             SUPREME COURT OF MISSOURI
                                         en banc

RANDY SPALDING,                               )
                                              )
                            Respondent,       )
                                              )
       v.                                     )         No. SC94580
                                              )
STEWART TITLE GUARANTY                        )
COMPANY,                                      )
                                              )
                            Appellant.        )

            APPEAL FROM THE CIRCUIT COURT OF JACKSON COUNTY
                     The Honorable Michael W. Manners, Judge

                               Opinion issued May 12, 2015

                                         Introduction

       Stewart Title Guaranty Company appeals the circuit court's judgment in favor of

Randy Spalding after a jury trial on his claims for breach of contract and vexatious refusal

to pay in regard to a title insurance policy. Stewart Title contends that the circuit court

erred in: (1) overruling its motions for directed verdict and judgment notwithstanding the

verdict because the suit on the title insurance policy was time barred under the five-year

statute of limitations for breach of contract; (2) refusing to give its proposed instruction

concerning its statute of limitations defense; (3) overruling its motions for directed verdict

and judgment notwithstanding the verdict because Spalding failed to make a submissible

case as to the existence and amount of the damages for the breach of contract;

(4) admitting evidence from appraiser Brian Reardon regarding the damages sustained
from the title defect under the policy; and (5) giving Instruction No. 7, regarding the

measure of damages. Further, Stewart Title asserts that, if this Court reverses the circuit

court's judgment regarding the breach of contract claim, then the circuit court necessarily

erred in failing to sustain Stewart Title's motions for directed verdict, judgment

notwithstanding the verdict, or new trial on the vexatious refusal to pay claim. The Court

affirms.

                           Facts and Procedural Background

       Viewing the evidence in the light most favorable to the judgment, Spalding

established that, in 2003, he contracted to buy approximately 419 acres of property in the

City of Lake Winnebago in Cass County, Missouri. The land was bound by 167th Street,

the existing Lake Winnebago Dam, and Missouri Route 291, and much of the land is in a

federally-designated flood area. Spalding and his wife formed an entity named Spalding

Land Company (SLC) to take title to the property in February 2003. The land was in

receivership at the time of the acquisition, and SLC acquired the land for $1,510,000.

       Stewart Title issued a policy of title insurance to SLC on February 12, 2003, in the

amount of $1.7 million, insuring the property as described in Schedule A of the policy.

Pursuant to the policy, Stewart Title insured against loss or damage sustained or incurred

by SLC by reason of "[t]itle to the estate or interest described in Schedule A being vested

other than as stated therein;" "[a]ny defect in or lien or encumbrance on the title;"

"[u]nmarketability of the title;" and "[l]ack of a right of access to and from the land." The

policy stated that it was "a contract of indemnity against actual monetary loss or damage

sustained or incurred by the insured claimant" with liability not to exceed the lesser of
"(i) the Amount of Insurance stated in Schedule A; or, (ii) the difference between the value

of the insured estate or interest as insured and the value of the insured estate or interest

subject to the defect, lien or encumbrance insured against by this policy."

       After purchasing the land, Spalding began talking with various people about

developing the land. In 2005, Matt Bowen, John Bowen, and Scott Westlake created a

new company named South Winnebago Partners (SWP).                 SWP began working with

Spalding and SLC on plans for developing the property. The parties developed a plan to

expand the existing Lake Winnebago into the flood area on the property to create new

lake-front lots and traditional lots with lake-access rights. 1    In 2007, pursuant to an

amended and restated operating agreement, SWP became one of the two members of SLC,

along with Spalding. SWP also became the manager of SLC. The agreement recognized

that the property was Spalding's contribution to SLC and that "services" were SWP's

contribution to SLC.

       SLC sought (and eventually obtained) a permit from the United States Army Corps

of Engineers to partially remove the existing dam, construct a new dam and spillway, and

expand Lake Winnebago. SLC also contracted with HNTB to be the land planner and with

Olsson and Associates to perform engineering work. Further, SWP acquired options to

purchase on surrounding parcels of land that might be needed for the project. Moreover,

SLC presented its plan to the Lake Winnebago Homeowners Association and the city of

Lake Winnebago, and both entities supported the plan.


