1

The Honorable Stephen N. Limbaugh, United States District Judge for the

Eastern District of Missouri.

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 01-3408

___________

Agape Baptist Church, Inc., *

*

Plaintiff/Appellee, *

* Appeal from the United States

v. * District Court for the

* Eastern District of Missouri.

Church Mutual Insurance Company, *

*

Defendant/Appellant, *

*

Brown & James, P.C.; *

Newsam Harp, Inc., *

*

Defendants. *

___________

Submitted: June 10, 2002

Filed: August 8, 2002

___________

Before RILEY, BEAM, and MELLOY, Circuit Judges.

___________

BEAM, Circuit Judge.

Appellant Church Mutual Insurance Company (Church Mutual) appeals from

a final judgment entered by the district court1

 pursuant to a jury verdict in favor of
2

At trial, Agape claimed that the amount agreed upon was at least $300,000.

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Agape Baptist Church, Inc. (Agape). Church Mutual contends that a jury instruction

as to insurance contents coverage was not supported by substantial evidence and

therefore seeks a new trial. Because we find sufficient evidence in the record to

support submission of the instruction to the jury, we affirm.

Church Mutual insured Agape's property during a policy period extending from

April 3, 1996, to April 3, 1999. After Agape was advised at a Christian Law

Association seminar to reevaluate the adequacy of its insurance coverage, Church

Mutual's agent, Bruce West, met with Agape's Pastor James Clemensen on April 22,

1998, to increase the amount of Agape's personal property blanket coverage. 

Fire damaged a school operated by Agape on June 6, 1998, and Agape's

personal property was destroyed by the fire. Agape claimed a loss of personal

property in the amount of $186,339.66. However, Church Mutual limited Agape's

recovery to $92,800, pursuant to an endorsement that was effective as of May 20,

1998, but delivered to Agape after the fire. Agape subsequently brought a contract

action against Church Mutual to recover purportedly insured losses, alleging, among

other things, that Church Mutual breached the insurance contract and that it

vexatiously refused to pay policy proceeds. In its complaint, Agape alleged that

Church Mutual "at all time[s] mentioned herein, regularly conducted its customary

insurance business by and through its agent BRUCE WEST," and that "West solicited

insurance business for [Church Mutual] and regularly advertised he was an agent of

[Church Mutual]; and, West had actual, apparent or ostensible authority from [Church

Mutual] to issue insurance contract binders of insurance and insurance policy

endorsements on behalf of [Church Mutual]." Agape further alleged that, when the

policy was issued, Church Mutual improperly set the personal property coverage limit

at "$92,800[.00] instead of at $350,000.00 as agreed."2

 As a portion of damages
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under its breach of contract claim, Agape sought "the difference in the $92,800.00

and $350,000.00 Personal Property Insurance Contract Loss Event coverage." 

The case was tried to a jury. In its supplemental trial brief, Agape revealed that

it was basing its claim on an oral agreement made by agent West with Clemensen, to

increase the policy's contents limit to $300,000. Because the district court apparently

determined that during discovery Agape had not adequately disclosed information

concerning West's oral statements, it excluded a good deal of testimony regarding

such communications. However, testimony was received, to some degree, in response

to Church Mutual's cross-examination, alluding to the oral agreement and

Clemensen's belief that he had increased coverage to $300,000. 

Included in the jury instructions was "Jury Instruction No. 8," which states:

If you believe plaintiff Agape Baptist Church, Inc. and Bruce

West orally agreed defendant Church Mutual Insurance Company was

bound to at least $300,000 of personal property insurance policy

coverage prior to June 6, 1998, as mentioned in the evidence, then you

may not award more than $300,000 to plaintiff Agape Baptist Church,

Inc. as damages for its personal property claim element under these

instructions.

If you do not believe plaintiff Agape Baptist Church, Inc. and

Bruce West orally agreed defendant Church Mutual Insurance Company

was bound to at least $300,000 of personal property insurance policy

coverage prior to June 6, 1998, then you may not award more than

$92,800 to plaintiff Agape Baptist Church, Inc. as damages for its

personal property claim element under these instructions.

