On November 12, 1979, Richard Miller was in an accident on U.S. Highway 83 in South Dakota while transporting 109 calves from Idaho to a buyer in Nebraska. Miller was transporting the calves pursuant to an agreement with Jerry Roseth (plaintiff). Under the agreement, Miller was to transport livestock for Roseth using Roseth’s trailer, and Roseth was to receive 20 percent of the trucking payment. During the accident, 14 calves were either killed or lost. Roseth reported the accident to Black Hills Agency (Black Hills) (defendant). Roseth had purchased an insurance policy with St. Paul Property & Liability Insurance Company (St. Paul) (defendant) from Black Hills. Roseth’s insurance policy with St. Paul covered livestock mortality, but contained an exclusion for livestock that survived but were injured. James Wattleworth, St. Paul’s adjuster, contacted Roseth. Roseth told Wattleworth that the surviving calves were in poor shape and that Roseth’s insurance policy would cover the loss of these injured calves. Wattleworth admitted to Roseth that he did not have a copy of Roseth’s policy, but told Roseth that St. Paul would perform under the policy. To minimize loss, Roseth and Wattleworth agreed that Roseth should sell the calves immediately. The calves were sold at an $8,865.98 loss. St. Paul paid Roseth only for the 14 calves that were either killed or lost. Roseth filed suit against St. Paul and Black Hills for the $8,865.98 loss that he suffered when he sold the injured calves. Roseth claimed that St. Paul was estopped from enforcing the exclusion because Wattleworth had failed to correct Roseth’s misconception about his coverage under the insurance policy. Roseth claimed that, as a result, he was led to believe that he would be reimbursed for his losses from the injured calves. The trial court found that St. Paul was estopped from denying coverage because of Wattleworth’s actions. St. Paul appealed.