Chase Resorts, Inc. v. Safety Mut. Cas. Corp.

• Court: Missouri Court of Appeals
• Writing for the Court: SIMON
• Citation: Chase Resorts, Inc. v. Safety Mut. Cas. Corp., 869 S.W.2d 145 (Mo. App. 1993)
• Decision Date: 23 November 1993
• Docket Number: No. 63058,63058
• Parties: CHASE RESORTS, INC., Appellant, v. SAFETY MUTUAL CASUALTY CORP., Respondent.

Page 145

869 S.W.2d 145

CHASE RESORTS, INC., Appellant, v. SAFETY MUTUAL CASUALTY CORP., Respondent.

No. 63058.

Missouri Court of Appeals,

Eastern District,

Division Three.

Nov. 23, 1993.

Motion for Rehearing and/or Transfer to Supreme Court Denied Dec. 29, 1993.

Application to Transfer Denied Feb. 22, 1994.

George L. Roberts, Jr., Robt. L. Devereaux, St. Louis, for appellant.

Russell F. Watters, Robt. Wm. Cockerham, St. Louis, for respondent.

SIMON, Presiding Judge.

Chase Resorts, Inc., appellant, appeals the granting of summary judgment in favor of respondent, Safety Mutual Casualty Corporation (Safety Mutual), appellant's excess insurer. Appellant filed a declaratory judgment action against Safety Mutual and the Missouri Property and Casualty Insurance Guaranty Association (MIGA) seeking: (1) a declaration of the rights and obligations of the parties under the MIGA Act §§ 375.771 to 375.779 R.S.Mo.Cum.Supp.1989 and the insurance policies of North West Insurance Company (North-West), appellant's underlying insurer, and Safety Mutual; (2) an order for either MIGA or Safety Mutual to pay appellant's attorneys fees in the underlying litigation plus interest; and (3) the attorneys fees and costs of this action. On appeal, appellant contends that the trial court erred as a matter of law in granting summary judgment for the following reasons: (1) the language of Safety Mutual's excess insurance policy defining "Ultimate Net Loss" entitles appellant to be reimbursed for all its legal costs after the initial verdict; and (2) the underlying insurance was exhausted when the verdict of $700,000 was rendered, and thus, Safety Mutual had the duty and obligation to defend appellant.

We reverse and remand.

The following facts are stipulated by the parties and are not in dispute unless otherwise indicated. Appellant owns the Lodge of the Four Seasons located at the Lake of the Ozarks, which operated the Four Seasons Marina. On February 27, 1984, a boat dock at the Four Seasons Marina collapsed causing injuries to Mr. and Mrs. Kramer and Mr. and Mrs. Sebastian.

North-West issued its comprehensive general liability insurance policy providing appellant with insurance for liability for bodily injury and property damages up to a limit of $500,000. Safety Mutual issued its commercial umbrella liability insurance policy providing appellant with umbrella coverage for bodily injury, property damage, and advertising injury up to a limit of $5,000,000 in excess of the underlying coverage provided by North-West. On September 4, 1984, Mr. and Mrs. Kramer filed a negligence action in the Circuit Court of the City of St. Louis against appellant, and North-West provided the defense for appellant. However, during the pendency of the Kramer case, North-West was declared insolvent and could no longer provide the defense. After a brief time during which appellant paid for its own defense, MIGA, of which North-West was a member insurer, provided the defense for appellant pursuant to § 375.785.4(1)(b) R.S.Mo.Cum.Supp.1984 (Repealed L.1989 S.B. 333 § A).

Subsequently, the case was tried, and in January 1988, the initial verdict awarded Mrs. Kramer $600,000 on her claim for personal injuries, Mr. Kramer $50,000 on his claim for personal injuries, and $50,000 on his claim for loss of consortium. Appellant claims that after the verdict, MIGA offered to pay appellant only for the Kramers' special damages totalling $37,412.63, and that MIGA would not pay until appellant signed a policyholder's release. MIGA had no interest in appealing. Appellant claims it rejected MIGA's offer. After January, 1988, appellant paid for its own defense. Appellant settled the claims of the Sebastians for approximately $16,000 without a trial in the fall of 1988.

Appellant appealed the initial jury verdict. We reversed and remanded in Kramer v. Chase Resorts, Inc., 777 S.W.2d 647 (Mo.App.1989). We directed that the Kramers elect either a retrial where the damage award would remain unchanged but the jury would be instructed to determine after reconsideration of the evidence what percentage of fault, if any, is attributable to the Kramers, or a retrial on all issues. Id. at 653.

