{ "id": 11713470, "name": "METROPOLITAN PROPERTY AND CASUALTY INSURANCE COMPANY, Plaintiff v. BILLY DEAN DILLARD, Defendant", "name_abbreviation": "Metropolitan Property & Casualty Insurance v. Dillard", "decision_date": "1997-07-15", "docket_number": "No. COA96-982", "first_page": "795", "last_page": "800", "citations": [ { "type": "official", "cite": "126 N.C. App. 795" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "32 ALR3d 661", "category": "reporters:specialty", "reporter": "A.L.R. 3d", "opinion_index": -1 }, { "cite": "25 ALR3d 580", "category": "reporters:specialty", "reporter": "A.L.R. 3d", "opinion_index": -1 }, { "cite": "329 S.E.2d 333", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1985, "pin_cites": [ { "page": "338" } ], "opinion_index": 0 }, { "cite": "313 N.C. 362", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4726773 ], "year": 1985, "pin_cites": [ { "page": "369" } ], "opinion_index": 0, "case_paths": [ "/nc/313/0362-01" ] }, { "cite": "419 S.E.2d 766", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1992, "pin_cites": [ { "page": "769" } ], "opinion_index": 0 }, { "cite": "332 N.C. 326", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2504386 ], "year": 1992, "pin_cites": [ { "page": "331" } ], "opinion_index": 0, "case_paths": [ "/nc/332/0326-01" ] }, { "cite": "77 S.E.2d 692", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1953, "pin_cites": [ { "page": "695" } ], "opinion_index": 0 }, { "cite": "238 N.C. 278", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8605813 ], "year": 1953, "pin_cites": [ { "page": "282" } ], "opinion_index": 0, "case_paths": [ "/nc/238/0278-01" ] }, { "cite": "443 S.E.2d 797", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1994, "pin_cites": [ { "page": "801", "parenthetical": "quoting Thomas-Yelverton Co. v. Insurance Co., 238 N.C. 278, 282, 77 S.E.2d 692, 695 (1953); N.C. Gen. Stat. \u00a7 58-3-10 (1994) (emphasis added" }, { "page": "800" }, { "page": "800", "parenthetical": "defining \"material\" misrepresentation" } ], "opinion_index": 0 }, { "cite": "115 N.C. App. 123", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 12123051 ], "weight": 3, "year": 1994, "pin_cites": [ { "page": "128", "parenthetical": "quoting Thomas-Yelverton Co. v. Insurance Co., 238 N.C. 278, 282, 77 S.E.2d 692, 695 (1953); N.C. Gen. Stat. \u00a7 58-3-10 (1994) (emphasis added" }, { "page": "127" }, { "page": "127" } ], "opinion_index": 0, "case_paths": [ "/nc-app/115/0123-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 58-3-10", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 2, "year": 1994, "pin_cites": [ { "parenthetical": "emphasis added" } ], "opinion_index": 0 }, { "cite": "662 S.W.2d 556", "category": "reporters:state_regional", "reporter": "S.W.2d", "case_ids": [ 9943217 ], "weight": 2, "year": 1983, "pin_cites": [ { "page": "563", "parenthetical": "allowing reformation for insurance contract for fire damage despite incorrect land description supplied by insured" } ], "opinion_index": 0, "case_paths": [ "/sw2d/662/0556-01" ] }, { "cite": "379 S.E.2d 851", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1989, "opinion_index": 0 }, { "cite": "324 N.C. 518", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2483781 ], "year": 1989, "opinion_index": 0, "case_paths": [ "/nc/324/0518-01" ] }, { "cite": "370 S.E.2d 435", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1988, "pin_cites": [ { "page": "437" }, { "page": "437", "parenthetical": "mutual mistake of fact where both parties to property transaction believed that conveyed tract of land was 12 acres instead of 17 acres entitled aggrieved party to reformation" }, { "page": "437" } ], "opinion_index": 0 }, { "cite": "91 N.C. App. 93", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8524519 ], "weight": 3, "year": 1988, "pin_cites": [ { "page": "95-96" }, { "page": "96" }, { "page": "95" } ], "opinion_index": 0, "case_paths": [ "/nc-app/91/0093-01" ] } ], "analysis": { "cardinality": 555, "char_count": 11270, "ocr_confidence": 0.753, "pagerank": { "raw": 3.2190423466094483e-07, "percentile": 0.8669874189576303 }, "sha256": "745061827ebf6b2d84d3c06c1baa3c3e8bc1d73c4dbdf402e163a37588bb9438", "simhash": "1:1f4b1172855f9713", "word_count": 1787 }, "last_updated": "2023-07-14T19:11:14.463583+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges COZORT and MARTIN, John C. concur." ], "parties": [ "METROPOLITAN PROPERTY AND CASUALTY INSURANCE COMPANY, Plaintiff v. BILLY DEAN DILLARD, Defendant" ], "opinions": [ { "text": "McGEE, Judge.