Court Opinion

ID: 9592116
Source: CourtListenerOpinion
Date Created: 2023-08-22 00:10:31.947619+00
Date Added: 2024-06-11T18:01:15.466944
License: Public Domain

UHLENHOPP, Justice
(concurring).
Two questions are involved. On which side rested the burden of proof as to the conditions precedent regarding notice and cooperation by Ruhoff? Should the Hay-neses have been permitted to reopen and offer evidence of substantial performance or estoppel as to those conditions ?
I. In the absence of special statutory provision, a third party bringing an action against an insurer on a liability insurance policy stands in the shoes of the insured, insofar as the insured’s performance of conditions in the policy is concerned. 12 Couch, Insurance 2d § 45:812 at 701-702, § 45:874 at 747-749 (1964); 7 Am.Jur.2d Automobile Insurance § 225 at 574; 44 Am.Jur.2d Insurance § 1586 at 474 ; 46 C. J.S. Insurance § 1191c (6) at 120; Annots. 72 A.L.R. 1446, 1499, 98 A.L.R. 1465, 1484, 139 A.L.R. 771, 806. See also Ferris v. Employers Mut. Cas. Co., 255 Iowa 511, 515, 122 N.W.2d 263, 265-266 (action by third party on policy and under Iowa direct action statute — “Also, it must be pointed out that plaintiff’s rights are to be measured by those of Riley [insured] as against the defendant-insurer. The statute, section 516.1, supra, and the provisions of the policy, if applicable at all here, do no more than place the plaintiff in Riley’s position.”). Iowa has no special statutory provision on this point. Therefore, unexcused breach of policy conditions as to notice or cooperation by the insured will bar recovery by third parties like the Haynes-es.
This particular policy expressly makes compliance with the terms of the policy a “condition precedent” to an action against Dairyland. Two of those terms are notice and cooperation by Ruhoff. When compliance with the terms of a policy is expressly made a condition precedent to the insurer’s liability, the burden rests on the insured to prove substantial performance of the provisions, or waiver, estoppel, excuse, or nonprejudice. Henderson v. Hawkeye-Security Ins. Co., 252 Iowa 97, 106 N.W.2d 86; Western Mutual Ins. Co. v. Baldwin, 258 Iowa 460, 137 N.W.2d 918 (insurer’s declaratory judgment action against both insured and damaged third party — policy provisions same as here); Henschel v. Hawkeye-Security Ins. Co;, 178 N.W.2d 409, 417 (“Henschels were therefore obliged to allege compliance with conditions precedent or to assert performance or occurrence of the conditions was waived or excused”). If the action is by the damaged third party, the burden devolves upon him to prove performance of conditions precedent by the insured or waiver, estop-pel, excuse, or nonprejudice, since he occupies the insured’s shoes. 12 Couch, Insurance 2d § 45:824 at 710 (1964) (“the burden of proof is on the injured party to establish all facts essential to the existence of liability to him of the insurer. He therefore has the burden of proving that all conditions precedent specified in the policy have been satisfied”). See Ewing v. Colorado Farm Mut. Cas. Co., 133 Colo. 447, 296 P.2d 1040; McFarland v. Farm Bureau Mut. Auto. Ins. Co., 201 Md. 241, *8893 A.2d 551; Rose v. Regan, 344 Mass. 223, 181 N.E.2d 796; Travelers’ Indem. Co. v. Holiman, 174 Miss. 220, 164 So. 36; Northwestern Mut. Ins. Co. v. Independence Mut. Ins. Co., 319 S.W.2d 898 (Mo.App.); Fisk v. Atlantic Nat. Ins. Co., 108 N.H. 353, 236 A.2d 688; Mason v. Allstate Ins. Co., 12 A.D.2d 138, 209 N.Y.S.2d 104; Woodruff v. State Farm Mut. Auto. Ins. Co., 260 N.C. 723, 133 S.E.2d 704; Muncie v. Travelers Ins. Co., 253 N.C. 74, 116 S. E.2d 474.
The burden of proof is not shifted by rule 98, Rules of Civil Procedure. The rule states that “performance of conditions precedent . . . may be pleaded as legal conclusions, without averring the facts comprising them. It shall not be sufficient to deny such averment in terms contradicting it, but the facts relied on must be stated.” Under such a rule an insured or damaged third party is not required laboriously to allege performance of each condition in the policy. He may allege generally performance of conditions precedent, and the insurer then avers the conditions not complied with and the facts constituting nonperformance. The pleadings are thus shorter and more to the point. Ben-anti v. Delaware Ins. Co., 86 Conn. 15, 84 A. 109. But the court has recently decided that rule 98 does not change the burden of proof. Henschel v. Hawkeye-Security Ins. Co., 178 N.W.2d 409 (Iowa).
In the present petition the Hayneses did not allege performance of conditions precedent or waiver, estoppel, excuse, or nonprejudice. Dairyland did not move to dismiss as it might have done but answered averring nonperformance of the conditions as to notice and cooperation. The Haynes-es replied, denying Dairyland’s averments and alleging estoppel. Did these pleadings of the parties change the burden of proof?