1
  SLC had two different plans for development of the property. The 2006 plan called for
development of between 354 and 365 lots. The 2007 plan called for the development of 154 lake-
front lots and 231 traditional lots with lake-access rights.
                                              3
      Things appeared to be progressing with the development plan until January 2006

when Spalding received a telephone call from Paul Estes. Estes claimed that he owned a

one-acre tract of land at the bottom of the lake proposed by SLC. Realizing that Estes's

claim could preclude the development of the lake, Spalding contacted Coffelt Title, the

agent for Stewart Title that had issued the title insurance policy to SLC. Coffelt Title

responded with a letter to Spalding, dated March 21, 2006, acknowledging Spalding's

claim and advising Spalding to contact Stewart Title regarding his claim.

      As it turned out, both SLC and Estes held deeds showing that they owned this one-

acre tract of land. Both SLC and Estes had purchased title insurance from Stewart Title,

and both Estes and Spalding contacted Stewart Title about a possible title defect. From

April 2006 until mid-June 2006, Stewart Title conducted an investigation to determine

whether SLC or Estes possessed good title to the one-acre tract of land. On June 16, 2006,

Stewart Title completed its investigation and determined that Estes owned the one-acre

tract and that SLC did not. On July 15, 2006, Spalding contacted Stewart Title, and SLC

made a claim under the title insurance policy.

      After discovering that SLC's title was defective, Stewart Title made an election

under paragraph 6 of the policy and chose to pay the loss suffered by SLC as a result of the

defect. Paragraph 6 provides:

      6. OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS;
      TERMINATION OF LIABILITY.

             In case of a claim under this policy, the Company shall have the following
      additional options:

      (a) To Pay or Tender Payment of the Amount of Insurance.

                                             4
       ....
       (b) To Pay or Otherwise Settle With Parties Other than the Insured or With
       the Insured Claimant

       (i) to pay or otherwise settle with other parties for or in the name of an
       insured claimant any claim insured against under this policy, together with
       any costs, attorneys' fees and expenses incurred by the insured claimant
       which were authorized by the Company up to the time of payment and which
       the Company is obligated to pay; or

       (ii) to pay or otherwise settle with the insured claimant the loss or damage
       provided for under this policy, together with any costs, attorneys' fees and
       expenses incurred by the insured claimant which were authorized by the
       Company up to the time of payment and which the Company is obligated to
       pay.

       Upon the exercise by the Company of either of the options provided for in
       paragraphs (b)(i) or (ii), the Company's obligations to the insured under this
       policy for the claimed loss or damage, other than the payments required to be
       made, shall terminate, including any liability or obligation to defend,
       prosecute or continue any litigation.

Stewart Title informed SLC that "[t]he loss under the policy is measured as the 'difference

between the value of the insured estate or interest as insured and the value of the insured

estate or interest subject to the defect, lien or encumbrance insured against by this policy.'"

Stewart Title, therefore, claimed that SLC's loss "would be the difference in value between

the property with the 1 acre tract owned by Estes and the value of the property without that

1 acre tract." Stewart Title told SLC that it would commission an appraisal to determine

this difference.

       On July 3, 2007, Stewart Title sent a letter to SLC's counsel indicating that it

completed its appraisal and that such appraisal "measured the diminution in value at

$10,000." Along with its letter, Stewart Title enclosed a check in the amount of $10,000 to

fully resolve the claim.
                                              5
       On July 12, 2007, SLC returned Stewart Title's check and informed Stewart Title

that $10,000 did not adequately compensate SLC for its loss. The letter said:

       [W]e do believe that my client's loss is the difference in value of the land as
       insured, including the one (1) acre at issue, and the value of the land
       excluding the one (1) acre. Without the one (1) acre which is in question, the
       proposed Lake expansion cannot go forward, and Spalding Land Company
       LLC will suffer loss in the value of its land far greater than the amount of the
       insurance policy. With the defect corrected, and the one (1) acre in question
       included in the Spalding Land Company LLC tract, there would not be a loss
       to Spalding Land Company LLC. We do not believe that the appraisal
       provided accurately values the property with and without that one (1) acre.

SLC continued to suggest that, in lieu of paying the loss suffered by SLC as a result of its

defective title, Stewart Title purchase the one-acre tract from Estes. Estes had requested

payment of $387,000. To facilitate this approach, Spalding purchased and repeatedly

renewed an option to purchase the tract from Estes. However, Stewart Title continued to

insist that SLC's loss was only $10,000.