In addition, you may award plaintiff Agape Baptist Church, Inc.

nine percent (9%) per annum Missouri statutory interest from September

3, 1998[,] to the current date on the sum you find due and owing to

plaintiff Baptist Church, Inc. as an element of plaintiff Agape Baptist

Church, Inc.'s damages. 
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The jury returned a $150,000 verdict in Agape's favor on Church Mutual's

policy, $37,125 for interest, and $15,000 as a penalty for vexatious refusal to pay. On

appeal, Church Mutual argues that "Jury Instruction No. 8" improperly "permitted the

jury to find that Agape had contents coverage of at least $300,000 based on an alleged

oral agreement made by Church Mutual's agent, Bruce West." 

The form and language of jury instructions are committed to the district court's

sound discretion so long as the jury is correctly instructed on the substantive issues

of the case. Wheeling Pittsburgh Steel Corp. v. Beelman River Terminals, Inc., 254

F.3d 706, 711 (8th Cir. 2001). The substance of jury instructions in diversity cases

is governed by applicable state law. Id. In such cases, "the jury instructions, when

read as a whole, must fairly and adequately present the relevant state law." Id. 

"A litigant is entitled to have the jury charged concerning his theory of the case

if there is any evidence to support the claim, direct or circumstantial." Strudl v.

American Family Mut. Ins. Co., 536 F.2d 242, 246 (8th Cir. 1976). Also, "in

determining whether the evidence is sufficient to support the giving of a particular

instruction, the evidence should be considered in the light most favorable to the party

offering the instruction, giving it 'the benefit of all favorable inferences reasonably

deducible therefrom.'" Hallberg v. Brasher, 679 F.2d 751, 757 n.6 (8th Cir. 1982)

(quoting Underwood v. Crosby, 447 S.W.2d 566, 570 (Mo. 1969) (en banc)).

Under Missouri law, "an insurance company is bound by the acts of an agent

acting within the scope of his apparent authority, or within the powers which it held

out the agent as possessing, unless the limitations upon the agent's powers are known

by or brought to the notice of the insured." Voss v. American Mut. Liab. Ins. Co.,

341 S.W.2d 270, 276 (Mo. App. 1960). Also, "in the absence of any evidence that

an applicant had knowledge or was put on notice of . . . restrictions [on the agent's

authority], the applicant is not bound by them, and is entitled to rely and act upon the

agent's apparent and ostensible powers." Id. 
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Missouri case law indicates that contracts of insurance "may be verbal or in

writing, or partly in writing and partly verbal," so long as "the minds of the parties

shall have met on all the essential terms of the contract." Chailland v. M. F. A. Mut.

Ins. Co., 375 S.W.2d 78, 81 (Mo. 1964) (en banc). "'[W]here the minds of the parties

for a valuable consideration have met on all the terms of the contract, it is complete

and enforceable, although it was intended by the parties to be evidenced by a policy

which, because of some fortuity, was not delivered before the happening of the event

insured against.'" Id. (citation omitted). Elements of an oral contract under Missouri

law include the subject matter, the risk insured against, the amount, the duration of

the risk, and the premium. Id. However, "[i]t is not essential that all of these

elements of the contract be expressly agreed upon if the intention of the parties to the

contract in these particulars can be gathered from the circumstances of the case." Id.

Furthermore, "[a]n oral contract of insurance is binding, although the premium is not

to be paid at the time of its consummation if credit is given." Id.

The present matter does not implicate a purely oral agreement, but instead

involves a claimed insurance contract that was "partly in writing and partly verbal."

See id. At trial, the following colloquy between Church Mutual's counsel and

Clemensen occurred:

[Counsel for Church Mutual] Q: And you had a contract, you had a

policy of insurance with Church Mutual Insurance Company?

[Clemensen] A: Yes.

Q: And in that contract, the insurance company made certain promises

to you; right?

A: That's right.

