Barker v. H & J Transporters, Inc., WD

• Decision Date: 21 July 1992
• Docket Number: No. WD,WD
• Citation: 837 S.W.2d 537
• Court: Missouri Court of Appeals
• Parties: William Ronald BARKER and Delores Barker, Respondents, v. H & J TRANSPORTERS, INC., and its Insurer, American States Insurance Company, Appellants Intervenors, Raymond Palmarin and John Scharff and Northland Insurance Company, Defendants. 45092.

Page 537

837 S.W.2d 537

William Ronald BARKER and Delores Barker, Respondents, v. H & J TRANSPORTERS, INC., and its Insurer, American States

Insurance Company, Appellants Intervenors,

Raymond Palmarin and John Scharff and Northland Insurance

Company, Defendants.

No. WD 45092.

Missouri Court of Appeals,

Western District.

July 21, 1992.

Motion for Rehearing and/or Transfer to

Supreme Court Denied

Sept. 1, 1992.

Application to Transfer Denied Oct. 27, 1992.

George C. Allen, Jr., Kansas City, for appellants.

Andrew J. Gelbach, Warrensburg, for respondents.

Before HANNA, P.J., and FENNER and ULRICH, JJ.

ULRICH, Judge.

H & J Transporters, Inc., (H & J) and its Workers' Compensation insurer, American States Insurance Company (American States), appeal the subrogation action judgment distributing $25,000 of insurance proceeds paid into the court by Dairyland Insurance Company. H & J and American States sought recovery for a portion of the $25,000 as a result of their having paid $57,253.74 in Workers' Compensation benefits. The court awarded 92.5 percent of the $25,000 ($23,125) to William R. Barker and 7.5 percent of the $25,000 ($1,875) to H & J and American States for their subrogation claim. On appeal, H & J and American States assert that the trial judge, by misinterpreting the term "recovery" in § 287.150.3, RSMo Supp.1990, applied the incorrect formula for determining how much of the insurance proceeds should be allocated for appellants' subrogation claim pursuant to § 287.150.3. The issue presented is whether "recovery" as used in § 287.150.3, which gives a subrogation claim against third parties to contributors who paid Workers' Compensation benefits, means judgments against third parties or amounts actually received for third party liability.

The judgment is reversed and the trial court is ordered to enter judgment in accordance with this opinion.

The record on appeal establishes the following facts. On September 4, 1987, Mr. Barker, while in the course of his employment with H & J, was involved in an automobile accident caused by the negligence of Raymond Palmarin. At the time of the accident, a liability policy purchased by H & J from Northland Insurance Company (Northland) was in effect. The policy covered the vehicle Mr. Barker was driving and included uninsured/underinsured motorist coverage with a combined limit of $50,000. Shandy Stewart owned the truck driven by Mr. Baker and leased to H & J. Shandy Stewart had also purchased an identical liability policy from Northland which also covered the tractor-trailer Mr. Barker was driving. This policy also included the same uninsured/underinsured motorist coverage with a combined single limit of $50,000. Mr. Scharff, driver of another vehicle involved in the accident, did not have liability insurance coverage. Mr. Palmarin was covered by a liability insurance policy issued by Dairyland Insurance Company (Dairyland) with limits of $25,000. The Dairyland insurance policy amount was paid into court, and division of the $25,000 is the focus of controversy in this appeal.

Mr. Barker suffered numerous injuries as a result of the accident. Mr. Barker made a Workers' Compensation claim against his employer H & J, and its insurer American States. American States and H & J paid $57,253.74 in Workers' Compensation benefits to or on behalf of Mr. Barker. On March 29, 1989, Mr. Barker and his wife filed suit against Mr. Palmarin, alleging that he negligently drove the vehicle he was in on the wrong side of the road thereby contributing to cause the accident; against Mr. Scharff, alleging that his improper turn contributed to cause the wreck; and against Northland for the two insurance policies issued to both H & J and Mr. Stewart, which provided $50,000 uninsured/underinsured motorist coverage for each separate policy.