       With the dispute unresolved with Stewart Title, SLC ceased operations and assigned

this claim along with the land in question to Spalding. On June 9, 2011, Spalding filed suit

against Stewart Title asserting claims for breach of contract and vexatious refusal to pay in

regard to a title insurance policy. After a jury trial, the circuit court entered an amended

judgment for Spalding in the amount of $1,100,000 on the policy, penalties in the amount

of $110,150, and attorney fees in the amount of $81,000. Stewart Title appeals.

       Stewart Title contends that the circuit court erred in overruling its motions for

directed verdict and judgment notwithstanding the verdict because the suit on the title

insurance policy was time barred under the five-year statute of limitations for breach of

contract. Stewart Title asserts that the title insurance policy is a contract of indemnity that

                                              6
contains no unconditional promise to pay as required to bring this case within the 10-year

statute of limitations.

       The running of the applicable statute of limitations is an affirmative defense. The

party asserting the affirmative defense of the running of the applicable statute of

limitations bears the burden of not only pleading it, but also proving it as a matter of law.

Powel v. Chaminade College Preparatory, Inc., 197 S.W.3d 576, 580 (Mo. banc 2006);

see also Rule 55.08. "Thus, unless the party asserting the affirmative defense of the

running of the statute of limitations proves its defense, as a matter of law, the trial court

does not err in denying that party's motion's for directed verdict" or judgment

notwithstanding the verdict. Townsend v. Eastern Chemical Waste Systems, 234 S.W.3d

452 (Mo. App. 2007).

          A Cause of Action for Breach of Contract Does Not Accrue Until a Breach
                                  of the Contract Occurs 2

2
  Stewart Title asserts that, pursuant to section 516.120(1) "[a]ll actions upon contracts, obligation
or liabilities" must be brought within five years. If, however, the action is upon any writing for the
payment of money, the action must be commenced within 10 years. §516.110(1). Stewart Title
contends that the five-year statute of limitations under section 516.120(1) applies in this case
because the title insurance policy at issue is a contract of indemnity that contains no unconditional
promise to pay as required to invoke the 10-year statute of limitations.
         Spalding contends the 10-year statute of limitations applies. He argues that his claim
under this title insurance policy fits into the §516.110(1) exception that only applies to "actions
upon a written contract . . . for the payment of money or property." It is true that some claims
made against insurance policies are written contracts for the payment of money and, therefore, the
10-year statute of limitations applies. See Johnson v. State Mut. Life Assurance. Co. of Am., 942
F.2d 1260, 1263 (8th Cir. 1991) (interpreting §§ 516.120(1) and 516.110(1)); Brown v. CRST
Malone, Inc., No. 4:11CV1527, 2012 WL 4711450 (E.D. Mo. 2012). The particular terms of each
contract (policy of insurance in this context) must be examined in accord with this Court's analysis
set out in Rolwing v. Nestle Holdings, Inc., 437 S.W.3d 180, 182-83 (Mo banc 2014), to determine
which statute of limitations applies. None of the cases relied on by Spalding involved a title
insurance policy or terms similar to the policy at issue in this case that provided the insurance
company with the option to comply with its coverage obligations by electing remedies that were
other than the payment of money. It is assumed for purposes of resolving this case that the five-
year statute of limitations applies.
                                                  7
         Once Stewart Title determined that SLC's title was defective, it acted consistently

with its contractual obligations. It made an election to pay SLC for its "actual monetary

loss or damage." This was Stewart Title's right under the policy. It was not until July 3,

2007, when Stewart Title sent a letter to SLC's counsel indicating that it completed its

appraisal of the property and included a check for $10,000 to fully resolve the claim under

the title insurance policy that Spalding's claim for breach of contract occurred. Stated

differently, the claim for breach of contract did not accrue until Stewart Title allegedly

failed or refused to adequately compensate SLC for "the actual monetary loss or damage"

as required under the title insurance policy.

         Section 516.100 3 provides:

         Civil actions, other than those for the recovery of real property, can only be
         commenced within the periods prescribed in the following sections, after the
         causes of action shall have accrued; provided, that for the purposes of
         sections 516.100 to 516.370, the cause of action shall not be deemed to
         accrue when the wrong is done or the technical breach of contract or duty
         occurs, but when the damage resulting therefrom is sustained and is capable
         of ascertainment, and, if more than one item of damage, then the last item, so
         that all resulting damage may be recovered, and full and complete relief
         obtained.

