## Facts

- Pamela Coke and Ward Ferrell obtained an automobile/RV insurance policy from American Family Mutual Insurance Company covering a 2003 Monaco motor home.
- Coke and Ferrell purchased the RV for $149,500 plus a trade-in, but legal title was placed in Toy Hon USA, a corporation owned by Ferrell.
- Coke and Ferrell took possession, used the RV for personal travel, and planned to live in it while building a home.
- They paid for repairs and related expenditures, including approximately $1,000 for a fuel-leak repair, a $6,000 warranty, about $6,300 for tires, and construction costs to store the RV.
- The RV was substantially damaged in an accident in Arizona.
- Coke and Ferrell submitted a claim; American Family denied coverage, asserting (among other grounds) that Coke and Ferrell lacked an insurable interest because they were not the titled owners.
- American Family filed a declaratory judgment action; Coke and Ferrell counterclaimed for breach of contract and vexatious refusal to pay (a defamation claim was later dismissed).
- At the close of the evidence, the trial court directed a verdict for American Family on the counterclaims on the ground that Coke and Ferrell had no insurable interest.

## Issues

1. Whether insureds may have an insurable interest in a motor vehicle even when legal title is held by a related corporation.
2. Whether the evidence, viewed favorably to Coke and Ferrell, was sufficient to submit insurable interest (and thus their breach-of-contract and vexatious-refusal counterclaims) to the jury rather than resolve it by directed verdict.

## Decision

- The appellate court reversed the directed verdict and remanded for further proceedings.
- The court held Coke and Ferrell presented substantial evidence of an insurable interest in the RV despite Toy Hon USA holding title.
- Because a reasonable jury could find an insurable interest, the trial court erred in removing the counterclaims from the jury on that basis.

## Legal Principles

- Missouri favors finding an insurable interest and sustaining coverage where there is a substantial possibility the insured will suffer loss from the property’s destruction.
- An insurable interest does not require legal title; it exists when a person has a pecuniary stake in the property’s preservation or faces direct economic loss from its destruction.
- Motor vehicle title statutes governing ownership and transfer are not dispositive of insurable interest for insurance coverage purposes.
- On a directed verdict, courts must view evidence in the light most favorable to the nonmovant and allow reasonable inferences; a directed verdict is proper only when there is no substantial evidence for a submissible case.

## Conclusion

The court ruled that evidence of Coke and Ferrell’s purchase, use, and financial investment in the RV could establish a pecuniary stake sufficient for an insurable interest, so their breach-of-contract and vexatious-refusal counterclaims could not be barred by directed verdict solely because title was held in a related corporation’s name.


Am. Fam. Mut. Ins. Co. v. Coke, 358 S.W.3d 576 (Mo. Ct. App. 2012)