Question

In August 1982, a hog confinement building owned by Charles Ridenour collapsed and was rendered a total loss. Some of Ridenour's hogs were killed as a further result of the collapse. Ridenour made a claim for these losses with his property insurer, Farm Bureau Insurance Company, whose Country Squire policy had been issued on Ridenour's property in July 1977 and had been renewed on a yearly basis after that. Farm Bureau denied the claim because the policy did not provide coverage for the collapse of farm buildings such as the hog confinement structure. Moreover, though the policy provided coverage for hog deaths resulting from certain designated causes, collapse of a building was not among the causes listed. Asserting that the parties' insurance contract was to have covered the peril of building collapse notwithstanding the terms of the written policy, Ridenour sued Farm Bureau. He asked the court to order reformation of the written policy so that it would conform to the parties' supposed agreement regarding coverage. At trial, Ridenour testified about a February 1982 meeting in which he, his wife, and their son discussed insurance coverage with Farm Bureau agent Tim Moomey. Ridenour testified that he wanted to be certain there was insurance coverage if the hog confinement building collapsed because he had heard about the collapse of a similar structure owned by someone else. Therefore, he asked Moomey whether the Country Squire policy then in force provided such coverage. According to Ridenour, Moomey said that it did. Ridenour's wife, Thelma, testified that she asked Moomey (during the same meeting) whether there would be coverage if the floor slats of the hog confinement building collapsed and caused hogs to fall into the pit below the building. According to her testimony, Moomey responded affirmatively. The Ridenours' son, Tom, testified to the same effect. Mr. and Mrs. Ridenour both testified that they had not completely read the Country Squire policy and that because they did not understand the wording, they relied on Moomey to interpret the policy for them. Moomey, who had ended his relationship with Farm Bureau by the time the case came to trial, testified that at no time did the Ridenours request that the hogs and the confinement building be insured so as to provide coverage for losses resulting from collapse of the building. Moomey knew that collapse coverage was not available from Farm Bureau for hog confinement buildings. In addition, Moomey testified that he met with Ridenour in April 1982 and conducted a "farm review" in which he discussed a coverage checklist and the Country Squire policy's declarations pages (which set forth the policy limits). This checklist, which Ridenour signed after Moomey reviewed it with him, made no reference to coverage for collapse losses. (Ridenour admitted in his testimony that he had signed the checklist after Moomey read off the listed items to him.) When Moomey was contacted by the Ridenours on the day the building collapsed, he had his secretary prepare a notice of loss report for submission to Farm Bureau. He also assigned an adjuster to inspect the property. Moomey and the adjuster discussed the fact that the Country Squire policy did not provide coverage for Ridenour's losses. Ridenour further testified that the day after the collapse occurred, Moomey told him he was sorry but that Farm Bureau's home office had said there was no coverage. The trial court granted reformation, as Ridenour had requested. Farm Bureau appealed. Was the trial court's decision correct?



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  • CreatedJuly 16, 2014
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