Until Stewart Title refused to adequately compensate SLC for the damage, Stewart Title

had not breached the contract and SLC had no claim for such a breach. Spalding filed his

petition with the circuit court asserting its claim against Stewart Title for breach of contract

on June 9, 2011. Therefore, Spalding's claims were timely because suit was filed fewer

than five years after Stewart Title's letter of July 3, 2007.




3
    All statutory citations are to RSMo 2000.
                                                8
       Stewart Title argues that the statute of limitation began to run at the moment SLC

learned of the possible title defect because that is when damages were capable of

ascertainment.    However, in light of the term of this title insurance policy and the

particular facts of this case, the mere existence of a possible title defect did not give rise to

any cause of action against Stewart Title. The title insurance policy at issue in this case

did not guarantee SLC good title or protect SLC against potential claims. Rather, the

policy indemnified SLC against "actual monetary loss or damage sustained or incurred by

the insured claimant who has suffered loss or damage by reason of the matter insured

against by the policy."

       Stewart Title has even recognized that the mere presence of a title defect does not

establish a breach of its title insurance policy. Reviewing this Stewart Title insurance

policy the Maryland court of appeals held, "The contractual language is consistent with the

position that a title insurance policy is breached only after notice of an alleged defect in

title is tendered to the insurer and the insurer fails to cure the defect or obtain title within a

reasonable time thereafter." Stewart Title Guar. Co. v. West, 676 A.2d 953, 962 (Md. App.

1996) (internal citations and quotations omitted).          In this case Stewart Title, after

investigation, selected its other option, which was to pay for the actual monetary loss.

       Although SLC was put on notice in early 2006 about Estes's possible ownership

claim to the one-acre tract of land, it took until June 16, 2006, for Stewart Title to complete

its investigation and determine that an actual defect existed with SLC's title to the property.

Until that determination was made, SLC did not suffer an "actual monetary loss or




                                                9
damage" and could not seek indemnification from Stewart Title. 4 In a case involving a

contract of indemnity against loss, the claim accrues when the indemnitee sustains actual

loss.   Burns & McDonnell Eng'g Co., v. Torson Const. Co., 834 S.W.2d 755, 758 (Mo.

App. 1992). Therefore, the earliest that damages could have possibly been ascertained was

on June 16, 2006. Until that date, SLC did not sustain any actual loss that would trigger

Stewart Title's duty to indemnify. But, as previously stated, Stewart Title did not breach

its contract with SLC until July 3, 2007, when it allegedly failed and refused to adequately

compensate SLC for the "actual monetary loss or damage" as required under the policy.

Spalding filed his petition with the circuit court asserting its claim against Stewart Title for

breach of contract on June 9, 2011.

        To the extent that Stewart Title asserts that the circuit court erred in refusing to give

Stewart Title's proposed instruction to the jury concerning its statute of limitations defense,

this assertion is without merit. Stewart Title argues that the evidence supported the

submission of the instruction in that the jury could have reasonably found that the injury

and substantial damages were capable of ascertainment more than five years prior to the

suit when SLC learned of Estes's title defect in January 2006. As explained above, even

assuming the five-year statute of limitations applies, as a matter of law it did not begin to

run when Spalding became aware of the possible title defect. Rather, under the terms of

this insurance policy, Stewart Title's election to pay the loss rather than cure the defect

4
 Stewart Title relies on Hopmeirer v. First Am. Title Ins. Co., 856 S.W.2d 387, 388 (Mo. App.
1993), in support of its contention that the statute of limitations began to run once Spalding and
SLC were on notice of the potential title defect. In Hopmeirer, the title insurance policy at issue
guaranteed the policyholder good title. Accordingly, the policy was breached when the
policyholder discovered that he did not possess good title. In this case, the breach of contract did
not occur until Stewart Title failed to pay the "actual monetary loss or damage."
                                                10
results in the statute of limitations beginning to run when Stewart Title failed or refused to

adequately compensate Spalding for "the actual monetary loss or damage." Stewart Title

did not breach its contract with SLC—and, therefore, Spalding could not sue Stewart Title

