Bowan ex rel. Bowan v. Gen. Sec. Indem. Co.

• Decision Date: 22 September 2005
• Docket Number: No. ED 85148.,No. ED 85145.,ED 85145.,ED 85148.
• Citation: 174 S.W.3d 1
• Parties: Donna BOWAN, by and through Her Next Friend and Mother, Audrey BOWAN, Respondent, v. GENERAL SECURITY INDEMNITY COMPANY OF ARIZONA, and Express Medical Transporters, Appellants.
• Court: Missouri Supreme Court

Page 1

174 S.W.3d 1

Donna BOWAN, by and through Her Next Friend and Mother, Audrey BOWAN, Respondent, v. GENERAL SECURITY INDEMNITY COMPANY OF ARIZONA, and Express Medical Transporters, Appellants.

No. ED 85145.

No. ED 85148.

Missouri Court of Appeals, Eastern District, Division One.

August 16, 2005.

Application for Transfer to Supreme Court Denied September 22, 2005.

COPYRIGHT MATERIAL OMITTED

Phillip C. Rouse, Steven H. Mustoe, Chris Stucky, Kansas City, MO, for Appellant.

James P. Leonard, Devereaux, Stokes, Nolan & Fernandez, P.C., St. Louis, MO, for Respondent.

GARY M. GAERTNER, SR., Presiding Judge.

Appellants, General Security Indemnity Company of Arizona ("GSIC") and Express Medical Transporters ("EMT"), appeal from the judgment of the Circuit Court of the City of St. Louis in favor of respondent, Donna Bowan, by and through her next friend and mother, Audrey Bowan ("Bowan"). We affirm.

Bowan, who is now deceased, was a physically and mentally disabled individual. EMT, a non-emergency transportation company, regularly transported Bowan to and from her place of work.

On August 17, 2001, Bowan was a passenger in a fifteen passenger van owned by EMT and driven by EMT employee Larry Briggs. The van was involved in a collision with a pickup truck driven by Amy Jo Demery.¹ At the time of the accident, Bowan was not wearing a seatbelt. Bowan sustained injuries in the accident rendering her a paraplegic. As a result of her injuries, Bowan was forced to move into a nursing home.

Bowan sued EMT and Demery for injuries she sustained in the collision. Bowan alleged that Demery, EMT, and Briggs were negligent in the operation of their respective vehicles and that EMT and Briggs were negligent in failing to determine that Bowan was not wearing a seatbelt before the collision.

At the time of the collision, EMT was insured under two different policies. EMT had a Commercial General Liability ("CGL") policy with GSIC. The CGL policy had liability limits of $1,000,000. EMT also had a Business Auto policy with GSIC, which also had liability limits of $1,000,000. EMT's Business Auto policy further provided Underinsured Motorist ("UIM") coverage, which had liability limits of $1,000,000.

Bowan was an "insured" under EMT's Business Auto policy, which entitled her to receive UIM benefits under certain circumstances. Before trial, Bowan entered into an agreement with EMT pursuant to section 537.065 RSMo (2000).² According to this agreement, Bowan agreed not to execute or levy against the personal assets of EMT, but rather to pursue collection of any judgment through EMT's CGL and Business Auto policies. In exchange for Bowan's promise, GSIC paid Bowan $930,000 through "The Donna Bowan Special Needs Trust." GSIC also promised that $30,000 would be held in trust for the benefit of "The Donna Bowan Special Needs Trust" against any possible claims made by third parties against GSIC. The $930,000 payment was made to Bowan under the UIM endorsement of EMT's Business Auto policy.

Bowan's case against Demery and EMT went to trial on January 21, 2003. The jury returned a verdict against Demery and EMT on January 24, 2003. The jury assessed Bowan's damages at $3,500,000, but also found Bowan was twenty percent at fault for her negligence in failing to wear a seatbelt. The trial court entered judgment against Demery and EMT in the amount of $2,800,000.

We reversed the trial court's judgment with respect to the award of prejudgment interest, but affirmed the judgment in all other respects. Bowan v. Express Medical Transporters, 135 S.W.3d 452, 465 (Mo.App. E.D.2004).

The present case is the result of Bowan's attempt to collect this judgment from GSIC. Bowan filed a petition for equitable garnishment against GSIC and EMT in an attempt to get GSIC to satisfy the judgment against EMT for EMT's negligence as determined by the judgment in the underlying case.

GSIC filed a motion for summary judgment in response in which it argued: (1) there was no coverage under the CGL policy because of an auto exclusion in that policy; (2) Bowan already recovered $990,000³ of the $1,000,000 in coverage afforded under the UIM endorsement; and (3) Bowan is not entitled to duplicate payments under the UIM endorsement and the liability portion of the auto policy.