\nOn 20 March 1995, plaintiff Metropolitan Property and Casualty Insurance Company filed a complaint seeking a declaratory judgment to determine its liability to defendant Billy Dean Dillard arising from an application for homeowners insurance submitted to plaintiff by defendant on 6 January 1995. After initially purchasing automobile insurance from plaintiff on 6 January 1995, defendant inquired as to the possibility of insuring two residences, one of which is a secondary non-seasonable residence which defendant has owned since 1974. The insurance agent assisting defendant in filling out the policy application to insure this residence asked him for information about the property. When the agent asked defendant for the address of this residence, defendant stated \u201c4321 Sudbury Road\u201d; this was incorrect as defendant did not own a residence at this address, but instead owned a residence at \u201c4220 Sudbury Road.\u201d The description of the residence as having been built in 1967, being 1600 square feet in size, brick veneer, with a fourteen-foot deck was correct, as was the mortgagee listed on the application (United Carolina Bank of Whiteville, North Carolina). Defendant stated in his deposition that after he gave the insurance agent the street address of the Sudbury Road property he told the agent that, \u201cThis could be incorrect.\u201d The insurance agent stated in her deposition that she did not recall defendant saying this and had he expressed uncertainty about the address she would have told him, \u201cWe need the street address.\u201d\nDuring the course of completing the application, defendant, when asked, told the insurance agent he had not had any insurance which was declined, canceled or non-renewed during the past three years. Investigation by plaintiff revealed that a policy with The Great American Insurance Company had been canceled on 2 October 1994 for non-payment of premiums. Defendant paid for the insurance as part of his monthly mortgage payment and did not continue to pay insurance premiums after making his last mortgage payment. In her deposition the insurance agent stated plaintiff would not issue coverage if the insurance applicant previously had insurance canceled or non-renewed.\nThe insurance policy issued by plaintiff states the effective date of the policy is 6 January 1995. During the evening of 6 January 1995, a fire occurred at the 4220 Sudbury Road residence. On 7 January 1995 defendant arrived at the residence and noticed that the correct street number was 4220 instead of 4321. He then notified the insurance agency and a correction note was made on the application: \u201cAddress should read 4220 Sudbury per Mr. Dillard 1-9-95.\u201d On 30 January 1995 plaintiff mailed a cancellation notice for both residences stating the reason for the cancellation was because of \u201cadverse information found in [the defendant\u2019s] credit report in conjunction with [the 6 January 1995] fire loss.\u201d\nThe issues are: (1) whether a homeowner\u2019s insurance policy containing an incorrect street address provided by the homeowner in his application for insurance is unenforceable to insure the homeowner\u2019s actual residence as a matter of law; and (2) whether the homeowner\u2019s statement that he had never had an insurance policy canceled or not renewed constitutes a material misrepresentation.\nI.\nDefendant argues the mistake as to the street number was mutual, and reformation of the insurance policy to include the correct address is necessary in order to give effect to the party\u2019s actual, original agreement to insure defendant\u2019s Sudbury Road residence. We agree. \u201cReformation is a well-established equitable remedy used to reframe written instruments where, through mutual mistake or the unilateral mistake of one party induced by the fraud of the other, the written instrument fails to embody the parties\u2019 actual, original agreement.