for that breach—until July 3, 2007. Because Spalding filed suit on June 9, 2011, well

within the statute of limitations Stewart Title argues applies (i.e., the five-year statute), the

circuit court did not err in refusing to submit Stewart Title's instruction regarding its statute

of limitations defense. 5

                                      Expert Testimony

       Stewart complains about the insufficiencies of the testimony of Spalding's appraiser

in regard to damages. Stewart Title asserts that the circuit court erred in overruling its

motions for directed verdict and judgment notwithstanding the verdict because Spalding

failed to make a submissible case as to the existence and amount of the claimed damage

for breach of contract. Stewart Title argues that Spalding's only evidence of damages

came from his appraiser, Brian Reardon, and contends that the circuit court should have

granted its motions for directed verdict and judgment notwithstanding the verdict because:

(1) Reardon's appraisal was based on a lake development plan that Spalding and SLC had

abandoned; (2) Reardon's appraisal was based on a plan that included uninsured parcels of

land that were never owned by SLC or Spalding; and (3) Reardon provided no basis for a

rational and non-speculative estimate of damage arising from the title defect under the

policy. In another point on appeal, Stewart Title asserts that the circuit court erred in

admitting the testimony from Reardon regarding damages because his testimony was
5
  "Whether a jury was properly instructed is a question of law this Court reviews de novo." Hayes
v. Price, 313 S.W.3d 645, 650 (Mo. banc 2010).
                                               11
inadmissible as speculative, unreliable, and unsupported by the facts because it was based

on assumptions contrary to the facts in evidence, including "the existence of a

governmental permit to create a lake development, title insurance coverage and ownership

of all required property, and the availability of financing."

       These issues will be analyzed collectively. Section 490.065 governs the admission

and exclusion of expert testimony and has four requirements: 1) the expert witness must be

qualified; 2) the testimony will assist the trier of fact; 3) the expert's testimony is based on

facts or data of a type reasonably relied on by other experts in the field; and 4) the facts or

data used by the expert are otherwise reasonably reliable. This Court reviews a circuit

court's decision to admit or exclude expert testimony for an abuse of discretion. Kivland v.

Columbia Orthopaedic Grp. LLP, 331 S.W.3d 299, 311 (Mo. banc 2011); see also section

490.065. But, "this Court reviews the interpretation of the statute de novo." Kivland, 331

S.W.3d at 311.

       "The standard of review for the denial of a judgment notwithstanding the verdict

(JNOV) is essentially the same as review of the denial of a motion for directed verdict."

All Am. Painting, LLC v. Fin. Solutions & Associates, Inc., 315 S.W.3d 719, 723 (Mo.

banc 2010).

       When reviewing a circuit court's denial of a judgment notwithstanding the
       verdict, [t]his Court must determine whether the plaintiff presented a
       submissible case by offering evidence to support every element necessary for
       liability. Evidence is viewed in the light most favorable to the jury's verdict,
       giving the plaintiff all reasonable inferences and disregarding all conflicting
       evidence and inferences. This Court will reverse the jury's verdict for
       insufficient evidence only where there is a complete absence of probative
       fact to support the jury's conclusion.


                                              12
Smith v. Brown & Williamson Tobacco Corp., 410 S.W.3d 623, 630 (Mo. banc 2013)

(internal citations and quotations omitted).

       Spalding presented evidence of damages through Brian Reardon, a licensed

appraiser with Bliss & Associates. Reardon conducted an appraisal of the land at issue and

determined that the estimate of damages as of February 15, 2007, was:

       Insured Property                                     $5,700,000
       Insured Property Subject to Defect                   $1,600,000
       Damages                                              $4,100,000

This valuation stemmed from the proposed lake development that was in progress when

the title defect was determined. Stewart Title asserts that, because Reardon reached his

damage opinion by considering and valuing a 2007 lake development plan with 385 lots

that included parcels never insured under the title insurance policy and never owned by

Spalding or SLC, the evidence failed to provide a reasonable basis for a fact finder to

determine what, if any, portion of Reardon's opinion establishes or quantifies damages

attributable to the title defect in the insured property.