This matter came before the trial court based on a joint stipulation of facts, GSIC's motion for summary judgment and "memorandum in response thereto," Bowan's response to GSIC's motion for summary judgment and memorandum in opposition thereto, oral argument, and Bowan's exhibits A through H that were submitted during oral argument. On August 2, 2004, the trial court found that the CGL policy was to be applied to pay the judgment rendered against GSIC in the underlying case. The trial court also found that the business auto policy provided coverage and that there would be no "duplicate" payment until such time as the entire judgment had been satisfied. The trial court entered judgment in favor of Bowan for $1,840,000 for damages to be covered by the CGL policy and the business auto policy, in favor of Bowan for $165,600.50 in pre-judgment interest under the CGL policy, and in favor of Bowan for $248,626 in post-judgment interest under the CGL policy and the business auto policy. The trial court subsequently amended its judgment to award $208,303.79 in pre-judgment interest.⁴ This appeal followed.

When a case is tried on stipulated facts, the only issue we review on appeal is whether the trial court reached the proper legal conclusions from the stipulated facts. Melton v. Country Mut. Ins. Co., 75 S.W.3d 321, 324 (Mo.App. E.D. 2002). A controversy involving the interpretation and application of an insurance contract is a matter of law for the court when the underlying facts are not in question. Hunt v. Capitol Indem. Corp., 26 S.W.3d 341, 342 (Mo.App. E.D.2000).

In their first point on appeal, GSIC and EMT argue the trial court erred in finding that the CGL policy provided coverage for Bowan's personal injury claims.

Where an insurance company relies upon an exclusion in its policy to deny coverage, the insurance company carries the burden to prove the facts that make the exclusion applicable. Columbia Mut. Ins. Co. v. Neal, 992 S.W.2d 204, 207 (Mo.App. E.D.1999). In our review of the policy, "[w]e will construe the exclusion clause strictly against the insurer." Id., quoting Killian v. State Farm Fire & Cas. Co., 903 S.W.2d 215, 217 (Mo.App. W.D.1995). Insurance contracts are designed to furnish protection; as a result, where possible, we will interpret them to grant coverage rather than defeat it. Centermark Properties, Inc. v. Home Indem., 897 S.W.2d 98, 100-01 (Mo.App. E.D.1995). Generally, we find definitions in an insurance policy to be controlling as to the terms used within the policy. Polston v. Aetna Life Ins. Co., 932 S.W.2d 786, 788 (Mo.App. E.D.1996).

It is broadly accepted that where an insured risk and an excluded risk constitute concurrent proximate causes of an accident, a liability insurer is liable as long as one of the causes is covered by the policy. Braxton v. United States Fire Ins. Co., 651 S.W.2d 616, 619 (Mo.App. E.D.1983).

The CGL policy states that the policy does not apply to "`[b]odily injury' or `property damage' arising out of the ownership, maintenance, use or entrustment to others of any aircraft, `auto' or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and `loading and unloading.'" Further, "loading and unloading" is defined as "the handling of property."

The trial court found that driver's duty to ensure that the disabled passengers were properly secured arose when driver was standing outside of the vehicle before operation. Further, the trial court found that this case did not fall under the "loading and unloading" definition in the policy. As a result, the trial court found that the CGL policy provided coverage in the underlying case.

We agree that based on the policy's definition of "loading and unloading," the failure to secure Bowan does not qualify for the exclusion because she is not property. Therefore, the key question is whether the failure to secure Bowan is a negligent act distinct from the "operation" of the vehicle, and further whether the failure to secure is a concurrent proximate cause of Bowan's injuries such that GSIC would be liable under the reasoning of Braxton. Missouri cases interpreting similar policy provisions fall into two basic categories. The first category involves cases where the negligence is independent of or divisible from the use of a motor vehicle as contemplated by the policy.

For example, in Centermark, a police officer sued Centermark and a security officer employed by it after the police officer's patrol car was struck by a vehicle owned by Centermark and driven by an unauthorized third person. Centermark, 897 S.W.2d at 99. In that case, relying on the reasoning of Braxton, we found coverage, because there were allegations of negligence that were independent of ownership maintenance, operation, or use of an automobile. Id. at 101. Specifically, Centermark "failed to comply with set procedures for apprehending, subduing, and controlling third parties and persons suspected of criminal activity and it failed to have proper and adequate hiring practices and training policies and programs for its security officers." Id.

In Neal, a driver backed a vehicle over a child, who was supervised by his grandparents, killing the child. Neal, 992 S.W.2d at 205. We found that this case was one of first impression because it involved negligent supervision of the child who was run over by the vehicle, rather than negligent entrustment and negligent supervision of employees. Id. at 208. Further, we found that the automobile exclusion did not apply to mother's claim against the grandparents for negligent supervision of a minor because the use of the vehicle that caused the...