Ballmer v. Ballmer, WD

• Decision Date: 12 March 1996
• Docket Number: No. WD,WD
• Citation: 923 S.W.2d 365
• Parties: Sylvia Lee BALLMER, Respondent, v. Wilbur Lynn BALLMER, Respondent, State Farm Mutual Auto Insurance Company, Intervenor-Appellant. 51253.
• Court: Missouri Court of Appeals

Page 365

923 S.W.2d 365

Sylvia Lee BALLMER, Respondent, v. Wilbur Lynn BALLMER, Respondent State Farm Mutual Auto Insurance Company, Intervenor-Appellant.

No. WD 51253.

Missouri Court of Appeals Western District.

March 12, 1996.

Motion for Rehearing and/or Transfer to

Supreme Court Denied April 30, 1996.

Application to Transfer Denied June 25, 1996.

Edward W. Mullen, Kansas City, for Appellant.

Andrew Jay Gelsbach, Warrensburg, for Respondent Sylvia Lee Ballmer.

Leonard K. Breon, Warrensburg, Phillip Sanford Smith, Kansas City, for Respondent Wilbur Lynn Ballmer.

Before FENNER, C.J., P.J., and LOWENSTEIN and BRECKENRIDGE, JJ.

FENNER, Chief Judge.

State Farm Mutual Automobile Insurance Company ("State Farm") appeals from the trial court's denial of its motion to intervene in a wrongful death action filed by Sylvia Ballmer against her son, Wilbur Ballmer, arising out of the death of Daniel Ellis, Sylvia's son and Wilbur's half-brother, in an automobile accident in which Daniel was a passenger in a vehicle driven by Wilbur Ballmer.

This is the second time this case has come before this court. The record reveals that on September 18, 1991, Sylvia Ballmer filed this wrongful death suit against Wilbur Ballmer. State Farm provided a policy of insurance to Sharon Kulenkamp, Wilbur's half-sister and the owner of the car he was driving at the time of the accident in question. State Farm retained an attorney for the purpose of filing an answer to the lawsuit. The attorney was instructed to appear and defend Wilbur pursuant to a reservation of State Farm's right to withdraw from the defense and deny liability under the household exclusion provision in the policy issued to Kulenkamp. Wilbur refused State Farm's offer and asked the attorney hired by State Farm to withdraw from the case.

State Farm filed a declaratory judgment action on November 21, 1991, asking the court to find that the policy issued to Kulenkamp did not cover Wilbur or Daniel because of the household exclusion provision in the policy. State Farm also filed a motion for leave to intervene in the wrongful death suit for the purpose of seeking a stay of those proceedings. In a letter to Sylvia Ballmer's attorney dated November 21, 1991, State Farm discussed the case of Halpin v. American Family Mutual Insurance Company which, at the time, was pending before the Supreme Court of Missouri, stating that Halpin would possibly decide the validity of the household exclusion clause. State Farm claimed that if Halpin resolved the exclusion clause issue adverse to its position, it would promptly pay its $25,000 policy limits to Sylvia Ballmer in exchange for a dismissal with prejudice of the wrongful death case and a full release of Wilbur Ballmer.

Unbeknownst to State Farm, Sylvia Ballmer and Wilbur Ballmer executed a settlement agreement on December 2, 1991, pursuant to § 537.060 and § 537.065, RSMo 1986, which released Wilbur from the wrongful death claim and agreed that Sylvia would limit her recovery to the proceeds of the State Farm insurance policy. Prior to the convening of the hearing on State Farm's motion for leave to intervene to stay the wrongful death action, counsel for the Ballmers filed an offer of judgment and a purported acceptance of such offer, both dated December 9, 1991, in which Wilbur Ballmer confessed judgment in the amount of $1,500,000. Following the hearing on the motions for leave to intervene and for a stay, the court granted the motions and declined to act on the offer of judgment and acceptance.

State Farm filed a motion to vacate the purported offer of judgment and acceptance on December 10, 1991, setting forth the relationship between the parties and arguing that the amount of the purported settlement, the relationship between the parties, and the facts and circumstances of the case illustrated that the offer and acceptance constituted a sham and artifice designed to perpetrate a fraud upon State Farm and upon the court's own processes. Because the wrongful death action was stayed, the trial court has neither heard the motion nor taken any action on the purported offer and acceptance of judgment.

