Wendilyn EMRYS, a Personal Representative of the Estate of Barbara Caballero, Plaintiff-Appellant,
FARMERS INSURANCE COMPANY OF OREGON, Defendant-Respondent.
and submitted August 2, 2017.
Douglas County Circuit Court 11CV0557CC; William A. Marshall,
W. Kelly argued the cause and fled the briefs for appellant.
Francis J. Maloney, III, argued the cause for respondent.
Also on the brief were Janis C. Puracal and Maloney
Lauersdorf Reiner PC.
Ortega, Presiding Judge, and Garrett, Judge, and Powers,
Summary: In this action to enforce an insurance contract,
which is before the Court of Appeals for the second time,
plaintiff seeks reformation of the contract to reflect the
correct identity of the insured property. On appeal,
plaintiff argues that the trial court, on remand, misapplied
the legal standard for determining whether an antecedent
agreement existed and erred by finding that an antecedent
agreement did not exist regarding the identity of the insured
property. Held: The trial court erred on remand by
applying an incorrect legal standard. The Court of Appeals
exercised its discretion to review the case de novo and found
that plaintiff had established that an antecedent agreement
existed regarding the identity of the insured property.
Or.App. 108] GARRETT, J.
case, which is before us for the second time, plaintiff seeks
reformation of an insurance contract.
plaintiff's first appeal, we concluded that the trial
court had applied the wrong legal standard in assessing
whether plaintiff had proved the existence of an antecedent
agreement. Emrys v. Farmers Ins. Co., 275 Or.App.
691, 698, 365 P.3d 1119 (2015) (Emrys I) (vacating
and remanding for reconsideration). On remand, the trial
court again concluded that plaintiff had failed to prove the
existence of an antecedent agreement by clear and convincing
evidence. In this second appeal, plaintiff argues that the
trial court again erred in ruling that she had failed to
prove the existence of an antecedent agreement regarding the
identity of the insured property. We agree with plaintiff.
Moreover, as explained below, we exercise our discretion to
review the case de novo and, having done so, we find
that plaintiff and defendant agreed that the insurance policy
would cover the property that was actively being rented and
was managed by North County Realty. Based on that finding, we
conclude that plaintiff and defendant entered into an
antecedent agreement to cover the rental property located at
106 Cofey Crossing Lane in Yoncalla and that the policy can
be reformed to match the parties' intent.
operative facts are set out in Emrys I:
"Plaintiff is the personal representative of
Caballero's estate, which owned five parcels of land near
Yoncalla in Douglas County, two of which had houses on them.
The two houses were located next to each other at 106 and 108
Cofey Crossing Lane, respectively. Caballero purchased two
landlord insurance policies from defendant in 2001, one for
each house. The policies covered, among other things, fire
damage to the houses. However, both policies contained
inaccurate legal descriptions for the insured properties, and
neither policy included street addresses for the properties.
[294 Or.App. 109] The policies were renewable on a yearly
basis. Through its agents, defendant contacted the Douglas
County Planning Department in 2004 and asked the department
to provide it with the street addresses for the properties
covered by the policies. A year later, before defendant's
agents had heard back from the county, Caballero allowed one
of the policies to lapse. The Douglas County Planning
Department subsequently told defendant's agents that the
address for the property covered by the remaining insurance
policy was 108 Cofey Crossing Lane, and defendant amended the
policy to identify the property by that address. Caballero
died in 2006, and plaintiff, Caballero's niece, was
appointed personal representative of Caballero's estate.
The house at 106 Cofey Crossing Lane was being leased by a
tenant at the time that Caballero died; the house at 108
Cofey Crossing Lane was uninhabited.
"When plaintiff became personal representative of
Caballero's estate, she did not know that Caballero had
owned property in Yoncalla. Plaintiff first became aware of
the property when, in going through Caballero's
belongings, she found a card that defendant's agents had
sent to Caballero, asking her to call them about the
property. Plaintiff investigated and learned of the five
Yoncalla parcels, acquiring in the process the tax
identification numbers for them. Plaintiff also learned that
Caballero had hired a property management company, North
County Realty, to lease one of the houses on the Yoncalla
property. Plaintiff called North County Realty and was told
that a tenant was still renting the house. Plaintiff then
called defendant in April 2006 and asked one of
defendant's agents 'if they insured the properties in
Yoncalla for the Caballeros.' She was told that they did,
and she agreed during the telephone call to purchase a
landlord insurance policy for the Yoncalla property from
defendant, telling defendant's agent that she wanted to
continue the existing policy for the leased property. She
also told defendant's agent that she had little knowledge
of the property, giving the agent the tax identification
numbers for the parcels and telling the agent to contact
North County Realty for any additional information that it
needed about the location of the leased house. Thereafter,
defendant's agents sent plaintiff invoices listing the
property covered by the policy as '108 Coffee
Crossing.' The estate paid the premiums for the policy.
Plaintiff testified that she believed that the policy covered
the leased property. It was defendant's practice not to
[294 Or.App. 110] provide a landlord insurance policy for
properties that were not rented by a tenant.
"The house at 106 Cofey Crossing Lane-the property
rented by a tenant-was damaged by fire in 2010. Plaintiff
filed a claim with defendant on behalf of Caballero's
estate, seeking compensation for the damage to the house.
Defendant denied the claim on the ground that its insurance
policy covered the house at 108 Cofey Crossing Lane, not the
house at 106 Cofey Crossing Lane. Plaintiff responded by
filing an action against defendant seeking reformation of the