Purscell v. Tico Ins. Co.

• Citation: 959 F.Supp.2d 1195
• Decision Date: 24 May 2013
• Docket Number: Case No. 2:12–cv–04039.
• Parties: Ben PURSCELL, Plaintiff, v. TICO INSURANCE COMPANY and Infinity Assurance Insurance Company, Defendants.
• Court: U.S. District Court — Western District of Missouri

959 F.Supp.2d 1195

Ben PURSCELL, Plaintiff,

v.TICO INSURANCE COMPANY and Infinity Assurance Insurance Company, Defendants.

Case No. 2:12–cv–04039.

United States District Court,

W.D. Missouri,

Central Division.

May 24, 2013.

Grant L. Davis, Shawn Gayland Foster, Valley Renshaw, Davis, Bethune & Jones, LLC, William Clayton Crawford, Foland, Wickens, Eisfelder, Roper, & Hofer, PC, Kansas City, Mo, for Plaintiff.

Charles A. Danaher, Peter H. Klee, McKenna Long & Aldridge LLP, San Diego, CA, James Maloney, William Clayton Crawford, Foland, Wickens, Eisfelder, Roper, & Hofer, PC, Kansas City, MO, for Defendants.

ORDER

NANETTE K. LAUGHREY, District Judge.

Pending before the Court is a Motion for Summary Judgment by Defendants TICO Insurance Company and Infinity Assurance Insurance Company (collectively “Infinity”) [Doc. # 62]. After viewing all the facts in the light most favorable to the Plaintiff, the Court GRANTS Infinity's Motion for Summary Judgment.

I. Background

Plaintiff Ben Purscell purchased an insurance policy issued by Infinity and underwritten by TICO Insurance Co. The policy purchased was in effect from May 16, 2006 to November 16, 2006. It limited liability to $25,000 per person and $50,000 per accident for bodily injury, and $10,000 for property damage. The insurance policy contract provides, “we will pay damages for bodily injury and property damage for which an insured person is legally liable because of an accident up to the policy limits... We will settle or defend, as we consider appropriate, any claim or action which is covered under the policy. Our duty to settle or defend ends when our limit of liability for this coverage has been exhausted by payment of judgment or settlement. We have no duty to settle or defend any claim or action that is not covered under the policy.”

A. The Accident

On May 19, 2006, three days after his policy went into effect, Plaintiff was involved in an automobile accident, the circumstances of which are as follows. Amy Priesendorf, Plaintiff's co-worker, came to Plaintiff's house around 10:00 p.m. She was drunk and crying, and asked Plaintiff if they could go for a ride. At Priesendorf's direction, Plaintiff drove to a cemetery, where Priesendorf said a friend who had died in a car accident was buried. They talked, and Priesendorf calmed down. As they were driving back to Plaintiff's house, Priesendorf put her foot over Plaintiff's foot and pressed down on the accelerator. Plaintiff told her to stop messing around, and Priesendorf stopped. However, Priesendorf then scooted closer to Plaintiff and put her foot on top of Plaintiff's over the accelerator again. Plaintiff attempted to get his foot out from under hers but was unable to do so. He told Priesendorf to stop because they were approaching an intersection with a stop sign. Plaintiff attempted to stand on the brake to stop the car, but Priesendorf continued to press the accelerator down and the brake had no effect. Plaintiff saw headlights from another car at the intersection ahead and told Priesendorf another car was coming. Priesendorf looked at the car ahead and continued to press down on the accelerator.Plaintiff estimates the car accelerated from 35 to 75 miles per hour. As they passed through the stop sign at the intersection, Plaintiff swerved to the left in an attempt to avoid hitting the other car. The other car was driven by Tim Carr, and his passenger was Amy Carr. Plaintiff's right passenger side hit Mr. Carr's driver's side. Both cars overturned and the Carrs' car caught fire. Priesendorf was thrown from the car and pronounced dead at the scene. Mr. Carr was seriously injured and airlifted to the hospital. Mrs. Carr also suffered injuries and was taken to the hospital by ambulance.

B. Post–Accident Developments

On May 22, 2006, Infinity learned of the accident and ordered a police report. Plaintiff's claim file from Infinity reveals that on May 23, Infinity Claim Representative Karen Martin and Supervisor Cynthia Woodall learned that the accident involved a fatality to Plaintiff's passenger, Priesendorf, a severe injury to the driver of the other vehicle, Tim Carr, and a minimal injury to Amy Carr. Infinity's Regional Casualty Manager, Metta Weburg, noted that they would put $25,000 on reserve for Priesendorf and $25,000 to be split between the Carrs. On May 31, Infinity learned that Tim Carr's medical bills “are approaching 90K” and that Amy Carr had suffered a sprained wrist.