Furthermore, Agape read into evidence Church Mutual's admission, found

within the pleadings, that West "had actual, apparent or ostensible authority from
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insured's company to issue insurance contract binders of insurance and . . . insurance

policy endorsements on behalf of insurance company." Also read into evidence was

Church Mutual's admission that "it issued policy number 0151217-02-449714 to

Agape Baptist Church and Boarding School; that Bruce West had inspected this

property and that an increase in coverage was requested and approved shortly before

the fire." The subject matter of the policy was divulged to the jury in Agape's reading

of portions of the written contract. For instance, Agape's counsel read the following:

Covered property . . . means the following types of property for which

a limit of insurance is shown in the declaration page[:] . . . . your

personal property . . . not otherwise insured under building, located in

or on the building . . . consisting of the following. . . . furniture and

fixtures[,] . . . machinery and equipment[,] . . . all other personal

property owned by you and used in your operation. . . .

Evidence also indicated that Church Mutual would "pay for direct physical loss of or

damage to covered property at the premises . . . caused by or resulting from any

covered cause of loss." On cross-examination, Church Mutual elicited testimony

from Clemensen that, at the time of trial, Agape was continuing to pay Church Mutual

policy premiums.

At trial, many attempts to elicit testimony regarding Clemensen's dealings with

Church Mutual's agent West were thwarted. However, paramount to the ultimate

result is Church Mutual's admission in its answer "that it issued Policy No. 0151217-

02-449714 to Agape Baptist Church and Boarding School, that Bruce West had

inspected the property, and that an increase in coverage was requested and approved

shortly before the fire." Church Mutual merely denied the amount of coverage agreed

upon. We are, consequently, left to determine not whether there was sufficient

evidence of an agreement to increase the amount of coverage, but what the evidence

was as to the amount of the increase.
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As earlier noted, we find that there was sufficient evidence in the record to

support the $300,000 damages ceiling in Jury Instruction No. 8. The policy's written

terms indicated that there was a personal property limit of insurance of $92,800. 

However, at trial, Clemensen testified that he thought that figure was wrong, and

answered affirmatively when asked "[t]hat number should have been the [$]300,000

that you agreed to with Mr. West?" Clemensen testified that when West left their

April 22, 1998, meeting, it was his understanding that the minimum amount of

personal property blanket coverage would be "[a]t least [$]300,000" based on an

inventory list of personal property items and accompanying fair market values and

costs, and on his "agreements with Mr. West." He also testified that the increase in

coverage was to have become effective immediately after April 22, 1998, pursuant

to their agreement, and that the increased coverage was for at least $300,000 for the

blanket personal property.

On cross-examination, Church Mutual, through its questioning and

Clemensen's response, revealed that Agape increased its coverage under a policy with

Church Mutual. Also, Church Mutual asked Clemensen, "you didn't make any

changes[,] if I understood your testimony[,] until April 22nd when you had Bruce

West come out to your property?" Clemensen responded, "[r]ight." Church Mutual

also asked Clemensen, "[t]hen on April 22, 1998, the time you're saying that you

discussed with Bruce West these changes, you made another change in your policy,

didn't you?" Again, Clemensen responded "[r]ight." Moreover, Church Mutual told

Clemensen, "[b]ut it's your testimony today that you had coverage as of April 22 for

. . . $300,000 in content coverage." Also, in response to questioning as to whether

Church Mutual gave Agape additional coverage after the fire, counsel for Church

Mutual elicited Clemensen's testimony that "[o]n April 22nd . . . when [West] came

to visit he did."

Giving Agape the benefit of all favorable inferences deducible from the

evidence, we find that Jury Instruction No. 8 was sufficiently supported. Agape was
3

Because we have determined that the jury instruction was not improperly

submitted, we need not reach the issues Agape set forth in its motion to dismiss and,

consequently, deny that motion.

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therefore entitled to have the jury charged concerning its theory of the coverage

increase to $300,000. Thus, we conclude that the district court did not err in

submitting the instruction and affirm.3

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.