Reformation, What is it?
An insurance policy is a contract and therefore subject to general principals of contract law. Missouri law allows a contract to be reformed when by reason of fraud or mutual mistake the written contract does not express the actual agreement of the parties to the contract. Mills v. Camerson Mut. Ins. Co., 764 S.W. 2d 244, 249 (Mo. App. 1984). In cases of mistake the mistake must be mutual, but that does not mean the parties have to agree that the mistake was a mistake of both parties as long as the evidence shows that both parties were in fact operating under a misapprehension of fact or law, or bot. See State Farm Mut. Ins. Co. v. McGuire, 905 S.W. 2d 150 (Mo. App. W.D. 1995).
In essence what this legal doctrine allows is a showing that there was an joint objective or purpose arrived upon by agreement between the parties, but that the expression of that agreement in the written contract is flawed. The proof required for reformation is clear, cogent and convincing evidence. However, where the litigants present conflicting evidence about the actual agreement, a Missouri court is free to sort out the conflicts which only need be supported by competent and substantial evidence. CMI Food Services v. Hatridge Leasing, 890 S.W. 2d 420 (Mo. App. W.D. 1995).
There are a variety of ways that this theory can help policyholders who have been left out in the cold without coverage. The theory can help not only where the policyholder and company make a mutual mistake but also where a mistake occurs between an agent and an insurance company, because legally the policyholders mistake is being a party to the erroneous policy. If you are in a situation where you thought you had insurance coverage and your insurance policy does not reflect your understanding of the agreement at the time the agreement was made, don't give up. The insurance company is not the final word on justice.
In essence what this legal doctrine allows is a showing that there was an joint objective or purpose arrived upon by agreement between the parties, but that the expression of that agreement in the written contract is flawed. The proof required for reformation is clear, cogent and convincing evidence. However, where the litigants present conflicting evidence about the actual agreement, a Missouri court is free to sort out the conflicts which only need be supported by competent and substantial evidence. CMI Food Services v. Hatridge Leasing, 890 S.W. 2d 420 (Mo. App. W.D. 1995).
There are a variety of ways that this theory can help policyholders who have been left out in the cold without coverage. The theory can help not only where the policyholder and company make a mutual mistake but also where a mistake occurs between an agent and an insurance company, because legally the policyholders mistake is being a party to the erroneous policy. If you are in a situation where you thought you had insurance coverage and your insurance policy does not reflect your understanding of the agreement at the time the agreement was made, don't give up. The insurance company is not the final word on justice.