On January 28, 1992, the Supreme Court issued an opinion in the Halpin case determining that the Missouri Motor Vehicle Financial Responsibility Law, §§ 303.010--.370 rendered an otherwise applicable household exclusion unenforceable up to the minimum statutory liability limits. 823 S.W.2d 479, 480 (Mo. banc 1992). The household exclusion was, however, valid as to any coverage exceeding the minimum financial responsibility amounts. Id. at 482-83; State Farm Mut. Auto. Ins. Co. v. Zumwalt, 825 S.W.2d 906, 909 (Mo.App.1992). State Farm thereafter tendered $25,000 to Sylvia Ballmer in settlement of the wrongful death claim, but the offer was rejected. State Farm also renewed its offer to defend Wilbur with a reservation of rights, which was again refused.

In August 1993, the declaratory judgment action was tried in the Circuit Court of Henry County. The court held that the insurance policy afforded no liability coverage for the death of Ellis by reason of the household exclusion, but that State Farm was obligated to provide liability coverage of $25,000, the minimum financial responsibility limits required by Missouri law, pursuant to the Halpin decision. The court also declared that State Farm had no duty to defend or indemnify Wilbur in the wrongful death action, could not do so without his consent, and had no right to intervene in the wrongful death action. Sylvia Ballmer, Wilbur Ballmer, and State Farm all appealed the trial court's judgment to this court. We affirmed the trial court's ruling in an unpublished opinion authored by Judge Paul M. Spinden and transferred the case to the Missouri Supreme Court.

In State Farm Mut. Auto. Ins. Co. v. Ballmer, 899 S.W.2d 523 (Mo. banc 1995) (Ballmer I ), the Supreme Court affirmed the trial court's determination that State Farm was obligated to provide $25,000 of liability coverage pursuant to Halpin despite the applicable household exclusion, and that State Farm had no duty to defend Wilbur Ballmer and could not do so without his consent. Ballmer I, 899 S.W.2d at 526-27. The court, however, reversed the trial court's determination that State Farm had no right to intervene in the underlying wrongful death action, stating:

[I]t is unnecessary to address State Farm's ... assertion that it has a right to intervene in the wrongful death action for the reason that State Farm has not attempted to do so. State Farm may seek to intervene in that action pursuant to Rule 52.12(a)(2). In the event of an adverse judgment, State Farm may appeal.

Id. at 527. Thereafter, on June 1, 1995, State Farm filed a motion to intervene in the wrongful death action, claiming that it is entitled to defend its interests in the action pursuant to Rule 52.12(a)(2), and that a denial of its right to defend would deprive State Farm of due process and unconstitutionally deny it access to the courts. State Farm's motion was heard on June 12, 1995, and denied by the trial court. This appeal followed.

I. STANDARD OF REVIEW

The applicable standard of review is found in Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). The judgment of the trial court denying State Farm's motion to intervene will be reversed if it erroneously declares or applies the law. The burden is on State Farm, the intervenor, as pleader, to show all the elements required for intervention as of right pursuant to Rule 52.12. McDaniel v. Park Place Care Ctr., Inc., 861 S.W.2d 179, 180 (Mo.App.1993).

II. STATE FARM'S RIGHT TO INTERVENE

The manner in which one not a party to an action may establish an interest in the subject matter of the dispute and protect that interest is by intervention. State ex rel. Hughes v. Smith, 485 S.W.2d 646, 651 (Mo.App.1972). In Missouri, intervention as a matter of right is governed by Rule 52.12(a), which states that intervention shall be permitted upon timely application if:

[T]he applicant claims an interest relating to the property or transaction that is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant's ability to protect that interest, unless the applicant's interest is adequately represented by existing parties.

As the rule indicates, a would-be intervenor must meet three requirements in order to intervene as a matter of right: (1) an interest in the subject matter; (2) a disposition of the action that may impede the ability of the applicant to protect that interest; and (3) the applicant's interests are not adequately represented by the existing parties. Whitehead v. Lakeside Hosp. Ass'n, 844 S.W.2d 475, 479 (Mo.App., 1992). If an applicant meets these requirements, thereby satisfying the burden of proof, the right to intervene is absolute. Id. at 478-79. A motion to intervene may be denied if any one of the requirements is not met. In re Estate of Potashnick, 841 S.W.2d 714, 719 (Mo.App.1992).

State Farm claims it satisfies the three requirements for intervention as a matter of right because it has a claim or interest in the transaction as a result of $25,000 in liability insurance coverage it must provide if a judgment is entered in Sylvia Ballmer's favor. Additionally, the settlement agreement between Sylvia and Wilbur Ballmer indicates Sylvia will try to collect the full judgment from State Farm and not seek recovery from Wilbur. Second, State Farm claims its ability to protect this interest will be impaired or impeded by the judgment sought by Sylvia Ballmer in the wrongful death claim because "it is apparent plaintiff [Sylvia Ballmer] expects to contend that the amount of any judgments she obtains cannot be contested by State Farm in any later action, whether by garnishment or a subsequent proceeding to collect the entire judgment including excess over policy limits." Finally, State Farm...