A similar situation existed in Knapp v. Brotherhood of American Yeomen, 139 Iowa 136, 117 N.W. 298. The wife of the deceased insured sued as beneficiary under a life insurance certificate. While she alleged performance of conditions by her husband, she did not allege performance of conditions required of her. One of the latter conditions was submission to arbitration. The insurer did not plead a defense of failure to arbitrate. On first appeal, this court held that no issue as to submission to arbitration was in the case. Knapp v. Brotherhood of American Yeomen, 128 Iowa 566, 567, 105 N.W. 63, 64 (“No issue was raised by the pleadings, therefore, as to whether there had been such submission”). The judgment was reversed on other grounds, and on remand the defendant insurer amended its answer, specifically denying performance of the condition as to arbitration. On second appeal, this court held that “the burden rested on plaintiff, after such specific denial, to prove performance of this condition precedent or waiver thereof. . . . ” 139 Iowa at 138, 117 N.W. at 299 (italics added). The decision is in point here and it is in line with the view generally held that mispleading does not ordinarily change the burden of proof. Raiche v. Standard Oil Co., 137 F.2d 446 (8th Cir.) ; Yazoo & M. V. R. R. v. M. Levy & Sons, 141 Miss. 199, 106 So. 525; Stephens v. Fire Ass’n of Philadelphia, 139 Mo.App. 369, 123 S.W. 63. See also Homire v. Rodgers, 74 Iowa 395, 37 N.W. 972. Thus, although Dairyland tendered the issue in its answer, the burden rested on the Hayneses to prove Ruhoff substantially performed the conditions as to notice and cooperation or that Dairyland was estopped, as the Hayneses pleaded in their reply. A case quite similar is Ewing v. Colorado Farm. Mut. Cas. Co., 133 Colo. 447, 296 P. 2d 1040.
As a result, Dairyland’s motion to direct at the conclusion of the evidence was good; no evidence of substantial performance or estoppel had been introduced. Likewise, the Hayneses’ motion to direct was not good. The trial court therefore ruled correctly on those motions.
*89II. But the Hayneses also moved at the time to reopen in order to introduce additional evidence. It is a fair assumption that when Dairyland’s motion to direct was made, the Hayneses, like many litigants before them, woke up to the absence of proof of an essential element of their case. The trial court had abundant discretion to let the Hayneses reopen and try to adduce the missing proof and then to let Dairyland put in evidence. S3 Am.Jur. Trial § 123 at 109; 88 C.J.S. Trial § 104 at 217. But the court did not do so. Was the court in error in refusing to permit the Hayneses to reopen under the circumstances here ? That is really the controlling question in the appeal, and it is a close one.
The Hayneses appear to have gotten into their predicament at trial because of the state of the pleadings. Normally the burden of proof is on the party who alleges a fact. Rule 344(f)(5), R.C.P. The Hayneses’ petition contained no allegations regarding notice and cooperation by Ru-hoff; Dairyland’s answer did contain such averments. Too, the Hayneses may have been confused as to the burden of proof by the nature of the case. The suit was not by the individual who was required to perform the conditions, but by third parties.
In addition, the pleadings were filed in 1969; the opinion of this court in the Hen-schel case, dealing with rule 98 and the burden of pleading and proving performance of conditions precedent, was filed in June of 1970; and the trial of the present case occurred about three months after the Henschel opinion was filed. Even so, the problem would have surfaced earlier if the pleading process had proceeded in the usual manner. While the Hayneses’ petition was deficient in failing to contain allegations relating to conditions precedent, Dairyland did not file a motion to dismiss. Rule 104(b), R.C.P. Dairyland was not required to do so and could raise the matter as a point of law in its answer and ask for a ruling in advance of trial. Rules 72, 105. But Dairyland did not take that course either, and instead pleaded nonperformance of conditions precedent as a matter of fact. Thus, the legal question as to the burden of pleading and proof did not arise until the motions to direct a verdict were made at trial.
If the Hayneses had deliberately withheld pleading and proving performance or estoppel as a tactical maneuver or to trap Dairyland, they would not be entitled to relief. But such does not appear to be the case. The fact appears to be that since the answer rather than the petition dealt with conditions precedent, since Henschel had not yet been decided when the pleadings were drafted, and since the present case involved a rather complicated area of civil procedure and insurance law, the Hayneses got into their fix inadvertently rather than deliberately.
A trial is a quest for the truth. Trial courts have broad discretion to reopen the evidence and this court has said, “Such discretion is to be liberally exercised.” Dobler v. Bawden, 238 Iowa 76, 85, 25 N.W.2d 866, 871. See also 88 C.J.S. Trial § 104 at 218 (“The trial court has a wide discretion in passing on a motion to reopen, and such discretion is to be liberally exercised in behalf of allowing the whole case to be presented, for the best advancement of the ends of justice.”). A trial court may reopen the evidence after both sides have rested and after a motion to direct a verdict has been made. Lee v. Farmers Mut. Hail Ins. Ass’n, 214 Iowa 932, 241 N.W. 403 (insured allowed to reopen twice); 53 Am.Jur. Trial § 124 at 110 (“It is common practice for the trial court to allow the case to be reopened and additional evidence introduced in order to prevent a nonsuit, where counsel for the plaintiff has omitted evidence by accident, inadvertence, or even because of a mistake as to the necessity for offering a particular witness or particular evidence.”).
The motion to reopen should have been granted here. This is an exceptional case in which refusal to allow introduction of additional evidence constituted error. The *90case should be remanded for another trial pursuant to rule 349, R.C.P.