Emrys v. Farmers Ins. Co. of Oregon

If two parties enter an agreement to insure a property, but identify the wrong property, an antecedent agreement to reform a contract has been met.

Caballero purchased two landlord insurance policies from defendant insurance company. The policies included fire insurance. The properties were at #106 and #108 Cofey Crossing Lane. Caballero died and Emrys was named representative of Caballero’s estate. The house at #106 was rented when Caballero died; the house at #108 was empty. Emrys did not know that Caballero was a landlord prior to Caballero’s death. Emrys contacted defendant to ask about the insurance policies. Through Defendant, Emrys purchased a policy for the uninsured property and renewed the existing policy. The policy was registered under “108 Coffee Crossing.” The house at #106 was damaged by a fire. Emrys filed a claim with defendant to recover the damage. Defendant denied the claim, stating that the policy covered #108 but not #106. Emrys sued, seeking reformation of the contract and for breach of contract damages. The trial court found that there was a mutual mistake, but that there was no evidence that the parties had agreed to insure #106, and thus the contract could not be reformed to reflect this. The trial court dismissed Emrys’s claim. Emrys appealed, challenging the trial court’s finding that the parties had not agreed to insure #106. The Court held that the trial court erred when it mistook the required nature of an antecedent agreement, and that there is evidence in the record suggesting that there was a preexisting agreement to insure #106. Vacated and remanded for factfinding regarding the context of the antecedent agreement.