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Law School Case Brief

Hartford Fire Ins. Co. v. W. Fire Ins. Co. - 226 Kan. 197, 597 P.2d 622 (1979)


With respect to renewals of existing insurance policies, a binding contract of renewal must be clearly established, and must have all the essentials of a valid contract, as in the creation of the contract in the first instance. Thus a renewal cannot be effected or consummated without the mutual assent of the parties and a meeting of the minds of the parties on all the essentials of the contract, and a new consideration. A mere custom of companies or their agents in certain localities to renew, without request, is not sufficient to establish a renewal, unless it is of such a nature as to be binding on insured as well as on insurer. 


Freeman Construction Company (“Freeman”) maintained insurance on equipment with Western Fire Insurance Company (“Western”). The policy insured a bulldozer that was owned by intervenor lessor, Manley Leasing Company, Inc. (“Manley”). Western's policy contained various loss payable clauses, including one in favor of Manley. The bank had a person oversee Freeman's financial affairs who determined Freeman would benefit by changing to another insurance company. Through a series of events, Western's agent sent a renewal policy to lessee's office and Hartford Fire Insurance Company (“Hartford”) issued a new policy to lessee. The bulldozer was damaged by fire and lessee filed a claim with Freeman. A premium was not paid to Western for renewal. Hartford paid Freeman and filed suit against Western. At trial, the court entered a judgment in favor of Hartford finding that the receipt and retention by lessee of a policy sent to him by Western without objection was binding as an acceptance. Western and Manley appealed.


Were the receipt and retention by Freeman of a policy sent to him by Western without objection binding as an acceptance?




The court reversed in favor of Western as delivery of the renewal policy by Western constituted an offer of insurance that was not accepted by Freeman.

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