Between May 23 and June 7, 2006, Martin and Plaintiff had been trying to speak on the phone but continually missed each other. On June 7, 2006, Martin and Plaintiff finally made contact. Martin took a statement from Plaintiff, in which Plaintiff relayed the facts of the accident as described above. Plaintiff also stated that since the accident he had learned from a friend of Priesendorf's that her friend whose gravesite they had visited had been killed in a car accident while Priesendorf was driving drunk. He had also learned that Priesendorf had been hospitalized for attempting suicide, and that none of her friends would drive with her because she would interfere with drivers by jerking the steering wheel out of their hands or “do[ing] stuff” with the accelerator.

On June 6, 2006, the Carrs' attorney, Kirk Rahm, wrote to Infinity offering to settle both the Carrs' claims for the full extent of the policy limits, $25,000 each or $50,000. He informed Infinity that Mr. Carr's injuries were over $97,000 and ongoing, and that Ms. Carr's injuries were over $3,000 and expected to be ongoing. Infinity responded to Rahm's letter on June 12, 2006, stating that it needed to further investigate issues of coverage before it could make a settlement offer and would contact Rahm after completing its investigation. Infinity's claim notes indicate that it was concerned whether “the actions of the insured passenger Amy may be considered as ‘use’ of the vehicle ... If her actions during this loss are considered to be ‘use’ of our car, we have coverage issues since her actions would be considered intentional and without our name insured's permission.”

On June 12, Infinity mailed two letters to Plaintiff, one stating that a demand of $50,000 had been received, and the other stating that because of coverage issues, Infinity was declining to enter into settlement negotiations until further investigation had been conducted.

On June 14, Rahm wrote to request clarification on the issues of coverage Infinity had mentioned; receiving no response, on June 21, Rahm wrote withdrawing the Carrs' offer to settle. On June 28, Martin wrote to Rahm, stating, “We are not denying any liability in the case to the Carr's [sic], but with a fatality involved, limits are going to be settled on a prorata basis and most likely submitted to the court for settlement.” On June 30, Rahm responded that given Priesendorf's role in the accident, he did not believe any wrongful death claim on her part would be meritorious, and informed Infinity that the Carrs were open to settlement discussions.

Infinity's claim notes of July 6 reported that Priesendorf's parents were pursuing a claim for her wrongful death. On July 12, Martin recorded that the claimants' attorneys would be discussing how to split the policy limits three ways. On July 16, Rahm informed Infinity that he was filing suit on behalf of the Carrs. Plaintiff was served with the lawsuit on July 29. From July 12—November 16, 2006, Infinity's records reveal that its lawyer, Mike White, regularly requested updates from the claimants' lawyers as to the status of their negotiations over the policy limits. At one point, the lawyer retained by Infinity to represent Plaintiff stated that he wished to arrange a meeting among all the claimants' lawyers, but there is no indication this meeting ever occurred. Infinity's records also show that throughout this period, White discussed the possibility of filing an interpleader if an agreement regarding the division of the policy limits could not be reached.

On August 14, 2006, Plaintiff's criminal attorney, Carmen Smith, wrote to Infinity, stating, “In your representation of this claim, Mr. Purscell requests that you settle this matter within his policy limits.” White responded informing her that Priesendorf was also asserting a wrongful death claim and that the claimants were in negotiations over dividing the policy limits. Smith did not respond to White's letter. On November 17, White wrote to Smith stating that he believed the claimants had been unable to reach an agreement and that Infinity would be filing an interpleader action, and requesting her input. Smith did not respond to this letter either. White filed the petition for an interpleader on December 4, 2006.

Plaintiff's trial took place on January 25, 2008. The jury found that Plaintiff and Priesendorf were each 50% liable, and assessed Tim Carr's damages at $830,000 and Amy Carr's damages at $75,000. On February 29, 2008, the Circuit Court of Pettis County, Missouri, approved the settlement of the Priesendorf's wrongful death claim for $7,764.50, in exchange for a release against Plaintiff. It apportioned Infinity's $50,000.00 insurance among the parties as follows: $7,764.50 to Priesendorf's parents, $25,000.00 to Tim Carr, and $17,235.50 to Amy Carr.

II. DiscussionA. Summary Judgment Procedure

Plaintiff has two remaining claims before the Court; one for bad faith failure to settle (Count I), and one for breach of fiduciary duty (Count III). Infinity seeks summary judgment on both claims and states in its motion for summary judgment that its Suggestions in Support include “full argument demonstrating that it is entitled to judgment as a matter of law.” [Docs. 62 and 64]. However, in its Motion for Summary Judgment and its Suggestions, Infinity only identified the following grounds for summary judgment:

1) Plaintiff failed to demand that Infinity “accept the June 6 demand in whole or in part.” [Docs. 62 and...