\u201d Dettor v. BHI Property Co., 91 N.C. App. 93, 95-96, 370 S.E.2d 435, 437 (1988), rev\u2019d on other grounds, 324 N.C. 518, 379 S.E.2d 851 (1989). \u201cA mutual mistake is one common to both parties to a contract . . . wherein each labors under the same misconception respecting a material fact, the terms of the agreement, or the provisions of the written instrument designed to embody such agreement.\u201d 17 C.J.S. Contracts \u00a7 144 (1963). Reformation is proper to give effect to the terms of the contract the parties originally agreed upon provided there is \u201cclear, cogent and convincing\u201d evidence of the parties\u2019 intentions to contract upon these terms. Dettor, 91 N.C. App. at 96, 370 S.E.2d at 437 (mutual mistake of fact where both parties to property transaction believed that conveyed tract of land was 12 acres instead of 17 acres entitled aggrieved party to reformation). \u201c[Negligence on the part of one party [which induces the mistake] does not preclude a finding of mutual mistake.\u201d Moreland v. State Farm Fire and Casualty Co., 662 S.W.2d 556, 563 (Mo. App. 1983) (allowing reformation for insurance contract for fire damage despite incorrect land description supplied by insured). In other words, the fact that the mistake arises because the party who is seeking the reformation supplied the incorrect information does not make the mistake unilateral. Id.\nIn this case defendant has presented \u201cclear, cogent and convincing evidence\u201d that the mistake as to the address of the insured residence was mutual as both parties believed they were contracting to insure a house owned by defendant and defendant did not own the 4321 Sudbury Road residence. This evidence included both a statement by the insurance agent that she believed defendant intended to insure property which belonged to him, and the policy itself, which contained a detailed description of the 4220 Sudbury Road property, despite the incorrect street number. As no material fact remains as to the parties\u2019 intentions, defendant is entitled to reformation as a matter of law. Dettor, 91 N.C. App. at 95, 370 S.E.2d at 437.\nII.\nWe next address whether plaintiff is entitled to summary judgment on the grounds that defendant made a material misrepresentation when he told the insurance agent he had never had an insurance policy canceled or not renewed. In North Carolina, \u201cstatements or descriptions in any application for a policy of insurance\u201d will not \u201cprevent a recovery on the policy\u201d unless they are \u201cmaterial or fraudulent.\u201d N.C. Gen. Stat. \u00a7 58-3-10 (1994). Absent fraud,\na misrepresentation of a material fact, or the suppression thereof, in an application for insurance, will avoid the policy \u201ceven though the assured be innocent of fraud or an intention to deceive or to wrongfully induce the assurer to act, or whether the statement be made in ignorance or good faith, or unintentionally. \u201d\nTharrington v. Sturdivant Life Ins. Co., 115 N.C. App. 123, 128, 443 S.E.2d 797, 801 (1994) (quoting Thomas-Yelverton Co. v. Insurance Co., 238 N.C. 278, 282, 77 S.E.2d 692, 695 (1953); N.C. Gen. Stat. \u00a7 58-3-10 (1994) (emphasis added). \u201c[A] representation in an application for an insurance policy is material \u2018if the knowledge or ignorance of it would naturally influence the judgment of the insurer in making the contract, or in estimating the degree and character of the risk, or in fixing the rate of premium,\u2019 \u201d and is generally a question of fact for a jury. Tharrington, 115 N.C. App. at 127, 443 S.E.2d at 800 (quoting Goodwin v. Investors Life Insurance, North America, 332 N.C. 326, 331, 419 S.E.2d 766, 769 (1992)); 45 C.J.S. Insurance \u00a7 780 (1993). The insurance company has the burden of proving misrepresentation which is an affirmative defense to the enforcement of an insurance contract. Bryant v. Nationwide Mut. Fire Ins. Co., 313 N.C. 362, 369, 329 S.E.2d 333, 338 (1985).