Eklund v. Farmers Ins. Exchange

• Decision Date: 17 March 2004
• Docket Number: No. 02-279., No. 02-278
• Parties: Randy EKLUND, Appellant (Plaintiff), v. FARMERS INSURANCE EXCHANGE, Appellee (Defendant in Intervention). Farmers Insurance Exchange, Appellant (Defendant in Intervention), v. Randy Eklund, Appellee (Plaintiff).
• Court: Wyoming Supreme Court

86 P.3d 259

2004 WY 24

Randy EKLUND, Appellant (Plaintiff), v. FARMERS INSURANCE EXCHANGE, Appellee (Defendant in Intervention).

Farmers Insurance Exchange, Appellant (Defendant in Intervention), v. Randy Eklund, Appellee (Plaintiff).

Nos. 02-278, 02-279.

Supreme Court of Wyoming.

March 17, 2004.

Representing Appellant Eklund: Les Bowron and Frank R. Chapman of Beech Street Law Office, Casper, WY. Argument by Mr. Bowron.

Representing Appellee Farmers Ins. Exch.: James D. Bramer and Blair J. Trautwein of Wick, Campbell, Bramer, Ukasick & Trautwein, LLC, Fort Collins, CO. Argument by Mr. Trautwein.

Before HILL, C.J., and GOLDEN, LEHMAN, KITE, and VOIGT, JJ.

LEHMAN, Justice.

[¶ 1] Farmers Insurance Exchange (Farmers), which is potentially liable to Randy Eklund (Eklund) under an underinsured motorist insurance policy, appeals the district court's denial of its motion for trial setting. The district court denied the motion finding that the issue of damages was res judicata due to a prior settlement between Eklund and the tortfeasor, Terry Tebben (Tebben), of which Farmers was aware. In the same order denying trial setting, the district court also determined that Gainsco Ins. Co. v. Amoco Prod. Co., 2002 WY 122, 53 P.3d 1051 (Wyo.2002) applied and ordered that Farmers could only be held liable for its policy limits based on its determination that the settlement between Eklund and Tebben was objectively unreasonable. Eklund challenges this determination. We reverse.

ISSUES

[¶ 2] Farmers advances the following issue on appeal:

Did the trial court err in denying defendant Farmers Insurance Exchange's motion for a trial setting and in finding against Farmers on its underinsured motorist coverage for policy limits?

Eklund appeals the following issues:

1. The District Court erred as a matter of law by applying Gainsco Ins. Co. v. Amoco Prod. Co., 2002 WY 122, 53 P.3d 1051 (Wyo.2002) to the facts of this personal injury case.

2. The District Court committed clear error when it purported to make findings of fact concerning the settlement, "policy limits," and the reasonableness of the settlement. This error may be reversed under the de novo standard of review.

FACTS

[¶ 3] This cases arises out of the same accident that was the subject of suit in Eklund v. PRI Envtl., Inc., 2001 WY 55, 25 P.3d 511 (Wyo.2001). That case thoroughly set forth the facts relating to the accident and the circumstances surrounding it, and we need not repeat those facts in their entirety. Instead, we will relate several of those foundational facts so as to put this case in context and disclose additional facts pertinent to the instant case. See PRI Environmental, ¶¶ 3-9.

[¶ 4] Tebben was employed by PRI Environmental, Inc (PRI). On several occasions he was required to purchase parts in Casper, Wyoming and deliver them to PRI's worksite. At the close of the workday on Friday, October 21, 1994, Tebben picked up a list of parts needed the following Monday. Tebben was instructed to purchase the parts on Monday morning before reporting back to work. After picking up the list, Tebben left for his home in Casper. Traveling ahead of Tebben on a dirt road were fellow PRI employees, Eklund and Warren Ash (Ash) in Ash's vehicle. At some point, Ash stopped on the road apparently to determine whether Tebben would take a shortcut or continue along the road. Tebben collided with the Ash vehicle causing physical injury to all three.

[¶ 5] Eklund filed an action against Tebben and PRI. Eklund claimed Tebben was negligent in driving his vehicle and that PRI was liable for his damages under the theory of respondeat superior. Farmers, which provided the underinsured motorist coverage on Ash's automobile, intervened as a defendant in the action on June 30, 1999. Farmers claimed that if Eklund were unable to fully recover his damages from Tebben and PRI, Farmers was potentially responsible to pay damages. Farmers participated at the pretrial conference and filed a pretrial conference memorandum as an additional defendant. In a later filed stipulation, the parties agreed that Farmers would not be identified as a party defendant to the jury and not appear at trial in front of the jury, but would be allowed to interact with both attorneys and the court outside the presence of the jury.

