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Pennsylvania Fire Insurance Co. v. Gold Issue Mining & Milling Co.

Supreme Court of Missouri · Civil Procedure

Civil ProcedurePersonal JurisdictionService of ProcessForeign CorporationsInsuranceforeign insurerMissouri section 7042superintendent of insurance

Facts

Plaintiff was an Arizona corporation and defendant was a Pennsylvania fire insurance company licensed to do business in Missouri. Defendant issued the policy in Colorado through its general agents there, insuring plaintiff's Colorado smelter property, which was later destroyed by fire caused by lightning. When plaintiff sued in Missouri, summons was served on the Missouri Superintendent of Insurance under section 7042. Defendant argued Missouri lacked jurisdiction because the parties were nonresidents and the contract and loss arose in Colorado; it also asserted policy defenses based on idleness and encumbrances.

Issue

May Missouri obtain personal jurisdiction over a foreign insurance company licensed to do business in Missouri, by service on the Missouri Superintendent of Insurance under section 7042, in a suit on an insurance policy made in another state? If so, did the insurer waive its policy defenses based on idleness and encumbrances through its general agents' knowledge and assent?

Rule

Section 7042 authorizes service on the Missouri Superintendent of Insurance in all transitory proceedings instituted in Missouri against a foreign insurance company licensed to do business in the state, not merely suits on policies made in Missouri, so long as the company has policies or liabilities outstanding in Missouri. Such service constitutes due process and is constitutional. Separately, when the insurer's general agents know of facts that would otherwise cause forfeiture and assent to them or continue the policy without objection, the insurer waives or is estopped from asserting those forfeiture conditions.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Lakeshore Forge LLC, an Ohio company, bought a fire policy in Indiana from Harbor Peak Indemnity, a Delaware insurer. Harbor Peak is licensed in Missouri, has filed the required appointment of the Missouri Superintendent of Insurance, and still has hundreds of active Missouri policies; after an Indiana warehouse fire, Lakeshore sues Harbor Peak in a Missouri circuit court and serves the Superintendent.

Harbor Peak moves to quash service, arguing the policy was made in Indiana on Indiana property between non-Missouri parties. How should the Missouri court rule?

Explanation. The majority construed the Missouri statute to cover all proceedings brought in Missouri against a licensed foreign insurer that has appointed the Superintendent and still has policies or liabilities outstanding in Missouri. The rule is not limited to insurance contracts made in Missouri. Because the action is transitory and the insurer voluntarily entered Missouri and appointed the Superintendent as statutory agent, service is valid and satisfies due process. (Derived from Pennsylvania Fire Insurance Co. v. Gold Issue Mining & Milling Co. (n.d.).)