\nIn this case, defendant told the insurance agent he had not had any insurance policy declined, canceled or non-renewed in the previous three years when in fact a previous homeowner\u2019s policy had been terminated for non-payment when defendant made the last mortgage payment on the property. The only evidence plaintiff introduced to show this was a material misrepresentation is the statement by the insurance agent that plaintiff would not issue coverage if the insurance applicant had previously had insurance canceled or non-renewed. As this evidence was in the form of an opinion of a witness, it falls within the province of a jury to determine its credibility. N.C.R. Evid. 104 (e) (1991). Moreover, a question of fact exists as to whether defendant\u2019s non-payment of a previous insurance policy resulting in the lapse of the policy would increase the risk that the property would be destroyed and would, thus, be material to the insurer. See Tharrington, 115 N.C. App. at 127, 443 S.E.2d at 800 (defining \u201cmaterial\u201d misrepresentation) (citations omitted). Thus, we hold that material issues of fact exist as to whether defendant\u2019s statement constituted a material misrepresentation and summary judgment on this issue was improper.\nReversed and remanded.\nJudges COZORT and MARTIN, John C. concur.", "type": "majority", "author": "McGEE, Judge." } ], "attorneys": [ "Baucom, Claytor, Benton, Morgan, Wood & White, P.A., by James F. Wood, III, for plaintiff-appellee.", "Ledford & Murray, P.C., by Joseph L. Ledford, for defendant-appellant." ], "corrections": "", "head_matter": "METROPOLITAN PROPERTY AND CASUALTY INSURANCE COMPANY, Plaintiff v. BILLY DEAN DILLARD, Defendant\nNo. COA96-982\n(Filed 15 July 1997)\n1. Insurance \u00a7 157 (NCI4th); Reformation of Instruments \u00a7 29 (NCI4th)\u2014 homeowner\u2019s policy \u2014 incorrect street address \u2014 mutual mistake \u2014 reformation of policy\nDefendant insured presented clear, cogent and convincing evidence that a mistake as to the address of the insured residence in a homeowner\u2019s policy was mutual as to both parties so that defendant was entitled to reformation of the policy to reflect the correct address where the evidence included a statement by the insurance agent who assisted defendant in filling out the policy application that she believed defendant intended to insure property which belonged to him, and the policy itself, which contained a detailed description of the insured\u2019s residence despite the incorrect street number.\nAm Jur 2d, Insurance \u00a7 360.\nReformation of property insurance policy to correctly identify the person or interest insured. 25 ALR3d 580.\nReformation of insurance policy to correctly identify risks and causes of loss. 32 ALR3d 661.\n2. Insurance \u00a7 831 (NCI4th)\u2014 homeowner\u2019s policy \u2014 misrepresentation as to prior cancellation \u2014 materiality as jury question\nSummary judgment was inappropriate on the issue of whether defendant insured made a material misrepresentation when he stated during the application process for a homeowner\u2019s policy that he had never had a policy canceled or not renewed when in fact defendant had had a previous homeowner\u2019s policy terminated for nonpayment of premiums after he had made the last mortgage payment on the property since a question of fact exists as to whether defendant\u2019s nonpayment of a previous insurance policy resulting in the lapse of the policy would increase the risk that the home would be destroyed and would thus be material to the insurer.\nAm Jur 2d, Insurance \u00a7\u00a7 1011-1020.\nAppeal by defendant from order entered 7 March 1996 by Judge William H. Helms in Mecklenburg County Superior Court. Heard in the Court of Appeals 23 April 1997.\nBaucom, Claytor, Benton, Morgan, Wood & White, P.A., by James F. Wood, III, for plaintiff-appellee.\nLedford & Murray, P.C., by Joseph L. Ledford, for defendant-appellant." }, "file_name": "0795-01", "first_page_order": 833, "last_page_order": 838 }