       To the extent that Stewart Title contends that Reardon's damage estimates were

based in part on the inclusion of uninsured and non-owned parcels of land in the 2007 lake

development plan, such was an issue for the jury to weigh in considering Reardon's

opinion valuating the property. Moreover, the jury heard evidence that SWP, SLC's

manager, had acquired options to purchase these parcels of land and that SWP could have

exercised its options if the development plan had gone forward. Further, Stewart Title

cross-examined Reardon extensively about whether the inclusion of non-owned parcels of

land would in any way change his appraisal, and Reardon acknowledged that it "could."

                                               13
Reardon agreed that, if Spalding had to purchase property from others to construct his lake

plan, it could change the costs in his appraisal report. Thus, Stewart Title pointed out the

shortcomings in Reardon's testimony, and it was up to the jury to weigh Reardon's

testimony.

      Stewart Title also contends that, because Spalding testified at trial that he now

intends to utilize a different lake development plan than the plan considered by Reardon,

Reardon's valuation of damages based on the old development plan is no longer sufficient

evidence of the damages suffered by Spalding as a result of the breach of the title

insurance policy. In Reardon's appraisal, he assumed the lake development plan would

have 154 "lake lots" and 231 "traditional lots," which was the plan that SLC was

proceeding under at the time that Reardon made his appraisal. Although Spalding testified

at trial that he now intended to develop the property under a plan that called for the

development of 345 and 365 lots, the jury still had before it Reardon's testimony regarding

his appraisal of the land as a lake development plan under the plan that SLC was

proceeding under at the time of the appraisal. Stewart Title had the opportunity and did

cross-examine Reardon about whether his valuation would change if the lake development

plan changed.

      Stewart Title further contends that Reardon's opinion was based on assumptions

contrary to the facts in evidence, including "the existence of a governmental permit to

create a lake development, title insurance coverage and ownership of all required property,

and the availability of financing."    As of the effective date of Reardon's appraisal,

numerous steps had been taken on the lake development plan.            The plan had been

                                            14
presented to the City of Lake Winnebago and the Lake Winnebago Homeowners

Association, and those entities had expressed support for the development. Although

Reardon testified at trial that he made the assumption that Spalding or SLC could have

obtained a permit for the lake development plan, in the appraisal he specifically stated:

       The US Army Corps of Engineers issued a joint public notice with the
       Missouri Department of Natural Resources, Water Pollution Control
       Program in order to collect comments in deciding whether to grand [sic]
       Section 401 water quality certification. This public notice was issued on
       March 23, 2007, which is after the effective date of this report, but is
       tangible evidence that permitting process was well along as of the effective
       date.

Reardon acknowledged that he made the assumption that Spalding owned or had the right

to buy the property shown in the development and that he based that assumption on what

Spalding told him and upon legal descriptions of the property that were given to him. In

addition, as noted previously, the evidence established that SWP, SLC's managing

member, had acquired options to purchase the parcels surrounding the land that might be

needed for development. Further, Reardon testified that it made no difference in his

appraisal whether it was financially possible for Spalding or SLC to proceed with the lake

development plan at the time of his appraisal because his market analysis established that

the development plan was financially feasible. He explained that the land could have been

sold to someone else to proceed with the development.

       After review of the record in its entirety, the Court holds that the circuit court did

not abuse its discretion in allowing any of this expert testimony. See Kivland, 331 S.W.3d

at 311. As a general rule, "[a]ny weakness in the factual underpinnings of the expert's

opinion . . . goes to the weight that testimony should be given and not its admissibility."

                                             15
Elliott v. State, 215 S.W.3d 88, 95 (Mo. banc 2007) (internal citations and quotation marks

omitted).   All of these assumptions may have been weaknesses in the factual

underpinnings of Reardon's opinion, but such weaknesses go to the weight of his testimony

and not to its admissibility. Stewart Title had the opportunity to cross-examine Reardon

extensively about his assumptions and did so, but the record establishes that Reardon's

assumptions were not so speculative, unreliable, and unsupported by the evidence as to

render his opinion inadmissible.

      After review of the record in its entirety, Spalding presented sufficient evidence to

support the jury's determination of damages for breach of contract. The circuit court,

therefore, did not err in overruling Stewart Title's motions for directed verdict and

judgment notwithstanding the verdict.

