Chastain v. United Fire & Cas. Co.
| Docket Number | SD:36869 |
| Decision Date | 29 July 2022 |
| Citation | 653 S.W.3d 616 |
| Parties | Gary CHASTAIN and Casey Chastain, Appellants, v. UNITED FIRE & CASUALTY COMPANY and, Lawrence Photo and Video, Inc., Respondents. |
| Court | Missouri Court of Appeals |
Appellants’ attorneys: Nick Smart and Steve Garner, Springfield, MO.
Respondent United Fire's attorneys: James C. Meyers and John G. Schultz, Springfield, MO.
Appellants, Gary Chastain and Casey Chastain ("the Chastains") appeal the trial court's denial of their motion for summary judgment and subsequent grant of summary judgment in favor of Respondent, United Fire & Casualty Company ("United Fire"), on the Chastains’ claim of equitable garnishment. The Chastains raise two points on appeal, asserting: (1) United Fire's insurance policy is ambiguous and those ambiguities should be construed to grant coverage, and (2) a genuine issue of material fact existed that precluded summary judgment. We affirm.
On December 18, 2014, Gary Chastain took 47 of his family videos to Lawrence Photo and Video, Inc., ("Lawrence Photo")1 to be converted and copied to digital video disks (DVDs). The Chastains’ video collection consisted of thirty-eight film reels, seven VHS tapes, one 8-millimeter tape, and one audio cassette (hereinafter "the Videos"). The Videos contained family events spanning the 1970's and 1980's. Gary Chastain received two claims tickets with an estimated completion time of four to six weeks.
After waiting several weeks, Gary Chastain called Lawrence Photo and spoke to its vice president, Kathy Delicato. During a subsequent phone call, Ms. Delicato explained to Gary Chastain that the Videos were not finished before eventually admitting that the Videos had been lost.
As of May 5, 2015, Gary Chastain still had not received the Videos or any completed DVDs, so he went to Lawrence Photo. Upon arriving, he found the store was out of business, but Ms. Delicato was still inside preparing the store for its new owners. Ms. Delicato allowed Gary Chastain inside the store and summoned another employee, Tyler Beck.
Delicato and Beck searched for the Videos without success, confirming they were not in the location used to store completed orders. Employees had been instructed to leave customer orders in a storage area reserved for customer orders and were further instructed that no customer orders should be thrown away.2 Beck, who had filled out the Chastains’ claim ticket, remembered seeing the Videos, but could not find them and was bewildered as to their location. Other customer orders were on the shelves, and those orders were not to leave the shelves unless a customer came in to pick up an order. None of Lawrence Photo's employees knew what happened to the Videos, beyond identifying where the videos should have been.
Lawrence Photo informed its insurer, United Fire, that the Chastains’ videos had been lost. Lawrence Photo reported that the loss occurred prior to Gary Chastain's visit on May fifth. United Fire investigated the loss, but neither Lawrence Photo nor the Chastains were able to explain how the Videos had gone missing. Delicato confirmed that the tapes were lost, that no one knew what happened to them, and that it was a mystery. As a result, United Fire issued a denial of claim letter. The letter provided that because there was no explanation as to what happened to the Videos, United Fire was denying coverage based on a provision in the policy that required the existence of some physical evidence showing what happened to missing property.
After receiving the letter denying the claim, the Chastains filed a civil petition against Lawrence Photo seeking recovery for the loss of the Videos. Lawrence Photo did not appear or defend the suit, and on January 26, 2017, a default judgment was entered against them.
The Chastains brought suit seeking equitable garnishment against United Fire and Lawrence Photo, alleging that the insurance policy provided by United Fire covered the lost videos, which were the subject of the underlying judgment against Lawrence Photo. United Fire filed a counterclaim for declaratory judgment against the Chastains and a cross-claim for declaratory judgment against Lawrence Photo. United Fire filed a motion for summary judgment seeking a declaratory judgment on the equitable garnishment claim. The Chastains filed a response and cross motion for summary judgment. The trial court heard oral arguments on the motions.
The trial court entered judgment in favor of United Fire and denied the Chastains’ motion for summary judgment, holding that although the Videos qualified as Covered Property, they did not meet the second requirement for coverage, which required a Covered Cause of Loss. The trial court further stated that there was "no explanation or evidence to show where, when, how or why [the Videos] were lost[,]" and there was "no physical evidence to show what happened to [the Videos,]" therefore United Fire was entitled to judgment as a matter of law on the equitable garnishment claim. The Chastains filed a timely notice of appeal. This appeal follows.
Point I- The "Property of Other" clause is not ambiguous
"The interpretation of an insurance policy, and the determination whether coverage and exclusion provisions are ambiguous, are questions of law that this Court reviews de novo. " Burns v. Smith , 303 S.W.3d 505, 509 (Mo. banc 2010). "Where, as here, the trial court granted summary judgment, this Court also applies a de novo standard of review." Id. This means we do not defer to the trial court's decision. Newton v. Mercy Clinic E. Communities , 596 S.W.3d 625, 628 (Mo. banc 2020). Rather, we employ the same criteria the trial court should have used in deciding whether to grant the motion. Id. "A ‘genuine issue’ that will prevent summary judgment exists where the record shows two plausible but contradictory accounts of the essential facts." Great S. Bank v. Blue Chalk Constr., LLC , 497 S.W.3d 825, 829 (Mo. App. 2016) (). We rarely review an appeal from the denial of summary judgment. Schnurbusch v. W. Plains Reg'l Animal Shelter , 571 S.W.3d 191, 203 (Mo. App. 2019). On very rare occasions, we will review the denial of summary judgment where the facts asserted by both parties are nearly identical and are so intertwined that the propriety of granting the motion is purely an issue of law.3 Keystone Mut. Ins. Co. v. Kuntz , 507 S.W.3d 162, 166 (Mo. App. 2016).
We begin by addressing the interpretation of United Fire's insurance policy, which is a question of law that we determine de novo.
Seeck v. Geico Gen. Ins. Co. , 212 S.W.3d 129, 132 (Mo. banc 2007). If an "insurance clause appears to provide coverage but other clauses indicate that such coverage is not provided, then the policy is ambiguous, and the ambiguity will be resolved in favor of coverage for the insured." Id. at 134. However, "[t]he mere presence of an exclusion does not render an insurance policy ambiguous." Floyd-Tunnell v. Shelter Mut. Ins. Co. , 439 S.W.3d 215, 221 (Mo. banc 2014). "In construing the terms of an insurance policy, this Court applies the meaning which would be attached by an ordinary person of average understanding if purchasing insurance, and resolves ambiguities in favor of the insured." Seeck , 212 S.W.3d at 132 (internal quotation marks and citation omitted). "An insured cannot create an ambiguity by reading only a part of the policy and claiming that, read in isolation, that portion of the policy suggests a level of coverage greater than the policy actually provides when read as a whole." Owners Ins. Co. v. Craig , 514 S.W.3d 614, 617 (Mo. banc 2017).
In their first point, the Chastains assert that United Fire's policy was ambiguous in that the Videos fall within the definitions provided in the "Covered Property" subsection of the policy and there are no relevant exclusions to coverage within that subsection. Rather, relevant exclusions appear in subsequent subsections, "Covered Causes of Loss" and "Limitations," so the Chastains contend that the policy appears to grant coverage before stripping that coverage away. The Chastains further argue that an average person of ordinary understanding would read the only provision relating to "property of others," see that the lost videos fall within the policy's definition of "Covered Property," and would believe that since the only listed exception does not apply to their circumstance United Fire would pay for their loss. The relevant policy provisions are reproduced below:
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