On July 24, 1989, H & J and American States intervened in the case seeking to assert their subrogation rights, pursuant to § 287.150, against Mr. Scharff and Mr. Palmarin, and against Northland for the uninsured/underinsured coverage provision contained in the policy issued by Northland to H & J. H & J and American States do not claim a right to the uninsured motorist policy purchased by Mr. Stewart but only the $50,000 uninsured/underinsured policy purchased by H & J from Northland. Northland moved for summary judgment against H & J and American States claiming that, first, H & J and American States had no right of subrogation against the uninsured/underinsured motorist benefits provided by Northland's policy and, second, that the policy excluded coverage for Workers' Compensation benefits. The trial court sustained the motion for summary judgment on November 27, 1989, designating the ruling as final for purposes of appeal, which H & J and American States appealed. On September 11, 1990, this court affirmed the trial court's summary judgment, holding that H & J and American States were not entitled to any portion of Northland's uninsured/underinsured motorist coverage because Northland was not a "third person" liable to the employee and, therefore, H & J and American States have no subrogation rights to those insurance proceeds. Barker v. Palmarin, 799 S.W.2d 117 (Mo.App.1990).

On May 11, 1990, Mr. Barker, pursuant to § 537.065, RSMo 1986, settled with Mr. Palmarin's insurer, Dairyland. Dairyland agreed to pay into the court its $25,000 policy limits in return for the Barkers' agreement not to execute on the judgment against Mr. Palmarin and/or his insurer, Dairyland, in the event that judgment is entered against Mr. Palmarin. Accordingly, Dairyland paid the $25,000 into the circuit court. On May 31, 1991, H & J and American States filed their Motion and Suggestions for the Distribution of Funds, based on their subrogation rights under § 287.150.3, for a portion of the $25,000 paid into the court by Mr. Palmarin's insurance carrier, Dairyland.

On March 18, 1991, Mr. Barker and his wife entered into a settlement with Northland whereby Mr. Barker and his wife agreed to dismiss Northland from the lawsuit with prejudice in return for payment by Northland of the $50,000 uninsured/underinsured provision of the policy purchased by Mr. Stewart and payment of $37,500 uninsured/underinsured provision of the policy purchased by H & J. On March 29, 1991, after the Barkers voluntarily dismissed the action against Mr. Scharff, the court called the case for trial and, after hearing the evidence produced by the Barkers, entered the following judgment:

Plaintiffs appear in person and by attorney Andy Gelbach. Defendant-Intervenors H & J Transporters and American States Insurance Company appear by attorney George Allen. Evidence presented. No one else appears. Court finds that in the wreck at issue in this cause of action, the defendant Raymond Palmarin is 100% at fault and plaintiff William Barker is 0% at fault. Court assesses the damages of Plaintiff William Barker at $700,000.00 and assesses the damages of Plaintiff Delores Barker at $50,000.00. ¹

On July 8, 1991, the trial court heard evidence on appellants' motion for distribution of the $25,000 paid by Dairyland into court. Appellants H & J and American States offered proof of the subrogation amount and the Workers' Compensation settlement with Mr. Barker for $57,253.74. Appellants, by offering evidence concerning efforts to collect their subrogation interest from Dairyland, established that they, along with the Barkers, effected the settlement agreement with Dairyland. The Barkers entered as evidence the § 537.065 agreement with Dairyland and the payment of Dairyland's policy limits into court. The Barkers also entered as evidence the settlement agreement with Northland for $87,500 and the judgment against Mr. Palmarin, wherein the court ordered judgment for Mr. Barker and his wife for $700,000 and $50,000, respectively. Subsequently, on July 10, 1991, the court made the following determination regarding division of the $25,000 paid into court by Dairyland:

The Court, having taken the matter under advisement, does hereby make the following Order to the Circuit Clerk for the distribution of the $25,000.00 presently held in the Court registry in this case: $23,125.00 to Plaintiffs Barker; $1,875.00 to Intervenors H & J Transporters, Inc., and their Insurer American States Insurance Company. The Court, in arriving at the division, applies the formula as interpreted by this Court to apply to the facts of this case, recommended in the case of Ruediger vs. Kallmeyer, (510 [sic] S.W.2d 56, Mo.Banc., 1973). The Court finds the amount of Intervenors [sic ] claim, (excluding a claim for attorney's fees and...