Opinion ID: 1873435
Heading Depth: 2
Heading Rank: 4

Heading: Vexatious Refusal to Pay

Text: In its final point, American Family asserts that the trial court erred in overruling its motion for judgment notwithstanding the verdict because there was no substantial evidence to support the jury's verdict awarding Sherry attorney's fees for vexatious refusal to pay. Review of this claim requires this Court to accept as true the evidence and reasonable inferences therefrom in a light most favorable to the prevailing party and to disregard contradictory evidence. Georgescu v. K Mart Corp., 813 S.W.2d 298, 299 (Mo. banc 1991). A claim of vexatious refusal to pay requires proof (1) of an insurance policy, (2) of the insurer's refusal to pay and (3) that the insurer's refusal was without reasonable cause or excuse. Dhyne v. State Farm Fire & Cas. Co., 188 S.W.3d 454, 456-57 (Mo. banc 2006). There is no dispute that Sherry was insured by American Family or that American Family did not pay Sherry's claim. The dispute centers on the third element. Viewed in the light most favorable to the jury's verdict, the evidence showed that American Family refused to pay Sherry's claim without reasonable cause or excuse. Sherry notified American Family of the property damage as early as July 2004. American Family took no steps to investigate Sherry's claim until it assigned an adjuster to the claim in July 2005. There was also evidence that American Family told Sherry that it would not investigate further until the homeowners filed a lawsuit. The evidence of American Family's delay and then refusal to investigate Sherry's claim provided the jury with a basis for concluding that American Family unreasonably refused to pay Sherry's valid claim for property damage. The trial court did not err in overruling American Family's motion for judgment notwithstanding the verdict.