Court Opinion

ID: 9854138
Source: CourtListenerOpinion
Date Created: 2023-09-24 06:01:47.835082+00
Date Added: 2024-06-11T09:22:56.788950
License: Public Domain

Lewis, Chief Justice
(dissenting) :
The lower court correctly held that the complaint alleged a cause of action for fraudulent breach of contract, and I dissent from the holding of the majority to the contrary.
The complaint alleges the following facts: Appellant had agreed to issue an endorsement to an existing policy between the parties, insuring two additional trailers. In furnishing to appellant identification of the two trailers for the purpose of the endorsement to the policy, respondent-insured inadvertently furnished the wrong serial number for one of the trailers. Prior to December 5, 1973, appellant was notified of the mistake in the serial number for one of the trailers, with a request that the correction be made in the endorsement. This trailer was stolen on December 5, 1973. Appellant was notified of the theft. After receiving notice of the mistake in the serial number and of the theft, appellant issued its endorsement, effective November 27, 1973, listing the incorrect serial number and placing a limit of $12,-500.00 on its liability. Appellant then refused to pay respondent for the loss on the ground that it had not issued the endorsement to cover the stolen trailer.
These allegations, taken as true in considering the motion to strike, show that appellant agreed to insure the trailer in question at full market value before the theft and before it issued the endorsement; after notice of the theft, appellant issued an endorsement covering a trailer which it knew respondent did not own, with coverage at less than its market value; and payment was then denied on the ground that *262the trailer in question, was not covered by the endorsement. These facts give rise to a reasonable inference that appellant’s issuance of the endorsement covering a trailer, which he knew did not exist, at an amount less than that agreed upon, and after it knew of the theft, was done to avoid liability under its prior agreement with the respondent-insured. This would, in my opinion, constitute a fraudulent act sufficient to support an award of punitive damages.
I therefore, dissent.