Summary 2010 WY 57

Summary of Decision issued May 4, 2010

Summaries are prepared by Law Librarians and are not official statements of the Wyoming Supreme Court.

Case Name: Ohio Casualty ins. Co. v. W.N. McMurry Construction Co.; McMurry v. Ohio Casualty Ins. Co.; McMurry v. BW Ins. Agency, Inc.

Citation: 2010 WY 57

Docket Number: S-08-0163; S-08-0164; S-08-0165

Appeal from the District Court of Natrona County, the Honorable John C. Brooks, Judge.

Representing Ohio Casualty Ins. Co.: Patrick J. Murphy and Scott P. Klosterman of Williams, Porter, Day & Neville, PC, Casper, Wyoming.

Representing W.N. McMurry Construction Co.: W.W. Reeves and Anna Reeves Olson of Park Street Law Office, Casper, Wyoming.

Representing BW Insurance: Billie L.M. Addleman and Richard A. Mincer of Hirst Applegate PC, Cheyenne, Wyoming.

Facts/Discussion: The three consolidated appeals arose out of McMurry Construction’s legal action to recover for two separate incidents involving two separate insurance policies. Both policies were issued to it by Ohio Casualty Ins. BW Insurance was the procuring agent for both policies.

S-08-0163: McMurry Construction sought through reformation to enforce a contract other than that into which it entered. The numbers ultimately reported to Ohio Casualty and supplied by McMurry Construction were unintentionally lower than they should have been. A review of the process showed there was no mistake reciprocal and common to both parties with each party being under the same misconception. It was a mistake in reaching the antecedent agreement which cannot be corrected by means of reformation.
S-08-0164: McMurry Construction challenged the interest calculations of the district court in its award of damages after reformation of the builder’s risk policy. Since the Court reversed the district court order requiring reformation, the appeal was moot and therefore dismissed.
S-08-0165: This appeal is based on the district court’s grant of summary judgment in favor of BW Insurance on contract and tort claims made against it by McMurry Construction as well as the district court’s denial of McMurry Construction’s attempt to reform its business auto insurance policy to gain coverage for a driver (Nelson) Ohio Casualty had expressly excluded from the policy. McMurry Construction recognized that failure to read an insurance policy will bar claims against an agent for breach of contract and negligence. It also admits it never read the business auto policy. It argued that the duty to read a policy is mitigated if the insured does not have a reasonable opportunity to read the policy. The Court found the argument specious since the policy was delivered in January and the accident in question occurred in September. McMurry Construction sought reformation of the business auto policy. Ashba of BW Insurance informed McMurry Construction that Nelson was covered under the policy. The Court’s question was whether Ashba and thus BW Insurance were acting as an agent for Ohio Casualty when he made that statement. Ohio Casualty made it clear in the auto policy that BW Insurance had no authority to alter the terms of the policy. BW Insurance did not have actual authority from Ohio Casualty to remove the exclusion-of-named-person endorsement.

Conclusion: (S-08-0163) The remedy of reformation was not available for the purpose of making a new and different contract for the parties. Instead, it was confined to establishment of the actual agreement reached between the parties as to the material terms of the contract. McMurry Construction and Ohio Casualty never reached a mutual agreement on material terms of the insurance policy – specifically the coverage limits. The decision of the district court was reversed.
(S-08-0164 dismissed)
(S-08-0165) McMurry Construction had plenty of time to read the business auto policy. The grant of summary judgment to BW Insurance on contract and tort claims was appropriate. Although Ashba told Fairservis that Nelson was covered, Ashba did not have the actual authority to effect such a change. Ohio Casualty never agreed to cover Nelson and never removed the exclusion-of-named-person endorsement from the policy. There was no basis for the reformation of the policy the district court’s decision on both of those issues was affirmed.

Appeal S-08-0163 was reversed. Appeal S-08-0164 was dismissed. Appeal S-08-0165 was affirmed.

J. Golden delivered the decision.

Link: http://tinyurl.com/23fo39o .

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