy with an exclusion pertaining to the neighbor's claim and substantially similar claims.


When it came time to renew the insurance policy, the Clevengers made inquiries to their personal insurance agent, Bill Adams of Oliver Insurance Agency, about whether the pollution policy would provide coverage for claims concerning their neighbor's lake. Adams, in turn, sought assurances from the insurance broker. Thereafter, the Clevengers claim that Adams "assured" them that they would have coverage for any incident concerning their neighbor's lake, and, based on Adams' assurance, they renewed the policy with the exclusion still attached. Shortly thereafter, their neighbor sued them for damage to their lake. Gulf Insurance denied the Clevenger's claim for coverage and refused to provide a defense because the claims in the lawsuit were excluded by the endorsement. The Clevengers ultimately settled the neighbor's lawsuit. Their claims against Oliver on theories of negligence and promissory estoppel (because they did not receive coverage for the claim) proceeded to a jury trial.


 After denial of its motion for new trial and motion for judgment notwithstanding the verdict, Oliver has appealed. It does not attack the portion of the verdict or judgment that was based on the negligence theory. Oliver does seek a judgment notwithstanding the verdict and alternatively a new trial on the promissory estoppel theory. Because its Point I is dispositive, we do not consider its other contentions.



 Oliver claims that the Clevengers failed to adduce sufficient evidence to make a submissible case of promissory estoppel.


Oliver makes no argument regarding the negligence claim.


A claim of promissory estoppel has four elements: "(1) [a] promise; (2) on which a party relies to his detriment; (3) in a way the promisor expected or should have expected; and (4) resulting in an injustice which only enforcement of the promise could cure." Zipper v. Health Midwest, 978 S.W.2d 398, 411 (Mo.App.W.D.1998) (citing Response Oncology, Inc. v. Blue Cross & Blue Shield of Mo., 941 S.W.2d 771, 778 (Mo.App.W.D.1997)). "The promise giving rise to the cause of action must be definite, and the promise must be made 'in a contractual sense.' " Id. (quoting Prenger v. Baumhoer, 939 S.W.2d 23, 26 (Mo.App.W.D.1997)). In Missouri, promissory estoppel "is not a favorite of the law and each element must clearly appear and be proven by the party seeking its enforcement." Id. (citing Farmland Indus., Inc. v. Bittner, 920 S.W.2d 581, 583 (Mo.App.W.D.1996)).


 Oliver urges that the opinion in Zipper supports his argument here that the Clevengers failed to prove a crucial element of their claim. In Zipper, the plaintiff brought an action for promissory estoppel, among other claims, alleging that the defendants breached an oral agreement to sell him an office building. Id. at 403. The court held that the plaintiff adduced sufficient evidence to establish the first three elements of promissory estoppel but failed to establish the final element and, therefore, affirmed the trial court's entry of summary judgment. Id. at 411-12. The court said that the plaintiff created an issue of material fact on whether a promise was made with a statement in his affidavit that the defendants promised him that they would sell him the office building. Id. at 411. The second element was established by the existence of several exhibits showing that he expended money renovating the building in reliance on the promise. Id. And, he provided sufficient evidence to satisfy the third element by introducing a note that the defendants co-signed with him to acquire funds for the renovation and other letters in which the defendants were actively involved in the renovation process. Id. However, in affirming the trial court's granting of summary judgment, this court held that the plaintiff "failed to establish the final element" of promissory estoppel, in that he "ha[d] other remedies at law available that would adequately compensate his injury." Id. at 412.


Specifically, this court held that the plaintiff was really seeking to recover restitution damages, i.e. the amount he expended in making renovations to the building. Id. In making this determination, the court relied on the Restatement (Second) of Contracts, Sec. 139(2)(a) (1981), which states, in relevant part: "In determining whether injustice can be avoided only by enforcement of the promise ... the availability and adequacy of other remedies" at law is a significant factor to be considered. Id. at 411. In fact, the court declared that it is the "most significant" factor to consider. Id. at 412. Because the plaintiff was not seeking specific enforcement of the promise, and was instead seeking a remedy at law, application of promissory estoppel was inappropriate. Id.


 We believe the same reasoning applies in this case. Neal Clevenger testified that Adams "assured" him that he had coverage for claims regarding his neighbor's lake. Additionally, Neal Clevenger testified that he renewed the policy based on Adams' assurances. Finally, the Clevengers adduced evidence from Adams that, as the Clevengers' insurance agent for over twenty years, he knew that they relied on him to explain what was covered and what was not covered. While the Clevengers adduced sufficient evidence of the first three elements, they failed to show a resulting injustice, which only enforcement of the promise could cure. What the Clevengers sought was not the issuance of an insurance policy that would cover the risk (a promise that Oliver could not fulfill) but damages for Oliver's mistaken representation that the policy they did receive would provide coverage. The Clevengers had an available and adequate remedy at law, i.e. an action in negligence. In fact, they prevailed on that theory. "Generally, equity will not intercede if an adequate remedy at law exists." Id. Because the Clevengers had an adequate remedy at law, equitable relief is not appropriate.


 The Clevengers make cursory reference to Hammons v. Ehney, 924 S.W.2d 843, 847 (Mo. banc 1996), for the proposition that an adequate remedy at law does not bar recover under promissory estoppel. The Clevengers misconstrue the holding in Hammons. Hammons does not speak to the elements of promissory estoppel. Rather, the issue in Hammons was whether a debtor could maintain an equitable action for contribution against a co-debtor (which could be tried without a jury) where the debtor had an adequate remedy at law in the form of a statutory action for contribution (which would implicate the co-debtor's constitutional right to a jury trial). On appeal, the co-debtor claimed that because the debtor's claim for contribution was a legal claim, she had the right to a jury trial. 924 S.W.2d at 846. The court disagreed stating that even though contribution between co-debtors originated as an equitable claim in Missouri, "the subsequent creation of a legal claim for contribution ... created concurrent jurisdiction in both law and equity for contribution." Id. at 847. It further stated that an exception to the recognized principle that "equity will not intercede if there is an adequate remedy at law" is "for claims which originated in equity prior to the recognition of a legal claim." Id. Thus, Hammons is of no relevance to the case at bar.


At oral argument, the Clevengers cited State ex rel. Leonardi v.. Sherry, 137 S.W.3d 462 (Mo. banc 2004), for the proposition that even though they had an adequate remedy at law, the promissory estoppel claim was properly submitted. The primary issue in Leonardi was whether the appellant's constitutional right to a jury trial was violated when the trial court, in exercising the equitable cleanup doctrine, refused to grant him a jury trial on the legal claims in the case. Id. at 464. Thus, the Clevengers' reliance on Leonardi is misplaced.


 Because the Clevengers failed to prove that only enforcement of the promise could cure the resulting injustice, we reverse and remand with directions to the trial court to enter judgment on the negligence claim in accordance with the jury verdict.

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