            Instruction No. 7 Properly Instructed the Measure of Damages

      Stewart Title asserts that the circuit court erred in giving the jury Instruction No. 7

and in overruling its motion for new trial because the instruction erroneously defined the

measure of damages in accordance with the highest and best use of the property under

condemnation law rather than the benefit of the bargain under contract law. Stewart Title

contends that, because the policy specified the applicable measure of damages as "actual

monetary loss or damage" based on the property "as insured," it was improper to base

damages on a nonexistent lake development.

      "Instructional error is reviewed de novo." Howard v. City of Kansas City, 332

S.W.3d 772, 789 (Mo. banc 2011). This Court will only reverse a verdict for instructional




                                            16
error "if the party claiming instructional error establishes that the instruction at issue

misdirected, misled, or confused the jury, resulting in prejudicial error." Id. at 790.

         Instruction No. 7 provided:

         If you find in favor of Plaintiff, you must award Plaintiff such sum as you
         believe was the difference between the fair market value of the entire insured
         property at the time the title defect was discovered and the fair market value
         of the insured property subject to the title defect. In determining the fair
         market value of the property, you may consider evidence of the value of the
         property including the highest and best use to which the property reasonably
         may be applied or adapted, the value of the property if freely sold on the
         open market, and generally accepted appraisal practices. You may give such
         evidence the weight and credibility you believe are appropriate under the
         circumstances. If you find that Plaintiff failed to mitigate damages as
         submitted in Instruction No. 8, in determining Plaintiff's total damages you
         must not include those damages that would not have occurred without such
         failure.

         The phrase "fair market value" as used in this instruction means the price that
         the insured property in question would bring when offered for sale by one
         willing but not obliged to sell it and when bought by one willing or desirous
         to purchase it but who is not compelled to do so.

         The instruction is a modified version of MAI No. 9.02. 6 Where, as here, no specific

MAI instruction is directly applicable, "an MAI must be modified to fairly submit the

issues in a particular case, or where there is no applicable MAI so that an instruction not in

MAI must be given[.]" Rule 70.02(b). The instruction given or modified "shall be simple,

brief, impartial, free from argument, and shall not submit to the jury or require findings of

detailed evidentiary facts." Id. In Fohn v. Title Ins. Corp. of St. Louis, this Court noted:

         [I]n the area of eminent domain the pattern instruction to guide a jury in
         awarding damages (where part of property is taken) may be found in MAI-
         9.02. It, in part, provides: "You must award . . . such sum as you believe
         is . . . the difference between the fair market value of . . . (the) whole
6
    MAI No. 9.02 is the approved damage instruction for eminent domain cases.


                                                17
       property immediately before the taking . . . and the value of . . . (the)
       remaining property immediately after such taking . . ." The "difference" thus
       found is accepted as the "loss" suffered by the owner of the land. The
       defendant has not suggested, nor has own research revealed any persuasive
       reason why the same approach shold [sic] not be applicable in this instance.
       Not only does it appear to be the most fair and accurate method, but its
       adoption in title insurance cases would contribute toward uniformity in the
       area of assessment of damages.

529 S.W.2d 1, 4 (Mo. banc 1975). The MAI No. 9.02 eminent domain instruction in effect

at the time the Fohn court issued its opinion provided:

       You must award defendant such sum as you believe is [was] the difference
       between the fair market value of defendant's whole property immediately
       before the taking [on (insert date of appropriation)] and the value of
       defendant's remaining property immediately after such taking, which
       difference in value is the direct result of the taking and of the uses which
       plaintiff has the right to make of the property taken. 7

       Stewart Title contends that the measure of damages used in condemnation cases

does not apply to cases involving a breach of title insurance policy. In Fohn, this Court

held that it was appropriate to modify the eminent domain damage instruction, MAI No.