[¶ 6] PRI filed a motion for summary judgment. PRI claimed that Tebben was on his way home at the time of the accident, so no genuine issue of material fact existed concerning whether Tebben was acting in the scope of his employment at the time of the accident. On November 23, 1999, the district court granted PRI's motion on the basis that, at the time of the accident, Tebben was simply leaving the jobsite after work and did not have to return with the parts until Monday morning. Therefore, the court concluded that the only reasonable inference that could be drawn from the facts was that Tebben was not acting in the scope of his employment when the accident happened. See PRI Environmental, ¶¶ 3-9.

[¶ 7] The remaining parties were set for trial on December 6, 1999; but, on the day that trial was to begin, Eklund and Tebben agreed to a settlement. This settlement included a stipulated judgment against Tebben for the sum of seven hundred fifty thousand dollars. In relevant part, the settlement was explained to the court as follows:

MR. BOWRON: ... The parties Eklund and Tebben have arrived at a settlement of this matter which involves the following terms and conditions:

Mr. Tebben will allow judgment to be taken against him in favor of Mr. Eklund for the sum of $750,000.

The judgment by this agreement—and we'll have a stipulation prepared and entered into between the parties—will set forth that Mr. Eklund, in exchange for that judgment for the sum of $750,000, Mr. Eklund covenants not to execute against Mr. Tebben personally in terms of his personal assets, and that includes that Mr. Tebben will not provide Mr. Eklund with an assignment of any claim or claims that he may have against his own insurance company, Mountain West Farm Bureau.

Mr. Eklund preserves and reserves his right to appeal the Court's granting of summary judgment in favor of PRI on the issue of whether or not Mr. Tebben was within the scope of his employment at the time of the accident, and that issue necessarily incorporates the concept that PRI, by virtue of the doctrine of respondeat superior, is liable for Mr. Eklund's injuries as the employer of Terry Tebben.

And if Mr. Bramer wants to make a record of it, he may. But I believe that although they are an observer to this case, this agreement does not do anything to inhibit Farmers Insurance Exchange from also appealing, as a party defendant, the Court's granting of summary judgment in favor of PRI Environmental, Inc., as Mr. Tebben's employer.

...

If I have left anything out or if either of the attorneys wish to add anything, I should mention that Mr. Bramer, who represents Farmers Insurance Exchange, and I have discussed the underinsured motorist provisions to which Mr. Eklund is a party beneficiary, and that the rights under that policy of insurance remain.

The parties are free to agree or disagree as to the amount of damages, and they may or may not agree to arbitrate any claim Mr. Eklund may have or does have against Farmers Insurance Exchange. And I believe that's all I have.

MR. BRAMER: This is James Bramer appearing on behalf of Farmers Insurance Exchange. As Mr. Bowron has stated, I would just restate that Farmers Insurance Exchange reserves all rights to appeals related to pre-jury issues, and also reserves all contract rights that may come from an insurance policy written to Mr. Warren Ash for which the plaintiff Randy Eklund has beneficiary rights as an additional insurer. That's all I have.

...

MR. BRAMER: I should also add one more point on behalf of Farmers Insurance Exchange: It's to be clear that this agreement did not have the participation of Farmers Insurance Exchange. It is an agreement between the plaintiff, Randy Eklund, and the defendant, Terry Tebben, only.

MR. BOWRON: And I have to make sure that I make it clear, however, that Mr. Bramer, on behalf of Farmers Insurance Exchange, was informed of and advised of the contents of this settlement at all times, well prior to this agreement being put on record.

[¶ 8] At that point, court adjourned and no trial took place. Thereafter, the various parties appealed the summary judgment granted to PRI, and this court affirmed that summary judgment. See PRI Environmental, ¶¶ 22-23. Having previously never done so, on June 6, 2002, Eklund filed a motion for entry of judgment against Tebben in accordance with the stipulated agreement. On June 28, 2002, Farmers filed a motion for trial setting. Following these motions, but before the court ruled on these motions, on October 7, 2002, Eklund filed a separate action against Farmers in the Eighth Judicial District of Wyoming. In this action Eklund sought a declaratory judgment that Farmers waived its right to a jury trial on the issue of Eklund's damages and is estopped from seeking re-litigation of all issues related to those damages. Eklund additionally sought damages for alleged bad faith, policy benefits, and attorney fees pursuant to Wyo. Stat. Ann. § 26-15-124.

[¶ 9] On November 5, 2002, the trial court denied Farmers' motion for trial setting and entered an order against Farmers. The district court found that the doctrine of res judicata barred Farmers from disputing damages. In its order the district court found "Farmers had an opportunity to present their claim to a jury. Farmers chose to forgo its right to a jury determination of damages when it failed to prosecute its case in front of a jury when it had the opportunity to do so." The order also stated that in light of Gainsco Ins. Co. v. Amoco Prod. Co., 2002 WY 122, 53 P.3d 1051 (Wyo.2002), the amount of the settlement between Eklund and Tebben was objectively unreasonable and...