Columbia Mut. Ins. Co. v. Epstein, ED 86854.

• Decision Date: 01 August 2006
• Docket Number: No. ED 86854.,ED 86854.
• Citation: 200 S.W.3d 547
• Court: Missouri Court of Appeals
• Parties: COLUMBIA MUTUAL INSURANCE COMPANY, Plaintiff/Appellant, v. Gary EPSTEIN, d/b/a M & E Concrete Forms Company and Jeff Doerr and Connie Doerr, Defendants/Respondents.

Page 547

200 S.W.3d 547

COLUMBIA MUTUAL INSURANCE COMPANY, Plaintiff/Appellant, v. Gary EPSTEIN, d/b/a M & E Concrete Forms Company and Jeff Doerr and Connie Doerr, Defendants/Respondents.

No. ED 86854.

Missouri Court of Appeals, Eastern District, Division Three.

August 1, 2006.

Sanford Goffstein, Lori R. Koch, St. Louis, MO, for appellant.

David C. Knieriem, Clayton, MO, Kurt A. Voss, Kevin A. Richardson, Washington, MO, for respondents.

LAWRENCE E. MOONEY, Judge.

The plaintiff, Columbia Mutual Insurance Company, appeals from summary judgment entered against Columbia and in favor of the defendants, Gary Epstein and Jeff and Connie Doerr, by the Circuit Court of Franklin County. Columbia filed a petition for declaratory judgment against Epstein and the Doerrs, claiming it had no duty to defend or indemnify Epstein based on the allegations in the Doerrs' underlying lawsuit against him. Epstein filed a counterclaim against Columbia, which was not resolved by the summary judgment and remains pending. The trial court designated its summary-judgment decision a final judgment for purposes of appeal, pursuant to Missouri Supreme Court Rule 74.01(b). However, such designation was improper because the trial court failed to dispose of "one claim" or a "distinct judicial unit" when it left Epstein's counterclaim unresolved. Therefore, we dismiss Columbia's appeal for lack of jurisdiction.

Facts

Columbia issued a commercial general liability policy of insurance to Gary Epstein d/b/a M & E Concrete Forms Co. Jeff and Connie Doerr filed a lawsuit against Epstein in connection with a concrete foundation Epstein poured for the Doerrs' new home. The Doerrs' second amended petition alleged breach of oral contract, breach of warranty, and product liability.¹ Columbia initially provided Epstein with a defense to the Doerrs' lawsuit but later withdrew. Columbia then filed a petition for declaratory judgment against Epstein and the Doerrs, claiming that the insurance policy issued to Epstein provided no coverage and seeking a judgment declaring that Columbia had no duty to defend or indemnify Epstein based on the allegations in the Doerrs' petition. Epstein filed a counterclaim seeking damages against Columbia for vexatious refusal to pay and bad faith.

All parties filed motions for summary judgment. The trial court denied Columbia's motion, granted the Doerrs' motion, and granted Epstein's motion for partial summary judgment, holding that the insurance policy Columbia issued to Epstein affords coverage and obligates Columbia to defend and indemnify Epstein as to the Doerrs' lawsuit. Epstein's counterclaim against Columbia remains pending. The trial court granted Columbia's motion for determination of no just reason for delay and designated its summary-judgment decision a final judgment for purposes of appeal, pursuant to Missouri Supreme Court Rule 74.01(b). Columbia now appeals the grant of summary judgment, which held that Columbia has a duty to defend and indemnify Epstein.

Discussion

In its first point on appeal, Columbia claims the trial court erred in finding that Columbia had a duty to defend and indemnify Epstein because the insurance policy affords no coverage for the claims alleged in the Doerrs' petition. Columbia argues the petition alleges no "occurrence" that would bring the suit within the parameters of the insuring agreement of the Columbia policy. In its second point, Columbia claims that even if the petition alleged an "occurrence" within the policy's parameters, the policy's business-risk exclusions apply to deny coverage for the Doerrs' claims. Epstein filed a motion to dismiss the appeal, which we have taken with the case. Epstein alleges this Court lacks jurisdiction because the trial court erred in certifying its judgment as final pursuant to Rule 74.01(b). The threshold question we must decide is whether the trial court properly certified its decision for appeal pursuant to Rule 74.01(b), thus providing this Court with jurisdiction.

