Section 10 Factual Basis Supporting Application of Vexatious Penalties

• Library: Damages 2012

To successfully pursue a claim for vexatious penalties, it is not necessary to have direct proof of the vexatious or recalcitrant nature of the refusal to pay. In fact, the standard necessary to support a vexatious award has been relaxed. Hester v. Am. Family Mut. Ins. Co., 733 S.W.2d 1, 2 (Mo. App. E.D. 1987). Thus, the claim for vexatious penalties may be proven upon a consideration of all the facts and circumstances. The rule has been variously stated as follows:

In DeWitt v. American Family Mutual Insurance Co., 667 S.W.2d 700, 710 (Mo. banc 1984), the Supreme Court of Missouri said, “Direct and specific evidence to show vexatious refusal is not required, the jury may find vexatious delay upon a general survey and a consideration of the whole testimony and all the facts and circumstances in connection with the case.”

In Berry v. Federal Kemper Insurance Co., 621 S.W.2d 948, 953 (Mo. App. S.D. 1981), the court said, “In order to recover it is not necessary to show affirmatively that the delay was vexatious; it is only required that the evidence and circumstances be sufficient to justify the conclusion that refusing to pay was vexatious.” See alsoHous. Auth. of City of Clinton ex rel. Evans Elec. Constr. Co. v. Baumann, 512 S.W.2d 436, 440 (Mo. App. W.D. 1974); Handly v. Lyons, 475 S.W.2d 451, 461 (Mo. App. W.D. 1971).

The following are examples of facts or circumstances that have been determined to justify recovery of vexatious penalties:

A mere suspicion that a fire was of an incendiary origin is not sufficient to justify refusal to pay unless there are substantial facts on which to base that suspicion. Hounihan v. Farm Bureau Mut. Ins. Co. of Mo., 523 S.W.2d 173, 175 (Mo. App. S.D. 1975); Laster v. State Farm Fire & Cas. Co., 693 S.W.2d 195...