9.02, to instruct the jury as to the measure of damages for a claim made against a title




7
  The 2012 Revision of MAI No. 9.02, which is the instruction that Spalding modified for
Instruction No. 7, now provides:
        You must award defendant such sum as you believe [was] is the difference between
        the fair market value of the entire property [immediately before the taking on
        (insert date of appropriation)] and the fair market value of the remaining
        [burdened] property [immediately after the taking]. In determining the fair market
        value of defendant's property, you may consider evidence of the value of the
        property including [comparable sales, capitalization of income, replacement cost
        less depreciation,] the highest and best use to which the property reasonably may
        be applied or adapted, the value of the property if freely sold on the open market,
        and generally accepted appraisal practices. You may give such evidence the weight
        and credibility you believe are appropriate under the circumstances.
                                             18
insurance policy. 8 Stewart Title asserts, however, that the measure of damages developed

for condemnation cases based on the highest and best use do not apply in this case in

which the policy defines the measure of damages. Pursuant to the terms of this policy,

Stewart Title insured against loss or damage sustained or incurred by SLC by reason of

"[t]itle to the estate or interest described in Schedule A being vested other than as stated

therein;" "[a]ny defect in or lien or encumbrance on the title;" "[u]nmarketability of the

title;" and "[l]ack of a right of access to and from the land." The terms of this policy

provided it was "a contract of indemnity against actual monetary loss or damage sustained

or incurred by the insured claimant" with liability not to exceed the lesser of: "(i) the

Amount of Insurance stated in Schedule A; or, (ii) the difference between the value of the

insured estate or interest as insured and the value of the insured estate or interest subject to

the defect, lien or encumbrance insured against by this policy."

       Stewart Title argues that the title insurance policy contains express limitations on

the measure of damage to the property "as insured" and a requirement of "actual monetary

loss or damage."      Stewart Title further argues that the policy language prohibits

consideration of the highest and best use of the insured property. However, the "as

insured" language that Stewart Title emphasizes refers to the condition of the title and not

to the property's use. 9 Stewart Title insured a fee simple estate in land having the legal

description set forth in the policy's Schedule A.          Therefore, in the event that the

policyholder is found to possess some lesser interest, the policyholder is entitled to
8
  Subsequently, the court of appeals, relying on Fohn, has affirmed the use of an instruction
modified from MAI No. 9.02 in a breach of title insurance policy and vexatious refusal to pay.
Davis v. Stewart Title Guar. Co., 726 S.W.2d 839, 853 (Mo. App. 1987).
9
  The same policy could be used to insure a life estate or a long-term leasehold interest.
                                              19
damages as measured by "the difference in the value of the insured estate or interest as

insured [(i.e. fee simple in land having the legal description set forth in Schedule A)] and

the value of the insured estate or interest subject to the defect." The policy is silent about

how this valuation is to be performed. Appraisers for both parties at trial testified that their

appraisals were based on the properties "highest and best use." No witness testified that

Spalding's damages must be calculated based on the value of the property as it was being

used at the time of the breach. To the extent that Stewart Title contends that the property

"as insured" under the policy necessarily meant undeveloped property, as opposed to fully

developed lake front property, its contention is without merit.

       The jury was instructed that, if it found in favor of Spalding, it had to award

"Plaintiff such sum as you believe was the difference between the fair market value of the

entire insured property at the time the title defect was discovered and the fair market value

of the insured property subject to the title defect." That, indeed, was the measure of

damages. The instruction merely informed the jury that, in determining the fair market

value of the property, the jury could consider "evidence of the value of the property

including the highest and best use to which the property reasonably may be applied or

adapted, the value of the property if freely sold on the open market, and generally accepted

appraisal practices." While such language may very well be surplusage or better left to

argument, it is nonetheless an accurate statement of the law and did not mislead or confuse

the jury.

       In this case, Spalding's expert testified the highest and best use of the property was

the proposed lake development. Even Stewart Title's claim counsel acknowledged that

                                              20
Stewart Title's appraiser considered the property's highest and best use as a mixed-use

purpose with commercial and single-family residential. Based on the evidence presented, it

was for the jury to determine fair market value, which was defined as "the price that the

insured property in question would bring when offered for sale by one willing but not

obliged to sell it and when bought by one willing or desirous to purchase it but who is not

compelled to do so." In making its determination about fair market value, the instruction

merely allowed the jury, but did not require it, to consider and weigh the evidence

concerning the highest and best use of the property. The circuit court, therefore, did not

err in giving the jury Instruction No. 7 and in overruling Stewart Title's motion for

judgment notwithstanding the verdict and new trial.

       The circuit court's judgment is affirmed. 10


                                                     __________________________
                                                     Zel M. Fischer, Judge

All concur.




10
  Because of the court's disposition of the breach of contract claim, it is unnecessary to consider
the additional request raised by Stewart Title that the vexatious refusal to pay judgment be
reversed.
                                                21
