Opinion ID: 1722984
Heading Depth: 1
Heading Rank: 5

Heading: denial of claim and litigation prior to this suit

Text: State Farm rejected the Simpsons' proof of loss and denied the proceeds of the policy on November 21, 1978. The next day State Farm filed suit for declaratory judgment in the United States District Court seeking a determination of its liability, if any, under the policy. In it State Farm alleged the fire was caused by an incendiary act on the part of the insured. This suit was dismissed without prejudice on May 14, 1979. On July 19, 1979, the Simpsons filed suit against State Farm in the Circuit Court of Jackson County alleging a breach of the insurance contract in an ex delicto action for bad faith. Other suits and their dismissals followed in both State and Federal Courts finally culminating in this suit which was filed in the Circuit Court of Jackson County on November 13, 1980. In it the plaintiffs designated State Farm Fire & Casualty Co., the defendant, as well as individuals Winston Hankins, General Counsel of State Farm with the responsibility of making final litigation decisions in punitive damage cases; Oren Haddock, George Johnson, and Rex Foster, all agents of State Farm. The Simpsons alleged the defendants were guilty of malicious prosecution, defamation, fraud, breach of fiduciary duty, and intentional infliction of emotional distress, for all of which they demanded redress by way of contractual, compensatory and punitive damages. State Farm filed a foreclosure proceeding in the state court which was later dismissed. Thereafter State Farm filed its answer denying the allegations of the complaint and asserting the following affirmative defenses: (1) The subject fire loss was intentionally caused or procured by the plaintiffs and therefore the policy was void ab initio; (2) The plaintiffs violated the policy provisions with respect to increasing the hazard of the subject property and therefore the policy is void; (3) The plaintiffs violated the insurance policy provisions with respect to willful concealments and misrepresentation of material facts and therefore the policy is void; (4) Plaintiffs violated the policy provision with respect to giving false statements under oath and therefore the policy is void; (5) State Farm paid $1500.00 to the plaintiffs for additional living expenses prior to its investigation regarding the facts of the fire and prior to its determination the coverage should be denied; (6) State Farm fullfilled all of its obligations under the policy by paying the mortgagee, Kimbrough Investment Company; (7) State Farm has an absolute privilege as to any pleadings filed in any court and cannot be liable for contents of any pleadings on the grounds of slander and libel. The counterclaim was filed by the defendant to recover the $1500.00 previously paid to the plaintiffs. With permission of the courts the defendant amended the answer by adding that the claim for punitive damages was barred by the statute of limitations. Thereafter an order was obtained allowing State Farm to raise the affirmative defense that the allegations of defamation set forth in the declaration were barred by the statute of limitations. An extensive trial followed, resulting in an appeal to this Court consisting of 23 volumes and more than 3000 pages of testimony, exhibits, instructions, motions, etc., a ponderous legal array indeed. Where possible this opinion will attempt to contain it within reasonable proportions.