The Kramers elected to retry the case to determine their percentage of fault, if any. After the retrial in December 1989, the jury found no fault attributable to the Kramers so that the prior judgment was unchanged. In March 1990, the Kramers' judgment was satisfied upon the payment of $484,000 by appellant and $166,000 by Safety Mutual, for a total of $650,000. The payment of $484,000 by appellant represented the $500,000 retained limit under the North-West policy reduced by the $16,000 Sebastian settlement payment.

In its declaratory judgment action against MIGA and Safety Mutual, appellant seeks: payment of $132,508.55 for its attorney fees incurred in defending the Kramers' action from January 1988 to March 1990 plus interest; MIGA to pay appellant $37,412.63 for the Kramers' special damages plus interest; and Safety Mutual and MIGA to pay reasonable attorney fees and the costs of this litigation. In July 1991, MIGA settled with appellant for $125,000. On July 13, 1992, appellant and Safety Mutual filed their Stipulation of Uncontested Facts. On August 10, 1992, Safety Mutual filed its motion for summary judgment essentially contending that MIGA was responsible for the defense in Kramer and that the underlying insurance was never exhausted.

On August 12, 1992, appellant filed its motion for summary judgment seeking that Safety Mutual be required to pay appellant $75,553.52 plus interest for appellant's remaining legal fees from Kramer. Appellant attached to its motion for summary judgment the affidavit of its Chief Financial Officer to prove that it incurred $75,553.52 in legal fees. The affidavit states that the MIGA settlement of $125,000 reimbursed appellant for the payment of $37,512.63 in special damages to the Kramers, and thus, the net settlement was for $87,487.37. We note that the $37,512.63 in special damages differs from the $37,412.63 in special damages appellant demanded from MIGA in its motion for declaratory judgment. The affidavit further asserts that the ultimate net loss is total legal fees of $156,802.53, minus the net settlement of $87.487.37, for a total of $69,315.16. The affidavit arrives at the figure of $75,553.52 by adding interest accrued from July 1991 to July 1992.

On October 20, 1992, the trial court denied appellant's motion for summary judgment but granted Safety Mutual's motion for summary judgment.

The granting of a motion for summary judgment purports to dispose all issues, and therefore, is a final appealable judgment. Kaufman v. Bormaster, 599 S.W.2d 35, 37[1-3] (Mo.App.1980). Appellate review of a summary judgment is guided by Rule 74.04 of the Missouri Rules of Civil Procedure, which provides in pertinent part:

(c) ... [summary] judgment shall be entered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.

Thus, review of a summary judgment is a two-step process; first, a determination that there was no genuine issue of material fact requiring trial; second, that the judgment is correct as a matter of law. State of Missouri, ex rel. James C. Kirkpatrick v. The Board of Election Commissioners of St. Louis County, 686 S.W.2d 888, 892 (Mo.App.1985). Further, a review of a grant of summary judgment is equivalent to the review of a court-tried case, and if, as a matter of law, the judgment is sustainable on any theory, it must be affirmed. McCready v. Southard, 671 S.W.2d 385, 387 (Mo.App.1984). We review the record on summary judgment in the light most favorable to the party against whom summary judgment was rendered. Y.G. v. Jewish Hospital of St. Louis, 795 S.W.2d 488, 494 (Mo.App.1990).

For the sake of a logical presentation, we will address appellant's second point first. Appellant contends the trial court erred as a matter of law in that Safety Mutual became obligated to defend appellant in January, 1988 when either North-West's policy coverage of $500,000 was exhausted upon the entry of the $700,000 judgment, or when MIGA tendered the $37,512.63 which MIGA contended was the extent of its responsibility pursuant to Missouri's Guaranty Act. Safety Mutual's policy provides:

INSURING AGREEMENT

* * * * * *

.... [Safety Mutual] will pay on behalf of the insured for ultimate net loss in excess of the retained limit hereinafter stated which the insured shall become legally obligated because of

A. personal injury or

B. property damage or

C. advertising injury

to which this insurance applies, caused by an occurrence, and

1. With respect to any personal injury, property damage or advertising injury not within terms of the coverage of underlying insurance but within the terms of coverage of this insurance; or

2. If the limits of liability of the underlying insurance are exhausted because of personal injury, property damage or advertising injury during the period of this policy,

.... [Safety Mutual] will a) have the right and duty to defend any suit against the insured seeking damages on account of such personal injury, property damage or advertising injury, even if any of the allegations of the suit are groundless, false or fraudulent, and make such investigation and settlement of any claim or suit as it deems expedient; but [Safety Mutual] shall not be obligated to pay any claim or judgment or to defend any suit after [Safety Mutual's] limit of liability has been exhausted by payment of judgments or settlements;

Appellant argues that because Safety Mutual's policy does not define the term "exhaustion," the policy is ambiguous. (Although appellant uses the term "exhaustion," Safety Mutual's policy uses the term "exhausted.") Appella...