This Court must always determine whether we have jurisdiction of an appeal. Committee For Educational Equality v. State, 878 S.W.2d 446, 450 (Mo. banc 1994). A final judgment is a prerequisite for appellate review, and if the judgment appealed is not final, we lack jurisdiction and must dismiss the appeal. Section 512.020 RSMo. (Supp.2005); ARC Industries, Inc. v. Siegel-Robert, Inc., 157 S.W.3d 344, 346 (Mo.App. E.D.2005). A final, appealable judgment disposes of all issues and all parties in the case, leaving nothing for future determination. ARC Industries, 157 S.W.3d at 346. Generally, when considering finality of judgment, if a counterclaim is pleaded, the trial court must make a finding that disposes of the counterclaim. Lumbermens Mut. Cas. v. Thornton, 36 S.W.3d 398, 402 (Mo.App. W.D.2000). Rule 74.01(b), however, permits the trial court to enter judgment on a single claim in a case with multiple claims and to certify its judgment as appealable upon an express determination that no just reason for delay exists. ARC Industries, 157 S.W.3d at 346. Rule 74.01(b) provides in pertinent part:

When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third-party claim, or when multiple parties are involved, the court may enter a judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay.

In this case, the trial court granted Columbia's motion for determination of no just reason for delay, and the court designated its judgment as a final judgment for purposes of appeal pursuant to Rule 74.01(b). Nonetheless, we must determine whether the designation was proper. ARC Industries, 157 S.W.3d at 346. The trial-court's order included no explanation as to the reason for the court's determination. When a court does not explain its decision, an appellate court should be skeptical. Horn v. Transcon Lines, Inc., 898 F.2d 589, 592 (7th Cir.1990).

For certification pursuant to Rule 74.01(b), the trial-court's decision must dispose of one claim. Rule 74.01(b); Comm. for Educ. Equal., 878 S.W.2d at 450. Declaratory judgment provides but one of several remedies; it is not a substantive claim. Comm. for Educ. Equal., 878 S.W.2d at 452. A judgment that resolves fewer than all the legal issues as to any single claim is not final despite the trial-judge's designation under Rule 74.01(b). Id. at 450. Similarly, a judgment that fails to dispose of all remedies asserted as to the same legal rights, leaving some legal rights open for future adjudication, is not a final judgment under Rule 74.01(b). Id.

The meaning of "one claim for relief" is derived from federal cases construing Federal Rule of Civil Procedure 54(b)², which Missouri's Rule 74.01(b) parallels.³ Id. at 451. "One claim" means one legal right, regardless of whether multiple remedies are sought. Id. Further, "one claim" means the aggregate of operative facts which give rise to a legally enforceable right. Id. In other words, claims are separate if they require proof of different facts and application of distinguishable law, subject to the limitation that severing claims does not run afoul of the doctrine forbidding splitting a cause of action. Id. The test for determining whether or not a cause of action is single and cannot be split is: 1) whether the actions brought arise out of the same act, contract, or transaction; or 2) whether the parties, subject matter, and evidence necessary to sustain the claim are the same in both actions. Thornton, 36 S.W.3d at 402.

The Missouri Supreme Court has offered additional guidance by stating that "a judgment is final only when it disposes of a `distinct judicial unit.'" Id., citing Gibson v. Brewer, 952 S.W.2d 239, 244 (Mo. banc 1997). The term "distinct judicial unit" means "the final judgment on a claim, and not a ruling on some of several issues arising out of the same transaction or occurrence which does not dispose of the claim." Gibson v. Brewer, 952 S.W.2d 239, 244 (Mo. banc 1997), quoting State ex rel. State Hwy. Comm'n. v. Smith, 303 S.W.2d 120, 123 (Mo.1957). "It is `differing,' `separate,' `distinct' transactions or occurrences that permit a separately appealable judgment, not differing legal theories or issues presented for recovery on the same claim." Id.

The purpose of Federal Rule 54(b) is to avoid review of multiple appeals that share underlying facts and legal issues. Comm. for Educ. Equal., 878 S.W.2d at 451. Federal Rule 54(b) was designed to spare appellate courts from repeated review of the facts of a case on successive appeals. Jack Walters & Sons Corp. v. Morton Bldg., Inc., 737 F.2d 698, 702 (7th Cir.1984). Missouri's Rule 74.01(b) serves the same purpose. Comm. for Educ. Equal., 878 S.W.2d at 451.

We hold that the trial-court's grant of summary judgment to the Doerrs and partial summary judgment to Epstein did not dispose of one claim, or a distinct judicial unit. While the trial court determined Columbia's duties, and hence Epstein's rights, as to defense and indemnification, the trial court left unresolved Epstein's right to damages in that it left Epstein's counterclaim for vexatious refusal to pay and bad faith open for future adjudication. Furthermore, claims are separate only if they require proof of different facts and application of distinguishable law. Id. Both issues in this case arise out of the same contract — the Columbia insurance policy issued to Epstein. The trial court determined that Columbia has a duty to defend and indemnify Epstein, and Columbia has appealed that determination, denying that the insurance policy affords coverage for the claims alleged in the Doerrs' petition. Through his counterclaim, Epstein alleges that Columbia's position as to coverage is unreasonable and, thus, its refusal to pay is vexatious and in bad faith. These two aspects of the case do not represent two distinct,...